80C31(3) PB

 

CHAPTER 1015.  FAIRFIELD HOSPITAL DISTRICT

SUBCHAPTER A.  GENERAL PROVISIONS

Revised Law

Sec. 1015.001.  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 Fairfield Hospital District.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 1.01.)

Source Law

Sec. 1.01.  In this Act:

(1)  "District" means the Fairfield Hospital District.

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

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

Revised Law

Sec. 1015.002.  AUTHORITY FOR OPERATION.  The Fairfield Hospital District operates and is financed as provided by Section 9, Article IX, Texas Constitution, and by this chapter.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 1.02.)

Source Law

Sec. 1.02.  The Fairfield 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 12, Acts of the 70th Legislature, 2nd Called Session, 1987, provides that the Fairfield Hospital District "may be created and established and, if created, must be maintained, operated, and financed" in the manner provided by the Texas Constitution.  The revised law omits references to the creation and establishment of the district as executed.  The revised law omits "maintained" because, in this context, the meaning of that term is included in the meaning of "operated."

Revised Law

Sec. 1015.003.  ESSENTIAL PUBLIC FUNCTION.  The district is a public entity performing an essential public function.  (Acts 70th Leg., 2nd C.S., Ch. 12, 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. 1015.004.  DISTRICT TERRITORY.  The boundaries of the district are coextensive with the boundaries of the Fairfield Independent School District as those boundaries existed on August 3, 1987.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 1.03.)

Source Law

Sec. 1.03.  The boundaries of the district are coextensive with the boundaries of the Fairfield Independent School District.

Revisor's Note

Section 1.03, Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, provides that the boundaries of the district are coextensive with the Fairfield Independent School District.  Under Chapter 13, Education Code, a school district's boundaries may be changed.

It is unlikely that the legislature intended for the district boundaries to change when the school district boundaries change.  A rule of statutory construction that applies here is that the delineation of a political subdivision's boundary by reference to that of another political subdivision refers to the boundary as it existed at the time of the delineation.  See Op. Tex. Att'y Gen. No. DM-186 (1992) (Hamilton County Hospital District boundaries do not change after commissioners precinct boundaries changed).  Changing the district boundaries based on changes in the school district boundaries would cause some territory to be included in the district and subject to an ad valorem tax for which an election was not held under Section 9, Article IX, Texas Constitution, and cause some territory subject to the tax to be removed from the district, possibly resulting in an unconstitutional impairment of the contract under which district bonds issued were supported by an ad valorem tax imposed on district property.

Had the legislature intended this result, it could have provided in the statute a method by which the changes in district boundaries could have been made to avoid these constitutional issues.  See Op. Tex. Att'y Gen No. DM-186 (1992).  In addition, this conclusion conforms to the actual practice of the district, which has the same boundaries as when the district was created.  Accordingly, the revised law defines the district boundaries as of the effective date of the act that made the boundaries coextensive with the school district.

Revised Law

Sec. 1015.005.  DISTRICT SUPPORT AND MAINTENANCE NOT STATE OBLIGATION.  The state may not be obligated for the support or maintenance of the district.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 10.01 (part).)

Source Law

Sec. 10.01.  The state may not become obligated for the support or maintenance of a hospital district created under this Act … .

Revised Law

Sec. 1015.006.  RESTRICTION ON STATE FINANCIAL ASSISTANCE.  The legislature may not make a direct appropriation for the construction, maintenance, or improvement of a district facility.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 10.01 (part).)

Source Law

Sec. 10.01.  … 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 12, Acts of the 70th Legislature, 2nd Called Session, 1987, provides procedures for holding an election on the creation of the district and the imposition of an ad valorem tax.  Because the creation of the district and the imposition of the tax were approved at the described election, the revised law omits that article as executed.  The omitted law reads:

ARTICLE 3.  CREATION OF DISTRICT

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

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

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

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

(2)  the date of the election;

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

(4)  the location of the polling places.

