80C113(2) MSE

 

CHAPTER 1048.  KARNES COUNTY HOSPITAL DISTRICT

SUBCHAPTER A.  GENERAL PROVISIONS

Revised Law

Sec. 1048.001.  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 Karnes County Hospital District.  (New.)

Revisor's Note

The definitions of "board," "director," and "district" are added to the revised law for drafting convenience and to eliminate frequent, unnecessary repetition of the substance of the definitions.

Revised Law

Sec. 1048.002.  AUTHORITY FOR CREATION.  The Karnes County Hospital District is created under the authority of Section 9, Article IX, Texas Constitution.  (Acts 61st Leg., R.S., Ch. 591, Sec. 1.)

Source Law

Sec. 1.  By authority of Article IX, Section 9, of the Texas Constitution, this Act authorizes the creation of Karnes County Hospital District of Karnes County, Texas.

Revised Law

Sec. 1048.003.  ESSENTIAL PUBLIC FUNCTION.  The district performs an essential public function in carrying out the purposes of this chapter.  (Acts 61st Leg., R.S., Ch. 591, Sec. 22 (part).)

Source Law

Sec. 22.  In carrying out the purposes of this Act, the district will be performing an essential public function and … .

Revised Law

Sec. 1048.004.  DISTRICT TERRITORY.  The boundaries of the district are coextensive with the boundaries of Karnes County.  (Acts 61st Leg., R.S., Ch. 591, Sec. 2.)

Source Law

Sec. 2.  The boundaries of this district are coterminous with the boundaries of Karnes County.

Revised Law

Sec. 1048.005.  CORRECTION OF INVALID PROCEDURES.  If a court holds that any procedure under this chapter violates the constitution of this state or of the United States, the district by resolution may provide an alternative procedure that conforms with the constitution.  (Acts 61st Leg., R.S., Ch. 591, Sec. 23 (part).)

Source Law

Sec. 23.  … [Federal or State Constitution] … Where any procedure hereunder may be held by any court to be violative of either of such constitutions, the district shall have the power by resolution to provide an alternative procedure conformable with such constitutions. …

Revisor's Note

Section 23, Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, provides that the act does not violate the federal or state constitution and requires that action under the act comply with the constitutions.  The revised law omits the reference to the federal constitution because, under the Supremacy Clause of the United States Constitution (Clause 2, Article VI), federal law always takes precedence over a state statute.  The revised law also omits the reference to the Texas Constitution because the state cannot modify constitutional requirements by statute.  The omitted law reads:

Sec. 23.  Nothing in this Act shall be construed to violate any provision of the Federal or State Constitution, and all acts done under this Act shall be in such manner as will conform thereto, whether expressly provided or not. …

Revised Law

Sec. 1048.006.  DISTRICT SUPPORT AND MAINTENANCE NOT STATE OBLIGATION.  The support and maintenance of the district may not become a charge against or obligation of this state.  (Acts 61st Leg., R.S., Ch. 591, Sec. 21 (part).)

Source Law

Sec. 21.  The support and maintenance of the hospital district shall never become a charge against or obligation of the State of Texas, … .

Revised Law

Sec. 1048.007.  RESTRICTION ON STATE FINANCIAL ASSISTANCE.  The legislature may not make a direct appropriation for the construction, maintenance, or improvement of a district facility.  (Acts 61st Leg., R.S., Ch. 591, Sec. 21 (part).)

Source Law

Sec. 21.  … nor shall any direct appropriation be made by the Legislature for the construction, maintenance, or improvement of any of the facilities of such district.

[Sections 1048.008-1048.050 reserved for expansion]

SUBCHAPTER B.  DISTRICT ADMINISTRATION

Revised Law

Sec. 1048.051.  BOARD ELECTION; TERM.  (a)  The board is governed by seven directors elected at large by place.

(b)  Unless four-year terms are established under Section 285.081, Health and Safety Code:

(1)  directors serve two-year terms;

(2)  an election shall be held each year on the May uniform election date under Section 41.001, Election Code; and

(3)  the terms of the directors elected to places one through four expire in odd-numbered years and the terms of the directors elected to places five through seven expire in even-numbered years.  (Acts 61st Leg., R.S., Ch. 591, Secs. 5(a), (a-1) (part), (a-2).)

Source Law

Sec. 5.  (a)  The district is governed by a board of seven directors.

(a-1)  Directors  shall be elected at large by place. …

(a-2)  A regular election for directors shall be held on the May uniform election date under Section 41.001, Election Code, each year. Directors from places one, two, three, and four shall be elected in odd-numbered years.  Directors from places five, six, and seven shall be elected in even-numbered years.

Revised Law

Sec. 1048.052.  NOTICE OF ELECTION.  Notice of an election of directors shall be published in a newspaper or newspapers that individually or collectively have general circulation in the district in accordance with Section 4.003, Election Code.  (Acts 61st Leg., R.S., Ch. 591, Sec. 5(a-3) (part).)

Source Law

(a-3)  Notice of each such election shall be published in a newspaper or newspapers which individually or collectively provide general circulation in the district in accordance with Section 4.003, Election Code. …

Revised Law

Sec. 1048.053.  QUALIFICATIONS FOR OFFICE.  (a)  A person may not be elected or appointed as a director unless the person is:

(1)  a qualified voter; and

(2)  a resident of the place for which the person is a candidate.

(b)  To be eligible to hold office on the board, a person must be a resident of the place for which the person is elected, as designated by the following political subdivisions:

(1)  for place one, Falls City Common School District;

(2)  for place two, Runge Independent School District and Nordheim Independent School District;

(3)  for places three and four, Karnes City Independent School District and Nixon Independent School District; and

(4)  for places five, six, and seven, Kenedy Independent School District, Pawnee Independent School District, and Pettus Independent School District.

(c)  A person is not eligible to serve as a director if the person is:

(1)  the district administrator;

(2)  a district employee; or

(3)  a hospital medical staff member.  (Acts 61st Leg., R.S., Ch. 591, Secs. 5(a-1) (part), (b).)

Source Law

(a-1)  … To be eligible to hold office on the board, a person must be a resident of the place for which the person is elected, as designated by the following political subdivisions:

(1)  place one, Falls City Common School District;

(2)  place two, Runge Independent School District and Nordheim Independent School District;

(3)  places three and four, Karnes City Independent School District and Nixon Independent School District; and

(4)  places five, six, and seven, Kenedy Independent School District, Pawnee Independent School District, and Pettus Independent School District.

(b)  No person shall be appointed or elected as a member of the board of directors unless the person is a resident of the place for which the person is a candidate and is a qualified voter.  Neither the administrator, an employee of the district, nor a member of the medical staff of the hospital is eligible to serve as a director.

Revised Law

Sec. 1048.054.  BOND.  (a)  Each director shall execute a good and sufficient bond for $5,000 that is:

(1)  payable to the district; and

(2)  conditioned on the faithful performance of the director's duties.

(b)  The district shall pay for a director's bond.  (Acts 61st Leg., R.S., Ch. 591, Sec. 5(a-5) (part).)

Source Law

(a-5)  Each member of the board of directors shall execute a good and sufficient bond for $5,000 payable to the district conditioned upon the faithful performance of the director's  duties and each bond shall be purchased at the expense of the district. …

Revisor's Note

Section 5(a-5), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, requires each director to execute the constitutional oath of office.  The revised law omits that provision because Section 1, Article XVI, Texas Constitution, requires all officers to take the oath (or affirmation) before assuming office.  The omitted law reads:

(a-5)  … All members of the board of directors shall execute the constitutional oath of office.

