TLC: Special District Local Laws Code Proposed Chapters

80C165(3) MDR

CHAPTER 1059. MCCULLOCH COUNTY HOSPITAL DISTRICT

SUBCHAPTER A. GENERAL PROVISIONS

Revised Law

Sec. 1059.001. 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 McCulloch County Hospital District. (Acts 71st Leg., R.S., Ch. 51, Sec. 1.01.)

Source Law

Sec. 1.01. In this Act:

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

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

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

Revised Law

Sec. 1059.002. AUTHORITY FOR OPERATION. The McCulloch County Hospital District operates and is financed as provided by Section 9, Article IX, Texas Constitution, and by this chapter. (Acts 71st Leg., R.S., Ch. 51, Sec. 1.02.)

Source Law

Sec. 1.02. The McCulloch 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.

Revisor's Note

Section 1.02, Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, provides that the district "may be created and established and, if created, must be maintained, operated, and financed" in the manner provided by the Texas Constitution and the act. The revised law omits references to the establishment and creation 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. 1059.003. ESSENTIAL PUBLIC FUNCTION. The district is a public entity performing an essential public function. (Acts 71st Leg., R.S., Ch. 51, 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. 1059.004. DISTRICT TERRITORY. The boundaries of the district are coextensive with the boundaries of McCulloch County, Texas. (Acts 71st Leg., R.S., Ch. 51, Sec. 1.03.)

Source Law

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

Revised Law

Sec. 1059.005. 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. 51, 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. 1059.006. 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. 51, 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 51, Acts of the 71st Legislature, Regular Session, 1989, provides procedures for holding an election on creation of the district and the imposition of an ad valorem tax. Because the creation of the district and the imposition of the tax were approved at the election, the revised law omits the relevant law as executed. The omitted law reads:

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

(b) On presentation of a petition for a creation election signed by at least 50 of the registered voters of the territory of the proposed district, according to the most recent official lists of registered voters, the temporary directors shall order an election to be held. The election shall be called not later than the 60th day after the date the petition is presented to the district.

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 of general circulation in the proposed district once a week for two consecutive weeks. The first publication must appear at least 35 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) Subsection (a), Section 41.001, Election Code, does not apply to an election ordered under this article.

Sec. 3.06. 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 McCulloch County Hospital District and the levy of annual taxes for hospital purposes at a rate not to exceed 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 within 12 months after 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.

[Sections 1059.007-1059.050 reserved for expansion]

SUBCHAPTER B. DISTRICT ADMINISTRATION

Revised Law

Sec. 1059.051. BOARD ELECTION; TERMS. (a) The district is governed by a board of seven directors.

(b) One director is elected from each commissioners precinct and three directors are elected from the district at large.

(d) An election shall be held on the uniform election date in May of each year to elect the appropriate number of directors. (Acts 71st Leg., R.S., Ch. 51, Secs. 4.01(a), 4.03(a), (d).)

Source Law

Sec. 4.01. (a) The district is governed by a board of seven directors.

Sec. 4.03. (a) One director shall be elected from each commissioner precinct and three directors shall be elected from the district at large.

(d) After the initial election 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 three-year terms.

Revisor's Note

(1) Sections 2.01, 2.02, 4.01(b), 4.02, and 4.03(b), (c), and (e), Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, provide procedures for appointing temporary directors and for electing the subsequent directors and the terms of the directors. The revised law omits the provisions as executed but codifies the establishment of a board consisting of seven directors serving staggered three-year terms. The omitted law reads:

Sec. 2.01. On the effective date of this Act, the following persons become temporary directors of the district:

1. Larry Blair

2. Ann Dodds

3. Joan Keeling

4. James R. Griffin

5. Daniel E. Miller

6. Jack Richardson

7. Joe Evridge

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.

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 commissioner precinct is the director for that precinct, and the three candidates receiving the highest number of votes from the district at large are the directors for the district at large.

(c) The candidates elected from odd-numbered precincts at the initial election serve for a term of two years, and the candidates elected from the even-numbered precincts at that election serve for a term of one year. The two candidates receiving the highest number of votes from the district at large at the initial election serve for a term of two years and the candidate receiving the third highest number of votes from the district at large serves for a term of one year.

(e) The candidates elected from odd-numbered precincts at the election to be held in 2000 shall serve for a term of two years, and their successor directors shall serve for three-year terms.

(2) Section 4.03(d), Chapter 51, 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 the legislative intent expressed in Section 4.03(d) that the election be held on the first Saturday in May, which was the uniform election date in May.

Revised Law

Sec. 1059.052. NOTICE OF ELECTION. Not earlier than 30 days or later than 10 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. 51, Sec. 4.04.)

