TLC: Special District Local Laws Code Proposed Chapters

80C22(3) YDB

CHAPTER 1016. CONCHO COUNTY HOSPITAL DISTRICT

SUBCHAPTER A. GENERAL PROVISIONS

Revised Law

Sec. 1016.001. 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 Concho 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. 1016.002. AUTHORITY FOR OPERATION. The Concho County Hospital District operates in accordance with and has the rights, powers, and duties provided by Section 9, Article IX, Texas Constitution, and by this chapter. (Acts 62nd Leg., R.S., Ch. 877, Sec. 1 (part).)

Source Law

Sec. 1. In accordance with the provisions of Article IX, Section 9, of the Texas Constitution, this Act shall be operative so as to authorize the creation, establishment, maintenance, and operation of a hospital district within this state … to be known as "Concho County Hospital District," with such rights, powers, and duties as provided in this Act, and in Article IX, Section 9, of the Texas Constitution.

Revisor's Note

Section 1, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, authorizes the "creation, establishment, maintenance, and operation" of the district. The revised law omits "creation" and "establishment" as executed. The revised law omits "maintenance" because, in this context, the meaning of that term is included in the meaning of "operation."

Revised Law

Sec. 1016.003. ESSENTIAL PUBLIC FUNCTION. The district performs an essential public function in carrying out the purposes of this chapter. (Acts 62nd Leg., R.S., Ch. 877, Sec. 21 (part).)

Source Law

Sec. 21. In carrying out the purposes of this Act, the district will be performing an essential public function and … .

Revised Law

Sec. 1016.004. DISTRICT TERRITORY. The boundaries of the district are coextensive with the boundaries of Concho County, Texas. (Acts 62nd Leg., R.S., Ch. 877, Sec. 1 (part).)

Source Law

Sec. 1. … [hospital district] … with boundaries coextensive with the boundaries of Concho County, Texas, … .

Revised Law

Sec. 1016.005. 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 62nd Leg., R.S., Ch. 877, Sec. 23 (part).)

Source Law

Sec. 23. … [federal or state constitutions] … . 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 877, Acts of the 62nd Legislature, Regular Session, 1971, 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 constitutions, and all acts done under this Act shall be in such manner as will conform thereto, whether expressly provided or not… .

Revised Law

Sec. 1016.006. 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 62nd Leg., R.S., Ch. 877, Sec. 20 (part).)

Source Law

Sec. 20. The support and maintenance of the hospital district shall never become a charge against or obligation of the State of Texas, … .

Revised Law

Sec. 1016.007. RESTRICTION ON STATE FINANCIAL ASSISTANCE. The legislature may not make a direct appropriation for construction, maintenance, or improvement of a district facility. (Acts 62nd Leg., R.S., Ch. 877, Sec. 20 (part).)

Source Law

Sec. 20. … nor shall any direct appropriation be made by the Legislature for the construction, maintenance, or improvement of any of the facilities of such district.

Revisor's Note

(End of Subchapter)

Sections 3(a), (b), and (c) and Section 4(a), Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, provide 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 those provisions as executed. The omitted law reads:

Sec. 3. (a) The district shall not be created, nor shall any tax therein be authorized, unless and until such creation and such tax are approved by a majority of the qualified taxpaying electors of the area of the proposed district voting at an election called for that purpose. Such election may be called by the county judge of Concho County or shall be called by the county judge upon presentation of a petition therefor signed by at least 100 qualified taxpaying electors of the area of the proposed district. Such election shall be held not less than 35 nor more than 60 days from the date the election is ordered. The order calling the election shall specify the date, place or places of holding the election, the form of ballot, the presiding judge and alternate judge for each voting place, and provide for clerks as in county elections. The order calling the election shall provide that the existing election precincts of the county shall be used at such election. Notice of election shall be given by publishing a substantial copy of the election order in a newspaper or newspapers which individually or collectively provide general circulation in the county or district once a week for two consecutive weeks, the first publication to appear at least 30 days prior to the date established for the election. The failure of such election shall not operate to prohibit the calling and holding of subsequent elections for the same purpose; provided, however, that no district election for confirmation can be held within six months of any preceding district election for confirmation, and, further provided, if this district is not confirmed within five years of the effective date of this Act, this Act is hereby repealed.

(b) At the election there shall be submitted to the qualified taxpaying electors of the area of the proposed district the proposition of whether the hospital district shall be created with authority to levy annual taxes at a rate not to exceed 75 cents on the $100 valuation of taxable property situated within the district subject to hospital district taxation for the purpose of meeting the requirements of the indebtedness and bonds assumed by it, and its maintenance and operating expenses, and a majority of the qualified taxpaying electors voting at said election in favor of the proposition shall be sufficient for its adoption.

(c) The form of ballot used at the election on the creation of the district shall be in conformity with Sections 61, 62, and 63, Texas Election Code, as amended (Articles 6.05, 6.06, and 6.07, Vernon's Texas Election Code), so that ballots must be printed to allow for voting for or against the proposition: "The creation of Concho County Hospital District, providing for the levy of a tax not to exceed 75 cents on each $100 valuation upon all taxable property situated within said district subject to hospital district taxation, and providing for the assumption by such district of all outstanding bonds and indebtedness heretofore issued, incurred for hospital purposes by Concho County."

Sec. 4. (a) Within 10 days after such election is held, the commissioners court of Concho County shall convene and canvass the returns of the election, and if a majority of the persons voting at the election vote against the creation of the district, this does not prevent the holding of other elections for the same purpose, and if a majority of the legally qualified taxpaying electors voting at said election voted in favor of the proposition, the court shall so find and declare the hospital district established and created and … .

[Sections 1016.008-1016.050 reserved for expansion]

SUBCHAPTER B. DISTRICT ADMINISTRATION

Revised Law

Sec. 1016.051. BOARD ELECTION; TERM. (a) The board consists of seven directors elected as follows:

(1) four directors, each of whom is a resident of a different county commissioners precinct; and

(2) three directors from the district at large.

(b) A district voter may vote on each of the seven directors.

(c) Directors serve staggered two-year terms unless four-year terms are established under Section 285.081, Health and Safety Code. (Acts 62nd Leg., R.S., Ch. 877, Sec. 4(a) (part).)