Revised Law

Sec. 1048.055.  BOARD VACANCY.  If a vacancy occurs in the office of director, the remaining directors shall appoint a director for the unexpired term.  (Acts 61st Leg., R.S., Ch. 591, Sec. 5(a-4).)

Source Law

(a-4)  Vacancies in office shall be filled for the unexpired term by the remainder of the directors.

Revised Law

Sec. 1048.056.  OFFICERS.  (a)  The board shall elect:

(1)  a president and a vice president from among its members; and

(2)  a secretary, who need not be a director.

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

(c)  The board shall fill a vacancy in a board office for the unexpired term.  (Acts 61st Leg., R.S., Ch. 591, Sec. 5(c).)

Source Law

(c)  The board of directors shall organize by electing one of their number as president and one of their number as vice president.  A secretary, who need not be a director, shall also be elected.  Officers shall be elected for a term of one year and vacancies shall be filled for the unexpired term by the board of directors.

Revised Law

Sec. 1048.057.  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 61st Leg., R.S., Ch. 591, Sec. 5(e).)

Source Law

(e)  All members of the board of directors and officers shall serve without compensation, but may be reimbursed for actual expenses incurred in the performance of their official duties upon the approval of such expenses by the board of directors and so reported in the minute book of the district or other records of the district.

Revisor's Note

Section 5(e), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, requires that approved expenses be reported in the "minute book of the district or other records of the district."  The revised law omits the reference to the "minute book of the district" because the minute book is a district record.

Revised Law

Sec. 1048.058.  VOTING REQUIREMENT.  A concurrence of four  directors is sufficient in any matter relating to district business.  (Acts 61st Leg., R.S., Ch. 591, Sec. 5(d) (part).)

Source Law

(d)  … [members of the board of directors] … a concurrence of four shall be sufficient in all matters pertaining to the business of the district.

Revisor's Note

Section 5(d), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, provides that four directors constitute a quorum.  The revised law omits that provision because it duplicates Section 311.013, Government Code (Code Construction Act), which provides that a quorum of a public body is a majority of the number of members fixed by statute.  The omitted law reads:

(d)  Any four members of the board of directors shall constitute a quorum and … .

Revised Law

Sec. 1048.059.  DISTRICT ADMINISTRATOR.  (a)  The board may appoint a qualified person as district administrator.

(b)  The district administrator serves at the will of the board and is entitled to the compensation determined by the board.  (Acts 61st Leg., R.S., Ch. 591, Sec. 6(d) (part).)

Source Law

(d)  The board of directors may appoint a qualified person to be known as the administrator of the hospital district.  Such administrator shall serve at the will of the board and shall receive such compensation as may be fixed by the board. …

Revised Law

Sec. 1048.060.  GENERAL DUTIES OF DISTRICT ADMINISTRATOR.  Subject to the limitations prescribed by the board, the district administrator shall:

(1)  supervise the work and activities of the district; and

(2)  direct the affairs of the district.  (Acts 61st Leg., R.S., Ch. 591, Sec. 6(d) (part).)

Source Law

(d)  … The administrator shall supervise all the work and activities of the district and shall have general direction of the affairs of the district, subject to the limitations as may be prescribed by the board.

Revised Law

Sec. 1048.061.  APPOINTMENT AND DISMISSAL OF STAFF AND EMPLOYEES.  (a)  The board may appoint to or dismiss from the staff the physicians, dentists, and podiatrists the board determines necessary for the efficient operation of the district and may make temporary appointments as necessary.

(b)  The district may employ the fiscal agents, accountants, architects, and attorneys the board considers proper.

(c)  The board may delegate to the district administrator the authority to hire district employees, including technicians and nurses.  (Acts 61st Leg., R.S., Ch. 591, Secs. 6(e), (f), 17.)

Source Law

[Sec. 6]

(e)  The board of directors shall have the authority to appoint to or dismiss from the staff physicians, dentists, and podiatrists as the board determines are necessary for the efficient operation of the district, and may provide for temporary appointments to the staff if warranted by circumstances.

(f)  The board may delegate to the administrator the authority to employ technicians, nurses, and employees of the district.

Sec. 17.  The district may employ fiscal agents, accountants, architects, and attorneys as the board may consider proper.

Revised Law

Sec. 1048.062.  SENIORITY; RETIREMENT BENEFITS.  The board may:

(1)  adopt rules related to the seniority of district employees, including rules for a retirement plan based on seniority; and

(2)  give effect to previous years of service for district employees continuously employed in the operation or management of hospital facilities acquired or constructed by the district.  (Acts 61st Leg., R.S., Ch. 591, Sec. 6(b).)

Source Law

(b)  The board is given full authority to establish rules and regulations relating to seniority of employees of the district (including a retirement plan based thereon) and may give effect to previous years of service for those employees who have been continuously employed in the operation or management of the hospital facilities acquired or constructed by the district.

Revisor's Note

Section 6(b), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, refers to "rules and regulations" established by the board.  Throughout this chapter, the revised law omits the references to "regulations" because under Section 311.005(5), Government Code (Code Construction Act), a rule is defined to include a regulation.

Revisor's Note

(End of Subchapter)

Section 5(a-3), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, states that a person must file a ballot application with the board secretary to be a candidate for director in accordance with Chapter 144, Election Code.  The revised law omits the statement because Chapter 144 applies to the district by its own terms under Section 1.002, Election Code.  The omitted law reads:

(a-3)  … Any person desiring to have the person's name printed on the ballot as a candidate for director shall file an application with the secretary of the board of directors in accordance with Chapter 144, Election Code.

[Sections 1048.063-1048.100 reserved for expansion]

SUBCHAPTER C.  POWERS AND DUTIES

Revised Law

Sec. 1048.101.  DISTRICT RESPONSIBILITY.  (a)  The district has full responsibility for providing hospital care for the district's indigent residents.

(b)  The district shall provide all necessary hospital and medical care for the district's needy inhabitants.  (Acts 61st Leg., R.S., Ch. 591, Secs. 3 (part), 20 (part).)

Source Law

Sec. 3.  … This district shall provide all necessary hospital and medical care for the needy inhabitants of the district.

Sec. 20.  … The said hospital district shall assume full responsibility for providing hospital care for the indigents residing within the district.

Revisor's Note

Section 20, Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, provides that the district "shall assume" full responsibility for providing hospital care for the district's indigent residents.  The revised law substitutes "has" for the quoted language because the duty to assume the responsibility is executed.

Revised Law

Sec. 1048.102.  RESTRICTION ON POLITICAL SUBDIVISION TAXATION AND DEBT.  A political subdivision of this state, other than the district, may not impose a tax or issue bonds or other obligations for hospital purposes or to provide hospital service or medical care in the district.  (Acts 61st Leg., R.S., Ch. 591, Secs. 3 (part), 20 (part).)

Source Law

Sec. 3.  … A municipality or political subdivision of this state other than the district may not impose a tax or issue bonds or other obligations of indebtedness for purpose of providing hospital service or medical care within the district. …

Sec. 20.  After creation of the hospital district, no municipality or political subdivision within the boundaries of the district shall have the power to levy taxes or issue bonds or other obligations for hospital purposes or for providing medical care. …

Revisor's Note

(1)  Sections 3 and 20, Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, refer to a "municipality or political subdivision."  The revised law omits the reference to "municipality" because "municipality" is included in the meaning of "political subdivision."

(2)  Section 20, Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, provides that "[a]fter creation of the hospital district," certain political subdivisions 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 "impose" is more commonly used.