Source Law

Sec. 4.04. Not earlier than 30 days or later than 10 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. 1059.053. QUALIFICATIONS FOR OFFICE. (a) To be eligible to be a candidate for or to serve as a director, a person must be:

(1) a resident of the district;

(2) a qualified voter; and

(3) able to obtain a bond as prescribed by Section 1059.054.

(b) In addition to Subsection (a), a person who is elected from a commissioners precinct or who is appointed to fill a vacancy for a commissioners precinct must be a resident of that commissioners precinct.

(d) A person formerly employed by the district may not serve as a director before the second anniversary of the date of the termination of that person's employment by the district. (Acts 71st Leg., R.S., Ch. 51, Sec. 4.06.)

Source Law

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

(1) a resident of the district;

(2) a qualified voter; and

(3) able to obtain a bond as prescribed by Section 4.07.

(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.

(d) A person formerly employed by the district may not serve as a director before the second anniversary of the date of the termination of that person's employment by the district.

Revised Law

Sec. 1059.054. BOND; RECORD OF BOND. (a) Before assuming the duties of office, each director must execute a bond for $5,000 that is:

(1) payable to the district; and

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

(b) Each director's bond shall be kept in the district's permanent records.

(c) The director shall obtain the bond from an insurer authorized to engage in business in this state. (Acts 71st Leg., R.S., Ch. 51, Sec. 4.07.)

Source Law

Sec. 4.07. (a) Before assuming the duties of the office, each director must execute a bond for $5,000 payable to the district, conditioned on the faithful performance of the person's duties as director.

(b) The bond shall be kept in the permanent records of the district.

Revised Law

Sec. 1059.055. 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. 51, Sec. 4.08.)

Source Law

Sec. 4.08. A vacancy in the office of director shall be filled for the unexpired term by appointment by the remaining directors.

Revised Law

Sec. 1059.056. 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. 51, Secs. 4.09, 4.10.)

Source Law

Sec. 4.09. 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. 4.10. (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. 1059.057. 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 71st Leg., R.S., Ch. 51, Sec. 4.11.)

Source Law

Sec. 4.11. 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 4.11, Chapter 51, 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 the "district's minute book" because the district's minute book is a district record.

Revised Law

Sec. 1059.058. 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. 51, Sec. 4.12.)

Source Law

Sec. 4.12. 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. 1059.059. 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.

(c) Before assuming the duties of district administrator, the administrator shall execute a bond in the amount determined 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 bond shall be kept in the district's permanent records.

(e) The district administrator shall obtain the bond from an insurer authorized to engage in business in this state.

(f) The board may pay for the bond with district money. (Acts 71st Leg., R.S., Ch. 51, Sec. 4.13.)

Source Law

Sec. 4.13. (a) The board may appoint a qualified person as administrator of the district.

(b) The administrator serves at the will of the board.

(d) Before assuming his duties, the administrator shall execute a bond payable to the hospital district in the amount of not less than $5,000 as determined by the board, conditioned on the faithful performance of his duties under this Act. The bond shall be kept in the permanent records of the district. The administrator shall obtain the bond from an insurance company authorized to do business in this state. The board may pay for the bond with district funds.

Revised Law

Sec. 1059.060. 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 general affairs of the district. (Acts 71st Leg., R.S., Ch. 51, Sec. 4.17.)

Source Law

Sec. 4.17. The administrator shall supervise the work and activities of the district and shall direct the general affairs of the district, subject to the limitations prescribed by the board.

Revised Law

Sec. 1059.061. APPOINTMENT AND REMOVAL OF STAFF AND EMPLOYEES. (a) The board may:

(1) appoint to or remove from the staff any doctors the board considers necessary for the efficient operation of the district and may make temporary appointments as necessary; and

(2) adopt policies relating to the method of appointing and removing staff members.

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

(d) The district may not employ a person who is related to a director within the second degree by consanguinity or affinity, as determined under Subchapter B, Chapter 573, Government Code, during that director's term of office. A district employee who is related to a person elected as a director within the second degree by consanguinity or affinity shall resign from employment when that director takes office. (Acts 71st Leg., R.S., Ch. 51, Secs. 4.14, 4.15.)

Source Law

Sec. 4.14. The board may appoint to or remove from the staff any doctors it considers necessary for the efficient operation of the district and may make temporary appointments as considered necessary. The board may adopt policies relating to the method of appointing and removing staff members.

Sec. 4.15. (a) The district may employ technicians, nurses, fiscal agents, accountants, architects, attorneys, and other necessary employees.