Source Law

(a) … [the commissioners court of Concho County shall] … appoint seven persons as directors of the hospital district to serve until the first Saturday in April, 1972, at which time seven directors shall be elected, four of whom shall each be a resident of a different commissioner's precinct, and three of whom shall be elected from the county at large. All legally qualified taxpaying electors throughout the county may vote on each of the seven directors. The four directors receiving the highest vote at such first election shall serve for two years, the other three directors shall serve for one year. Thereafter, each director shall serve for a period of two years and until his successor has been duly elected or appointed and qualified. …

Revisor's Note

(1) Section 4(a), Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, prescribes the procedures for appointing the initial directors and electing the subsequent directors and establishes the terms of the initial and subsequent directors. The revised law omits those provisions as executed but codifies the establishment of a board consisting of seven directors and the procedure for electing the directors. Section 4(a) also establishes staggered terms for directors that expire on the first Saturday in April in the first or second year after the election. The revised law codifies the provision specifying staggered terms but omits the provision relating to the date on which the initial terms expire as executed.

(2) Section 4(a), Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, refers to "legally qualified" electors. The revised law omits the reference to "qualified" 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. The revised law omits "legally" because Section 11.001, Election Code, provides that, to be eligible to vote, a person must satisfy all requirements for voting required by law for the particular election. In addition, throughout this chapter, the revised law substitutes "voters" for "electors" because the former is the term used in the Election Code.

(3) Section 4(a), Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, refers to "taxpaying" electors. The revised law omits the reference to "taxpaying" voters because in Hill v. Stone, 421 U.S. 289, 95 S. Ct. 1637 (1975), the United States Supreme Court determined that property ownership as a qualification for voting is an unconstitutional denial of equal protection. In the unlikely event that the law refers to paying a tax other than a property tax, the distinction is meaningless because all voters pay taxes (either directly or indirectly), and records of most other types of taxes (besides property) are not normally maintained.

(4) Section 4(a), Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, refers to directors elected from "the county" at large and to voters "throughout the county." The revised law substitutes "district" for "county" because the district territory is coextensive with the county and "district" is the correct term in this context.

(5) Section 4(a), Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, provides that directors serve two-year terms. Section 285.081, Health and Safety Code, applicable to this district, provides a mechanism by which the governing board of a hospital district, on its own motion, may order that the members are to be elected in even-numbered years to serve staggered four-year terms. The revised law is drafted accordingly and adds a reference to Section 285.081, Health and Safety Code, for the convenience of the reader.

(6) Section 4(c), Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, provides that directors' elections are held on the first Saturday in April each year. The revised law omits that provision as repealed by a 1986 amendment to Section 41.001, Election Code. Chapter 14, Acts of the 69th Legislature, 3rd Called Session, 1986, amended Section 41.001, Election Code, to prescribe certain uniform election dates. Section 37 of that act required a political subdivision that had held its general election of officers on the first Saturday in April to hold that election on a uniform election date in May or to choose a different uniform election date on which to hold the election. The omitted law reads:

(7) Section 4(a), Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, provides that a director serves "until his successor has been duly elected or appointed and qualified." The revised law omits this provision because it duplicates Section 17, Article XVI, Texas Constitution, which provides that an officer in this state is to continue to perform the officer's official duties until a successor has qualified.

Revised Law

Sec. 1016.052. NOTICE OF ELECTION. At least 10 days before the date of an election of directors, notice of the election shall be published one time in a newspaper of general circulation in Concho County. (Acts 62nd Leg., R.S., Ch. 877, Sec. 4(c) (part).)

Source Law

(c) [A regular election of directors] … notice of such election shall be published in a newspaper of general circulation in the county one time at least 10 days prior to the date of election. …

Revisor's Note

Section 4(c), Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, requires notice of a directors' election to be published "in the county." The revised law substitutes "Concho County" for the quoted language because Concho County is the county in which the district is located.

Revised Law

Sec. 1016.053. BALLOT PETITION. A person who wants to have the person's name printed on the ballot as a candidate for director must file with the board secretary a petition requesting that action. The petition must be:

(1) signed by at least 10 registered voters; and

(2) filed at least 25 days before the date of the election. (Acts 62nd Leg., R.S., Ch. 877, Sec. 4(c) (part).)

Source Law

(c) … Any person desiring his name to be printed on the ballot as a candidate for director shall file a petition, signed by not less than 10 legally qualified taxpaying voters asking that such name be printed on the ballot, with the secretary of the board of directors of the district. Such petitions shall be filed with such secretary at least 25 days prior to the date of election.

Revisor's Note

Section 4(c), Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, provides that a petition to be a candidate for director must be signed by "legally qualified taxpaying voters." The revised law omits "legally" as unnecessary because Section 11.001, Election Code, provides that to be eligible to vote, a person must satisfy all requirements for voting required by law. The revised law substitutes "registered" for "qualified" because in the context of eligibility to sign a petition, Section 277.0021, Election Code, provides that "qualified" voter means a "registered" voter. The revised law omits "taxpaying" for the reasons stated in Revisor's Note (3) to Section 1016.051.

Revised Law

Sec. 1016.054. QUALIFICATIONS FOR OFFICE. A person may not be elected or appointed as a director unless the person is:

(1) a resident of the district;

(2) a qualified voter;

(3) a freeholder; and

(4) at least 18 years of age when elected or appointed. (Acts 62nd Leg., R.S., Ch. 877, Sec. 4(a) (part).)

Source Law

(a) … No person shall be appointed or elected as a member of the board of directors of said hospital district unless he is a resident thereof and is a freeholder, and a qualified elector, and unless at the time of such election or appointment he shall be more than 21 years of age… .

Revisor's Note

Section 4(a), Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, provides that a person must be 21 years of age to be a director. The revised law substitutes "18" for "21" because Chapter 129, Civil Practice and Remedies Code, establishes 18 years as the age of majority in this state. Section 129.002, Civil Practice and Remedies Code, provides that a law adopted before August 27, 1973, that extends a right, privilege, or obligation to an individual on the basis of a minimum age of 19, 20, or 21 years shall be interpreted as prescribing a minimum age of 18 years. Section 4(a) was enacted in 1971 and has not been amended.