Sec. 3.04.  The temporary directors shall give notice of the election by publishing a substantial copy of the election order in a newspaper with general circulation in the proposed district once a week for two consecutive weeks.  The first publication must appear at least 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 Fairfield Hospital District and the levy of annual taxes for hospital purposes at a rate not to exceed 12 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 six 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 1015.007-1015.050 reserved for expansion]

SUBCHAPTER B.  DISTRICT ADMINISTRATION

Revised Law

Sec. 1015.051.  BOARD ELECTION; TERM.  (a)  The district is governed by a board of seven directors elected from the district at large.

(b)  Directors serve staggered four-year terms.

(c)  An election shall be held on the uniform election day in May of each even-numbered year to elect the appropriate number of directors.  (Acts 70th Leg., 2nd C.S., Ch. 12, Secs. 4.01(a), 4.03(a), (c).)

Source Law

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

 

Sec. 4.03.  (a)  Members of the board of directors shall be elected from the district at large.

 

(c)  An election shall be held on the first Saturday in May of each even-numbered year, and the appropriate number of successor directors shall be elected for four-year terms.

Revisor's Note

(1)  Section 4.01(b), Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, provides for temporary directors to serve as directors of the district.  The revised law omits the provision as executed.  The omitted law reads:

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

(2)  Section 4.03(b), Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, prescribes the terms of the initial directors and, in doing so, establishes staggered two-year terms for the directors.  The revised law omits the provision as executed and as impliedly repealed by Chapter 112, Acts of the 72nd Legislature, Regular Session, 1991, which increased the length of directors' terms from two years to four years.  The omitted law reads:

(b)  The seven candidates receiving the highest number of votes at the initial election of directors are directors for the district.  The four directors receiving the highest number of votes at the initial election serve for a term of two years.  The remaining directors serve for a term of one year.

(3)  Section 4.03(c), Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, was amended in 1991 to require 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 the 1991 amendment to Section 4.03(c) that the election be held on the first Saturday in May, which was the uniform election date in May.

Revised Law

Sec. 1015.052.  NOTICE OF ELECTION.  At least 35 days before the date of an election of directors, notice of the election shall be published one time in a newspaper with general circulation in the district.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 4.04.)

Source Law

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

Revised Law

Sec. 1015.053.  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; and

(2)  a qualified voter.

(b)  A district employee may not serve as a director.  (Acts 70th Leg., 2nd C.S., Ch. 12, 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; and

(2)  a qualified voter.

(b)  An employee of the district may not serve as a director.

Revised Law

Sec. 1015.054.  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)  The board may pay for a director's bond with district money.

(c)  Each director's bond shall be kept in the district's permanent records.  (Acts 70th Leg., 2nd C.S., Ch. 12, 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.

(c)  The board may pay for directors' bonds with district funds.

Revised Law

Sec. 1015.055.  BOARD VACANCY.  If a vacancy occurs in the office of director, the remaining directors shall appoint a director for the unexpired term.  (Acts 70th Leg., 2nd C.S., Ch. 12, 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. 1015.056.  OFFICERS.  (a)  The board shall elect a president and vice president from among its members.

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

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

(d)  The board shall fill a vacancy in a board office for the unexpired term.  (Acts 70th Leg., 2nd C.S., Ch. 12, Secs. 4.09, 4.10.)

Source Law

Sec. 4.09.  The board shall elect from among its members a president and vice-president.  The board also shall 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)  A vacancy in a board office shall be filled for the unexpired term by the board.

Revised Law

Sec. 1015.057.  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 70th Leg., 2nd C.S., Ch. 12, 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 12, Acts of the 70th Legislature, 2nd Called Session, 1987, 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 minute book is a district record.

Revised Law

Sec. 1015.058.  VOTING REQUIREMENT.  A concurrence of a majority of the directors voting is necessary in any matter relating to district business.  (Acts 70th Leg., 2nd C.S., Ch. 12, 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. 1015.059.  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 must execute a bond in the amount set by the board of not less than $5,000 that is:

(1)  payable to the district; and

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

(d)  The board may pay for the bond with district money.  (Acts 70th Leg., 2nd C.S., Ch. 12, Secs. 4.13(a) (part), (b) (part), (c) (part), (d).)

Source Law

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

(b)  The administrator, … [serves] at the will of the board.

(c)  The administrator, … [is] entitled to compensation as determined by 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 board may pay for the bond with district funds.

Revised Law

Sec. 1015.060.  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 70th Leg., 2nd C.S., Ch. 12, Sec. 4.16.)