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

(c) The district may not employ a person who is related to a director within the second degree by consanguinity or affinity, as defined by Subchapter B, Chapter 573, Government Code, during that director's term of office. A district employee who is related to a person elected as a director within the second degree by consanguinity or affinity shall resign from employment when that director takes office.

Revised Law

Sec. 1059.062. RECRUITMENT OF MEDICAL STAFF AND PROFESSIONAL PERSONNEL. The board may use innovative methods to recruit physicians, nurses, technicians, and other professional personnel, including:

(1) scholarship programs;

(2) agreements for future services;

(3) shared personnel;

(4) bonuses; and

(5) any other method the district considers necessary. (Acts 71st Leg., R.S., Ch. 51, Sec. 4.16.)

Source Law

Sec. 4.16. The board may employ innovative methods to recruit physicians, nurses, technicians, and other professional personnel. The methods may include scholarship programs, agreements for future services, shared personnel, bonuses, and any other method the district considers necessary.

Revised Law

Sec. 1059.063. 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. 51, Sec. 4.18.)

Source Law

Sec. 4.18. 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 51, Acts of the 71st Legislature, Regular Session, 1989, state that a person must file a ballot application with the board secretary to be a candidate for director and 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. 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 director must file with the secretary of the board of directors an application on a form provided by the district 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 51, Acts of the 71st Legislature, Regular Session, 1989, provides that a ballot application must specify the county commissioner precinct a candidate wishes to represent or specify that the candidate wishes to represent the district at large. 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:

(c) The application must specify the commissioner precinct the candidate wishes to represent or specify that the candidate wishes to represent the district at large.

[Sections 1059.064-1059.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Revised Law

Sec. 1059.101. DISTRICT RESPONSIBILITY. The district has full responsibility for:

(1) operating hospital facilities; and

(2) providing medical and hospital care for the district's needy inhabitants. (Acts 71st Leg., R.S., Ch. 51, Sec. 5.02(a) (part).)

Source Law

Sec. 5.02. (a) On creation of the district, the district:

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

…

Revisor's Note

Section 5.02(a), Chapter 51, 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. The revised law substitutes "has" for "assumes" because the obligation to assume the responsibility is executed.

Revised Law

Sec. 1059.102. RESTRICTION ON POLITICAL SUBDIVISION TAXATION AND DEBT. McCulloch County, the City of Brady, and the McCulloch County Hospital Authority 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. 51, Sec. 5.01(b).)

Source Law

(b) On or after creation of the district, McCulloch County, the City of Brady, and the McCulloch County Hospital Authority 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

Section 5.01(b), Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, provides that "[o]n or after creation of the 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 the former is more commonly used.

Revised Law

Sec. 1059.103. MANAGEMENT, CONTROL, AND ADMINISTRATION. The board shall manage, control, and administer the hospital system and the district's money and resources. (Acts 71st Leg., R.S., Ch. 51, Sec. 5.03.)

Source Law

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

Revised Law

Sec. 1059.104. RULES. The board may adopt rules governing:

(1) the operation of the hospital and hospital system; and

(2) the duties, functions, and responsibilities of district staff and employees. (Acts 71st Leg., R.S., Ch. 51, Sec. 5.04.)

Source Law

Sec. 5.04. The board may adopt rules governing the operation of the hospital and hospital system and the duties, functions, and responsibilities of district staff and employees.

Revised Law

Sec. 1059.105. 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. 51, 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. 1059.106. MOBILE EMERGENCY MEDICAL OR AIR AMBULANCE SERVICE. The district may operate or provide for the operation of a mobile emergency medical or air ambulance service. (Acts 71st Leg., R.S., Ch. 51, Sec. 5.02(a) (part).)

Source Law

Sec. 5.02. (a) … the district:

…

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

Revised Law

Sec. 1059.107. DISTRICT PROPERTY, FACILITIES, EQUIPMENT, AND SERVICES. (a) The board shall determine:

(1) the type, number, and location of buildings required to maintain an adequate hospital system; and

(2) the type of equipment necessary for hospital care.

(1) facilities for domiciliary care, including geriatric domiciliary care;

(2) outpatient clinics;

(3) dispensaries;

(4) convalescent home facilities;

(5) necessary nurses;

(6) domiciliaries and training centers;

(7) blood banks;

(8) community mental health centers;

(9) alcohol or chemical dependency centers;

(10) minor emergency centers;

(11) research centers; or

(12) laboratories.

(1) acquire property, including facilities and equipment, for the district for use in the hospital system; and

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

(d) The board may lease hospital facilities for the district.

