TLC: Special District Local Laws Code Proposed Chapters

80C109(3) JRJ

CHAPTER 1045. HUTCHINSON COUNTY HOSPITAL DISTRICT

SUBCHAPTER A. GENERAL PROVISIONS

Revised Law

Sec. 1045.001. DEFINITIONS. In this chapter:

(1) "Board" means the board of directors of the district.

(2) "Director" means a member of the board.

(3) "District" means the Hutchinson County Hospital District. (Acts 71st Leg., R.S., Ch. 77, Sec. 1.01.)

Source Law

Sec. 1.01. In this Act:

(1) "District" means the Hutchinson County Hospital District.

(2) "Board" means the board of directors of the district.

(3) "Director" means a member of the board.

Revised Law

Sec. 1045.002. AUTHORITY FOR OPERATION. The Hutchinson County Hospital District operates and is financed as provided by Section 9, Article IX, Texas Constitution, and by this chapter and other laws relating to hospital districts organized under Section 9, Article IX, Texas Constitution. (Acts 71st Leg., R.S., Ch. 77, Sec. 1.02.)

Source Law

Sec. 1.02. The Hutchinson County Hospital District may be created and established and, if created, must be maintained, operated, and financed in the manner provided by Article IX, Section 9, of the Texas Constitution and by this Act and other laws relating to hospital districts created and organized under Article IX, Section 9, of the Texas Constitution.

Revisor's Note

Section 1.02, Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provides that the Hutchinson County Hospital District may be "created and established and, if created, must be maintained, operated, and financed" in the manner provided by the Texas Constitution, this act, and various other laws. The revised law omits references to the creation and establishment of the district as executed. The revised law omits "maintained" because, in this context, the meaning of that term is included in the meaning of "operated."

Revised Law

Sec. 1045.003. ESSENTIAL PUBLIC FUNCTION. The district is a public entity performing an essential public function. (Acts 71st Leg., R.S., Ch. 77, Sec. 7.11 (part).)

Source Law

Sec. 7.11. Since the district created under this Act is a public entity performing an essential public function, … .

Revised Law

Sec. 1045.004. DISTRICT TERRITORY. The boundaries of the district are coextensive with the boundaries of Hutchinson County, Texas. (Acts 71st Leg., R.S., Ch. 77, Sec. 1.03.)

Source Law

Sec. 1.03. The boundaries of the district are coextensive with the boundaries of Hutchinson County, Texas.

Revised Law

Sec. 1045.005. DISTRICT SUPPORT AND MAINTENANCE NOT STATE OBLIGATION. The state may not become obligated for the support or maintenance of the district. (Acts 71st Leg., R.S., Ch. 77, Sec. 9.01 (part).)

Source Law

Sec. 9.01. The state may not become obligated for the support or maintenance of a hospital district created under this Act, … .

Revised Law

Sec. 1045.006. RESTRICTION ON STATE FINANCIAL ASSISTANCE. The legislature may not make a direct appropriation for the construction, maintenance, or improvement of a district facility. (Acts 71st Leg., R.S., Ch. 77, Sec. 9.01 (part).)

Source Law

Sec. 9.01. … nor may the legislature make a direct appropriation for the construction, maintenance, or improvement of a facility of the district.

Revisor's Note

(End of Subchapter)

Article 3, Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provides procedures for holding an election on the creation of the district and the imposition of an ad valorem tax. Because the creation of the hospital district and the imposition of the tax were approved at the described election, the revised law omits those provisions as executed. The omitted law reads:

Art. 3

Sec. 3.01. The district may be created and a tax may be authorized only if the creation and the tax are approved by a majority of the qualified voters of the territory of the proposed district voting at an election called and held for that purpose.

Sec. 3.02. A majority of the temporary directors of the district may order a creation election to be held.

Sec. 3.03. The order calling the election must state:

(1) the nature of the election, including the proposition that is to appear on the ballot;

(2) the date of the election;

(3) the hours during which the polls will be open; and

(4) the location of the polling places.

Sec. 3.04. The temporary directors shall give notice of the election by publishing a substantial copy of the election order in a newspaper with general circulation in the proposed district once a week for two consecutive weeks. The first publication must appear at least 14 days before the date set for the election.

Sec. 3.05. (a) The election shall be held not less than 45 days nor more than 60 days after the date on which the election is ordered.

(b) Section 41.001(a), Election Code, does not apply to an election ordered under this article.

Sec. 3.06. (a) The ballot for an election at which the issuance of bonds is not proposed shall be printed to permit voting for or against the proposition: "The creation of the Hutchinson County Hospital District and the levy of annual taxes for hospital purposes at a rate not to exceed ______ (insert amount not to exceed 75 cents) cents on each $100 valuation of all taxable property in the district."

(b) The temporary directors shall ensure that the ballot proposition includes a maximum tax rate of not more than 75 cents on each $100 valuation of all taxable property in the district.

Sec. 3.07. (a) The temporary directors of the district shall meet and canvass the returns of the election.

(b) If the temporary directors find that the election results are favorable to the proposition to create the district, they shall issue an order declaring the district created.

(c) If the temporary directors find that the election results are not favorable to the proposition to create the district, another creation election may not be held before the first anniversary of the date of the election at which voters disapproved the proposition.

Sec. 3.08. If the creation of the district is not approved at an election held within 60 months after the effective date of this Act, this Act expires.

Sec. 3.09. (a) The temporary directors may submit a proposition at the creation election on the issuance of bonds.

(b) If a bond proposition is submitted to the voters, the ballot for the election shall be printed to permit voting for or against the proposition: "The creation of the Hutchinson County Hospital District, the levy of annual taxes for hospital purposes at a rate not to exceed ______ (insert amount not to exceed 75 cents) cents on each $100 valuation of all taxable property in the district, and the issuance of bonds in an amount not to exceed ______ (insert amount) and to mature not later than ______ (insert date)."

(c) The board may issue bonds as provided by this Act if a majority of the votes cast at the election favor the proposition to create the district, authorize a tax, and issue bonds.

[Sections 1045.007-1045.050 reserved for expansion]

SUBCHAPTER B. DISTRICT ADMINISTRATION

Revised Law

Sec. 1045.051. BOARD ELECTION AND APPOINTMENT; TERM. (a) The board is governed by the following seven directors:

(1) one director elected from each county commissioner precinct; and

(2) three directors appointed by the Hutchinson County Commissioners Court.

(b) Elected directors serve staggered three-year terms, with as near as possible to one-third of the elected members' terms expiring each year. Appointed directors also serve staggered three-year terms, with one director's term expiring each year.

(c) A directors' election shall be held on the uniform election date in May of each year to elect the appropriate number of directors.

(d) Within 10 days of the date directors are elected, the commissioners court annually shall appoint the appropriate number of successor appointed directors.

(e) The commissioners court may not appoint a person to serve more than two successive terms. (Acts 71st Leg., R.S., Ch. 77, Secs. 4.01(a), 4.03(a), (d); New.)

Source Law

Sec. 4.01. (a) The district is governed by a board of seven directors, four of whom are elected and three of whom are appointed by the Commissioners Court of Hutchinson County as prescribed by Section 4.03 of this Act.

Sec. 4.03. (a) One director shall be elected from each county commissioner precinct and three directors shall be appointed by the commissioners court of Hutchinson County.

…

(d) After the initial elections of directors, an election shall be held on the first Saturday in May each year and the appropriate number of successor directors shall be elected for staggered three-year terms, with as near as possible to one-third of the elected members' terms expiring each year. The commissioners court shall annually within 10 days of the date that elected directors are elected appoint the appropriate number of successor appointed directors to serve staggered three-year terms. The commissioners court may not appoint a person to serve more than two successive terms.

Revisor's Note

(1) Article 2 and Section 4.01(b), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provide procedures for the appointment of temporary directors to serve as directors of the Hutchinson County Hospital District until the elected directors take office. The revised law omits those provisions as executed. The omitted law reads:

Art. 2

Sec. 2.01. On the effective date of this Act or as soon after that date as practicable, the commissioners court of Hutchinson County shall appoint seven persons to serve as temporary directors of the district.

Sec. 2.02. The directors remaining after a vacancy in the office of temporary director shall fill the vacancy by appointment by majority vote.

[Sec. 4.01]

(b) From the time the creation of the district is approved until the elected directors take office, the temporary directors serve as directors of the district.

(2) Sections 4.02 and 4.03(b) and (c), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, prescribe procedures for electing the initial board of directors and the terms of the initial directors. The revised law omits those provisions as executed. The omitted law reads:

Sec. 4.02. Directors shall be elected at an election to be held on the first Saturday in May following the creation of the district.

[Sec. 4.03]

(b) At the initial election of directors, the candidate receiving the highest number of votes from a county commissioner precinct is the director for that precinct.