Source Law

Sec. 4.16.  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. 1015.061.  ASSISTANT DISTRICT ADMINISTRATOR; ATTORNEY.  (a)  The board may appoint qualified persons as:

(1)  the assistant district administrator; and

(2)  the attorney for the district.

(b)  The assistant district administrator and the attorney for the district serve at the will of the board and are entitled to the compensation determined by the board.  (Acts 70th Leg., 2nd C.S., Ch. 12, Secs. 4.13(a) (part), (b) (part), (c) (part).)

Source Law

Sec. 4.13.  (a)  The board may appoint qualified persons as … assistant administrator, and attorney for the district.

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

(c)  The … assistant administrator, and attorney are entitled to compensation as determined by the board.

Revised Law

Sec. 1015.062.  APPOINTMENT AND RECRUITMENT 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 technicians, nurses, fiscal agents, accountants, architects, additional attorneys, and other necessary employees.

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

(d)  The board may spend money to recruit physicians, nurses, and other trained medical personnel.  The board may pay the tuition or other costs or expenses of a full-time medical student or nursing student who:

(1)  is enrolled in and is in good standing at an accredited school, college, or university; and

(2)  contractually agrees to become a district employee in return for that assistance.  (Acts 70th Leg., 2nd C.S., Ch. 12, Secs. 4.14, 4.15, 4.18(a), (b).)

Source Law

Sec. 4.14.  The board may appoint to the staff any doctors it considers necessary for the efficient operation of the district and may make temporary appointments as considered necessary.

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

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

Sec. 4.18.  (a)  The board may spend money to recruit physicians, nurses, or other trained medical personnel.

(b)  The board may enter into a contract with a full-time medical or nursing student enrolled and in good standing in an accredited school, college, or university, as authorized by this section.  Under the contract, the board may agree to pay the student's tuition or other costs or expenses in consideration of the student's contractual agreement to serve as an employee of the district on terms set out in the contract.

Revisor's Note

Section 4.18(b), Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, provides that a student who receives assistance from the district must become a district employee "on terms set out in the contract."  The revised law omits the quoted language because the provisions of a contract between the board and a student apply by their own terms.

Revised Law

Sec. 1015.063.  CONTINUING EDUCATION; RETRAINING.  The board may spend money for continuing education and retraining of employees.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 4.18(c).)

Source Law

(c)  The board may spend money for continuing education and retraining of employees.

Revised Law

Sec. 1015.064.  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 70th Leg., 2nd C.S., Ch. 12, Sec. 4.17.)

Source Law

Sec. 4.17.  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)  Article 2, Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, provides for temporary directors of the Fairfield Hospital District to serve until the initial election of the district board of directors.  The revised law omits that article as executed.  The omitted law reads:

ARTICLE 2.  TEMPORARY DIRECTORS

Sec. 2.01.   On the effective date of this Act the members of the board of directors of the Fairfield Hospital Authority become temporary directors of the district.

Sec. 2.02.   A vacancy in the office of temporary director shall be filled by appointment by majority vote of the remaining directors.

(2)  Section 4.02, Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, provides for the election of initial directors.  The revised law omits the provision as executed.  The omitted law reads:

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

(3)  Section 4.05, Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, states that a person must file a ballot application with the board secretary to be a candidate for director and prescribes 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 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.

[Sections 1015.065-1015.100 reserved for expansion]

SUBCHAPTER C.  POWERS AND DUTIES

Revised Law

Sec. 1015.101.  DISTRICT RESPONSIBILITY.  The district has full responsibility for:

(1)  operating all hospital facilities; and

(2)  providing medical and hospital care for the district's needy inhabitants.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 5.02 (part).)

Source Law

Sec. 5.02.  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; and … .

Revisor's Note

Section 5.02, Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, provides that "[o]n creation of the district," the district "assumes" certain responsibilities.  The revised law omits "on 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. 1015.102.  RESTRICTION ON MUNICIPAL TAXATION AND DEBT.  The City of Fairfield may not impose a tax or issue bonds or other obligations for hospital purposes or to provide medical care for district residents.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 5.01(b).)