(e) The board may sell or otherwise dispose of property, including facilities or equipment, for the district at public or private sale at the price and terms the board considers most advantageous. (Acts 71st Leg., R.S., Ch. 51, Sec. 5.06.)

Source Law

Sec. 5.06. (a) The board shall determine the type, number, and location of buildings required to establish and maintain an adequate hospital system and the type of equipment necessary for hospital care.

(b) The district has complete discretion as to the type and extent of services the district will offer. The district may provide any services or facilities the board finds necessary for hospital or medical care, including facilities for domiciliary care, outpatient clinics, dispensaries, facilities for geriatric domiciliary care, convalescent home facilities, necessary nurses, domiciliaries and training centers, blood banks, community mental health centers, alcohol or chemical dependency centers, minor emergency centers, research centers, or laboratories.

(c) The board may acquire property, facilities, and equipment for the district for use in the hospital system and may mortgage or pledge the property, facilities, or equipment acquired as security for the payment of the purchase price.

(d) The board may lease hospital facilities on behalf of the district.

(e) The board may sell or otherwise dispose of property, facilities, or equipment on behalf of the district at public or private sale and at the price and terms the board considers most advantageous.

Revisor's Note

Section 5.06(a), Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, 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.

Revised Law

Sec. 1059.108. EMINENT DOMAIN. (a) The district may exercise the power of eminent domain to acquire a fee simple or other interest in property located in district territory if the property interest is necessary to exercise a right 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. 51, 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 Subsection (a), Section 21.021, 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. 1059.109. COST OF RELOCATING OR ALTERING PROPERTY. In exercising the power of eminent domain, if the board requires relocating, raising, lowering, rerouting, changing the grade of, 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. 51, 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. 1059.110. 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 direction, limitation, or other provision prescribed in writing by the donor that is consistent with the proper management of the district. (Acts 71st Leg., R.S., Ch. 51, 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 proper management of the district.

Revised Law

Sec. 1059.111. 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. (Acts 71st Leg., R.S., Ch. 51, Sec. 5.07(a).)

Source Law

Sec. 5.07. (a) 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 $15,000 only after competitive bidding as provided by Subchapter B, Chapter 271, Local Government Code.

Revisor's Note

(1) Section 5.07(a), Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, provides that the district may enter into construction contracts that involve spending more than $15,000 only after competitive bidding as provided by Subchapter B, Chapter 271, Local Government Code. The revised law omits the reference to the $15,000 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(b), Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, provides that Article 5160, Revised Statutes, applies to the district's construction contracts in relation to performance and payment bonds. The revised law omits the reference because Article 5160 was codified as Chapter 2253, Government Code, and that chapter applies to hospital districts on its own terms. The omitted law reads:

(b) Article 5160, Revised Statutes, as it relates to performance and payment bonds, applies to construction contracts let by the district.

Revised Law

Sec. 1059.112. OPERATING AND MANAGEMENT CONTRACTS. The board may enter into an operating or management contract relating to a hospital facility for the district. (Acts 71st Leg., R.S., Ch. 51, Sec. 5.08.)

Source Law

Sec. 5.08. The board may enter into operating or management contracts relating to hospital facilities on behalf of the district.

Revised Law

Sec. 1059.113. CONTRACTS WITH GOVERNMENTAL ENTITIES FOR SERVICES. The board may contract with a political subdivision of this state or with a state or federal agency for the district to:

(1) furnish a mobile emergency medical or air ambulance service; or

(2) provide for the investigatory or welfare needs of district inhabitants. (Acts 71st Leg., R.S., Ch. 51, Sec. 5.13.)

Source Law

Sec. 5.13. The board may contract with a city, county, special district, or other political subdivision of the state or with a state or federal agency for the district to furnish a mobile emergency medical or air ambulance service or to provide for the investigatory or welfare needs of inhabitants of the district.

Revisor's Note

Section 5.13, Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, refers to "a city, county, special district, or other political subdivision of the state." 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 the state."

Revised Law

Sec. 1059.114. PAYMENT FOR TREATMENT; PROCEDURES. (a) When a patient who resides in the district is admitted to a district facility, the district administrator may have an inquiry made into the financial circumstances of:

(1) the patient; or

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

(b) As required by Section 9, Article IX, Texas Constitution, 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) issue subpoenas and subpoenas duces tecum;

(3) administer oaths;

(4) hear and resolve the question; and

(5) issue a final order.

(f) A final order of the board may be appealed to a district court in McCulloch County. The substantial evidence rule applies to the appeal. (Acts 71st Leg., R.S., Ch. 51, Secs. 5.11(a), (d), (e), (f), (g).)