(c) The candidates elected from odd-numbered county commissioner precincts at the initial election serve for a term of two years, and the candidates elected from the even-numbered county commissioner precincts at that election serve for a term of one year. The initial directors appointed by the commissioners court shall draw lots to determine which two directors shall serve for a term of two years and which director shall serve for a term of one year. The appointed officers take office on the date the elected directors take office.

(3) Section 4.03(d), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provides that "[a]fter the initial election of directors," directors serve staggered three-year terms. The revised law omits the quoted language as executed.

(4) Section 4.03(d), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, requires board elections to be held on the "first Saturday in May." From 1986 to 2003, Section 41.001, Election Code, provided for a uniform election date for all political subdivisions on the first Saturday in May. In Chapter 1315, Acts of the 78th Legislature, Regular Session, 2003, the legislature amended Section 41.001 by moving the uniform election date in May to the third Saturday. In Chapter 1, Acts of the 78th Legislature, 3rd Called Session, 2003, the legislature amended Section 41.001 by moving the uniform election date in May back to the first Saturday. In Chapter 471, Acts of the 79th Legislature, Regular Session, 2005, the legislature amended Section 41.001 by moving the uniform election date in May to the second Saturday. The revised law substitutes "uniform election date in May" for "first Saturday in May" to reflect these changes while preserving as closely as possible legislative intent that the election be held on the first Saturday in May, which was the uniform election date in May.

(5) Sections 3(b), (c), and (d), Chapter 224, Acts of the 74th Legislature, Regular Session, 1995, provide for the staggering of terms for directors elected in 1996 and 1997 to accomplish the change of the members' terms from two to three years. The revised law omits those provisions as executed. The omitted law reads:

(b) The election of directors scheduled before the effective date of this Act to be held in May 1996 shall be held, and the director who receives the highest total number of votes shall be elected to serve a three-year term, and the director who receives the second highest total number of votes shall be elected to serve a two-year term.

(c) The election of directors scheduled before the effective date of this Act to be held in May 1997 shall be held, and the director who receives the highest total number of votes shall be elected to serve a three-year term, and the director who receives the second highest total number of votes shall be elected to serve a two-year term.

(d) The commissioners court of Hutchinson County shall stagger the terms of appointed members so that the appointed members serve staggered three-year terms. This subsection expires December 31, 1997.

Revised Law

Sec. 1045.052. NOTICE OF ELECTION. At least 35 days before the date of an election of directors, notice of the election shall be published one time in a newspaper with general circulation in the district. (Acts 71st Leg., R.S., Ch. 77, Sec. 4.04.)

Source Law

Sec. 4.04. At least 35 days before the date of an election of directors, notice of the election shall be published one time in a newspaper with general circulation in the district.

Revised Law

Sec. 1045.053. QUALIFICATIONS FOR OFFICE. (a) To be eligible to be a candidate for an elected position or to serve as an elected or appointed director, a person must be:

(1) a resident of the district; and

(2) a qualified voter.

(b) A person who is elected from a commissioner precinct or who is appointed to fill a vacancy for a commissioner precinct must be a resident of that commissioner precinct.

Source Law

Sec. 4.06. (a) To be eligible to be a candidate for an elected position or to serve as an elected or appointed director, a person must be:

(1) a resident of the district; and

(2) a qualified voter.

(b) In addition to the qualifications required by Subsection (a) of this section, a person who is elected from a commissioner precinct or who is appointed to fill a vacancy for a commissioner precinct must be a resident of that commissioner precinct.

Revised Law

Sec. 1045.054. BOARD VACANCY. If a vacancy occurs in the office of director, the remaining directors shall appoint a director for the unexpired term. (Acts 71st Leg., R.S., Ch. 77, Sec. 4.07.)

Source Law

Sec. 4.07. A vacancy in the office of director shall be filled for the unexpired term by appointment by the remaining directors.

Revised Law

Sec. 1045.055. OFFICERS. (a) The board shall elect a president and a vice president from among its members.

(b) The board shall appoint a secretary, who need not be a director.

(d) The board shall fill a vacancy in a board office for the unexpired term. (Acts 71st Leg., R.S., Ch. 77, Secs. 4.08, 4.09.)

Source Law

Sec. 4.08. The board shall elect from among its members a president and a vice-president. The board shall also appoint a secretary. The secretary need not be a director.

Sec. 4.09. (a) Each officer of the board serves for a term of one year.

(b) The board shall fill a vacancy in a board office for the unexpired term.

Revised Law

Sec. 1045.056. COMPENSATION; EXPENSES. A director or officer serves without compensation but may be reimbursed for actual expenses incurred in the performance of official duties. The expenses must be:

(1) reported in the district's records; and

(2) approved by the board. (Acts 71st Leg., R.S., Ch. 77, Sec. 4.10.)

Source Law

Sec. 4.10. Directors and officers serve without compensation but may be reimbursed for actual expenses incurred in the performance of official duties. Those expenses must be reported in the district's minute book or other district records and must be approved by the board.

Revisor's Note

Section 4.10, Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, requires that approved expenses be reported in the "district's minute book or other district records." The revised law omits the reference to "minute book" because the district's minute book is a district record.

Revised Law

Sec. 1045.057. VOTING REQUIREMENT. A concurrence of a majority of the directors voting is necessary in any matter relating to district business. (Acts 71st Leg., R.S., Ch. 77, Sec. 4.11.)

Source Law

Sec. 4.11. A concurrence of a majority of the members of the board voting is necessary in matters relating to the business of the district.

Revised Law

Sec. 1045.058. ADMINISTRATORS. (a) The board may appoint qualified persons to serve as:

(1) district administrator; and

(2) ancillary health care facilities administrator.

(b) The administrators serve at the will of the board and are entitled to the compensation determined by the board.

(c) Before assuming the duties of district administrator, the administrator must execute a bond in the amount set by the board of not less than $5,000 that is:

(1) payable to the district; and

(2) conditioned on the faithful performance of the administrator's duties under this chapter.

(d) The board may pay for the district administrator's bond with district money. (Acts 71st Leg., R.S., Ch. 77, Secs. 4.12(a) (part), (b) (part), (c) (part), (d).)

Source Law

Sec. 4.12. (a) The board may appoint qualified persons as administrator of the district, administrator of ancillary health care facilities of the district, … .

(b) The administrators, … serve at the will of the board.

(d) Before assuming the administrator's duties, the district administrator shall execute a bond payable to the hospital district in an amount of not less than $5,000 as determined by the board, conditioned on the faithful performance of the administrator's duties under this Act. The board may pay for the bond with district funds.

Revised Law

Sec. 1045.059. GENERAL DUTIES OF DISTRICT ADMINISTRATOR. (a) The district administrator shall:

(1) supervise the work and activities of the district facilities and the staff, employees, contractors, and agents of the district; and

(2) direct the general affairs of the district subject to the limitations prescribed by the board.

(b) The district administrator is responsible for the overall management of all district facilities, including ancillary health care facilities. (Acts 71st Leg., R.S., Ch. 77, Sec. 4.15.)

Source Law

Sec. 4.15. (a) The district administrator shall supervise the work and activities of district facilities and the staff, employees, contractors, and agents of the district. The district administrator shall direct the general affairs of the district, subject to the limitations prescribed by the board.

(b) The district administrator is responsible for the overall management of all district facilities, including ancillary health care facilities.

Revised Law

Sec. 1045.060. ATTORNEY; ASSISTANT ADMINISTRATORS. (a) The board may appoint qualified persons as:

(1) the attorney for the district; and

(2) assistant administrators.

(b) The attorney for the district and the assistant administrators serve at the will of the board and are entitled to the compensation determined by the board. (Acts 71st Leg., R.S., Ch. 77, Secs. 4.12(a) (part), (b) (part), (c) (part).)

Source Law

Sec. 4.12. (a) The board may appoint qualified persons as … assistant administrators, and attorney for the district.

(b) The … assistant administrators, and attorney serve at the will of the board.

Revised Law

Sec. 1045.061. APPOINTMENT OF STAFF AND EMPLOYEES. (a) The board may appoint to the staff any doctors the board considers necessary for the efficient operation of the district and may make temporary appointments as considered necessary.

(b) The district may employ technicians, nurses, fiscal agents, accountants, architects, attorneys, and other necessary employees.

(c) The board may delegate to the district administrator the authority to hire district employees. (Acts 71st Leg., R.S., Ch. 77, Secs. 4.13, 4.14.)

Source Law

Sec. 4.13. The board may appoint to the staff any doctors it considers necessary for the efficient operation of the district and may make temporary appointments as considered necessary.

Sec. 4.14. (a) The district may employ technicians, nurses, fiscal agents, accountants, architects, additional attorneys, and other necessary employees.

(b) The board may delegate to the district administrator the authority to employ persons for the district.