Revised Law

Sec. 1016.055. BOND; RECORD OF BOND AND OATH OR AFFIRMATION OF OFFICE. (a) Each director shall execute a good and sufficient bond for $1,000 that is:

(1) payable to the district; and

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

(b) Each director's bond and the constitutional oath or affirmation of office shall be deposited with the district's depository bank for safekeeping. (Acts 62nd Leg., R.S., Ch. 877, Sec. 4(a) (part).)

Source Law

(a) … Each member of the board of directors shall qualify by executing the constitutional oath of office and shall execute a good and sufficient bond for $1,000 payable to said district conditioned upon the faithful performance of his duties, and such oaths and bonds shall be deposited with the depository bank of the district for safekeeping.

Revisor's Note

Section 4(a), Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, requires each director to take the constitutional oath of office. The revised law omits this provision because Section 1, Article XVI, Texas Constitution, requires all officers to take the oath (or affirmation) before assuming office. Additionally, the revised law provides for the deposit of the constitutional affirmation, as well as the constitutional oath, because Section 1, Article XVI, Texas Constitution, allows an officer in this state to take either the constitutional oath or affirmation.

Revised Law

Sec. 1016.056. BOARD VACANCY. (a) If a vacancy occurs in the office of director, the remaining directors shall appoint a director for the unexpired term.

(b) If the number of directors is reduced to fewer than four for any reason, the remaining directors shall immediately call a special election to fill the vacancies. If the remaining directors do not call the election, a district court, on application of a district voter or taxpayer, may order the directors to hold the election. (Acts 62nd Leg., R.S., Ch. 877, Sec. 4(b) (part).)

Source Law

(b) … All vacancies in the office of director shall be filled for the unexpired term by appointment by the remainder of the board of directors. In the event the number of directors shall be reduced to less than four for any reason, the remaining directors shall immediately call a special election to fill said vacancies, and upon failure to do so a district court may, upon application of any voter or taxpayer of the district, issue a mandate requiring that such election be ordered by the remaining directors.

Revised Law

Sec. 1016.057. OFFICERS. The board shall elect a president and a secretary from among its members. (Acts 62nd Leg., R.S., Ch. 877, Sec. 4(b) (part).)

Source Law

(b) The board of directors shall organize by electing one of their number as president and one of their number as secretary… .

Revised Law

Sec. 1016.058. VOTING REQUIREMENT. A concurrence of four directors is sufficient in any matter relating to district business. (Acts 62nd Leg., R.S., Ch. 877, Sec. 4(b) (part).)

Source Law

(b) … [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 4(b), Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, 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:

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

Revised Law

Sec. 1016.059. MEETINGS. (a) A board meeting may be called by the president or any four directors.

(b) Notice of the time and place of a board meeting must be given to each director at least 72 hours before the time of the meeting. (Acts 62nd Leg., R.S., Ch. 877, Sec. 4(b) (part).)

Source Law

(b) … A meeting of the board of directors may be called by the president or any four directors. Notice of the time and place of any meeting must be given to all the directors not less than 72 hours prior to the time of the meeting… .

Revised Law

Sec. 1016.060. DISTRICT ADMINISTRATOR; ASSISTANT ADMINISTRATOR. (a) The board may appoint a qualified person as district administrator.

(b) The board may appoint an assistant administrator.

(c) The district administrator and any assistant administrator serve at the will of the board and are entitled to the compensation determined by the board.

(d) On assuming the duties of district administrator, the administrator shall execute a bond payable to the district in an amount set by the board of not less than $5,000 that:

(1) is conditioned on the administrator performing the administrator's duties; and

(2) contains other conditions the board may require. (Acts 62nd Leg., R.S., Ch. 877, Sec. 6 (part).)

Source Law

Sec. 6. . . . The board of directors may appoint a qualified person to be known as the administrator or manager of the hospital district and may also appoint an assistant to the administrator or manager. Such administrator or manager and assistant administrator or manager, if any, shall serve at the will of the board and shall receive such compensation as may be fixed by the board. The administrator or manager shall, upon assuming his duties, execute a bond payable to the hospital district in an amount to be set by the board of directors, in no event less than $5,000, conditioned that he shall perform the duties required of him, and containing such other conditions as the board may require… .

Revisor's Note

Section 6, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, provides that the board may appoint a person as the "administrator or manager" of the district and may appoint an "assistant to the administrator or manager." Throughout this chapter, the revised law omits "manager" because, in context, "manager" is included in the meaning of "administrator."

Revised Law

Sec. 1016.061. 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 62nd Leg., R.S., Ch. 877, Sec. 6 (part).)

Source Law

Sec. 6. … The administrator or manager 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. 1016.062. APPOINTMENT OF STAFF AND EMPLOYEES. (a) The board may appoint to the staff any doctors the board considers necessary for the efficient operation of the district and may make temporary appointments as necessary.

(b) The district may employ 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 62nd Leg., R.S., Ch. 877, Secs. 6 (part), 16.)

Source Law

Sec. 6. … The board of directors shall have the authority to appoint to the staff such doctors as it may be deemed necessary for the efficient operation of the district, and may provide for temporary appointments to the staff if warranted by circumstances. The board may delegate to the administrator or manager the authority to employ technicians, nurses, and employees of the district. …

Sec. 16. The district may employ fiscal agents, accountants, architects, and attorneys as the board may consider proper.

Revised Law

Sec. 1016.063. 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:

(A) constructed by the district; or

(B) acquired by the district, including facilities acquired when the district was created. (Acts 62nd Leg., R.S., Ch. 877, Sec. 6 (part).)

Source Law

Sec. 6. … 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, including those acquired upon the creation thereof by reason of Section 2 of this Act, or constructed by the district… .

Revisor's Note

(1) Section 6, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, refers to "rules and regulations" established by the board. Throughout this chapter, the revised law omits references to "regulations" because under Section 311.005(5), Government Code (Code Construction Act), a rule is defined to include a regulation.

(2) Section 6, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, refers to facilities acquired on creation "by reason of Section 2 of this Act." The revised law omits the quoted language because the relevant portions of Section 2 were omitted for the reason stated in End of Chapter Revisor's Note (1).