Source Law

(b)  On or after creation of the district, the City of Fairfield 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 12, Acts of the 70th Legislature, 2nd Called Session, 1987, provides that "[o]n or after creation of the district," the City of Fairfield may not levy taxes or issue bonds for hospital purposes.  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. 1015.103.  MANAGEMENT, CONTROL, AND ADMINISTRATION.  The board shall manage, control, and administer the hospital system and the district's money and resources.  (Acts 70th Leg., 2nd C.S., Ch. 12, 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. 1015.104.  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 70th Leg., 2nd C.S., Ch. 12, 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. 1015.105.  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 70th Leg., 2nd C.S., Ch. 12, 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. 1015.106.  DISTRICT PROPERTY, FACILITIES, AND EQUIPMENT.  (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.

(b)  The board may:

(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.

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

(d)  The board may sell or otherwise dispose of the property, including facilities, or equipment, for the district.  (Acts 70th Leg., 2nd C.S., Ch. 12, 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 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.

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

(d)  The board may sell or otherwise dispose of property, facilities, or equipment on behalf of the district.

Revisor's Note

Section 5.06(a), Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, 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. 1015.107.  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 interest is necessary for the district to exercise the rights or authority conferred by this chapter.

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

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

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

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

(3)  provide a bond for costs or a supersedeas bond on an appeal or writ of error.  (Acts 70th Leg., 2nd C.S., Ch. 12, 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 right 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. 1015.108.  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, 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 70th Leg., 2nd C.S., Ch. 12, 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. 1015.109.  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 provision prescribed in writing by the donor that is consistent with the proper management of the district.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 5.14.)

Source Law

Sec. 5.14.  On behalf of the district, the board may accept donations, 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.

Revisor's Note

Section 5.14, Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, refers to "donations" and "gifts."  The revised law omits "donations" because "donations" is included in the meaning of "gifts."

Revised Law

Sec. 1015.110.  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 70th Leg., 2nd C.S., Ch. 12, 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 $10,000 only after competitive bidding as provided by Chapter 770, Acts of the 66th Legislature, Regular Session, 1979 (Article 2368a.3, Vernon's Texas Civil Statutes).

Revisor's Note

(1)  Section 5.07(a), Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, provides that the district may enter into construction contracts that involve spending more than $10,000 only after competitive bidding as provided by Chapter 770, Acts of the 66th Legislature, Regular Session, 1979 (Article 2368a.3, Vernon's Texas Civil Statutes).  Chapter 149, Acts of the 70th Legislature, Regular Session, 1987, revised the relevant parts of Article 2368a.3 as Subchapter B, Chapter 271, Local Government Code, and the revised law is drafted accordingly.  The revised law omits the reference to the $10,000 amount as superseded by Section 5, Chapter 115, Acts of the 77th Legislature, Regular Session, 2001, which amended Section 271.024, Local Government Code, to increase the contract amount for which competitive bidding is required to $25,000.

(2)  Section 5.07(b), Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, provides that Article 5160, Revised Statutes, applies to the district's construction contracts in relation to performance and payment bonds.  The revised law omits that reference because Article 5160 was codified in 1993 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. 1015.111.  OPERATING AND MANAGEMENT CONTRACTS.  The board may enter into an operating or management contract relating to a hospital facility for the district.  (Acts 70th Leg., 2nd C.S., Ch. 12, 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. 1015.112.  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 service; or

(2)  provide for the investigatory or welfare needs of district inhabitants.  (Acts 70th Leg., 2nd C.S., Ch. 12, 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 service or to provide for the investigatory or welfare needs of inhabitants of the district.

Revisor's Note

Section 5.13, Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, 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 those terms are included in the meaning of "political subdivision of the state."

Revised Law

Sec. 1015.113.  PAYMENT FOR TREATMENT; PROCEDURES.  (a)  Each year, the board may set criteria for determining residency, eligibility for a service, and the type of services available.

(b)  When a person who resides in the district is admitted as a patient to a district facility, the district administrator may have an inquiry made into the financial circumstances of:

(1)  the patient; and

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

(c)  To the extent that the patient or a relative of the patient who is legally responsible for the patient's support cannot pay for care and treatment provided by the district, the district shall supply the care and treatment without charging the patient or the patient's relative.

(d)  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 person's ability to pay.