Revised Law

Sec. 1045.062. RECRUITMENT OF MEDICAL STAFF AND EMPLOYEES. The board may spend district money, enter into agreements, and take other necessary action to recruit physicians and other persons to serve on the district's medical staff or to be employed by the district, including:

(1) advertising and marketing;

(2) paying travel, recruiting, and relocation expenses;

(3) providing a loan or scholarship to a physician or other person who:

(A) is currently enrolled in health care education courses at an institution of higher education; and

(B) contractually agrees to become a district employee or medical staff member; and

(4) providing on a rent-free basis or subsidizing the cost of office space or other facilities for a health care professional, including a physician. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.17(a).)

Source Law

Sec. 5.17. (a) The board may spend district funds, enter into agreements, and take other necessary action to recruit physicians and other persons to serve on the district's medical staff or to be employed by the district, including:

(1) advertising and marketing;

(2) paying travel, recruiting, and relocation expenses;

(3) providing a loan or scholarship to a physician or other person currently enrolled in health care education courses at an institution of higher education who contractually agrees to become a district employee or a member of the medical staff; and

(4) providing offices without the payment of rent or by otherwise subsidizing the cost of office space or other facilities for a health care professional, including a physician.

Revised Law

Sec. 1045.063. HEALTH CARE EDUCATIONAL PROGRAMS. The board may spend district money, enter into agreements, and take other necessary action to conduct, participate in, or otherwise assist in providing health care educational programs for current or prospective staff members or employees. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.17(b).)

Source Law

(b) The board may spend district funds, enter into agreements, and take other necessary action to conduct, participate in, or otherwise assist in providing health care educational programs for current or prospective staff members or employees.

Revised Law

Sec. 1045.064. LIABILITY INSURANCE; INDEMNIFICATION. (a) For an officer, director, board appointee, member of the medical staff, or district employee, the board may:

(1) purchase and maintain liability insurance to protect the person from liability that arises from performing a duty in that capacity; and

(2) agree to defend or indemnify the person with regard to a claim, cost, expense, or liability resulting from duties performed in that capacity.

(b) The board may establish a self-insurance program to fund an indemnity obligation under Subsection (a)(2). (Acts 71st Leg., R.S., Ch. 77, Sec. 5.16.)

Source Law

Sec. 5.16. (a) The board may purchase and maintain liability insurance coverage for an officer, director, board appointee, member of the medical staff, or district employee to protect the person from liability that arises from performing a duty in the person's capacity as an officer or employee of the district or member of the medical staff.

(b) The board may agree to defend or indemnify an officer, director, board appointee, member of the medical staff, or district employee with regard to a claim, cost, expense, or liability incurred as a result of performing a duty in the person's capacity as an officer or employee of the district or member of the medical staff. The board may establish a self-insurance program to fund an indemnity obligation under this subsection.

Revised Law

Sec. 1045.065. RETIREMENT BENEFITS. The board may provide retirement benefits for district employees by:

(1) establishing or administering a retirement program; or

(2) participating in:

(A) the Texas County and District Retirement System; or

(B) another statewide retirement system in which the district is eligible to participate. (Acts 71st Leg., R.S., Ch. 77, Sec. 4.16.)

Source Law

Sec. 4.16. The board may provide retirement benefits for employees of the district by establishing or administering a retirement program or by electing to participate in the Texas County and District Retirement System or in any other statewide retirement system in which the district is eligible to participate.

Revisor's Note

(End of Subchapter)

(1) Sections 4.05(a) and (b), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, state that in accordance with Chapter 144, Election Code, and "to the extent that chapter does not conflict with Article 4 of this Act," a person must file a ballot application with the board secretary to be a candidate for director, and the sections prescribe a deadline for filing the application. The revised law omits the requirement to file the application with the board secretary because it duplicates Sections 144.003 and 144.004, Election Code. In addition, the revised law omits the reference to Chapter 144, Election Code, and the quoted language because Chapter 144, Election Code, applies to the district on its own terms under Section 144.001, Election Code. The revised law omits the filing deadline because it is superseded by Section 144.005, Election Code. Section 1.002, Election Code, provides that the Election Code applies to all elections held in this state. The omitted law reads:

Sec. 4.05. (a) A person who wishes to have his name printed on the ballot as a candidate for a position as an elected director, in accordance with Chapter 144, Election Code, and to the extent that chapter does not conflict with Article 4 of this Act, must file with the secretary of the board of directors an application signed by the person asking that his name be placed on the ballot.

(b) The application must be filed with the secretary not later than the 31st day before the date of the election.

(2) Section 4.05(c), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provides that a ballot application must specify the county commissioner precinct a candidate wishes to represent. The revised law omits the provision because it duplicates Section 141.031(4)(C), Election Code, which requires a candidate to state on the ballot application the office sought by the candidate, including any place number or other distinguishing number. The omitted law reads:

(3) Section 4.05(d), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provides that Subchapter C, Chapter 2, Election Code, applies to the election of unopposed director candidates. The revised law omits the provision because Section 285.131, Health and Safety Code (requiring write-in candidates to file a declaration of candidacy), makes Subchapter C, Chapter 2, apply to the district. The omitted law reads:

(d) Subchapter C, Chapter 2, Election Code, applies to the election of unopposed candidates for the board of directors.

(4) Section 4.055, Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provides procedures regarding write-in voting for director elections. The revised law omits the provision because it mostly duplicates Section 285.131, Health and Safety Code, which, according to its terms, applies to all hospital districts created under general or special law. The portion of the provision regarding the deadline for filing a declaration of write-in candidacy is superseded by amendments made to Section 285.131, Health and Safety Code, by Section 11, Chapter 925, Acts of the 78th Legislature, Regular Session, 2003, and by Section 34, Chapter 1109, Acts of the 79th Legislature, Regular Session, 2005. In addition, this conclusion conforms to the actual practice of the district, which follows the guidelines established by the secretary of state. The omitted law reads as follows:

Sec. 4.055. (a) In a general or special election of directors, a write-in vote may not be counted unless the name written in appears on the list of write-in candidates.

(b) To be entitled to a place on the list of write-in candidates, a candidate must make a declaration of write-in candidacy.

(c) A declaration of write-in candidacy must be filed with the secretary of the board of directors not later than 5 p.m. of the 25th day before election day. However, if a candidate whose name is to appear on the ballot dies or is declared ineligible after the 28th day before election day, a declaration of write-in candidacy for the office sought by the deceased or ineligible candidate may be filed not later than 5 p.m. of the 22nd day before election day.

(d) Subchapter B, Chapter 146, Election Code, applies to write-in voting in an election of directors except to the extent of a conflict with this section.

[Sections 1045.066-1045.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Revised Law

Sec. 1045.101. DISTRICT RESPONSIBILITY. The district has full responsibility for:

(1) operating hospital and ancillary health care facilities; and

(2) providing medical, hospital, and ancillary health care for the district's needy inhabitants. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.02 (part).)

Source Law

Sec. 5.02. On creation of the district, the district:

(1) assumes full responsibility for operating hospital and ancillary health care facilities and for furnishing medical, hospital, and ancillary health care for the district's needy inhabitants;

…

Revisor's Note

Section 5.02, Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provides that "[o]n creation of the district," the district "assumes" certain responsibilities. The revised law omits "[o]n creation of the district" as executed and substitutes "has" for "assumes" because the duty to assume the responsibility is executed.

Revised Law

Sec. 1045.102. RESTRICTION ON COUNTY OR MUNICIPALITY TAXATION AND DEBT. Hutchinson County or a municipality in Hutchinson County may not impose a tax or issue bonds or other obligations for hospital purposes or to provide medical care for district residents. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.01(b).)

Source Law

(b) On or after creation of the district, Hutchinson County or a city located in Hutchinson County may not levy taxes or issue bonds or other obligations for hospital purposes or for providing medical care for the residents of the district.

Revisor's Note

(1) Section 5.01(b), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provides that "[o]n or after creation of the district," Hutchinson County or a city in Hutchinson County may not levy taxes or issue bonds. The revised law omits the quoted language as executed. In addition, throughout this chapter, the revised law substitutes "impose" for "levy" because, in this context, the terms are synonymous and the former is more commonly used.

(2) Section 5.01(b), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, refers to a "city." Throughout this chapter, the revised law substitutes "municipality" for "city" to conform to the terminology of the Local Government Code.

Revised Law

Sec. 1045.103. MANAGEMENT, CONTROL, AND ADMINISTRATION. The board shall manage, control, and administer the hospital system, the ancillary health care system, and the district's money and resources. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.03.)

Source Law

Sec. 5.03. The board shall manage, control, and administer the hospital system, the ancillary health care system, and the funds and resources of the district.

Revised Law

Sec. 1045.104. RULES. The board may adopt rules governing:

(1) the operation of the hospital, ancillary health care facilities, ancillary health care system, and hospital system; and

(2) the duties, functions, and responsibilities of district staff, employees, contractors, or agents. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.04.)

Source Law

Sec. 5.04. The board may adopt rules governing the operation of the hospital, ancillary health care facilities, ancillary health care system, and hospital system and the duties, functions, and responsibilities of the staff, employees, contractors, or agents of the district.