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 as required by Article IX, Section 9, of the Texas Constitution.

(d) The administrator of the district may have an inquiry made into the financial circumstances of any patient residing in the district and 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.

(e) 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 may 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.

(f) 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.

(g) 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, issue subpoenas and subpoenas duces tecum, administer oaths, 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

Section 5.11(g), Chapter 51, 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 "McCulloch County" for the quoted language because McCulloch County is the county in which the district is located.

Revised Law

Sec. 1059.115. POLICIES OR RULES ON INDIGENT HEALTH CARE. (a) The district may adopt, amend, or repeal policies or rules relating to indigent health care that include:

(1) eligibility of patients for indigent health care;

(2) application forms for patients or relatives of patients requesting indigent health care that may require personal and financial information to be furnished;

(3) procedures for obtaining and completing applications for indigent health care and for filing the completed applications with the district;

(4) procedures for reviewing applications to determine eligibility for indigent health care; and

(5) other procedures provided by this section and Section 1059.116.

(b) The application procedure to determine eligibility for indigent health care must be adopted not later than the beginning of each operating year and must comply with Chapter 61, Health and Safety Code. (Acts 71st Leg., R.S., Ch. 51, Secs. 5.11(b), (c).)

Source Law

(b) The district may adopt, amend, or repeal policies or rules relating to indigent health care that include:

(1) eligibility of patients for indigent health care;

(2) application forms for patients or relatives of patients requesting indigent health care that may require personal and financial information to be furnished;

(3) procedures for obtaining and completing applications for indigent health care and for filing the completed applications with the district;

(4) procedures for reviewing applications to determine eligibility for indigent health care; and

(5) other procedures provided by this section.

(c) The application procedure to determine eligibility for indigent health care must be adopted not later than the beginning of each operating year and must comply with Chapter 61, Health and Safety Code.

Revised Law

Sec. 1059.116. 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 McCulloch County to reimburse the district for the district's care and treatment of a person who is confined in a jail facility of McCulloch County and is not a district resident.

(c) The board may contract with the state or federal government for that government to reimburse the district for treatment of a sick or injured person. (Acts 71st Leg., R.S., Ch. 51, 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 McCulloch County for the district's care and treatment of a person confined in a jail facility of McCulloch County who is not a resident of the district.

(c) The board may contract with the state or federal government for the state or federal government to reimburse the district for treatment of a sick, diseased, or injured person.

Revisor's Note

(1) Section 5.12(a), Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, refers to a "city." The revised law substitutes "municipality" for "city" because that is the term used in the Local Government Code.

(2) Sections 5.12(a) and (c), Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, refer to a "sick, diseased, or injured person." The revised law omits the reference to "diseased" because it is included in the meaning of "sick."

Revised Law

Sec. 1059.117. AUTHORITY TO SUE AND BE SUED. (a) The board may sue and be sued on behalf of the district.

(b) The district may assert any defense or counterclaim the McCulloch County Hospital Authority could have asserted related to any debt that was:

(1) incurred by the authority for hospital purposes; and

(2) assumed by the district on the district's creation. (Acts 71st Leg., R.S., Ch. 51, Secs. 5.02(b), 5.15.)

Source Law

[Sec. 5.02. (a) … the district:

…

(2) assumes any outstanding indebtedness, including bonded indebtedness, incurred by the McCulloch County Hospital Authority for hospital purposes before the district's creation; and

…]

(b) The district may assert any defense or counterclaim relating to indebtedness assumed under Subsection (a) that the McCulloch County Hospital Authority could have asserted.

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

[Sections 1059.118-1059.150 reserved for expansion]

SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS

Revised Law

Sec. 1059.151. 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 revenue and balances available to cover the proposed budget; and

(7) the estimated tax rate required. (Acts 71st Leg., R.S., Ch. 51, 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. 1059.152. 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 of 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 judges to be in the interests of the taxpayers.

(e) The budget is effective only after adoption by the board. (Acts 71st Leg., R.S., Ch. 51, 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 of 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 administrator. The board may make any changes in the proposed budget that in its judgment the interests of the taxpayers demand.

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

Revised Law

Sec. 1059.153. 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. 51, Sec. 6.06.)

Source Law

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

Revised Law

Sec. 1059.154. 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. 51, 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. 1059.155. 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 that revenue bonds of the district are outstanding; or

(2) more than once in a 24-month period. (Acts 71st Leg., R.S., Ch. 51, Sec. 6.01.)

Source Law

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

(b) The fiscal year may not be changed when revenue bonds of the district are outstanding or more than once in a 24-month period.