(e)  The district administrator may collect the 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 the collection of expenses of the last illness of a deceased person.

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

(1)  call witnesses;

(2)  hear and resolve the question; and

(3)  issue a final order.

(g)  The final order of the board may be appealed to a district court in the county in which the district is located.  The substantial evidence rule applies to the appeal.  (Acts 70th Leg., 2nd C.S., Ch. 12, Secs. 5.11(a) (part), (b), (c), (d), (e), (f).)

Source Law

(a)  … The board shall have the power each year to set criteria for determining residency, eligibility for services, and types of services available.

(b)  If an individual residing in the district is admitted as a patient to a facility of the district, the administrator may have an inquiry made as to the patient's financial circumstances and as to financial circumstances of a relative of the patient who is legally responsible for the patient's support.

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

(d)  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.

(e)  To the extent that a patient or a relative of the patient legally responsible for the patient's support cannot pay for care and treatment provided by the district, the district shall supply that care and treatment without charging the patient or the patient's relative.

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

Revisor's Note

Section 5.11(a), Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, requires the district to adopt an application procedure for assistance eligibility.  The revised law omits the provision because it duplicates provisions in Sections 61.053(a) and (b), Health and Safety Code, which apply to the district and detail the application procedure.  The omitted law reads:

Sec. 5.11.  (a)  Not later than the beginning of each operating year, the district shall adopt an application procedure to determine eligibility for assistance as provided by Section 10.03, Indigent Health Care and Treatment Act (Article 4438f, Vernon's Texas Civil Statutes). …

Revised Law

Sec. 1015.114.  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 Freestone County or the police chief of the City of Fairfield to reimburse the district for the district's care and treatment of a person who is confined in a jail facility of Freestone County or the City of Fairfield and is not a district resident.  A prisoner in the Freestone County jail or any penal or police facility located in the district does not qualify as a district resident unless the person would meet the qualifications for residency notwithstanding the incarceration, its duration, or the facts surrounding the incarceration.

(c)  On behalf of the district, 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 70th Leg., 2nd C.S., Ch. 12, 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 the Indigent Health Care and Treatment Act (Article 4438f, Vernon's Texas Civil Statutes).

(b)  The board shall require reimbursement from the Freestone County sheriff or the police chief of Fairfield for the district's care and treatment of a person confined in a jail facility of Freestone County or the City of Fairfield who is not a resident of the district.  A prisoner in the Freestone County jail or any penal or police facility located within the hospital district does not qualify as a resident unless the person would meet the qualifications for residency notwithstanding the incarceration, its duration, or the facts surrounding the incarceration.

(c)  On behalf of the district, 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 12, Acts of the 70th Legislature, 2nd Called Session, 1987, refers to a "city."  Throughout this chapter, the revised law substitutes "municipality" for "city" because in context the terms are equivalent, and "municipality" is the term used by the Local Government Code.

(2)  Section 5.12(a), Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, refers to the treatment of a "sick, diseased, or injured person."  The revised law omits the references to "diseased" because it is included in the meaning of "sick."

(3)  Section 5.12(a), Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, refers to the Indigent Health Care and Treatment Act (Article 4438f, Vernon's Texas Civil Statutes).  That statute was codified in 1989 as Chapter 61, Health and Safety Code.  The revised law is drafted accordingly.

Revised Law

Sec. 1015.115.  AUTHORITY TO SUE AND BE SUED.  The board may sue and be sued on behalf of the district.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 5.15.)

Source Law

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

[Sections 1015.116-1015.150 reserved for expansion]

SUBCHAPTER D.  GENERAL FINANCIAL PROVISIONS

Revised Law

Sec. 1015.151.  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 70th Leg., 2nd C.S., Ch. 12, 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 established amount of revenues and balances available to cover the proposed budget; and

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

Revised Law

Sec. 1015.152.  NOTICE; HEARING; ADOPTION OF BUDGET.  (a)  The board shall hold a public hearing on the proposed annual budget.

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

(c)  Any district resident is entitled to be present and participate at the hearing.

(d)  At the conclusion of the hearing, the board shall adopt a budget by acting on the budget proposed by the district administrator.  The board may make any changes in the proposed budget that the board judges to be in the interests of the taxpayers.