Revised Law

Sec. 1045.105. PURCHASING AND ACCOUNTING PROCEDURES. The board may prescribe:

(1) the method of making purchases and expenditures by and for the district; and

(2) accounting and control procedures for the district. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.05.)

Source Law

Sec. 5.05. (a) The board may prescribe the method of making purchases and expenditures by and for the district.

(b) The board may prescribe accounting and control procedures for the district.

Revised Law

Sec. 1045.106. MOBILE EMERGENCY MEDICAL SERVICE. The district may operate or provide for the operation of a mobile emergency medical service. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.02 (part).)

Source Law

Sec. 5.02. … the district:

…

(3) may operate or provide for the operation of a mobile emergency medical service.

Revised Law

Sec. 1045.107. DISTRICT PROPERTY, FACILITIES, AND EQUIPMENT. (a) The board shall determine the type, number, and location, either inside or outside the district, of facilities required to maintain an adequate hospital system and ancillary health care system and the type of equipment necessary for hospital care and ancillary health care services, including:

(1) domiciliary care and treatment of sick or injured patients;

(2) geriatric services;

(3) outpatient clinics;

(4) rural health clinics;

(5) convalescent home facilities;

(6) physician's offices;

(7) home health services;

(8) durable medical equipment;

(9) long-term care;

(10) skilled nursing care;

(11) intermediate nursing care;

(12) hospice care;

(13) ambulatory surgery centers;

(14) urgent care facilities;

(15) operation of a mobile emergency medical service; and

(16) any other facility or equipment the board considers necessary for the delivery of hospital, medical, and ancillary health care services.

(b) The board may:

(1) acquire by lease, purchase, or lease to purchase property, including facilities, supplies, and equipment, for the district for use in the hospital system and ancillary health care system; and

(2) mortgage or pledge the property as security for the payment of the purchase price.

(c) The board may lease or sell all or part of the hospital facilities or ancillary health care facilities for the district.

(d) The board may lease, sell, or otherwise dispose of all or part of the district's property for the district, including facilities, supplies, or equipment, to a public or private entity. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.06.)

Source Law

Sec. 5.06. (a) The board has complete discretion to determine the type, number, and location, either inside or outside the district, of facilities required to establish and maintain an adequate hospital system and ancillary health care system, and the type of equipment necessary for hospital care and ancillary health care, including domiciliary care and treatment of sick or injured patients, geriatric services, outpatient clinics, rural health clinics, convalescent home facilities, physician's offices, home health services, durable medical equipment, long-term care, skilled nursing care, intermediate nursing care, hospice care, ambulatory surgery centers, urgent care facilities, operation of a mobile emergency medical service, and any other facility or equipment the board considers necessary for the delivery of hospital, medical, and ancillary health care services.

(b) The board may acquire by lease, purchase, or lease to purchase property, facilities, supplies, and equipment for the district for use in the hospital system and ancillary health care system and may mortgage or pledge the property, facilities, supplies, or equipment acquired as security for the payment of the purchase price.

(c) The board, on behalf of the district, may lease or sell all or part of the hospital facilities or ancillary health care facilities.

(d) The board, on behalf of the district, may lease, sell, or otherwise dispose of all or part of the district's property, facilities, supplies, or equipment to a public or private entity.

Revisor's Note

Section 5.06(a), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, requires the board to determine the facilities required to "establish and maintain" an adequate hospital system and ancillary health care system. The revised law omits the reference to establishing the systems as executed.

Revised Law

Sec. 1045.108. EMINENT DOMAIN. (a) The district may exercise the power of eminent domain to acquire a fee simple or other interest in any type of property located in district territory if the interest is necessary for the district to exercise the rights or authority conferred by this chapter.

(b) The district must exercise the power of eminent domain in the manner provided by Chapter 21, Property Code, except the district is not required to deposit in the trial court money or a bond as provided by Section 21.021(a), Property Code.

(1) pay in advance or provide a bond or other security for costs in the trial court;

(2) provide a bond for the issuance of a temporary restraining order or a temporary injunction; or

(3) provide a bond for costs or a supersedeas bond on an appeal or writ of error. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.09.)

Source Law

Sec. 5.09. (a) The district may exercise the power of eminent domain to acquire by condemnation a fee simple or other interest in property located in the territory of the district if the property interest is necessary to the exercise of the rights or authority conferred by this Act.

(b) The district must exercise the power of eminent domain in the manner provided by Chapter 21, Property Code, but the district is not required to deposit in the trial court money or a bond as provided by Section 21.021(a), Property Code.

(c) In a condemnation proceeding brought by the district, the district is not required to pay in advance or give bond or other security for costs in the trial court, to give bond for the issuance of a temporary restraining order or a temporary injunction, or to give bond for costs or supersedeas on an appeal or writ of error.

Revised Law

Sec. 1045.109. COST OF RELOCATING OR ALTERING PROPERTY. In exercising the power of eminent domain, if the board requires relocating, raising, lowering, rerouting, changing the grade, or altering the construction of any railroad, highway, pipeline, or electric transmission and electric distribution, telegraph, or telephone line, conduit, pole, or facility, the district must bear the actual cost of relocating, raising, lowering, rerouting, changing the grade, or altering the construction to provide comparable replacement without enhancement of facilities, after deducting the net salvage value derived from the old facility. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.10.)

Source Law

Sec. 5.10. In exercising the power of eminent domain, if the board requires relocating, raising, lowering, rerouting, changing the grade, or altering the construction of any railroad, highway, pipeline, or electric transmission and electric distribution, telegraph, or telephone lines, conduits, poles, or facilities, the district must bear the actual cost of relocating, raising, lowering, rerouting, changing the grade, or altering the construction to provide comparable replacement without enhancement of facilities, after deducting the net salvage value derived from the old facility.

Revised Law

Sec. 1045.110. GIFTS AND ENDOWMENTS. The board may accept for the district a gift or endowment to be held in trust for any purpose and under any written direction, limitation, or provision prescribed in writing by the donor that is consistent with the authority and proper management of the district. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.14.)

Source Law

Sec. 5.14. On behalf of the district, the board may accept gifts and endowments to be held in trust for any purpose and under any direction, limitation, or provision prescribed in writing by the donor that is consistent with the authority and proper management of the district.

Revised Law

Sec. 1045.111. GENERAL CONTRACT POWER. The board may contract for the district. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.07(a).)

Source Law

Sec. 5.07. (a) The board may contract on behalf of the district.

Revised Law

Sec. 1045.112. CONSTRUCTION CONTRACTS. (a) The board may enter into construction contracts for the district.

(b) The board may enter into a construction contract that involves the expenditure of more than the amount provided by Section 271.024, Local Government Code, only after competitive bidding as provided by Subchapter B, Chapter 271, Local Government Code, or other applicable law. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.07(b).)

Source Law

(b) The board may enter into construction contracts on behalf of the district; however, the board may enter into construction contracts that involve spending more than $10,000 only after competitive bidding as provided by Subchapter B, Chapter 271, Local Government Code, or other applicable law.

Revisor's Note

(1) Section 5.07(b), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provides that the district may enter into construction contracts that involve spending more than $10,000 only after competitive bidding as provided by Subchapter B, Chapter 271, Local Government Code. The revised law omits the reference to the $10,000 amount as superseded by Section 5, Chapter 115, Acts of the 77th Legislature, Regular Session, 2001, which amended Section 271.024, Local Government Code, to increase the contract amount for which competitive bidding is required to $25,000.

(2) Section 5.07(c), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provides that Chapter 2253, Government Code, applies to the district's construction contracts in relation to performance and payment bonds. The revised law omits the provision because Chapter 2253 applies to the district on its own terms. The omitted law reads:

(c) Chapter 2253, Government Code, as it relates to performance and payment bonds, applies to construction contracts let by the district.

Revised Law

Sec. 1045.113. OPERATING AND MANAGEMENT CONTRACTS. The board may enter into an operating or management contract for the district with one or more public or private entities relating to a hospital or ancillary health care facility or service. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.08.)

Source Law

Sec. 5.08. The board, on behalf of the district, may enter into operating or management contracts with one or more public or private entities relating to hospital and ancillary health care facilities and services.

Revised Law

Sec. 1045.114. CONTRACTS WITH GOVERNMENTAL ENTITIES FOR CERTAIN SERVICES. The board may contract with a political subdivision of this state, a state, the federal government, an agency or political subdivision of those public entities, or a charitable or other private entity for the district to:

(1) furnish a mobile emergency medical service; or

(2) provide for the investigatory or welfare needs of district inhabitants or of persons for whom the public or private entity has an obligation to provide care. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.13.)

Source Law

Sec. 5.13. The board may contract with any city, county, special district, or state, the federal government, an agency or political subdivision of those public entities, or a charitable or other private entity for the district to furnish a mobile emergency medical service or to provide for the investigatory or welfare needs of inhabitants of the district or of persons for whom the public or private entity has an obligation to provide care.