Revised Law

Sec. 1059.156. ANNUAL AUDIT. The board annually shall have an audit made of the district's financial condition. (Acts 71st Leg., R.S., Ch. 51, Sec. 6.02.)

Source Law

Sec. 6.02. Annually, the board shall have an audit made of the financial condition of the district.

Revised Law

Sec. 1059.157. 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. 51, 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. 1059.158. FINANCIAL REPORT. As soon as practicable after the close of the fiscal year, the district administrator 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. 51, Sec. 6.08.)

Source Law

Sec. 6.08. As soon as practicable after the close of the fiscal year, the administrator 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. 1059.159. 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 1059.160(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 must remain on deposit. This subsection does not limit the power of the board to place a portion of district money on time deposit or to purchase certificates of deposit.

(c) The district may not deposit money with 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 other security 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. 51, Sec. 6.11.)

Source Law

Sec. 6.11. (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 Subsection (b) of Section 6.09 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 in an amount that exceeds the maximum amount secured by the Federal Deposit Insurance Corporation, the bank must execute a bond or other security 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. 1059.160. SPENDING AND INVESTMENT RESTRICTIONS. (a) Except as provided by Sections 1059.111, 1059.201, 1059.204, and 1059.205, the district may not incur a debt payable from district revenue other than the revenue 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 only in funds or securities specified by Chapter 2256, Government Code. (Acts 71st Leg., R.S., Ch. 51, Sec. 6.09.)

Source Law

Sec. 6.09. (a) Except as provided by Subsection (a), Section 5.07, and Sections 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 year of the district.

(b) The board may invest operating, depreciation, or building reserves only in funds or securities specified by Article 836 or 837, Revised Statutes.

Revisor's Note

Section 6.09(b), Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, refers to "Article 836 or 837, Revised Statutes." Those articles were impliedly repealed by the enactment of the Public Funds Investment Act of 1987 (Article 842a-2, Vernon's Texas Civil Statutes), which was revised in 1993 as Chapter 2256, Government Code. Chapter 2256, Government Code, defines "local government" to include hospital districts and applies to the district by its own terms. The revised law therefore substitutes a reference to Chapter 2256, Government Code, for the references to Articles 836 and 837.

Revised Law

Sec. 1059.161. AUTHORITY TO BORROW MONEY. (a) The district may borrow money for district operating expenses in an amount not to exceed the amount of tax revenue the district expects to receive during the 12-month period following the date the money is borrowed.

(b) The district may pledge all or any part of that tax revenue to repay the amount borrowed. (Acts 71st Leg., R.S., Ch. 51, Sec. 6.10.)

Source Law

Sec. 6.10. The district may borrow money to pay its operating expenses in an amount not to exceed the amount of tax revenue that the district expects to receive during the 12-month period following the date on which the money is borrowed. The district may pledge all or any part of those tax revenues to the payment of the amounts borrowed.

[Sections 1059.162-1059.200 reserved for expansion]

SUBCHAPTER E. BONDS

Revised Law

Sec. 1059.201. 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, or renovate buildings or improvements;

(2) equip buildings or improvements for hospital purposes; or

(3) acquire and operate a mobile emergency medical or air ambulance service. (Acts 71st Leg., R.S., Ch. 51, 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, repair, or renovate buildings or improvements;

(2) equip buildings or improvements for hospital purposes; or

(3) acquire and operate a mobile emergency medical or air ambulance service.

Revisor's Note

Section 7.01, Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, provides that the board may 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. 1059.202. TAX TO PAY GENERAL OBLIGATION BONDS. (a) At the time general obligation bonds are issued by the district under Section 1059.201, 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 71st Leg., R.S., Ch. 51, 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 51, 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 to refer to a property tax.

Revised Law

Sec. 1059.203. 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 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 bond election. (Acts 71st Leg., R.S., Ch. 51, 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 51, 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 51, 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 51, 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 51, 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 this 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. 1059.204. REVENUE BONDS. (a) The board may issue revenue bonds to:

(1) purchase, construct, acquire, repair, equip, or renovate buildings or improvements for hospital purposes, including the purposes described by Section 1059.107;

(2) acquire sites to be used for hospital purposes; or

(3) acquire and operate a mobile emergency medical or air ambulance service to assist the district in carrying out its hospital purposes.

(b) The bonds must be payable from and secured by a pledge of all or part of the revenue 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. (Acts 71st Leg., R.S., Ch. 51, 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 purposes, including the purposes provided by Section 5.06;

(2) acquire sites to be used for hospital purposes; or

(3) acquire and operate a mobile emergency medical or air ambulance service to assist the district in carrying out its hospital 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.