Revised Law

Sec. 1048.103.  MANAGEMENT, CONTROL, AND ADMINISTRATION.  The board shall manage, control, and administer the hospital system and the district's money and resources.  (Acts 61st Leg., R.S., Ch. 591, Sec. 6(a) (part).)

Source Law

Sec. 6.  (a)  The board of directors shall manage, control and administer the hospital system and all funds and resources of the district, but … .

Revised Law

Sec. 1048.104.  HOSPITAL SYSTEM.  (a)  The district has the responsibility to establish a hospital or hospital system within its boundaries to provide hospital and medical care to the district's residents.

(b)  The hospital system may include:

(1)  a hospital, clinic, health facility, extended care facility, outpatient facility, rehabilitation or recreation facility, pharmacy, medical laboratory, dental laboratory, physicians' office building, laundry facility, administrative facility, or other building related to a health facility or system;

(2)  a single or multiunit housing facility for medical staff, nurses, interns, other employees of a health facility or system, patients of a health facility, or relatives of patients admitted for treatment or care in a health facility;

(3)  a support facility related to a hospital project, including an office building, a parking lot or other parking structure, or a maintenance, safety, or utility facility, and any equipment related to the support facility; and

(4)  any other facilities the board determines necessary for hospital or medical care.  (Acts 61st Leg., R.S., Ch. 591, Secs. 3 (part), 10(a) (part).)

Source Law

Sec. 3.  The district authorized to be created by this Act is charged with the responsibility of establishing a hospital or a hospital system within its boundaries to furnish hospital and medical care to the residents of the district. …

Sec. 10.  (a)  … The hospital system may include:

(1)  a hospital, clinic, health facility, extended care facility, outpatient facility, rehabilitation or recreation facility, pharmacy, medical laboratory, dental laboratory, physicians' office building, laundry facility, administrative facility, or other building related to a health facility or system;

(2)  a single or multi-unit housing facility for medical staff, nurses, interns, other employees of a health facility or system, patients of a health facility, or relatives of patients admitted for treatment or care in a health facility;

(3)  a support facility related to a hospital project, such as an office building, parking lot or other parking structure, or a maintenance, safety, or utility facility, and any equipment related to the support facility; and

(4)  any other facilities determined by the board to be necessary for hospital or medical care.

Revised Law

Sec. 1048.105.  RULES.  The board may adopt rules governing the operation of the hospital, the hospital system, and the district's staff and employees.  (Acts 61st Leg., R.S., Ch. 591, Sec. 6(c) (part).)

Source Law

(c)  The district, through its board of directors, shall have the power and authority … to promulgate rules and regulations governing the operation of the hospital, hospital system, its staff and its employees.

Revisor's Note

Section 6(c), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, provides that the board may "promulgate" rules to govern the district.  The revised law substitutes "adopt" for "promulgate" because the terms are synonymous and the former is more commonly used.

Revised Law

Sec. 1048.106.  PURCHASING AND ACCOUNTING PROCEDURES.  The board may prescribe:

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

(2)  all accounting and control procedures.  (Acts 61st Leg., R.S., Ch. 591, Sec. 11 (part).)

Source Law

Sec. 11.  The board of directors of such district shall have the power to prescribe the method and manner of making purchases and expenditures by and for such hospital district, and shall also be authorized to prescribe all accounting and control procedures. …

Revised Law

Sec. 1048.107.  DISTRICT PROPERTY, FACILITIES, AND EQUIPMENT.  (a)  The board shall determine the type, number, and location of buildings required to maintain an adequate hospital system.

(b)  The board may lease all or part of the district's buildings and other facilities on terms considered to be in the best interest of the district's inhabitants.  The term of the lease may not exceed 25 years.

(c)  The district may acquire equipment for use in the district's hospital system and mortgage or pledge the property as security for the payment of the purchase price.  A contract entered into under this subsection must provide that the entire obligation be retired not later than the fifth anniversary of the date of the contract.

(d)  The district may sell or otherwise dispose of any property, including equipment, on terms the board finds are in the best interest of the district's inhabitants.  (Acts 61st Leg., R.S., Ch. 591, Secs. 10(a) (part), (b) (part), (c), 11 (part).)

Source Law

Sec. 10.  (a)  The board of directors is hereby given complete discretion as to the type of buildings, both as to number and location, required to establish and maintain an adequate hospital system. …

(b)  The district, through it board of directors, … may lease all or part of its buildings and facilities upon terms and conditions considered to be to the best interest of its inhabitants, provided that in no event shall any lease be for a period in excess of 25 years from the date entered.

(c)  The district is authorized to sell or otherwise dispose of any property, real or personal, or equipment of any nature upon terms and conditions found by the board to be in the best interest of its inhabitants.

Sec. 11.  … The district may acquire equipment for use in its hospital system and mortgage or pledge the property so acquired as security for the payment of the purchase price, but any such contract shall provide for the entire obligation of the district to be retired within five years from the date of the contract. …

Revisor's Note

(1)  Section 10(a), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, requires the board to determine the buildings required to "establish and maintain" an adequate hospital system.  The revised law omits the reference to establishing the hospital system as executed.

(2)  Section 10(b), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, refers to "terms and conditions."  The revised law omits the reference to "conditions" because "conditions" is included in the meaning of "terms."

(3)  Section 10(b), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, refers to "any property, real or personal."  The revised law omits the reference to "real or personal" property because under Section 311.005, Government Code (Code Construction Act), "property" means "real and personal property."

Revised Law

Sec. 1048.108.  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 a power, right, or privilege 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, Property Code.

(c)  In a condemnation proceeding brought by the district, the district is not required to:

(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 61st Leg., R.S., Ch. 591, Sec. 15.)

Source Law

Sec. 15.  (a)  The district shall have the right and power of eminent domain for the purpose of acquiring by condemnation any and all property of any kind and character in fee simple, or any lesser interest therein, within the boundaries of the district necessary to the powers, rights and privileges conferred by this Act, in the manner provided by Chapter 21, Property Code.

(b)  The district is not required to deposit in the trial court money or a bond as provided by Section 21.021, Property Code.

(c)  In condemnation proceedings being prosecuted by the district, the district shall not be required to pay in advance or give bond or other security for costs in the trial court, nor to give any bond otherwise required for the issuance of a temporary restraining order or a temporary injunction nor to give bond for costs or for supersedeas on any appeal or writ of error.

Revisor's Note

Section 15, Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, provides that the district has the "right and power of eminent domain for the purpose of acquiring [property] by condemnation."  The revised law substitutes for the quoted language "may exercise the power of eminent domain to acquire [property]" because the phrases have the same meaning, and the latter phrase is consistent with modern usage in laws relating to eminent domain.

Revised Law

Sec. 1048.109.  GIFTS AND ENDOWMENTS.  The board may accept for the district a gift or endowment to be held in trust and administered by the board for the purposes and under the directions, limitations, or other provisions prescribed in writing by the donor that are not inconsistent with the proper management and objectives of the district.  (Acts 61st Leg., R.S., Ch. 591, Sec. 19.)

Source Law

Sec. 19.  The board of directors of the hospital district is authorized on behalf of such district to accept donations, gifts, and endowments to be held in trust and administered by the board of directors for such purposes and under such directions, limitations, and provisions as may be prescribed in writing by the donor not inconsistent with proper management and object of the hospital district.

Revisor's Note

Section 19, Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, refers to "donations" and "gifts."  The revised law omits the reference to "donations" because "donations" is included in the meaning of "gifts."