[Sections 1016.064-1016.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Revised Law

Sec. 1016.101. DISTRICT RESPONSIBILITY. The district has full responsibility for providing hospital care for the district's indigent residents. (Acts 62nd Leg., R.S., Ch. 877, Sec. 19 (part).)

Source Law

Sec. 19. . . . The said hospital district shall assume full responsibility for providing hospital care for the indigents residing within the district… .

Revisor's Note

Section 19, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, 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. 1016.102. RESTRICTION ON POLITICAL SUBDIVISION TAXATION AND DEBT. A political subdivision located within the district may not impose a tax or issue bonds or other obligations for hospital purposes or to provide medical care. (Acts 62nd Leg., R.S., Ch. 877, Sec. 19 (part).)

Source Law

Sec. 19. 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) Section 19, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, 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 the former is more commonly used.

(2) Section 19, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, refers to a "municipality or political subdivision." The revised law omits the reference to "municipality" because "municipality" is included in the meaning of "political subdivision."

Revised Law

Sec. 1016.103. MANAGEMENT, CONTROL, AND ADMINISTRATION. The board shall manage, control, and administer the hospital system and the district's money and resources. (Acts 62nd Leg., R.S., Ch. 877, Sec. 6 (part).)

Source Law

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

Revised Law

Sec. 1016.104. HOSPITAL SYSTEM. (a) The district shall provide for the establishment of a hospital system by:

(1) purchasing, constructing, acquiring, repairing, or renovating buildings and equipment;

(2) equipping the buildings; and

(3) administering the buildings and equipment for hospital purposes.

(b) The hospital system may include:

(1) facilities for domiciliary care of the sick, injured, or geriatric;

(2) facilities for outpatient clinics;

(3) dispensaries;

(4) convalescent home facilities;

(5) necessary nurses' domiciliaries and training centers;

(6) blood banks;

(7) research centers or laboratories; and

(8) any other facilities the board considers necessary for hospital care. (Acts 62nd Leg., R.S., Ch. 877, Secs. 2 (part), 10 (part).)

Source Law

Sec. 2. . . . the district shall provide for the establishment of a hospital system by the purchase, construction, acquisition, repair, or renovation of buildings and equipment, and equipping the same, and the administration thereof for hospital purposes… .

Sec. 10. … The hospital system may include facilities for domiciliary care of the sick, wounded, and injured, facilities for out-patient clinic or clinics, dispensaries, facilities for geriatric domiciliary care, convalescent home facilities, necessary nurses' domiciliaries and training centers, blood banks, and research centers or laboratories, and any other facilities deemed necessary for hospital care by the directors… .

Revisor's Note

Section 10, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, refers to the care and treatment of the "sick, wounded, and injured." The revised law omits the reference to "wounded" because "wounded" is included in the meaning of "injured."

Revised Law

Sec. 1016.105. RULES. The board may adopt rules governing the operation of the hospital, the hospital system, and the district's staff and employees. (Acts 62nd Leg., R.S., Ch. 877, Sec. 6 (part).)

Source Law

Sec. 6. … 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, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, 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. 1016.106. 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 62nd Leg., R.S., Ch. 877, 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. 1016.107. 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. The board may not sell or dispose of any real property unless the board affirmatively finds that the property is not needed for the operation of the hospital system. (Acts 62nd Leg., R.S., Ch. 877, Secs. 10 (part), 11 (part).)

Source Law

Sec. 10. 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… . The district, through its 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. The district shall be empowered to sell or otherwise dispose of any property or equipment of any nature upon terms and conditions found by the board to be in the best interest of its inhabitants, provided, however, that in no event shall the board be authorized to sell or dispose of any real property unless the board affirmatively finds that the same is not needed for the operation of the hospital system.

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, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, requires the board to determine the type of 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, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, refers to "terms and conditions." The revised law omits the reference to "conditions" because "conditions" is included in the meaning of "terms."

Revised Law

Sec. 1016.108. 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(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 62nd Leg., R.S., Ch. 877, Sec. 15.)

Source Law

Sec. 15. 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 the general law with respect to condemnation by counties, provided that the district shall not be required to make deposits in the registry of the trial court of the sum required by Paragraph 2, Article 3268, Revised Civil Statutes of Texas, 1925, as amended, or to make bond as therein provided. 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

(1) Section 15, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, 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.

(2) Section 15, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, provides that the district must exercise the power of eminent domain in the manner provided by "the general law with respect to condemnation by counties." The revised law substitutes for the quoted language a reference to Chapter 21, Property Code, because that is the general law governing eminent domain for governmental entities, including counties.

(3) Section 15, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, refers to "Paragraph 2, Article 3268, Revised Civil Statutes of Texas, 1925, as amended." That statute was codified in 1983 as Section 21.021(a), Property Code. The revised law is drafted accordingly. In addition, throughout this chapter, the revised law omits the references to "as amended" because under Section 311.027, Government Code (Code Construction Act), a reference to a statute applies to all reenactments, revisions, or amendments of that statute unless expressly provided otherwise.

Revised Law

Sec. 1016.109. 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 62nd Leg., R.S., Ch. 877, Sec. 18 (part).)

Source Law

Sec. 18. 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 objective of the hospital district.

Revisor's Note

(1) Section 18, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, refers to "donations" and "gifts." The revised law omits the reference to "donations" because "donations" is included in the meaning of "gifts."

(2) Section 18, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, refers to previous gifts or endowments made to Concho County. The revised law omits the quoted language as executed. The omitted law reads:

Sec. 18. . . . in addition to those heretofore made to Concho County for hospital purposes, … .

Revised Law

Sec. 1016.110. CONSTRUCTION OR PURCHASE CONTRACTS. A construction or purchase contract that involves the expenditure of more than $2,000 may be made only after advertising in the manner provided by Chapter 252 and Subchapter C, Chapter 262, Local Government Code. (Acts 62nd Leg., R.S., Ch. 877, Sec. 11 (part).)

Source Law

Sec. 11. … All contracts for construction or purchases involving the expenditure of more than $2,000 may be made only after advertising in the manner provided by Chapter 163, Acts of the 42nd Legislature, Regular Session, 1931, as amended (Article 2368a, Vernon's Texas Civil Statutes)… .