Revised Law

Sec. 1059.205. REFUNDING BONDS. (a) The board may 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 71st Leg., R.S., Ch. 51, 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 51, 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. 1059.206. MATURITY OF BONDS. District bonds must mature not later than 50 years after the date of issuance. (Acts 71st Leg., R.S., Ch. 51, 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 51, Acts of the 71st Legislature, Regular Session, 1989, provides that 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). 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, Government Code. The omitted law reads:

Sec. 7.06. … 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. 1059.207. 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 71st Leg., R.S., Ch. 51, Sec. 7.07.)

Source Law

Sec. 7.07. The president of the board shall execute the bonds in the name of the district, and the secretary of the board shall countersign the bonds in the manner provided by the Texas Uniform Facsimile Signature of Public Officials Act (Article 717j-1, Vernon's Texas Civil Statutes).

Revisor's Note

Section 7.07, Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, refers to the Texas Uniform Facsimile Signature of Public Officials Act (Article 717j-1, Vernon's Texas Civil Statutes). That statute was codified in 1999 as Chapter 618, Government Code, and the revised law is drafted accordingly.

Revised Law

Sec. 1059.208. 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; and

(3) profits made in the sale of the bonds. (Acts 71st Leg., R.S., Ch. 51, 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 51, Acts of the 71st Legislature, Regular Session, 1989, provides that district 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 those 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 district bonds 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 51, Acts of the 71st Legislature, Regular Session, 1989, provides that district bonds are legal and authorized investments for certain entities. The revised law omits the 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 district bonds 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 51, Acts of the 71st Legislature, Regular Session, 1989, provides that district bonds may secure deposits of public funds of this state or public agencies of this 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 1059.209-1059.250 reserved for expansion]

SUBCHAPTER F. AD VALOREM TAX

Revised Law

Sec. 1059.251. 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. 51, Secs. 8.01(a) (part), (c), (d), 8.02(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. 8.02]

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

Revised Law

Sec. 1059.252. 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. 51, Secs. 8.01(a) (part), (b), 8.03 (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. 8.03. 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 8.03, Chapter 51, 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 the 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. 8.03. … On determination of the amount of tax required to be levied, the board shall make the levy and certify it to the tax assessor-collector.

Revised Law

Sec. 1059.253. 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 71st Leg., R.S., Ch. 51, Sec. 8.04(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 8.04(a), Chapter 51, 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. 8.04. (a) The Tax Code governs the appraisal, assessment, and collection of district taxes.

Revisor's Note

(End of Subchapter)

Section 8.02(a), Chapter 51, 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. 8.02. (a) The board may levy taxes for the entire year in which the district is created.

[Sections 1059.254-1059.300 reserved for expansion]

SUBCHAPTER G. DISSOLUTION

Revised Law

Sec. 1059.301. 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 a number of district residents equal to 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(a), Election Code, does not apply to an election ordered under this section. (Acts 71st Leg., R.S., Ch. 51, Secs. 10.01(a), (b), (c).)

Source Law

Sec. 10.01. (a) The district may be dissolved only if the dissolution is approved by a majority of the qualified voters of the district voting in an election called and 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 a number of residents of the district equal to at least 15 percent of the registered voters in the district.

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

(1) Section 10.01(a), Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, provides for dissolution of the district if approved by a majority of the "qualified" voters. The revised law omits "qualified" for the reason stated in Revisor's Note (1) to Section 1059.203.

(2) Section 10.01(a), Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, provides that the district may be dissolved if authorized at an election "called and held" for that purpose. The revised law omits the reference to "calling" an election for the reason stated in Revisor's Note (2) to Section 1059.203.

Revised Law

Sec. 1059.302. NOTICE OF ELECTION. (a) The board shall give notice of an election under this subchapter by publishing once a week for two consecutive weeks the election order in a newspaper with general circulation in the district.

(b) The first publication of notice must appear not later than the 35th day before the date set for the election. (Acts 71st Leg., R.S., Ch. 51, Sec. 10.01(d) (part).)

Source Law

(d) The board shall give notice of the election by publishing 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 less than 35 days before the date set for the election. …

Revised Law

Sec. 1059.303. BALLOT. The ballot for an election under this subchapter must be printed to permit voting for or against the proposition: "The dissolution of the McCulloch County Hospital District." (Acts 71st Leg., R.S., Ch. 51, Sec. 10.01(d) (part).)

Source Law

(d) … The ballot for the election shall be printed to permit voting for or against the proposition: "The dissolution of the McCulloch County Hospital District."

Revised Law

Sec. 1059.304. 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 71st Leg., R.S., Ch. 51, Sec. 10.01(e).)