Revisor's Note

Section 5.13, Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, refers to "any city, county, special district, or state, the federal government, an agency or political subdivision of those public entities." Throughout this chapter, the revised law omits references to "city," "county," and "special district" in this context because each of those entities is included in the meaning of "political subdivision of this state."

Revised Law

Sec. 1045.115. JOINT OWNERSHIP ARRANGEMENT. (a) The board may enter into a joint ownership arrangement for the district with one or more public or private entities for:

(1) the provision of management or operating services; and

(2) the ownership of all or part of real property, facilities, equipment, or supplies.

(b) Before the board enters into the arrangement, the board must determine that the arrangement is:

(1) in the district's best interest; and

(2) for a public purpose of the district. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.19.)

Source Law

Sec. 5.19. (a) The board, on behalf of the district, may enter into a joint ownership arrangement with one or more public or private entities for the:

(1) provision of management or operating services; and

(2) ownership of all or part of real property, facilities, equipment, or supplies.

(b) The board must determine the arrangement is in the district's best interest and is for a public purpose of the district before the board enters into an arrangement under this section.

Revised Law

Sec. 1045.116. PAYMENT FOR TREATMENT; PROCEDURES. (a) When a patient is admitted to a district facility, the district administrator may have an inquiry made into the financial circumstances of:

(1) the patient; and

(2) a relative of the patient who is legally responsible for the patient's support.

(b) The district without charge shall provide to a patient who resides in the district the care and treatment that the patient or a relative of the patient who is legally responsible for the patient's support cannot pay.

(c) On determining that the patient or a relative legally responsible for the patient's support can pay for all or part of the care and treatment provided by the district, the district administrator shall report that determination to the board, and the board shall issue an order directing the patient or the relative to pay the district a specified amount each week. The amount must be based on the individual's ability to pay.

(d) The district administrator may collect money owed to the district from the patient's estate or from that of a relative legally responsible for the patient's support in the manner provided by law for collection of expenses of the last illness of a deceased person.

(e) If there is a dispute relating to an individual's ability to pay or if the district administrator has any doubt concerning an individual's ability to pay, the board shall:

(1) call witnesses;

(2) hear and resolve the question; and

(3) issue a final order.

(f) The final order of the board may be appealed to a district court in Hutchinson County. The substantial evidence rule applies to the appeal. (Acts 71st Leg., R.S., Ch. 77, Secs. 5.11(a), (c), (d), (e), (f).)

Source Law

Sec. 5.11. (a) The district shall without charge supply to a patient residing in the district the care and treatment that the patient or a relative of the patient who is legally responsible for the patient's support cannot pay.

(c) The administrator of the district may have an inquiry made into the financial circumstances of any patient admitted to a district facility and into the financial circumstances of a relative of the patient who is legally responsible for the patient's support.

(d) On finding that the patient or a relative of the patient legally responsible for the patient's support can pay for all or any part of the care and treatment provided by the district, the administrator shall report that finding to the board, and the board shall issue an order directing the patient or the relative to pay the district each week a specified amount that the individual is able to pay.

(e) The administrator may collect money owed to the district from the estate of the patient or from that of a relative who was legally responsible for the patient's support in the manner provided by law for collection of expenses in the last illness of a deceased person.

(f) If there is a dispute relating to an individual's ability to pay or if the administrator has any doubt concerning an individual's ability to pay, the board shall call witnesses, hear and resolve the question, and issue a final order. An appeal from a final order of the board must be made to a district court in the county in which the district is located and the substantial evidence rule applies.

Revisor's Note

(1) Section 5.11(b), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, requires the district to adopt an application procedure for assistance eligibility. The revised law omits the provision because it duplicates Sections 61.053(a) and (b), Health and Safety Code, which apply to the district and detail the application procedure. The omitted law reads:

(b) Not later than the beginning of each operating year, the district shall adopt an application procedure to determine eligibility for assistance, as provided by Section 61.053, Health and Safety Code.

(2) Section 5.11(f), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, authorizes the appeal of a final order to be made to the district court "in the county in which the district is located." The revised law substitutes "Hutchinson County" for the quoted language because Hutchinson County is the county in which the district is located.

Revised Law

Sec. 1045.117. REIMBURSEMENT FOR SERVICES. (a) The board shall require a county, municipality, or public hospital located outside the district to reimburse the district for the district's care and treatment of a sick or injured person of that county, municipality, or public hospital as provided by Chapter 61, Health and Safety Code.

(b) The board shall require the sheriff of Hutchinson County or the police chief of a municipality in Hutchinson County to reimburse the district for the district's care and treatment of a person who is confined in a jail facility of Hutchinson County or the municipality and is not a resident of the district.

(c) The board may contract with this or another state, the federal government, or an agency or political subdivision of this or another state or of the federal government to reimburse the district for the care and treatment of a sick or injured person. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.12.)

Source Law

Sec. 5.12. (a) The board shall require reimbursement from a county, city, or public hospital located outside the boundaries of the district for the district's care and treatment of a sick, diseased, or injured person of that county, city, or public hospital as provided by Chapter 61, Health and Safety Code.

(b) The board shall require reimbursement from the sheriff of Hutchinson County or from the police chief of a city in the county for the district's care and treatment of a person confined in a jail facility of Hutchinson County or the city who is not a resident of the district.

(c) The board may contract with this or another state, the federal government, or an agency or political subdivision of this or another state or the federal government to reimburse the district for the care and treatment of a sick, diseased, or injured person.

Revisor's Note

Sections 5.12(a) and (c), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, refer to "a sick, diseased, or injured person." The revised law omits the references to "diseased" because "diseased" is included in the meaning of "sick."

Revised Law

Sec. 1045.118. AUTHORITY TO SUE AND BE SUED. The board may sue and be sued on behalf of the district. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.15.)

Source Law

Sec. 5.15. The board may sue and be sued on behalf of the district.

[Sections 1045.119-1045.150 reserved for expansion]

SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS

Revised Law

Sec. 1045.151. BUDGET. (a) The district administrator shall prepare a proposed annual budget for the district.

(b) The proposed budget must contain a complete financial statement, including a statement of:

(1) the outstanding obligations of the district;

(2) the amount of cash on hand in each district fund;

(3) the amount of money received by the district from all sources during the previous year;

(4) the amount of money available to the district from all sources during the ensuing year;

(5) the amount of the balances expected at the end of the year in which the budget is being prepared;

(6) the estimated amount of revenues and balances available to cover the proposed budget; and

(7) the estimated tax rate required. (Acts 71st Leg., R.S., Ch. 77, Sec. 6.04.)

Source Law

Sec. 6.04. (a) The administrator of the district shall prepare a proposed annual budget for the district.

(b) The proposed budget must contain a complete financial statement, including a statement of:

(1) the outstanding obligations of the district;

(2) the amount of cash on hand to the credit of each fund of the district;

(3) the amount of money received by the district from all sources during the previous year;

(4) the amount of money available to the district from all sources during the ensuing year;

(5) the amount of the balances expected at the end of the year in which the budget is being prepared;

(6) the estimated amount of revenues and balances available to cover the proposed budget; and

(7) the estimated tax rate that will be required.

Revised Law

Sec. 1045.152. NOTICE; HEARING; ADOPTION OF BUDGET. (a) The board shall hold a public hearing on the proposed annual budget.

(b) The board shall publish notice of the hearing in a newspaper with general circulation in the district not later than the 10th day before the date of the hearing.

(d) At the conclusion of the hearing, the board shall adopt a budget by acting on the budget proposed by the district administrator. The board may make any changes in the proposed budget that the board considers proper to provide adequate care and treatment at a district hospital or ancillary health care facility.

(e) The budget is effective only after adoption by the board. (Acts 71st Leg., R.S., Ch. 77, Sec. 6.05.)

Source Law

Sec. 6.05. (a) The board shall hold a public hearing on the proposed annual budget.

(b) The board shall publish notice of the hearing in a newspaper with general circulation in the district not later than the 10th day before the date of the hearing.

(d) At the conclusion of the hearing, the board shall adopt a budget by acting on the budget proposed by the district administrator. The board may make any changes in the proposed budget that the board considers proper to provide adequate care and treatment at a hospital or ancillary health care facility of the district.

(e) The budget is effective only after adoption by the board.

Revised Law

Sec. 1045.153. AMENDMENTS TO BUDGET. After the annual budget is adopted, the budget may be amended on the board's approval. (Acts 71st Leg., R.S., Ch. 77, Sec. 6.06.)

Source Law

Sec. 6.06. After adoption, the annual budget may be amended on the board's approval.

Revised Law

Sec. 1045.154. RESTRICTION ON EXPENDITURES. Money may be spent only for an expense included in the budget or an amendment to the budget. (Acts 71st Leg., R.S., Ch. 77, Sec. 6.07.)

Source Law

Sec. 6.07. Money may not be spent for an expense not included in the annual budget or an amendment to it.

Revised Law

Sec. 1045.155. FISCAL YEAR. The district operates according to the fiscal year established by the board. (Acts 71st Leg., R.S., Ch. 77, Sec. 6.01.)