Revisor's Note

(1) Section 11, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, permits construction or purchase contracts involving more than $2,000 only after advertising as provided by Chapter 163, Acts of the 42nd Legislature, Regular Session, 1931, as amended (Article 2368a, Vernon's Texas Civil Statutes). Article 2368a was amended by Chapter 641, Acts of the 69th Legislature, Regular Session, 1985, which transferred provisions relating to advertising for bids by counties to the County Purchasing Act (V.A.C.S. Article 2368a.5). The County Purchasing Act was codified in 1987 as Subchapter C, Chapter 262, Local Government Code. Article 2368a, relating to advertising for bids by municipalities, was codified in 1987 as Chapter 252, Local Government Code. The revised law is drafted accordingly.

(2) Section 11, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, provides that the provisions of Article 5160, Revised Civil Statutes of Texas, 1925, apply to the district's construction contracts in relation to performance and payment bonds. The revised law omits this 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:

Sec. 11. … The provisions of Article 5160, Revised Civil Statutes of Texas, 1925, as amended, relating to performance and payment bonds, shall apply to construction contracts let by the district… .

Revised Law

Sec. 1016.111. OPERATING AND MANAGEMENT CONTRACTS. The board may enter into an operating or management contract relating to a district facility. (Acts 62nd Leg., R.S., Ch. 877, Sec. 10 (part).)

Source Law

Sec. 10… . The district, through its board of directors, is further authorized to enter into an operating or management contract with regard to its facilities or a part thereof, or … .

Revised Law

Sec. 1016.112. CONTRACTS WITH GOVERNMENTAL ENTITIES FOR HOSPITALIZATION. (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 hospitalization of a sick or injured person. (Acts 62nd Leg., R.S., Ch. 877, Sec. 6 (part).)

Source Law

Sec. 6. … Such 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 hospitalization of sick, diseased, or injured persons.

Revisor's Note

(1) Section 6, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, 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, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, refers to the hospitalization of a "sick, diseased, or injured person." The revised law omits the references to "diseased" because "diseased" is included in the meaning of "sick."

Revised Law

Sec. 1016.113. 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 and other services for the hospital or welfare needs of district inhabitants. (Acts 62nd Leg., R.S., Ch. 877, Sec. 6 (part).)

Source Law

Sec. 6. … Such board shall be authorized to contract with any other political subdivision or governmental agency whereby the district will provide investigatory and other services as to the hospital or welfare needs of the inhabitants of the district and … .

Revised Law

Sec. 1016.114. 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 circumstances of:

(1) the patient; and

(2) the patient's relatives who are legally liable for the patient's support.

(b) If the district administrator determines that the patient or those relatives cannot pay all or part of the costs of the care and treatment in the hospital, the amount of the costs that cannot be paid becomes a charge against the district.

(c) If the district administrator determines that the patient or those relatives can pay for all or part of the costs of the patient's care and treatment, the patient or those relatives shall be ordered to pay the district a specified amount each week for the patient's care and support. The amount ordered must be proportionate to the person's financial ability.

(d) The district administrator may collect the amount from the patient's estate, or from any relative who is legally liable for the patient's support, in the manner provided by law for the collection of expenses of the last illness of a deceased person.

(e) If there is a dispute as to the ability to pay, or doubt in the mind of the district administrator, the board shall hold a hearing and, after calling witnesses, shall:

(1) resolve the dispute or doubt; and

(2) issue any appropriate orders.

(f) The final order of the board may be appealed to the district court. The substantial evidence rule applies to the appeal. (Acts 62nd Leg., R.S., Ch. 877, Sec. 17.)

Source Law

Sec. 17. Whenever a patient residing within the district has been admitted to the facilities thereof, the administrator or manager may cause inquiry to be made as to his circumstances and those of the relatives of such patient legally liable for his support. If he finds that such patient or said relatives are able to pay for his care and treatment in whole or in part, an order shall be made directing such patient or said relatives to pay the hospital district for the care and support of such patient a specified sum per week in proportion to their financial ability. The administrator or manager shall have power and authority to collect such sums from the estate of the patient or his relatives legally liable for his support in the manner provided by law for the collection of expenses in the last illness of a deceased person. If the administrator or manager finds that such patient or said relatives are not able to pay either in whole or in part for his care and treatment in such hospital, same shall become a charge upon the hospital district as to the amount of the inability to pay. Should there be any dispute as to the ability to pay or doubt in the mind of the administrator or manager, the board of directors shall hear and determine same after calling witnesses, and shall make such order or orders as may be proper. Appeals from the final order of the board shall lie to the district court. The substantial evidence rule shall apply.

Revised Law

Sec. 1016.115. 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 performing only governmental functions are entitled. (Acts 62nd Leg., R.S., Ch. 877, Sec. 6 (part).)

Source Law

Sec. 6. … 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 who perform only governmental functions, … .

[Sections 1016.116-1016.150 reserved for expansion]

SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS

Revised Law

Sec. 1016.151. 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:

(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;

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

(6) the estimated revenue and balances available to cover the proposed budget;

(7) the estimated tax rate required; and

(8) the proposed expenditures and disbursements and the estimated receipts and collections for the following fiscal year. (Acts 62nd Leg., R.S., Ch. 877, Sec. 7 (part).)

Source Law

Sec. 7. … The administrator or manager shall prepare an annual budget for approval by the board of directors. The budget shall also contain a complete financial statement of the district showing all outstanding obligations of the district, the cash on hand to the credit of each and every fund of the district, the funds received from all sources during the previous year, the funds available from all sources during the ensuing year, with balances expected at year end of the year in which the budget is being prepared, and estimated revenues and balances available to cover the proposed budget and the estimated tax rate which will be required, and the proposed expenditures and disbursements and the estimated receipts and collections for the following fiscal year. …

Revised Law

Sec. 1016.152. NOTICE; HEARING; ADOPTION OF BUDGET. (a) The board shall hold a public hearing on the proposed annual budget.

(b) At least 10 days 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 property taxpayer of the district is entitled to be present and participate at the hearing in accordance with the rules of decorum and procedures prescribed by the board.

(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 interest of the taxpayers and that the law warrants. (Acts 62nd Leg., R.S., Ch. 877, Sec. 7 (part).)