(e)  The budget is effective only after adoption by the board.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 6.05.)

Source Law

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

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

(c)  Any resident of the district is entitled to be present and participate at the hearing.

(d)  At the conclusion of the hearing, the board shall adopt a budget by acting on the budget proposed by the 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. 1015.153.  AMENDMENTS TO BUDGET.  After the budget is adopted, the budget may be amended on the board's approval.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 6.06.)

Source Law

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

Revised Law

Sec. 1015.154.  RESTRICTION ON EXPENDITURES.  Money may be spent only for an expense included in the budget or an amendment to the budget.  (Acts 70th Leg., 2nd C.S., Ch. 12, 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. 1015.155.  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 70th Leg., 2nd C.S., Ch. 12, Sec. 6.01.)

Source Law

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

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

Revised Law

Sec. 1015.156.  ANNUAL AUDIT.  The board annually shall have an audit made of the district's financial condition.  (Acts 70th Leg., 2nd C.S., Ch. 12, 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. 1015.157.  INSPECTION OF ANNUAL AUDIT AND DISTRICT RECORDS.  The annual audit and other district records shall be open to inspection during regular business hours at the district's principal office.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 6.03.)

Source Law

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

Revised Law

Sec. 1015.158.  FINANCIAL REPORT.  As soon as practicable after the close of each 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 70th Leg., 2nd C.S., Ch. 12, 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. 1015.159.  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 1015.160(b) and money transmitted to a bank for payment of bonds or obligations issued or assumed by the district, shall be deposited as received with the depository bank and shall remain on deposit.  This subsection does not limit the power of the board to place a part of district money on time deposit or to purchase certificates of deposit.

(c)  The district may not deposit money with a bank in an amount that exceeds the maximum amount secured by the Federal Deposit Insurance Corporation unless the bank has first executed 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 70th Leg., 2nd C.S., Ch. 12, 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 the district's 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. 1015.160.  SPENDING AND INVESTMENT RESTRICTIONS.  (a)  Except as otherwise provided by Sections 1015.110, 1015.161, 1015.201, 1015.204, and 1015.205, 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 70th Leg., 2nd C.S., Ch. 12, Sec. 6.09.)

Source Law

Sec. 6.09.  (a)  Except as provided by Subsection (a) of Section 5.07 and Sections 7.01, 7.04, 7.05, and 6.10 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 not invest operating, depreciation, or building reserves in funds or securities other than those specified by Article 836 or 837, Revised Statutes.

Revisor's Note

Section 6.09(b), Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, 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 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. 1015.161.  AUTHORITY TO BORROW MONEY; SECURITY.  (a) The board may borrow money at a rate not to exceed the maximum annual percentage rate allowed by law for district obligations at the time the loan is made if the board declares that money is not available to meet authorized district obligations, which creates an emergency.

(b)  To secure a loan, the board may pledge:

(1)  district revenue that is not pledged to pay the district's bonded indebtedness;

(2)  a district tax to be imposed by the district in the next 12-month period that is not pledged to pay the principal of or interest on district bonds; or

(3)  district bonds that have been authorized but not sold.

(c)  A loan for which taxes or bonds are pledged must mature not later than the first anniversary of the date the loan is made.  A loan for which district revenue is pledged must mature not later than the fifth anniversary of the date the loan is made.

(d)  Money obtained from a loan under this section may be spent only for:

(1)  a purpose for which the board declared an emergency; and

(2)  if district taxes or bonds are pledged to pay the loan, the purpose for which the pledged taxes were imposed or the pledged bonds were authorized.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 6.10.)

Source Law

Sec. 6.10.  (a)  The board may declare that funds are not available to meet lawfully authorized obligations of the district, thereby creating an emergency, and may borrow money at a rate not to exceed the maximum annual percentage rate allowed by law for obligations of the district at the time the loan is made.

(b)  To secure a loan, the board may pledge:

(1)  revenues of the district that are not pledged to pay any bonded indebtedness of the district;

(2)  district taxes to be levied by the district in the next 12-month period that are not pledged to pay the principal of or interest on district bonds; or

(3)  district bonds that have been authorized but not sold.