Revised Law

Sec. 1048.110.  CONSTRUCTION AND PURCHASE CONTRACTS.  A construction or purchase contract that involves an expenditure of more than the amount provided by Section 271.024, Local Government Code, must comply with the competitive bidding requirements provided by Subchapter B, Chapter 271, Local Government Code.  (Acts 61st Leg., R.S., Ch. 591, Sec. 11 (part).)

Source Law

Sec. 11.  … All contracts for construction or purchases involving an expenditure in excess of the amount provided by Section 271.024, Local Government Code, must comply with the competitive bidding requirements provided by Subchapter B, Chapter 271, Local Government Code. …

Revisor's Note

Section 11, Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, provides that Chapter 2253, Government Code, applies to the district's construction contracts in relation to performance and payment bonds.  The revised law omits that provision because Chapter 2253, Government Code, applies to the district by its own terms.  The omitted law reads:

Sec. 11.  … The provisions of Chapter 2253, Government Code, relating to performance and payment of bonds shall apply to construction contracts let by the district. …

Revised Law

Sec. 1048.111.  OPERATING AND MANAGEMENT CONTRACTS.  The board may enter into an operating or management contract relating to a district facility.  (Acts 61st Leg., R.S., Ch. 591, Sec. 10(b) (part).)

Source Law

(b)  The district, through its board of directors, is authorized to enter into an operating or management contract with regard to its facilities or a part thereof, or … .

Revised Law

Sec. 1048.112.  CONTRACTS WITH GOVERNMENTAL ENTITIES FOR HOSPITAL TREATMENT.  (a)  The board may contract with a county or municipality located outside the district's boundaries for the hospitalization of a sick or injured person of that county or municipality.

(b)  The board may contract with this state or a federal agency for the hospital treatment of a sick or injured person.  (Acts 61st Leg., R.S., Ch. 591, Sec. 6(g) (part).)

Source Law

(g)  The board … shall be authorized to contract with any county or incorporated municipality located outside its boundaries for the hospitalization of the sick, diseased, or injured persons of any such county or municipality, and shall have the authority to contract with the State of Texas or agencies of the federal government for the hospital treatment of sick, diseased or injured persons.

Revisor's Note

(1)  Section 6(g), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, refers to an "incorporated" municipality.  The revised law omits the reference to "incorporated" because under the Local Government Code all municipalities must be incorporated.

(2)  Section 6(g), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, refers to the treatment of a "sick, diseased, or injured" person.  The revised law omits the reference to "diseased" because "diseased" is included in the meaning of "sick."

Revised Law

Sec. 1048.113.  CONTRACTS WITH GOVERNMENTAL ENTITIES FOR INVESTIGATORY OR OTHER SERVICES.  The board may contract with a political subdivision or governmental agency for the district to provide investigatory or other services for the hospital or welfare needs of district inhabitants.  (Acts 61st Leg., R.S., Ch. 591, Sec. 6(g) (part).)

Source Law

(g)  The board shall be authorized to contract with any other political subdivision or governmental agency whereby the district will provide investigatory or other services as to the hospital, or welfare needs of the inhabitants of the district and … .

Revised Law

Sec. 1048.114.  CARE AND TREATMENT FOR INDIGENT.  The district shall provide health care and treatment to an individual determined to be indigent in accordance with policies and procedures adopted by the board.  (Acts 61st Leg., R.S., Ch. 591, Sec. 18.)

Source Law

Sec. 18.  The district shall provide health care and treatment to individuals determined to be indigent in accordance with policies and procedures adopted by the board of directors.

Revised Law

Sec. 1048.115.  NONPROFIT CORPORATION.  (a)  The district may create and sponsor a nonprofit corporation under the Business Organizations Code and may contribute money to or solicit money for the corporation.

(a-1)  On or before December 31, 2009, the district may create and sponsor a nonprofit corporation under the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes) or the Business Organizations Code, as applicable, and may contribute money to or solicit money for the corporation.

(b)  The corporation may use money contributed by the district only to provide health care or other services the district is authorized to provide under this chapter.

(c)  The corporation may invest the corporation's money in any manner in which the district may invest the district's money, including investing money as authorized by Chapter 2256, Government Code.

(d)  The board shall establish controls to ensure that the corporation uses its money as required by this section.

(e)  This subsection and Subsection (a-1) expire December 31, 2009.  (Acts 61st Leg., R.S., Ch. 591, Sec. 6A.)

Source Law

Sec. 6A.  (a)  The district may create and sponsor a nonprofit corporation under the Business Organizations Code and may contribute money to or solicit money for the corporation.

(a-1)  On or before December 31, 2009, the district may create and sponsor a nonprofit corporation under the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes) or the Business Organizations Code, as applicable, and may contribute money to or solicit money for the corporation.

(b)  A corporation created under this section may use money contributed by the district only to provide health care or other services the district is authorized to provide under this Act.

(c)  The corporation may invest the corporation's money in any manner in which the district may invest the district's money, including investing money as authorized by Chapter 2256, Government Code.

(d)  The board shall establish controls to ensure that the corporation uses its money as required by this section.

(e)  This subsection and Subsection (a-1) expire December 31, 2009.

Revised Law

Sec. 1048.116.  AUTHORITY TO SUE AND BE SUED.  (a)  The district, through the board, may sue and be sued.

(b)  The district is entitled to all causes of action and defenses to which similar authorities are entitled.  (Acts 61st Leg., R.S., Ch. 591, Sec. 6(c) (part).)

Source Law

(c)  The district, through its board of directors, shall have the power and authority to sue and be sued, and shall be entitled to all causes of action and defenses enjoyed by similar authorities, … .

[Sections 1048.117-1048.150 reserved for expansion]

SUBCHAPTER D.  GENERAL FINANCIAL PROVISIONS

Revised Law

Sec. 1048.151.  BUDGET.  (a)  The district administrator shall prepare an annual budget for approval by the board.

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

(1)  the outstanding obligations of the district;

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

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

(4)  the money available to the district from all sources during the ensuing year, with the balances expected at the end of the year in which the budget is being prepared;

(5)  the estimated revenue and balances available to cover the proposed expenditures and disbursements; and

(6)  the estimated receipts and collections for the following fiscal year.  (Acts 61st Leg., R.S., Ch. 591, Sec. 7(c).)

Source Law

(c)  The administrator shall prepare an annual budget for approval by the board of directors.  The budget shall contain a complete financial statement of the district showing:

(1)  all outstanding obligations of the district;

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

(3)  the funds received from all sources during the previous year;

(4)  the funds available from all sources during the ensuing year, with balances expected at end of the year in which the budget is being prepared;

(5)  estimated revenues and balances available to cover the proposed expenditures and disbursements; and

(6)  the estimated receipts and collections for the following fiscal year.

Revised Law

Sec. 1048.152.  NOTICE; HEARING; ADOPTION OF BUDGET.  (a)  The board shall hold a public hearing on the proposed annual budget.

(b)  Not later than the 10th day before the date of the hearing, notice of the hearing shall be published one time in a newspaper or newspapers that individually or collectively have general circulation in the district.

(c)  Any district resident is entitled to be present and participate at 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 judges to be in the interests of the taxpayers and that the law warrants.  (Acts 61st Leg., R.S., Ch. 591, Secs. 7(d), (f) (part).)