Source Law

Sec. 7. … A public hearing on the annual budget shall be held by the board of directors after notice of such hearing has been published one time at least 10 days before the date set therefor. Notice of the budget hearing shall be published in a newspaper or newspapers which individually or collectively provide general circulation in the hospital district. Any property taxpayer of the district shall have the right to be present and participate in said hearing within such rules of decorum and procedures as may be prescribed by the board. 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 budget as in their judgment the law warrants and the interest of the taxpayers demands. … the annual budget, and … shall be approved by the board of directors. …

Revised Law

Sec. 1016.153. AMENDMENTS TO BUDGET. The budget may be amended as required by circumstances. The board must approve all amendments. (Acts 62nd Leg., R.S., Ch. 877, Sec. 7 (part).)

Source Law

Sec. 7. … 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, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, states that the board may amend the budget "from time to time." Throughout this chapter, the revised law omits the quoted language because the authority to take an action implies the authority to do so at any time.

Revised Law

Sec. 1016.154. RESTRICTION ON EXPENDITURES. Money may be spent only for an expense included in the budget or an amendment to the budget. (Acts 62nd Leg., R.S., Ch. 877, Sec. 7 (part).)

Source Law

Sec. 7. … No expenditure may be made for any expense not included in the annual budget or an amendment thereto. …

Revised Law

Sec. 1016.155. FISCAL YEAR. (a) The district operates according to a fiscal year established by the board.

(b) The fiscal year may not be changed more than once in a 24-month period. (Acts 62nd Leg., R.S., Ch. 877, Sec. 7 (part).)

Source Law

Sec. 7. The district shall be operated on the basis of a fiscal year as established from time to time by the board of directors of the district, provided such fiscal year shall not be changed more often than once in any 24-month period. …

Revised Law

Sec. 1016.156. AUDIT. (a) The board shall have an independent audit made of the district's financial condition for the fiscal year.

(b) As soon as the audit is completed, the audit shall be filed at the district's office. (Acts 62nd Leg., R.S., Ch. 877, Sec. 7 (part).)

Source Law

Sec. 7. … The board shall cause an independent audit to be made of the financial condition of the district, … such audit to be made covering such fiscal year, and the same shall be filed at the office of the district as soon as it is completed. …

Revised Law

Sec. 1016.157. INSPECTION OF AUDIT AND DISTRICT RECORDS. The audit and other district records shall be open to inspection at the district's principal office. (Acts 62nd Leg., R.S., Ch. 877, Sec. 7 (part).)

Source Law

Sec. 7. … [The board shall cause an independent audit to be made of the financial condition of the district,] which, together with other records of the district, shall be open to inspection at the principal office of the district, … .

Revised Law

Sec. 1016.158. 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 62nd Leg., R.S., Ch. 877, Sec. 7 (part).)

Source Law

Sec. 7. … As soon as practicable after the close of each fiscal year, the administrator or manager shall prepare for the board a full sworn statement of all moneys belonging to the district and a full account of the disbursement of same.

Revised Law

Sec. 1016.159. DEPOSITORY. (a) The board shall select one or more banks inside or outside the district to serve as a depository for district money.

(b) District money, other than money invested as provided by Section 1016.160(b), and money transmitted to a bank for payment of bonds or obligations issued or assumed by the district, shall be deposited as received with the depository bank and shall remain on deposit.

(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 62nd Leg., R.S., Ch. 877, Sec. 12.)

Source Law

Sec. 12. The board of directors of the district shall name one or more banks within, without (either or both), its boundaries to serve as depository for the funds of the district. All funds of the district, except those invested as provided in Section 5 of this Act, and those transmitted to a bank or banks of payment for bonds or obligations issued or assumed 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.

Revisor's Note

Section 12, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, provides that district funds shall be deposited as received, "except those invested as provided in Section 5 of this Act." Although Section 5, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, does not relate to the investment of funds, Section 6 of that act does. For that reason, the revised law refers to Section 1016.160(b), which codifies the relevant part of Section 6.

Revised Law

Sec. 1016.160. SPENDING AND INVESTMENT RESTRICTIONS. (a) Except as otherwise provided by Section 1016.107(c), this subchapter, and 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 62nd Leg., R.S., Ch. 877, Secs. 6 (part), 11 (part).)

Source Law

Sec. 6. … in no event shall any operating, depreciation, or building fund reserves be invested in any funds or securities other than those specified in Articles 836 and 837, Revised Civil Statutes of Texas, 1925, as amended. …

Sec. 11. … Except as permitted in the preceding sentence and as permitted by Sections 7 and 8 of this Act, 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

(1) Section 6, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, refers to "Articles 836 and 837, Revised Civil Statutes of Texas, 1925, as amended." 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 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.

(2) Section 11, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, states that "[e]xcept as permitted in the preceding sentence and Sections 7 and 8 of this Act," the district may not incur certain obligations. The preceding sentence in Section 11 is codified in Section 1016.107(c). Sections 7 and 8 are codified in Subchapters D and E. The revised law is drafted accordingly.

[Sections 1016.161-1016.200 reserved for expansion]

SUBCHAPTER E. BONDS

Revised Law

Sec. 1016.201. 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 purposes. (Acts 62nd Leg., R.S., Ch. 877, Sec. 8 (part).)

Source Law

Sec. 8. The board of directors shall have the power and authority to issue and sell its 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 purposes, and for any or all of such purposes. …

Revisor's Note

Section 8, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, provides that the board has the power and authority to issue and sell bonds in the name and on the faith and credit of the district. Because the type of bonds described by Section 8 are known as "general obligation bonds," the revised law is drafted accordingly.

Revised Law

Sec. 1016.202. TAX TO PAY GENERAL OBLIGATION BONDS. (a) At the time general obligation bonds are issued by the district under Section 1016.201, 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 tax rate approved by the voters at the election authorizing the imposition of the tax. (Acts 62nd Leg., R.S., Ch. 877, Sec. 8 (part).)

Source Law

Sec. 8. … At the time of the issuance of any bonds by the district a tax shall be levied 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 rate of tax voted under the provisions of Section 3(b) of this Act. …

Revisor's Note

(1) Section 8, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, 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.