(c)  If taxes or bonds are pledged to pay a loan, the loan must mature not later than 12 months after the date on which the loan is made. If revenues of the district are pledged to pay a loan, the loan must mature not more than five years after the date on which the loan is made.

(d)  Money obtained from a loan under this subsection may not be spent for any purpose other than the purpose for which the board declared an emergency and, if taxes or bonds are pledged to pay the loan, for any purpose other than the purposes for which the pledged taxes were levied or the pledged bonds were authorized.

[Sections 1015.162-1015.200 reserved for expansion]

SUBCHAPTER E.  BONDS

Revised Law

Sec. 1015.201.  GENERAL OBLIGATION BONDS.  If authorized by an election, the board may issue and sell general obligation bonds in the name and on the faith and credit of the district to:

(1)  purchase, construct, acquire, repair, or renovate buildings or improvements; and

(2)  equip buildings or improvements for hospital purposes.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 7.01.)

Source Law

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

(1)  purchase, construct, acquire, repair, or renovate buildings or improvements; or

(2)  equip buildings or improvements for hospital purposes.

Revisor's Note

Section 7.01, Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, 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. 1015.202.  TAX TO PAY GENERAL OBLIGATION BONDS.  (a)  At the time general obligation bonds are issued by the district under Section 1015.201, 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 70th Leg., 2nd C.S., Ch. 12, 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 12, Acts of the 70th Legislature, 2nd Called Session, 1987, 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. 1015.203.  GENERAL OBLIGATION BOND ELECTION.  (a)  The district may issue general obligation bonds only if the bonds are authorized by a majority of district voters voting at an election held for that purpose.

(b)  The board may order a bond election.

(c)  The order calling the election must specify:

(1)  the nature and date of the election;

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

(3)  the location of the polling places;

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

(5)  the maximum maturity of the bonds.

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

(e)  The board shall declare the results of the election.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 7.03.)

Source Law

Sec. 7.03.  (a)  The district may not issue general obligation bonds until 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.

(c)  Notice of a bond election shall be given as provided by Article 704, Revised Statutes.

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

Revisor's Note

(1)  Section 7.03(a), Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, refers to a majority 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 12, Acts of the 70th Legislature, 2nd Called Session, 1987, refers to an election "called and held."  Throughout this chapter, the revised law omits references 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 12, Acts of the 70th Legislature, 2nd Called Session, 1987, 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 12, Acts of the 70th Legislature, 2nd Called Session, 1987, provides that "[t]he board shall canvass the returns" of a bond election.  The revised law omits that requirement because it duplicates Section 67.002, Election Code, which requires the governing body of a political subdivision that orders an election to canvass the returns.

Revised Law

Sec. 1015.204.  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 hospital system.

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

(d)  The bonds must be issued in the manner 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 70th Leg., 2nd C.S., Ch. 12, 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; 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 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 8, 10, 11, 12, and 13, County Hospital Authority Act (Article 4494r, Vernon's Texas Civil Statutes), for issuance of revenue bonds by county hospital authorities.

Revisor's Note

Section 7.04(c), Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, refers to Sections 8, 10, 11, 12, and 13, County Hospital Authority Act (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. 1015.205.  REFUNDING BONDS.  (a)  The board may issue refunding bonds to refund an outstanding indebtedness issued or assumed by the district.

(b)  A refunding bond may be:

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

(2)  exchanged wholly or partly for not less than a similar principal amount of outstanding indebtedness.  (Acts 70th Leg., 2nd C.S., Ch. 12, 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 12, Acts of the 70th Legislature, 2nd Called Session, 1987, 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. 1015.206.  MATURITY OF BONDS.  District bonds must mature not later than 50 years after the date of issuance.  (Acts 70th Leg., 2nd C.S., Ch. 12, 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 12, Acts of the 70th Legislature, 2nd Called Session, 1987, 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.  The omitted law reads:

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

Revised Law

Sec. 1015.207.  EXECUTION OF BONDS.  (a)  The board president shall execute district bonds in the district's name.