Source Law

(e) 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. 1059.305. 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 McCulloch County or another governmental entity in McCulloch 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. (Acts 71st Leg., R.S., Ch. 51, Secs. 10.01(f), (g).)

Source Law

(f) 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 a county or other governmental entity in the county in which the district is located; or

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

(g) If the district transfers the land, buildings, improvements, equipment, and other assets to a county or other 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.

Revisor's Note

Section 10.01(f), Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, refers to "a county or other governmental entity in the county in which the district is located." The revised law substitutes "McCulloch County or another governmental entity in McCulloch County" for the reason stated in the revisor's note to Section 1059.114.

Revised Law

Sec. 1059.306. SALE OR TRANSFER OF ASSETS AND LIABILITIES. (a) The district may not be dissolved unless the board provides for the sale or transfer of the district's assets and liabilities to another person.

(b) The dissolution of the district and the sale or transfer of the district's assets or liabilities may not contravene a trust indenture or bond resolution relating to the district's outstanding bonds. The dissolution and sale or transfer does not diminish or impair the rights of a holder of an outstanding bond, warrant, or other obligation of the district.

(c) The sale or transfer of the district's assets and liabilities must satisfy the debt and bond obligations of the district in a manner that protects the interests of district residents, including the residents' collective property rights in the district's assets.

(d) The district may not transfer or dispose of the district's assets except for due compensation unless:

(1) the transfer is made to another governmental entity that serves the district; and

(2) the transferred assets are to be used for the benefit of district residents.

(e) A grant from federal funds is an obligation to be repaid in satisfaction. (Acts 71st Leg., R.S., Ch. 51, Secs. 10.01(m), (n).)

Source Law

(m) The district may not be dissolved unless the board provides for the sale or transfer of the district's assets and liabilities to another person or entity. The dissolution of the district and the sale or transfer of the district's assets or liabilities may not contravene a trust indenture or bond resolution relating to the outstanding bonds of the district. The dissolution and sale or transfer does not diminish or impair the rights of a holder of an outstanding bond, warrant, or other obligation of the district.

(n) The sale or transfer of the district's assets and liabilities must satisfy the debt and bond obligation of the district in a manner that protects the interests of the residents of the district, including the residents' collective property rights in the district's assets. A grant from federal funds is an obligation to be repaid in satisfaction. The district may not transfer or dispose of the district's assets except for due compensation unless the transfer is made to another governmental entity that serves the district and the transferred assets are to be used for the benefit of the residents of the district.

Revisor's Note

Section 10.01(m), Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, refers to "another person or entity." The revised law omits "entity" because "entity" is included in the meaning of "person" under Section 311.005(2), Government Code (Code Construction Act).

Revised Law

Sec. 1059.307. 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 71st Leg., R.S., Ch. 51, Secs. 10.01(h), (i), (j).)

Source Law

(h) 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.

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

(j) 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 funds to the county tax assessor-collector.

Revised Law

Sec. 1059.308. 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 McCulloch County summarizing the board's actions in dissolving the district.

(b) Not later than the 10th day after the date the Commissioners Court of McCulloch 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 71st Leg., R.S., Ch. 51, Secs. 10.01(k), (l).)

Source Law

(k) After the district has paid all its debts and has disposed of all its assets and funds as prescribed by this section, the board shall file a written report with the Commissioners Court of McCulloch County setting forth a summary of the board's actions in dissolving the district.

(l) 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 McCulloch 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)

Sections 5.01(a) and 5.02(a)(2), Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, require McCulloch County and the McCulloch County Hospital Authority to transfer land, buildings, improvements, equipment, funds, and taxes to the district after the district is created and to provide for the assumption of debt by the district on creation. The revised law omits the provisions as executed. The omitted law reads:

Sec. 5.01. (a) On creation of the district, McCulloch County and the McCulloch County Hospital Authority shall convey or transfer to the district:

(1) title to land, buildings, improvements, and equipment related to the hospital system owned by McCulloch County or the McCulloch County Hospital Authority;

(2) operating funds and reserves for operating expenses and funds that have been budgeted by McCulloch County or the McCulloch County Hospital Authority to provide medical care for residents of the district for the remainder of the fiscal year in which the district is established;

(3) taxes levied by McCulloch County for hospital purposes for the year in which the district is created; and

(4) funds established for payment of indebtedness assumed by the district.

Sec. 5.02. (a) … [the district:]

…

(2) assumes any outstanding indebtedness, including bonded indebtedness, incurred by the McCulloch County Hospital Authority for hospital purposes before the district's creation; and

…


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