(2) Section 8, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, provides that the tax rate may not exceed "the rate of tax voted under the provisions of Section 3(b) of this Act." Section 3(b) sets out procedures for the district's creation election and requires voter approval of the district's authority to impose taxes. Because the revised law omits Section 3(b) for the reason stated in the revisor's note at the end of Subchapter A, the revised law substitutes "the tax rate approved by the voters at the election authorizing the imposition of the tax" for the quoted language.

Revised Law

Sec. 1016.203. 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 order calling the election shall provide for clerks as in county elections and must specify:

(1) the date of the election;

(2) the location of the polling places;

(3) the presiding and alternate election judges for each polling place;

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

(5) the maximum maturity of the bonds; and

(6) the maximum interest rate of the bonds.

(c) Notice of a bond election shall be given as provided by Section 1251.003, Government Code. (Acts 62nd Leg., R.S., Ch. 877, Sec. 8 (part).)

Source Law

Sec. 8. … Except as provided in Section 9, no bonds shall be issued by such hospital district until authorized by a majority of the qualified electors of the district voting at an election called for such purpose. The order for bond election shall specify the date of the election, the amount of bonds to be authorized, the maximum maturity thereof, the maximum rate of interest they are to bear, the place or places where the election shall be held, the presiding judge and alternate judge for each voting place and provide for clerks as in county elections. Notice of any bond election shall be given as provided in Article 704, Revised Civil Statutes of Texas, 1925, as amended, and shall be conducted in accordance with the general laws of Texas pertaining to general elections, except as modified by the provisions of this Act.

Revisor's Note

(1) Section 8, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, states that "[e]xcept as provided in Section 9," the district may not issue bonds without an election. Section 9, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, authorizes the district to issue refunding bonds and revenue bonds. Unless it is specifically stated otherwise, refunding bonds and revenue bonds may be issued without holding an election. Therefore, the revised law specifies that the election requirement applies only to general obligation bonds.

(2) Section 8, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, refers to a majority of the "qualified" electors. 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.

(3) Section 8, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, 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 8, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, states that an election under Section 8 "shall be conducted in accordance with the general laws of Texas pertaining to general elections, except as modified by the provisions of this Act." The general law on elections in Texas 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.

Revised Law

Sec. 1016.204. REVENUE BONDS. (a) The board may issue revenue bonds to:

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

(2) acquire sites to be used for 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 hospitals.

(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 62nd Leg., R.S., Ch. 877, Sec. 9(b) (part).)

Source Law

(b) In addition to the power to issue bonds payable from taxes levied by the district, as contemplated by the preceding section, the board of directors is further authorized to issue and … revenue bonds for purchasing, constructing, acquiring, repairing, equipping, or renovating buildings and improvements for hospital 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 8, 10, 11, 12, and 13, Chapter 122, Acts of the 58th Legislature, 1963 (Article 4494r, Vernon's Texas Civil Statutes).

Revisor's Note

Section 9(b), Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, refers to Sections 8, 10, 11, 12, and 13, Chapter 122, Acts of the 58th Legislature, 1963 (Article 4494r, Vernon's Texas Civil Statutes). Those provisions were codified in 1989 as Sections 264.042, 264.043, and 264.046-264.049, Health and Safety Code. The revised law is drafted accordingly.

Revised Law

Sec. 1016.205. REFUNDING BONDS. (a) The board may issue refunding bonds to refund outstanding indebtedness issued or assumed by the district.

(b) Refunding bonds may be:

(1) sold, with the proceeds of the refunding bonds 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 62nd Leg., R.S., Ch. 877, Secs. 9(a) (part), (b) (part).)

Source Law

Sec. 9. (a) Refunding bonds of the district may be issued for the purpose of refunding and paying off any outstanding indebtedness it has issued or assumed. Such refunding bonds may be sold and the proceeds thereof 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, … .

(b) … [the board of directors is further authorized] … to refund any previously issued [revenue bonds] … .

Revisor's Note

(1) Section 9(a), Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, provides that refunding bonds must bear interest at the same or a lower rate than the debt refunded unless a savings is shown. The revised law omits this provision because it has been superseded by the enactment of the maximum interest provision found in Section 1204.006, Government Code. That section reflects the 1981 amendment of Chapter 3, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes, now Chapter 1204, Government Code), by Section 1, Chapter 61, Acts of the 67th Legislature, Regular Session, 1981, and permits a public agency, including a hospital district, to issue public securities at any net effective interest rate of 15 percent or less. Section 1204.006(a) applies to district bonds by application of Section 1204.001, Government Code. The omitted law reads:

(a) … 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 … .

(2) Section 9(a), Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, provides that refunding bonds sold to pay outstanding indebtedness shall be issued and payments made in the manner specified by Chapter 503, Acts of the 54th Legislature, 1955, as amended (Article 717k, Vernon's Texas Civil Statutes). Article 717k was codified in 1999 in Chapter 1207, Government Code. The revised law omits the provision because Chapter 1207, Government Code, applies to the district by its own terms under Section 1207.001, Government Code. The omitted law reads:

(a) … 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 the manner specified by Chapter 503, Acts of the 54th Legislature, 1955, as amended (Article 717k, Vernon's Texas Civil Statutes).

Revised Law

Sec. 1016.206. MATURITY OF BONDS. District bonds must mature not later than 40 years after the date of issuance. (Acts 62nd Leg., R.S., Ch. 877, Sec. 9(c) (part).)

Source Law

Revised Law

Sec. 1016.207. 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 62nd Leg., R.S., Ch. 877, Sec. 9(c) (part).)

Source Law

(c) … Bonds shall be executed in the name of the hospital district and in its behalf by the president of the board and countersigned by the secretary in the manner provided by Chapter 204, Acts of the 57th Legislature, Regular Session, 1961, as amended (Article 717j-1, Vernon's Texas Civil Statutes), and … .

Revisor's Note

(1) Section 9(c), Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, refers to Chapter 204, Acts of the 57th Legislature, Regular Session, 1961, as amended (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.

(2) Section 9(c), Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, 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 revised law omits that provision because the maximum interest rate noted in Chapter 3 was revised in 1999 as Section 1204.006, Government Code, and Section 1204.006 applies to the district by its own terms by application of Section 1204.001, Government Code. The omitted law reads:

(c) [Bonds of the district] … may bear interest at a rate or rates not to exceed that prescribed by Section 2, Chapter 3, Acts of the 61st Legislature, Regular Session, 1969, as amended (Article 717k-2, Vernon's Texas Civil Statutes)… .