Source Law

Sec. 6.01. The district operates on the fiscal year established by the board.

Revised Law

Sec. 1045.156. ANNUAL AUDIT. The board annually shall have an audit made of the district's financial records, accounts, and transactions. (Acts 71st Leg., R.S., Ch. 77, Sec. 6.02.)

Source Law

Sec. 6.02. Annually, the board shall have an audit made of the financial records, accounts, and transactions of the district.

Revised Law

Sec. 1045.157. INSPECTION OF ANNUAL AUDIT AND DISTRICT RECORDS. The annual audit and other district records are open to inspection during regular business hours at the district's principal office. (Acts 71st Leg., R.S., Ch. 77, Sec. 6.03.)

Source Law

Sec. 6.03. The annual audit and other district records are open to inspection during regular business hours at the principal office of the district.

Revised Law

Sec. 1045.158. FINANCIAL REPORT. As soon as practicable after the close of the fiscal year, the district administrator or other district agent responsible for the district's financial affairs shall prepare for the board:

(1) a sworn statement of the amount of district money; and

(2) an account of the disbursements of that money. (Acts 71st Leg., R.S., Ch. 77, Sec. 6.08.)

Source Law

Sec. 6.08. As soon as practicable after the close of the fiscal year, the administrator or other district agent responsible for the district's financial affairs shall prepare for the board a sworn statement of the amount of money that belongs to the district and an account of the disbursements of that money.

Revised Law

Sec. 1045.159. DEPOSITORY. (a) The board shall select at least one bank to serve as a depository for district money.

(b) District money, other than money invested as provided by Section 1045.160(b) and money transmitted to a bank for payment of bonds or obligations issued or assumed by the district, shall be deposited as received with the depository bank and shall remain on deposit. This subsection does not limit the power of the board to place a part of district money on time deposit or to purchase certificates of deposit.

(c) The district may not deposit money with a bank or purchase a certificate of deposit from a bank in an amount that exceeds the maximum amount secured by the Federal Deposit Insurance Corporation unless the bank first executes a bond or provides other collateral eligible to secure a public deposit in an amount sufficient to secure from loss the district money that exceeds the amount secured by the Federal Deposit Insurance Corporation. (Acts 71st Leg., R.S., Ch. 77, Sec. 6.10.)

Source Law

Sec. 6.10. (a) The board shall name at least one bank to serve as depository for district funds.

(b) District funds, other than those invested as provided by Section 6.09(b) of this Act and those transmitted to a bank of payment for bonds or obligations issued or assumed by the district, shall be deposited as received with the depository bank and must remain on deposit. This subsection does not limit the power of the board to place a portion of district funds on time deposit or to purchase certificates of deposit.

(c) Before the district deposits funds in a bank or purchases a certificate of deposit in an amount that exceeds the maximum amount secured by the Federal Deposit Insurance Corporation, the bank must execute a bond or provide other collateral eligible to secure public deposits in an amount sufficient to secure from loss the district funds that exceed the amount secured by the Federal Deposit Insurance Corporation.

Revised Law

Sec. 1045.160. SPENDING AND INVESTMENT RESTRICTIONS. (a) Except as provided by Sections 1045.112, 1045.202, 1045.205, and 1045.206, the district may not incur a debt payable from district revenues other than the revenues on hand or to be on hand in the current and immediately following district fiscal years.

(b) The board may invest operating, depreciation, or building reserves in:

(1) funds or securities specified by Chapter 2256, Government Code; or

(2) any other investment vehicle or fund if the board determines that investing the reserves in that vehicle or fund:

(A) is in the district's best interest; and

(B) does not violate the Texas Constitution. (Acts 71st Leg., R.S., Ch. 77, Sec. 6.09.)

Source Law

Sec. 6.09. (a) Except as provided by Sections 5.07(b), 7.01, 7.04, and 7.05 of this Act, the district may not incur a debt payable from revenues of the district other than the revenues on hand or to be on hand in the current and immediately following fiscal years of the district.

(b) The board may invest operating, depreciation, or building reserves in funds or securities specified by Article 836 or 837, Revised Statutes, or by Chapter 2256, Government Code, or in any other investment vehicle or fund if the board determines that investing the reserves in that vehicle or fund is in the district's best interest and does not violate the Texas Constitution.

Revisor's Note

Section 6.09(b), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, authorizes investments in funds or securities specified by "Article 836 or 837, Revised Statutes, or by Chapter 2256, Government Code." Articles 836 and 837, Revised Statutes, were impliedly repealed by the enactment of the Public Funds Investment Act of 1987 (Article 842a-2, Vernon's Texas Civil Statutes), which was codified in 1993 as Chapter 2256, Government Code. The revised law therefore omits the references to Articles 836 and 837.

Revised Law

Sec. 1045.161. AUTHORITY TO BORROW MONEY; SECURITY. (a) The board may borrow money for district operating expenses in an amount not to exceed the amount of tax or other revenue the district expects to receive during the fiscal year in which the money is borrowed.

(b) To repay the debt, the board may pledge all or part of the tax or other revenue received during the fiscal year in which the board borrows money under this section. (Acts 71st Leg., R.S., Ch. 77, Sec. 5.18.)

Source Law

Sec. 5.18. The board may borrow money to pay the district's operating expenses in an amount not to exceed the amount of tax or other revenue the district expects to receive during the fiscal year in which the money is borrowed. The district may pledge all or part of the tax or other revenue received during the fiscal year in which the board borrows money under this section to repay the indebtedness.

[Sections 1045.162-1045.200 reserved for expansion]

SUBCHAPTER E. BONDS

Revised Law

Sec. 1045.201. OBLIGATIONS AND CREDIT AGREEMENTS. The district may issue, sell, and deliver obligations and execute credit agreements as provided by Chapters 1201 and 1371, Government Code. (Acts 71st Leg., R.S., Ch. 77, Sec. 7.07.)

Source Law

Sec. 7.07. The district may issue, sell, and deliver obligations and execute credit agreements under and otherwise use the provisions of Chapter 656, Acts of the 68th Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas Civil Statutes), and the Bond Procedures Act of 1981 (Article 717k-6, Vernon's Texas Civil Statutes).

Revisor's Note

Section 7.07, Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, refers to Chapter 656, Acts of the 68th Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas Civil Statutes), and the Bond Procedures Act of 1981 (Article 717k-6, Vernon's Texas Civil Statutes). Article 717k-6 was codified in 1999 as Chapter 1201, Government Code, and Article 717q was codified in 1999 as Chapter 1371, Government Code. The revised law is drafted accordingly.

Revised Law

Sec. 1045.202. GENERAL OBLIGATION BONDS. The board may issue and sell general obligation bonds authorized by an election in the name and on the faith and credit of the district to:

(1) purchase, construct, acquire, repair, equip, or renovate buildings, facilities, equipment, or improvements for hospital purposes, including facilities and improvements incidental and beneficial to operating and maintaining hospitals and ancillary facilities that provide medical and ancillary health care services and treatment; or

(2) acquire and operate a mobile emergency medical service. (Acts 71st Leg., R.S., Ch. 77, Sec. 7.01.)

Source Law

Sec. 7.01. The board may issue and sell bonds authorized by an election in the name and on the faith and credit of the hospital district to:

(1) purchase, construct, acquire, equip, repair, or renovate buildings, facilities, equipment, or improvements for hospital purposes, including facilities and improvements incidental and beneficial to operating and maintaining hospitals and ancillary facilities that provide medical and ancillary health care services and treatment; or

(2) acquire and operate a mobile emergency medical service.

Revisor's Note

Section 7.01, Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provides that the board has the power and authority to issue and sell bonds in the name and on the faith and credit of the district. Because the type of bonds described by Section 7.01 are known as "general obligation bonds," the revised law is drafted accordingly.

Revised Law

Sec. 1045.203. TAX TO PAY GENERAL OBLIGATION BONDS. (a) At the time general obligation bonds are issued by the district under Section 1045.202, the board shall impose an ad valorem tax at a rate sufficient to create an interest and sinking fund to pay the principal of and interest on the bonds as the bonds mature.

(b) The tax required by this section together with any other ad valorem tax the district imposes may not in any year exceed the limit approved by the voters at the election authorizing the imposition of the tax. (Acts 71st Leg., R.S., Ch. 77, Sec. 7.02.)

Source Law

Sec. 7.02. (a) At the time the bonds are issued by the district, the board shall levy a tax.

(b) The tax must be sufficient to create an interest and sinking fund to pay the principal of and interest on the bonds as they mature.

(c) In any year, the tax together with any other tax the district levies may not exceed the limit approved by the voters at the election authorizing the levy of taxes.

Revisor's Note

Section 7.02, Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, requires the district to levy a tax to pay the principal of and interest on bonds. The revised law specifies that the tax is an "ad valorem" tax because it is clear from the source law that the tax is a property tax and "ad valorem" is the term most commonly used in relation to a property tax.