Source Law

(d)  The board shall hold a public hearing on the annual budget.  Notice of the budget hearing shall be published one time not later than 10 days before the date of the hearing in a newspaper or newspapers which individually or collectively provide general circulation in the hospital district.  Any resident of the district shall have the right to be present and participate at the hearing.  At the conclusion of the hearing, the budget, as proposed by the administrator, shall be acted upon by the board of directors.  The board of directors shall have authority to make such changes in the proposed budget as in its judgment the law warrants and the interest of the taxpayers demand.

(f)  … the annual budget, and … shall be approved by the board of directors.

Revised Law

Sec. 1048.153.  AMENDMENTS TO BUDGET.  The budget may be amended as required by circumstances.  The board must approve all amendments.  (Acts 61st Leg., R.S., Ch. 591, Sec. 7(f) (part).)

Source Law

(f)  The annual budget may be amended from time to time as the circumstances may require, but … all amendments thereto, shall be approved by the board of directors.

Revisor's Note

Section 7(f), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, states that the board may amend the budget "from time to time."  The revised law omits the quoted language because the authority to amend the budget implies the authority to do so at any time.

Revised Law

Sec. 1048.154.  RESTRICTION ON EXPENDITURES.  Money may be spent only for an expense included in the budget or an amendment to the budget.  (Acts 61st Leg., R.S., Ch. 591, Sec. 7(e).)

Source Law

(e)  No expenditure may be made for any expense not included in the annual budget or an amendment thereto.

Revised Law

Sec. 1048.155.  FISCAL YEAR.  (a)  The district operates according to a fiscal year established by the board.

(b)  The fiscal year may not be changed:

(1)  during a period in which revenue bonds of the district are outstanding; or

(2)  more than once in a 24-month period. (Acts 61st Leg., R.S., Ch. 591, Sec. 7(a).)

Source Law

Sec. 7.  (a)  The district shall be operated on the basis of a fiscal year established by the board.  The fiscal year may not be changed:

(1)  during a period in which revenue bonds of the district are outstanding; or

(2)  more than once in a 24-month period.

Revised Law

Sec. 1048.156.  ANNUAL AUDIT.  The board annually shall have an independent audit made of the district's financial condition.  (Acts 61st Leg., R.S., Ch. 591, Sec. 7(b) (part).)

Source Law

(b)  The board shall cause an annual independent audit to be made of the financial condition of the district, … .

Revised Law

Sec. 1048.157.  INSPECTION OF AUDIT AND DISTRICT RECORDS.  The annual audit and other district records shall be open to inspection at the district's principal office.  (Acts 61st Leg., R.S., Ch. 591, Sec. 7(b) (part).)

Source Law

(b)  … [annual independent audit] … which, together with other records of the district, shall be open to inspection at the principal office of the district.

Revised Law

Sec. 1048.158.  FINANCIAL REPORT.  As soon as practicable after the close of each fiscal year, the district administrator shall prepare for the board:

(1)  a complete sworn statement of all district money; and

(2)  a complete account of the disbursements of that money.  (Acts 61st Leg., R.S., Ch. 591, Sec. 7(g).)

Source Law

(g)  As soon as practicable after the close of each fiscal year, the administrator shall prepare for the board a full sworn statement of all moneys belonging to the district and a full account of the disbursements of same.

Revised Law

Sec. 1048.159.  DEPOSITORY.  (a)  The board shall select one or more banks in the district to serve as a depository for district money.

(b)  District money, other than money invested as provided by Section 1048.160(b), and money transmitted to a bank for payment of bonds or obligations issued by the district, shall be deposited as received with the depository bank and shall remain on deposit.

(c)  This chapter, including Subsection (b), does not limit the power of the board to place a part of district money on time deposit or to purchase certificates of deposit.  (Acts 61st Leg., R.S., Ch. 591, Sec. 12.)

Source Law

Sec. 12.  The board of directors of the district shall name one or more banks within its boundaries to serve as depository for the funds of the district.  All funds of the district, except those invested as provided in Section 6, and those transmitted to a bank or banks as payment for bonds or obligations issued by the district, shall be deposited as received with the depository bank and shall remain on deposit, provided that nothing herein shall limit the power of the board to place a portion of such funds on time deposit or purchase certificates of deposit.

Revised Law

Sec. 1048.160.  SPENDING AND INVESTMENT RESTRICTIONS.  (a)  Except as otherwise provided by Section 1048.107(c) and by Subchapter E, the district may not incur an obligation payable from district revenue other than the revenue on hand or to be on hand in the current and following district fiscal years.

(b)  The board may invest operating, depreciation, or building reserves only in funds or securities specified by Chapter 2256, Government Code.  (Acts 61st Leg., R.S., Ch. 591, Secs. 6(a) (part), 11 (part).)

Source Law

Sec. 6.  (a)  … in no event shall any operating, depreciation or building fund reserves be invested in any funds or securities other than those specified by Chapter 2256, Government Code.

Sec. 11.  … Except as permitted in the preceding sentence and as permitted by Sections 8, 9, and 9A, the district may incur no obligation payable from any revenues of the district, taxes or otherwise except those on hand or to be on hand within the then current and following fiscal year of the district.

Revisor's Note

Section 11, Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, states that "[e]xcept as permitted in the preceding sentence and as permitted by Sections 8, 9, and 9A," the district may not incur certain obligations.  The "preceding sentence" in Section 11 is codified in Section 1048.107(c).  Sections 8, 9,  and 9A are codified in Subchapter E.  The revised law is drafted accordingly.

[Sections 1048.161-1048.200 reserved for expansion]

SUBCHAPTER E.  BONDS

Revised Law

Sec. 1048.201.  GENERAL OBLIGATION BONDS.  The board may issue and sell general obligation bonds in the name and on the faith and credit of the district for any purpose relating to:

(1)  the purchase, construction, acquisition, repair, or renovation of buildings or improvements; and

(2)  equipping buildings or improvements for hospital system purposes.  (Acts 61st Leg., R.S., Ch. 591, Sec. 8(a) (part).)

Source Law

Sec. 8.  (a)  The board of directors shall have the power and authority to issue and sell general obligation bonds in the name and upon the faith and credit of such hospital district for the purchase, construction, acquisition, repair or renovation of buildings, and improvements and equipping the same for hospital system purposes, and for any or all of such purposes. …

Revised Law

Sec. 1048.202.  TAX TO PAY GENERAL OBLIGATION BONDS.  (a)  At the time general obligation bonds are issued by the district under Section 1048.201, 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 61st Leg., R.S., Ch. 591, Sec. 8(a) (part).)

Source Law

(a)  … At the time of the issuance of any general obligation bonds by the district, a tax shall be imposed by the board sufficient to create an interest and sinking fund to pay the interest on and principal of said bonds as same mature, providing such tax, together with any other taxes levied for said district shall not exceed the limit approved by the voters at the election authorizing the imposition of taxes. …

Revisor's Note

Section 8(a), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, requires the district to levy a tax sufficient 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 to refer to a property tax.

Revised Law

Sec. 1048.203.  BOND ELECTION.  (a)  The district may issue bonds, other than refunding bonds, wholly or partly secured by an ad valorem tax only if the bonds are authorized by a majority of the district voters voting at an election held for that purpose.

(b)  The order and publication of notice for the bond election must be provided in accordance with Chapter 1251, Government Code.  (Acts 61st Leg., R.S., Ch. 591, Secs. 8(a) (part), 9A(b).)

Source Law

Sec. 8.  (a)  … General obligation bonds may not be issued by the district until authorized by a majority of the qualified voters of the district voting at an election held for that purpose.  The order for the bond election and the publication of notice for the election must be provided in accordance with Chapter 1251, Government Code… .