(3) Section 9(c), Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, 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 9(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 of the district] … shall be subject to the same requirements in the matter of approval by the attorney general and registration by the comptroller 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. 1016.208. 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) the transfer and issuance of the bonds; and

(3) profits made in the sale of the bonds. (Acts 62nd Leg., R.S., Ch. 877, Sec. 21 (part).)

Source Law

Sec. 21. … 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 21, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, refers to "any municipality or political subdivision" of this state. The revised law omits "municipality" because that term is included in the meaning of "political subdivision" of this state.

Revisor's Note

(End of Subchapter)

(1) Section 14, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, 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 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 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)), 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 and indebtedness assumed 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 877, Acts of the 62nd Legislature, Regular Session, 1971, 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 1016.209-1016.250 reserved for expansion]

SUBCHAPTER F. TAXES

Revised Law

Sec. 1016.251. 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 or other obligations issued or assumed by the district for hospital purposes;

(2) pay indebtedness incurred or assumed by the district;

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

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

(5) acquire necessary sites for the hospital system by purchase, lease, or condemnation. (Acts 62nd Leg., R.S., Ch. 877, Secs. 5 (part), 13 (part).)

Source Law

Sec. 5. Upon the creation of such hospital district, the board of directors shall have the power and authority and it shall be their duty to levy taxes on all property subject to hospital district taxation for the benefit of the district … for the purpose of:

(1) paying the interest on and creating a sinking fund for bonds which may be assumed or issued by the hospital district for hospital purposes as herein provided;

(2) paying indebtedness incurred or assumed by the district;

(3) providing for the operation and maintenance of the hospital or hospital system; and

(4) making further improvements and additions to the hospital system, and for the acquisition of necessary sites therefor, by purchase, lease, or condemnation.

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) making further improvements and additions to the hospital system, and the acquisition of necessary sites therefor by purchase, lease or condemnation… .

Revisor's Note

(1) Section 5, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, provides that "[u]pon the creation of such hospital district," the board may levy taxes. The revised law omits the quoted language as executed.

(2) Section 5, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, requires the board to impose taxes at a certain time and in a certain manner. The revised law omits this provision because it was repealed by Section 6(b), Chapter 841, Acts of the 66th Legislature, Regular Session, 1979, which repealed all "general, local, and special laws" that conflicted with that act. The 1979 act enacted the Property Tax Code (Title 1, Tax Code), a comprehensive, substantive codification of all property tax law. Title 1, Tax Code, provides the exclusive procedure for the imposition and collection of property taxes by a taxing unit, including a hospital district. The omitted law reads:

Sec. 5. … [the board of directors shall have the power and authority and it shall be their duty to levy taxes on all property subject to hospital district taxation for the benefit of the district] at the same time taxes are levied for county purposes, using the county values and the county tax rolls, … .

Revised Law

Sec. 1016.252. TAX RATE. (a) The board may impose the tax at a rate not to exceed 75 cents on each $100 valuation of all 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 62nd Leg., R.S., Ch. 877, Secs. 5 (part), 13 (part).)

Source Law

Sec. 5. … a tax of not to exceed 75 cents on the $100 valuation of all taxable property within the hospital district, … .

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

Section 13, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, requires the board to levy the tax and to certify the tax rate to the tax assessor-collector. The revised law omits that provision because Section 26.05(a), Tax Code, requires the governing body of a taxing unit to adopt a tax rate for the current tax year and to notify the tax assessor of that rate. The omitted law reads:

Sec. 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.

Revisor's Note

(End of Chapter)

(1) Sections 2 and 19, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, provide for the transfer of certain land, buildings, improvements, equipment, supplies, funds, and taxes to the district after the district is created and provide for the assumption of debt by the district on creation. The revised law omits the provisions as executed. The omitted law reads:

Sec. 2. The district herein authorized to be created shall take over, and there shall be transferred to it, title to all lands, buildings, improvements, equipment, and supplies, and choses in action in anywise pertaining to the hospital or hospital system owned by Concho County, and thereafter, … . Such district shall assume all outstanding bonds and other obligations and indebtedness incurred by Concho County for hospital purposes prior to the creation of said district.

Sec. 19. … When the district is created and established, the county and all towns and cities located therein shall convey and transfer to the district title to all lands, buildings, improvements, and equipment in anywise pertaining to a hospital or hospital system which may be jointly or separately owned by the county or any city or town within said district. Operating funds and reserves for operating expenses which are on hand and funds which have been budgeted for hospital purposes by the county or any city or town therein for the remainder of the fiscal year in which the district is established shall likewise be transferred to said district, as shall taxes theretofore levied for hospital purposes for the current year and all sinking funds established for payment of indebtedness assumed by the district.

(2) Section 22, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, provides legislative intent regarding the creation of the district and the determination of qualified electors. The revised law omits that section as executed. The omitted law reads:

Sec. 22. The Legislature hereby recognizes that there is some confusion as to the proper qualification of electors in the light of recent court decisions. It is the intention of this Act to provide a procedure for the creation of the said hospital district and to allow such district, when created, to issue bonds payable from taxation, but that in each instance the authority shall be predicated upon the expression of the will of the majority of those who cast valid ballots at an election called for the purpose. Should the person or body calling an election determine that all qualified electors, including those who own taxable property which has been duly rendered for taxation, should be permitted to vote at an election (by reason of the aforesaid court decisions), nothing herein shall be construed as a limitation upon the power to call and hold an election, provided provision is made for the voting, tabulating, and counting of the ballots of the resident qualified property taxpaying electors who own taxable property which has been duly rendered for taxation separately from those who are qualified electors, and in any election so called a majority vote of the resident qualified property taxpaying voters who own taxable property which has been duly rendered for taxation and a majority vote of the qualified electors, including those who own taxable property which has been duly rendered for taxation, shall be required to sustain the proposition.

(3) Section 23, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, 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.

(4) Section 24, Chapter 877, Acts of the 62nd Legislature, Regular Session, 1971, provides that public notice of enactment of the statute was provided in a manner that satisfies the requirements of the Texas Constitution. The revised law omits that section 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.


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