Revised Law

Sec. 1045.204. GENERAL OBLIGATION BOND ELECTION. (a) The district may issue general obligation bonds only if the bonds are authorized by a majority of the district voters voting at an election held for that purpose.

(b) The board may order a bond election.

(1) the nature and date of the election;

(2) the hours during which the polls will be open;

(3) the location of the polling places;

(4) the amount of the bonds to be authorized; and

(5) the maximum maturity of the bonds.

(d) Notice of a bond election shall be given as provided by Section 1251.003, Government Code.

(e) The board shall declare the results of the election. (Acts 71st Leg., R.S., Ch. 77, Sec. 7.03.)

Source Law

Sec. 7.03. (a) The district may issue general obligation bonds only if the bonds are authorized by a majority of the qualified voters of the district voting at an election called and held for that purpose.

(b) The board may order a bond election. The order calling the election must state the nature and date of the election, the hours during which the polls will be open, the location of the polling places, the amount of bonds to be authorized, and the maximum maturity of the bonds.

(d) The board shall canvass the returns and declare the results of the election.

Revisor's Note

(1) Section 7.03(a), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, refers to a majority vote of the "qualified" voters of the district. The revised law omits "qualified" as unnecessary in this context because Chapter 11, Election Code, governs eligibility to vote in an election in this state and allows only "qualified" voters who are residents of the territory covered by the election to vote in an election.

(2) Section 7.03(a), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, refers to an election "called and held." The revised law omits the reference to "calling" an election because, in this context, "calling" an election is included in the meaning of "holding" an election. Under Chapter 3, Election Code, all elections must be ordered (called) before they may be held.

(3) Section 7.03(c), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, refers to Article 704, Revised Statutes, which specifies certain notice requirements for a bond election. That provision was codified in 1999 as Section 1251.003, Government Code. The revised law is drafted accordingly.

(4) Section 7.03(d), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provides that "[t]he board shall canvass the returns" of a bond election. The revised law omits that requirement because it duplicates Section 67.002, Election Code, which requires the governing body of a political subdivision that orders an election to canvass the returns.

Revised Law

Sec. 1045.205. REVENUE BONDS. (a) The board may issue revenue bonds to:

(1) purchase, construct, acquire, repair, equip, or renovate buildings or improvements for hospital and ancillary health care purposes;

(2) acquire sites to be used for hospital and ancillary health care purposes; or

(3) acquire and operate a mobile emergency medical service to assist the district in carrying out its hospital and ancillary health care purposes.

(b) The bonds must be payable from and secured by a pledge of all or part of the revenues derived from the operation of the district's hospital system.

(d) The bonds must be issued in the manner provided by Sections 264.042, 264.043, and 264.046-264.049, Health and Safety Code, for issuance of revenue bonds by a county hospital authority, or in accordance with other laws relating to the issuance of revenue bonds by a hospital district. (Acts 71st Leg., R.S., Ch. 77, Sec. 7.04.)

Source Law

Sec. 7.04. (a) The board may issue revenue bonds to:

(1) purchase, construct, acquire, repair, equip, or renovate buildings or improvements for hospital and ancillary health care purposes;

(2) acquire sites to be used for hospital and ancillary health care purposes; or

(3) acquire and operate a mobile emergency medical service to assist the district in carrying out its hospital and ancillary health care purposes.

(b) The bonds must be payable from and secured by a pledge of all or part of the revenues derived from the operation of the district's hospital system. The bonds may be additionally secured by a mortgage or deed of trust lien on all or part of district property.

(c) The bonds must be issued in the manner provided by Sections 264.042, 264.043, 264.046, 264.047, 264.048, and 264.049, Health and Safety Code, for issuance of revenue bonds by county hospital authorities, or in accordance with other laws relating to the issuance of revenue bonds by hospital districts.

Revised Law

Sec. 1045.206. REFUNDING BONDS. (a) The board may issue refunding bonds to refund outstanding bonds issued or assumed by the district.

(b) A refunding bond may be:

(1) sold, with the proceeds of the refunding bond applied to the payment of the bonds to be refunded; or

(2) exchanged wholly or partly for not less than a similar principal amount of outstanding indebtedness. (Acts 71st Leg., R.S., Ch. 77, Secs. 7.05(a), (c) (part).)

Source Law

Sec. 7.05. (a) Refunding bonds of the district may be issued to refund and pay off an outstanding indebtedness the district has issued or assumed.

(c) The refunding bonds may be sold and the proceeds applied to the payment of outstanding indebtedness or may be exchanged in whole or in part for not less than a similar principal amount of outstanding indebtedness… .

Revisor's Note

Sections 7.05(b) and (c), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, require the district to issue refunding bonds in the manner prescribed by Article 717k-3 (Vernon's Texas Civil Statutes), and, for refunding bonds that will be sold, to issue the bonds and to make payments on the bonds in the manner prescribed by Article 717k (Vernon's Texas Civil Statutes). Articles 717k and 717k-3 were codified in 1999 as Chapter 1207, Government Code. The revised law omits the provisions because Chapter 1207, Government Code, applies to the district by its own terms under Section 1207.001, Government Code. The omitted law reads:

(b) The bonds must be issued in the manner provided by Chapter 784, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-3, Vernon's Texas Civil Statutes).

(c) … If the refunding bonds are to be sold and the proceeds applied to the payment of outstanding indebtedness, the refunding bonds must be issued and payments made in the manner provided by Chapter 503, Acts of the 54th Legislature, Regular Session, 1955 (Article 717k, Vernon's Texas Civil Statutes).

Revised Law

Sec. 1045.207. MATURITY OF BONDS. District bonds must mature not later than 50 years after the date of issuance. (Acts 71st Leg., R.S., Ch. 77, Sec. 7.06 (part).)

Source Law

Sec. 7.06. District bonds must mature not more than 50 years after the date of their issuance and … .

Revisor's Note

Section 7.06, Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provides in part that bonds issued under Chapter 77 must bear interest at a rate not to exceed that provided by Chapter 3, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes). The maximum interest rate noted in Chapter 3 was revised in 1999 as Section 1204.006, Government Code. Section 1204.006 permits a public agency, including a hospital district, to issue public securities at any net effective interest rate of 15 percent or less and applies to the district under Section 1204.001, Government Code. The revised law omits the reference because it duplicates Section 1204.006. The omitted law reads:

Sec. 7.06. [District bonds] … must bear interest at a rate not to exceed that provided by Chapter 3, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes).

Revised Law

Sec. 1045.208. BONDS EXEMPT FROM TAXATION. The following are exempt from taxation by this state or a political subdivision of this state:

(1) bonds issued by the district;

(2) any transaction relating to the bonds; or

(3) profits made in the sale of the bonds. (Acts 71st Leg., R.S., Ch. 77, Sec. 7.11 (part).)

Source Law

Sec. 7.11. … bonds issued by the district, any transaction relating to the bonds, and profits made in the sale of the bonds are free from taxation by the state or by any city, county, special district, or other political subdivision of the state.

Revisor's Note

(End of Subchapter)

(1) Section 7.08, Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provides that the bonds are subject to the laws governing counties that relate to bond approval by the attorney general and registration of the bonds by the comptroller. Section 7.08 also provides that after approval and registration the bonds are "incontestable for any cause." The revised law omits these provisions because they duplicate, in substance, Chapter 1202, Government Code. Section 1202.003(a), Government Code, requires that bonds be submitted to the attorney general. Section 1202.003(b), Government Code, provides for approval of the bonds by the attorney general and requires the attorney general to submit the approved bonds to the comptroller for registration. Section 1202.005, Government Code, requires registration of the bonds by the comptroller. Section 1202.006, Government Code, provides that after approval and registration the bonds are incontestable and binding obligations. Chapter 1202, Government Code, applies to bonds issued under this chapter by application of Section 1202.001, Government Code. The omitted law reads:

Sec. 7.08. (a) District bonds are subject to the same requirements with regard to approval by the attorney general and registration by the comptroller of public accounts as the law provides for approval and registration of bonds issued by counties.

(b) On approval by the attorney general and registration by the comptroller of public accounts, the bonds are incontestable for any cause.