[Sec. 9A]

(b)  Bonds, other than refunding bonds, that the board proposes to secure wholly or partly by an ad valorem tax must be approved at an election held in the district in accordance with Section 8 of this Act.

Revisor's Note

(1)  Section 8(a), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, 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 the election.

(2)  Section 8(a), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, provides that a bond election "shall be conducted in accordance with the general laws of this state pertaining to general elections, except as modified by the provisions of this Act."  The general law on elections is the Election Code.  The revised law omits the quoted language because Section 1.002, Election Code, provides that the Election Code applies to all elections held in this state.  An exception to the application of the Election Code would apply by its own terms.  The omitted law reads:

(a)  … The election shall be conducted in accordance with the general laws of this state pertaining to general elections, except as modified by the provisions of this Act.

Revised Law

Sec. 1048.204.  REVENUE BONDS.  (a)  The board may issue revenue bonds to:

(1)  purchase, construct, acquire, repair, equip, or renovate buildings or improvements for hospital system purposes; or

(2)  acquire sites to be used for the hospital system.

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

(c)  The bonds may be additionally secured by a mortgage or deed of trust lien on all or part of district property.

(d)  The bonds must be issued in the manner and in accordance with the procedures and requirements prescribed 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.  (Acts 61st Leg., R.S., Ch. 591, Sec. 9 (part).)

Source Law

Sec. 9.  The board of directors is authorized to issue, and … revenue bonds for purchasing, constructing, acquiring, repairing, equipping, or renovating buildings and improvements for hospital system purposes, and for acquiring sites therefor, such bonds to be payable from and secured by a pledge of all or any part of the revenues of the district to be derived from the operation of its hospital or hospitals, and such bonds may be additionally secured by a mortgage or deed of trust lien on any part or all of its properties.  Such bonds shall be issued in the manner and in accordance with the procedures and requirements specified for the issuance of revenue bonds by county hospital authorities in Sections 264.042, 264.043, and 264.046-264.049, Health and Safety Code.

Revised Law

Sec. 1048.205.  REFUNDING BONDS.  (a)  The board may, without an election, issue refunding bonds to refund outstanding indebtedness 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 outstanding indebtedness; or

(2)  exchanged wholly or partly for not less than a similar principal amount of outstanding indebtedness.  (Acts 61st Leg., R.S., Ch. 591, Secs. 8(b) (part), 9 (part), 9A(b) (part).)

Source Law

[Sec. 8]

(b)  Refunding bonds of the district may be issued for the purpose of refunding and paying off any outstanding indebtedness issued or assumed.  Such refunding bonds may be sold and the proceeds therefrom applied to the payment of outstanding indebtedness, or may be exchanged in whole or in part for not less than a like principal amount of such outstanding indebtedness … .

Sec. 9.  … board of directors is authorized … to refund any previously issued, [revenue bonds] … .

[Sec. 9A]

(b)  [Bonds,] other than refunding bonds, [that the board proposes to secure wholly or partly by an ad valorem tax must be approved at an election] … .

Revisor's Note

(1)  Section 8(b), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, provides that refunding bonds sold to pay outstanding indebtedness must be issued and payments made in accordance with Chapter 1207, Government Code.  The revised law omits the provision because Chapter 1207 applies to the district by its own terms under Section 1207.001, Government Code.  The omitted law reads:

(b)  … provided further that if such refunding bonds are to be sold and the proceeds thereof applied to the payment of any such outstanding indebtedness, same shall be issued and payments made in accordance with Chapter 1207, Government Code.

(2)  Section 8(b), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, provides that the refunding bonds must bear interest at the same or a lower rate than the bonds refunded unless a savings is shown.  The revised law omits that provision as impliedly repealed by Section 2(a), Chapter 3, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes), which was revised in 1999 as Section 1204.006(a), Government Code.  Section 1204.006(a) permits a public agency, including a hospital district, to issue bonds at a net effective interest rate not to exceed 15 percent and applies to district bonds by application of Section 1204.001, Government Code.  The omitted law reads:

(b) … provided that, if refunding bonds are to be exchanged for a like amount of said outstanding indebtedness, such refunding bonds shall bear interest at the same or lower rate than borne by the debt refunded, unless it is shown mathematically that a saving will result in the total amount of interest to be paid on said refunding bonds, and … .

Revised Law

Sec. 1048.206.  ADDITIONAL MEANS OF SECURING REPAYMENT OF BONDS.  In addition to the authority to issue general obligation bonds and revenue bonds under this subchapter, the board may provide for the security and payment of district bonds from a pledge of a combination of ad valorem taxes as authorized by Section 1048.202 and revenue and other sources as authorized by Section 1048.204.  (Acts 61st Leg., R.S., Ch. 591, Sec. 9A(a).)

Source Law

Sec. 9A.  (a)  In addition to the power to issue bonds payable solely from and secured by taxes imposed by the district as authorized by Section 8 of this Act and the power to issue bonds payable from and secured by revenues and other sources as authorized by Section 9 of this Act, the board of directors may provide for the security and payment of district bonds from a pledge of a combination of:

(1)  ad valorem taxes as authorized by Section 8 of this Act; and

(2)  the revenues and other sources authorized by Section 9 of this Act.

Revised Law

Sec. 1048.207.  MATURITY OF BONDS.  District bonds must mature not later than the 40th anniversary of the date of issuance.  (Acts 61st Leg., R.S., Ch. 591, Sec. 8(c) (part).)

Source Law

(c)  Bonds of the district must mature not later than the 40th anniversary of the date of issuance and … .

Revised Law

Sec. 1048.208.  EXECUTION OF BONDS.  (a)  The board president shall execute the district's bonds in the district's name.

(b)  The board secretary shall countersign the bonds in the manner provided by Chapter 618, Government Code.  (Acts 61st Leg., R.S., Ch. 591, Sec. 8(c) (part).)

Source Law

(c)  … Bonds shall be executed in the name of the hospital district and on its behalf by the president of the board and countersigned by the secretary in the manner provided by Chapter 618, Government Code, and … .

Revisor's Note

(1)  Section 8(c), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, provides that district bonds must bear interest at a rate not to exceed that provided by Chapter 1204, Government Code.  The revised law omits the reference because  Chapter 1204 applies to the district by its own terms under Section 1204.001, Government Code.  The omitted law reads:

(c)  [Bonds of the district] … must bear a rate of interest that does not exceed the amount permitted by Chapter 1204, Government Code… .

(2)  Section 8(c), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, provides that district bonds are subject to the law governing counties that relates to bond approval by the attorney general and registration of the bonds by the comptroller.  Section 8(c) also provides that after approval and registration the bonds are "incontestable for any cause."  The revised law omits those provisions as superseded by Chapter 1202, Government Code (enacted as Article 3, Chapter 53, Acts of the 70th Legislature, 2nd Called Session, 1987).  Section 1202.003(a), Government Code, requires bonds to 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 district bonds by application of Section 1202.001, Government Code.  The omitted law reads:

(c)  … [Bonds] … shall be subject to the same requirements in the matter of approval by the Attorney General of Texas and registration by the Comptroller of Public Accounts of the State of Texas as are by law provided for approval and registration of bonds issued by counties.  Upon the approval of such bonds by the attorney general and registration by the comptroller, the same shall be incontestable for any cause.

Revised Law

Sec. 1048.209.  USE OF BOND PROCEEDS.  The district may use the proceeds of bonds issued under this subchapter to pay:

(1)  any expense the board determines is reasonable and necessary to issue, sell, and deliver the bonds;

(2)  interest payments on the bonds during a period of acquisition or construction of a project or facility to be provided through the bonds, not to exceed five years;

(3)  costs related to the operation and maintenance of a project or facility to be provided through the bonds:

(A)  during an estimated period of acquisition or construction, not to exceed five years; and

(B)  for one year after the project or facility is acquired or constructed;

(4)  costs related to the financing of the bond funds, including debt service reserve and contingency funds;

(5)  costs related to the issuance of the bonds;

(6)  costs related to the acquisition of land or interests in land for a project or facility to be provided through the bonds; and

(7)  costs of construction of a project or facility to be provided through the bonds, including the payment of related professional services and expenses.  (Acts 61st Leg., R.S., Ch. 591, Sec. 9B.)

Source Law

Sec. 9B.  (a)  The district may use the proceeds of bonds described by Section 8, 9, or 9A of this Act to pay:

(1)  any expense the board of directors determines is reasonable and necessary to effect the issuance, sale, and delivery of the bonds;

(2)  interest on the bonds during a period of acquisition or construction of a project or facility to be provided through the bonds;

(3)  operation and maintenance costs of a project or facility to be provided through the bonds during an estimated period of acquisition or construction and for one year after the project or facility is acquired or constructed;

(4)  costs related to the financing of the bond funds, including debt service reserve and contingency funds;

(5)  costs related to the issuance of the bonds;

(6)  costs related to the acquisition of land or an interest in land for a project or facility to be provided through the bonds; and

(7)  construction costs of a project or facility to be provided through the bonds, including the payment of related professional services and expenses.

(b)  A "period of acquisition or construction," as that term is used in Subsection (a), may not exceed five years.

Revised Law

Sec. 1048.210.  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)  the transfer and issuance of the bonds; and

(3)  profits made in the sale of the bonds.  (Acts 61st Leg., R.S., Ch. 591, Sec. 22 (part).)

Source Law

Sec. 22.  … [the district] … any bonds issued by it and their transfer and the issuance therefrom, including any profits made in the sale thereof, shall at all times be free from taxation by the state or any municipality or political subdivision thereof.

Revisor's Note

Section 22, Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, refers to "any municipality or political subdivision" of this state.  The revised law omits "municipality" because "municipality" is included in the meaning of "political subdivision."

Revisor's Note

(End of Subchapter)

(1)  Section 14, Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, provides that district bonds are authorized investments for certain entities.  The revised law omits the provision as unnecessary.  As to several of the entities listed, Section 14 has been superseded and impliedly repealed.  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 14 is superseded by 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 district bonds under 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)), 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. 14.  All bonds issued hereunder by the district shall be and are hereby declared to be legal and authorized investments of banks, savings banks, trust companies, building and loan associations, savings and loan associations, insurance companies, trustees, and sinking funds of cities, towns, villages, counties, school districts, or other political subdivisions of the State of Texas, and for all public funds of the State of Texas or its agencies including the state permanent school fund… .

(2)  Section 14, Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, provides that district bonds may secure deposits of public funds of this state or political subdivisions of this state.  The revised law omits the provisions as impliedly repealed by Section 404.0221, Government Code (enacted in 1995), which lists eligible collateral for deposits of state funds by the comptroller, and by Chapter 2257, Government Code (enacted in 1989 as Article 2529d, Vernon's Texas Civil Statutes), which governs eligible collateral for deposits of funds of other public agencies, including political subdivisions.  The omitted law reads:

Sec. 14. … Such bonds and indebtedness shall be eligible to secure deposit of public funds of the State of Texas and public funds of cities, towns, villages, counties, school districts, or other political subdivisions or corporations of the State of Texas, and shall be lawful and sufficient security for said deposits to the extent of their value when accompanied by all unmatured coupons appurtenant thereto.

[Sections 1048.211-1048.250 reserved for expansion]

SUBCHAPTER F.  TAXES

Revised Law

Sec. 1048.251.  IMPOSITION OF AD VALOREM TAX.  (a)  The board shall impose a tax on all property in the district subject to district taxation.

(b)  The board shall impose the tax to:

(1)  pay the interest on and create a sinking fund for bonds and other obligations issued or assumed by the district for hospital purposes;

(2)  provide for the operation and maintenance of the district and hospital system;

(3)  make improvements and additions to the hospital system; and

(4)  acquire necessary sites for the hospital system by purchase, lease, or condemnation.  (Acts 61st Leg., R.S., Ch. 591, Sec. 13 (part).)

Source Law

Sec. 13.  The board of directors shall annually levy a tax … for the purpose of (1) paying the interest on and creating a sinking fund for bonds and other obligations which may be issued or assumed by the hospital district for hospital purposes as herein provided; (2) providing for the operation and maintenance of the hospital district and hospital system; and (3) for the purpose of making further improvements and additions to the hospital system, and for the acquisition of necessary sites therefor by purchase, lease or condemnation. …

Revisor's Note

Section 13, Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, requires the board to annually levy a tax.  The revised law adds that the tax is imposed "on all property in the district subject to district taxation" to clarify the type of tax the district was authorized to impose at the creation election previously described in Section 4 of the act.  Section 4 was repealed by Section 15, Chapter 898, Acts of the 79th Legislature, Regular Session, 2005, but the taxing authority is still in effect.

Revised Law

Sec. 1048.252.  TAX RATE.  (a)  The board may impose the tax at a rate not to exceed 75 cents on each $100 valuation of taxable property in the district.

(b)  In setting the tax rate, the board shall consider the income of the district from sources other than taxation.  (Acts 61st Leg., R.S., Ch. 591, Sec. 13 (part).)

Source Law

Sec. 13.  [The board of directors shall annually levy a tax] of not to exceed the amount hereinabove permitted … .  In setting such tax rate the board shall take into consideration the income of the district from sources other than taxation… .

Revisor's Note

(1)  Section 13, Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, requires the board to levy a tax "of not to exceed the amount hereinabove permitted."  The revised law substitutes for the quoted language "75 cents on each $100 valuation of taxable property in the district" because that was the tax rate approved by voters at the election to create the district under Section 4, Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, and is the maximum tax rate allowed under Section 9, Article IX, Texas Constitution.  Section 4 was repealed by Section 15, Chapter 898, Acts of the 79th Legislature, Regular Session, 2005, but the 75-cent maximum tax rate is still in effect.

(2)  Section 13, Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, 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 year and to notify the tax assessor of that rate.  The omitted law reads:

Sec. 13… . Upon determination of the amount of tax required to be levied, the board shall make such levy and certify the same to the tax assessor-collector of said district.

Revised Law

Sec. 1048.253.  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 61st Leg., R.S., Ch. 591, Sec. 16(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 16(a), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, 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. 16.  (a)  The Tax Code governs the appraisal, assessment, and collection of district taxes.

[Sections 1048.254-1048.300 reserved for expansion]

SUBCHAPTER G.  DISSOLUTION

Revised Law

Sec. 1048.301.  DISSOLUTION; ELECTION.  (a)  The district may be dissolved only on approval of a majority of the district voters voting in an election held for that purpose.

(b)  The board may order an election on the question of dissolving the district and disposing of the district's assets and obligations.

(c)  The board shall order an election if the board receives a petition requesting an election that is signed by at least 15 percent of the registered voters in the district.

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

(e)  The order calling the election must state:

(1)  the nature of the election, including the proposition 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.

(f)  Section 41.001, Election Code, does not apply to an election ordered under this section.  (Acts 61st Leg., R.S., Ch. 591, Secs. 24A(a), (b), (c), (d).)