(2) Section 7.09, Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provides that bonds issued under that act are legal and authorized investments for certain entities. The revised law omits that provision as unnecessary. As to several of the entities listed, Section 7.09 has been superseded and impliedly repealed or it duplicates existing law. Investments in securities by banks are regulated by Section 34.101, Finance Code (enacted in 1995 as Section 5.101, Texas Banking Act (Article 342-5.101, Vernon's Texas Civil Statutes)). Investments in securities by savings banks are regulated by Section 93.001(c)(10), Finance Code (enacted in 1993 as Section 7.15(10), Texas Savings Bank Act (Article 489e, Vernon's Texas Civil Statutes)). Investments in securities by trust companies are regulated by Section 184.101, Finance Code (enacted in 1997 as Section 5.101, Texas Trust Company Act (Article 342a-5.101, Vernon's Texas Civil Statutes)). Investments in securities by savings and loan associations are regulated by Sections 63.002 and 64.001, Finance Code. As to the remaining entities listed, Section 7.09 duplicates Section 1201.041, Government Code (enacted as Section 9, Bond Procedures Act of 1981 (Article 717k-6, Vernon's Texas Civil Statutes)). Section 1201.041, Government Code, applies to bonds issued under this chapter by application of Section 1201.002, Government Code. The revised law omits the reference to sinking funds of this state because it has been superseded by Section 404.024, Government Code (enacted in 1985 as Section 2.014, Treasury Act (Article 4393-1, Vernon's Texas Civil Statutes and last amended in 2003)), which governs the investment of state funds. Section 404.024(b)(10), Government Code, authorizes the investment of state funds in obligations of political subdivisions, including hospital districts. The omitted law reads:

Sec. 7.09. District bonds and indebtedness assumed by the district are legal and authorized investments for:

(1) banks;

(2) savings banks;

(3) trust companies;

(4) savings and loan associations;

(5) insurance companies;

(6) fiduciaries;

(7) trustees;

(8) guardians; and

(9) sinking funds of cities, counties, school districts, and other political subdivisions of the state and other public funds of the state and its agencies, including the permanent school fund.

(3) Section 7.10, Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, effectively provides that bonds issued under that chapter may secure deposits of public funds of the state or public agencies of the state. The revised law omits the provisions relating to deposits of state funds by the comptroller as impliedly repealed by Section 404.0221, Government Code (enacted in 1995), which lists eligible collateral for deposits of state funds by the comptroller. As to deposits of other funds, this provision duplicates Chapter 2257, Government Code, which governs eligible collateral for deposits of funds of other public agencies, including political subdivisions, and permits those deposits to be secured by obligations issued by hospital districts. The omitted law reads:

Sec. 7.10. District bonds are eligible to secure deposits of public funds of the state and of cities, counties, school districts, and other political subdivisions of the state. The bonds are lawful and sufficient security for deposits to the extent of their value if accompanied by all unmatured coupons.

[Sections 1045.209-1045.250 reserved for expansion]

SUBCHAPTER F. TAXES

Revised Law

Sec. 1045.251. IMPOSITION OF AD VALOREM TAX. (a) The board may impose a tax on all property in the district subject to district taxation.

(b) The tax may be used to pay:

(1) indebtedness issued or assumed by the district; and

(2) the maintenance and operating expenses of the district.

(c) The district may not impose a tax to pay the principal of or interest on revenue bonds issued under this chapter. (Acts 71st Leg., R.S., Ch. 77, Secs. 8.01(a) (part), (c), (d), 8.03(b).)

Source Law

Sec. 8.01. (a) The board may annually levy taxes … .

(1) the indebtedness issued or assumed by the district; and

(2) the maintenance and operating expenses of the district.

(d) The district may not levy taxes to pay the principal of or interest on revenue bonds issued under this Act.

[Sec. 8.03]

(b) The board shall levy taxes on all property in the district subject to hospital district taxation.

Revised Law

Sec. 1045.252. TAX RATE. (a) The board may impose the tax at a rate not to exceed the limit approved by the voters at the election authorizing the imposition of the tax.

(b) The tax rate for all purposes may not exceed 75 cents on each $100 valuation of all taxable property in the district.

(c) In setting the tax rate, the board shall consider the income of the district from sources other than taxation. (Acts 71st Leg., R.S., Ch. 77, Secs. 8.01(a) (part), (b), 8.04 (part).)

Source Law

[Sec. 8.01]

(a) [The board may annually levy taxes] in an amount not to exceed the limit approved by the voters at the election authorizing the levy of taxes.

(b) The tax rate for all purposes may not exceed 75 cents on each $100 valuation of all taxable property in the district.

Sec. 8.04. In setting the tax rate, the board shall take into consideration the income of the district from sources other than taxation… .

Revisor's Note

Section 8.04, Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, requires the board to levy the tax and to certify the tax rate to the tax assessor-collector. The revised law omits that provision because Section 26.05(a), Tax Code, requires the governing body of a taxing unit to adopt a tax rate for the current tax year and to notify the tax assessor of that rate. The omitted law reads:

Sec. 8.04. … On determination of the amount of tax required to be levied, including anticipated delinquencies and the cost of assessing and collecting the taxes, the board shall make the levy and certify it to the tax assessor-collector.

Revised Law

Sec. 1045.253. ELECTION TO INCREASE MAXIMUM TAX RATE. (a) The board may order an election to increase the district's maximum ad valorem tax rate to a rate of not more than 75 cents on each $100 valuation of the taxable property in the district. The board shall order an election if the board receives a petition requesting an election that is signed by at least 50 qualified voters of the district.

(b) The election shall be held not later than the 60th day after the date the election is ordered.

(c) The ballot for the election shall be printed to permit voting for or against the proposition: "The imposition of annual taxes by the district for hospital purposes at a rate not to exceed _____ (insert amount not to exceed 75 cents) cents on the $100 valuation of all taxable property in the district."

(d) If the board finds that the election results favor the proposition, the board may impose taxes as authorized by the proposition. If the board finds that the election results do not favor the proposition, another election on the question of raising the district's maximum tax rate may not be held before the first anniversary of the date of the most recent election at which voters disapproved the proposition.

(e) Section 41.001(a), Election Code, does not apply to an election ordered under this section. (Acts 71st Leg., R.S., Ch. 77, Secs. 8.02(a), (b), (c) (part), (d) (part).)

Source Law

Sec. 8.02. (a) If the district residents approved a maximum tax rate of less than 75 cents on each $100 valuation of all taxable property in the district, the board may order an election on the question of increasing the district's maximum tax rate to a rate of not more than 75 cents on each $100 valuation of all taxable property in the district. The board shall order an election on this question if the board receives a petition requesting an election that is signed by at least 50 qualified voters in the district.

(b) The election shall be held not later than the 60th day after the date on which the election is ordered. Section 41.001(a), Election Code, does not apply to an election ordered under this section.

(c) The ballot for the election shall be printed to permit voting for or against the proposition: "The levy of annual taxes by the district for hospital purposes at a rate not to exceed ______ (insert amount not to exceed 75 cents) cents on each $100 valuation of all taxable property in the district." …

(d) … If the board finds that the election results are favorable to the proposition, the board may levy taxes as authorized by the proposition. If the board finds that the election results are not favorable to the proposition, another election on the question of raising the district's maximum tax rate may not be held before the first anniversary of the date of the election at which voters disapproved the proposition.

Revisor's Note

(1) Section 8.02(c), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provides that the Election Code governs an election held under that section. The revised law omits the provision because Section 1.002, Election Code, provides that the Election Code applies to all elections held in this state. The omitted law reads:

(2) Section 8.02(d), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, requires the board to meet and canvass the election returns. The revised law omits this provision for the reason stated in Revisor's Note (4) to Section 1045.204. The omitted law reads:

(d) The board shall meet and canvass the election returns… .

Revised Law

Sec. 1045.254. TAX ASSESSOR-COLLECTOR. The board may provide for the appointment of a tax assessor-collector for the district or may contract for the assessment and collection of taxes as provided by the Tax Code. (Acts 71st Leg., R.S., Ch. 77, Sec. 8.05(b).)

Source Law

(b) The board may provide for the appointment of a tax assessor-collector for the district or may contract for the assessment and collection of taxes as provided by the Tax Code.

Revisor's Note

Section 8.05(a), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provides that the Tax Code governs the appraisal, assessment, and collection of district taxes. The revised law omits that provision because Section 1.02, Tax Code, requires all taxing units of government to administer the assessment and collection of an ad valorem tax in conformity with Title 1, Tax Code. The omitted law reads:

Sec. 8.05. (a) The Tax Code governs the appraisal, assessment, and collection of district taxes.

Revisor's Note

(End of Subchapter)

Section 8.03(a), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provides that the district may levy taxes for the entire year in which the district is created. The revised law omits that provision as executed. The omitted law reads:

Sec. 8.03. (a) The board may levy taxes for the entire year in which the district is created.

Revisor's Note

(End of Chapter)

Sections 5.01(a) and 5.02(2), Chapter 77, Acts of the 71st Legislature, Regular Session, 1989, provide that on creation of the district, Hutchinson County shall transfer certain money to the district after the district is created and provide for the assumption of debt by the district on creation. The revised law omits that language as executed. The omitted law reads:

Sec. 5.01. (a) On creation of the district, Hutchinson County shall convey or transfer to the district any funds held by Hutchinson County that constitute the proceeds of the sale of the hospital formerly owned by Hutchinson County that have been deposited in special funds dedicated to the provision of health care to county residents under Article 4494m-1, Revised Statutes.

Sec. 5.02. … [the district:]

…

(2) assumes any outstanding indebtedness incurred by Hutchinson County in providing hospital care for residents of the territory of the district before the district's creation; and

…


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