Source Law

Sec. 24A.  (a)  The district may be dissolved only if the dissolution is approved by a majority of the registered voters of the district voting in an election held for that purpose.

(b)  The board may order an election on the question of dissolving the district and disposing of the district's assets and obligations.  The board shall order an election if the board receives a petition requesting an election that is signed by at least 15 percent of the registered voters in the district.

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

(d)  The order calling an election under this section 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.

Revisor's Note

Section 24A(a), Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, refers to a majority vote of the "registered" voters of the district.  The revised law omits "registered" 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, as defined by Section 11.002, Election Code, to vote in the election.  Section 11.002, Election Code, requires that a person be a registered voter to be a qualified voter.

Revised Law

Sec. 1048.302.  NOTICE OF ELECTION.  (a)  The board shall give notice of an election under this subchapter by publishing once a week for two consecutive weeks a substantial copy of the election order in a newspaper with general circulation in the district.

(b)  The first publication of the notice must appear not later than the 35th day before the date set for the election.  (Acts 61st Leg., R.S., Ch. 591, Sec. 24A(e).)

Source Law

(e)  The board shall give notice of the election by publishing a substantial copy of the election order in a newspaper with general circulation in the district once a week for two consecutive weeks.  The first publication must appear not later than the 35th day before the date set for the election.

Revised Law

Sec. 1048.303.  BALLOT.  The ballot for an election under this subchapter must be printed to permit voting for or against the proposition: "The dissolution of the Karnes County Hospital District."  (Acts 61st Leg., R.S., Ch. 591, Sec. 24A(f).)

Source Law

(f)  The ballot for the election must be printed to permit voting for or against the proposition: "The dissolution of the Karnes County Hospital District."

Revised Law

Sec. 1048.304.  ELECTION RESULTS.  (a)  If a majority of the votes in an election under this subchapter favor dissolution, the board shall find that the district is dissolved.

(b)  If a majority of the votes in the election do not favor dissolution, the board shall continue to administer the district and another election on the question of dissolution may not be held before the first anniversary of the date of the most recent election to dissolve the district.  (Acts 61st Leg., R.S., Ch. 591, Sec. 24A(g).)

Source Law

(g)  If a majority of the votes in the election favor dissolution, the board shall find that the district is dissolved.  If a majority of the votes in the election do not favor dissolution, the board shall continue to administer the district, and another election on the question of dissolution may not be held before the first anniversary of the most recent election to dissolve the district.

Revised Law

Sec. 1048.305.  TRANSFER OR ADMINISTRATION OF ASSETS.  (a)  If a majority of the votes in the election held under this subchapter favor dissolution, the board shall:

(1)  transfer the land, buildings, improvements, equipment, and other assets that belong to the district to Karnes County or another governmental entity in Karnes County; or

(2)  administer the property, assets, and debts until all money has been disposed of and all district debts have been paid or settled.

(b)  If the district makes the transfer under Subsection (a)(1), the county or entity assumes all debts and obligations of the district at the time of the transfer, and the district is dissolved.

(c)  If Subsection (a)(1) does not apply and the board administers the property, assets, and debts of the district under Subsection (a)(2), the district is dissolved when all money has been disposed of and all district debts have been paid or settled.  (Acts 61st Leg., R.S., Ch. 591, Secs. 24A(h), (i), (j).)

Source Law

(h)  If a majority of the votes in the election favor dissolution, the board shall:

(1)  transfer the land, buildings, improvements, equipment, and other assets that belong to the district to Karnes County or another governmental entity in Karnes County; or

(2)  administer the property, assets, and debts until all money has been disposed of and all district debts have been paid or settled.

(i)  If the district transfers the land, buildings, improvements, equipment, and other assets to Karnes County or another governmental entity, the county or entity assumes all debts and obligations of the district at the time of the transfer and the district is dissolved.

(j)  If the district does not transfer the land, buildings, improvements, equipment, and other assets to Karnes County or another governmental entity, the board shall administer the property, assets, and debts of the district until all funds have been disposed of and all district debts have been paid or settled, at which time the district is dissolved.

Revised Law

Sec. 1048.306.  IMPOSITION OF TAX AND RETURN OF SURPLUS TAXES.  (a)  After the board finds that the district is dissolved, the board shall:

(1)  determine the debt owed by the district; and

(2)  impose on the property included in the district's tax rolls a tax that is in proportion of the debt to the property value.

(b)  On the payment of all outstanding debts and obligations of the district, the board shall order the secretary to return to each district taxpayer the taxpayer's pro rata share of all unused tax money.

(c)  A taxpayer may request that the taxpayer's share of surplus tax money be credited to the taxpayer's county taxes.  If a taxpayer requests the credit, the board shall direct the secretary to transmit the money to the county tax assessor-collector.  (Acts 61st Leg., R.S., Ch. 591, Secs. 24A(k), (l), (m).)

Source Law

(k)  After the board finds that the district is dissolved, the board shall:

(1)  determine any remaining debt owed by the district; and

(2)  impose on the property included in the district's tax rolls a tax that is in proportion of the debt to the property value.

(l)  When all outstanding debts and obligations of the district are paid, the board shall order the secretary to return to each district taxpayer the taxpayer's pro rata share of all unused tax money.

(m)  A taxpayer may request that the taxpayer's share of surplus tax money be credited to the taxpayer's county taxes.  If a taxpayer requests the credit, the board shall direct the secretary to transmit the money to the county tax assessor-collector.

Revised Law

Sec. 1048.307.  REPORT; DISSOLUTION ORDER.  (a)  After the district has paid all district debts and has disposed of all district money and other assets as prescribed by this subchapter, the board shall file a written report with the Commissioners Court of Karnes County summarizing the board's actions in dissolving the district.

(b)  Not later than the 10th day after the date the Commissioners Court of Karnes County receives the report and determines that the requirements of this subchapter have been fulfilled, the commissioners court shall enter an order dissolving the district and releasing the board from any further duty or obligation.  (Acts 61st Leg., R.S., Ch. 591, Secs. 24A(n), (o).)

Source Law

(n)  After the district has paid all its debts and has disposed of all its assets and money as prescribed by this section, the board shall file a written report with the Commissioners Court of Karnes County summarizing the board's actions in dissolving the district.

(o)  Not later than the 10th day after the date it receives the report and determines that the requirements of this section have been fulfilled, the Commissioners Court of Karnes County shall enter an order dissolving the district and releasing the board of directors of the district from any further duty or obligation.

Revisor's Note

(End of Chapter)

(1)  Section 23, Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, provides that the act is severable.  The revised law omits that provision because it duplicates Section 311.032, Government Code (Code Construction Act), which provides that a provision of a statute is severable from each other provision of the statute that can be given effect.  The omitted law reads:

Sec. 23.  … If any provision of this Act should be invalid, such fact shall not affect the authorization for the creation of the district or the validity of any other provisions of this Act, and the Legislature hereby declares that it would have created the district and enacted the valid provisions of this Act notwithstanding the invalidity of any other provision or provisions hereof.

(2)  Section 24, Chapter 591, Acts of the 61st Legislature, Regular Session, 1969, provides that public notice of the enactment of the statute was provided in a manner that satisfies the requirements of the Texas Constitution.  The revised law omits that provision as executed.  The omitted law reads:

Sec. 24.  Proof of publication of the notice required in the enactment hereof under the provisions of Article IX, Section 9, of the Texas Constitution has been made in the manner and form provided by law pertaining to the enactment of local and special laws, and such notice is hereby found and declared proper and sufficient to satisfy such requirement.