(b)  The board secretary shall countersign the bonds in the manner provided by Chapter 618, Government Code.  (Acts 70th Leg., 2nd C.S., Ch. 12, 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 12, Acts of the 70th Legislature, 2nd Called Session, 1987, 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. 1015.208.  BONDS EXEMPT FROM TAXATION.  The following are exempt from taxation by this state or a political subdivision of this state:

(1)  bonds issued by the district;

(2)  any transaction relating to the bonds; or

(3)  profits made in the sale of the bonds.  (Acts 70th Leg., 2nd C.S., Ch. 12, 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 12, Acts of the 70th Legislature, 2nd Called Session, 1987, provides that district bonds are subject to the law governing county bonds that relates 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 bonds issued under this chapter by application of Section 1202.001, Government Code.  The omitted law reads:

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

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

(2)  Section 7.09, Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, provides that district bonds and indebtedness are legal and authorized investments for certain entities.  The revised law omits that provision as unnecessary.  As to several of the entities listed, Section 7.09 has been superseded and impliedly repealed or it duplicates existing law.  Investments in securities by banks are regulated by Section 34.101, Finance Code (enacted in 1995 as Section 5.101, Texas Banking Act (Article 342-5.101, Vernon's Texas Civil Statutes)).  Investments in securities by savings banks are regulated by Section 93.001(c)(10), Finance Code (enacted in 1993 as Section 7.15(10), Texas Savings Bank Act (Article 489e, Vernon's Texas Civil Statutes)).  Investments in securities by trust companies are regulated by Section 184.101, Finance Code (enacted in 1997 as Section 5.101, Texas Trust Company Act (Article 342a-5.101, Vernon's Texas Civil Statutes)).  Investments in securities by savings and loan associations are regulated by Sections 63.002 and 64.001, Finance Code.  As to the remaining entities listed, Section 7.09 duplicates Section 1201.041, Government Code (enacted as Section 9, Bond Procedures Act of 1981 (Article 717k-6, Vernon's Texas Civil Statutes)).  Section 1201.041, Government Code, applies to bonds issued under this chapter by application of Section 1201.002, Government Code.  The revised law omits the reference to sinking funds of this state because it has been superseded by Section 404.024, Government Code (enacted in 1985 as Section 2.014, Treasury Act (Article 4393-1, Vernon's Texas Civil Statutes and last amended in 2003)), which governs the investment of state funds. Section 404.024(b)(10), Government Code, authorizes the investment of state funds in obligations of political subdivisions, including hospital districts. The omitted law reads:

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

(1)  banks;

(2)  savings banks;

(3)  trust companies;

(4)  savings and loan associations;

(5)  insurance companies;

(6)  fiduciaries;

(7)  trustees;

(8)  guardians; and

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

(3)  Section 7.10, Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, effectively provides that bonds issued under that chapter may secure deposits of public funds of the state or political subdivisions of the state.  The revised law omits the provisions relating to deposits of state funds by the comptroller as impliedly repealed by Section 404.0221, Government Code (enacted in 1995), which lists eligible collateral for deposits of state funds by the comptroller.  As to deposits of other funds, the 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 1015.209-1015.250 reserved for expansion]

SUBCHAPTER F.  TAXES

Revised Law

Sec. 1015.251.  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 meet the requirements of:

(1)  district bonds;

(2)  indebtedness assumed by the district; and

(3)  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 70th Leg., 2nd C.S., Ch. 12, Secs. 8.01(a) (part), (c), (d), 8.02(b).)

Source Law

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

(c)  The taxes may be used for the purpose of meeting the requirements of the district bonds, the indebtedness assumed by it, and its maintenance and operating expenses.

(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 the hospital district taxation.

Revised Law

Sec. 1015.252.  TAX RATE.  (a)  The board may impose the tax at a rate for the initial tax year not to exceed eight cents on each $100 valuation of taxable property.

(b)  The tax rate for all purposes may not exceed 12 cents on each $100 valuation of all taxable property in the district.

(c)  In setting the tax rate, the board shall consider income of the district from sources other than taxation.

(d)  The board may decrease the tax rate or may elect not to impose a tax.  (Acts 70th Leg., 2nd C.S., Ch. 12, Secs. 8.01(a) (part), (b), 8.03 (part).)

Source Law

[Sec. 8.01]

(a)  [The board may annually levy taxes.]  The tax rate for the initial tax year set by the board may not exceed eight cents on each $100 valuation of all taxable property in the district. The board shall have the authority to decrease the tax rate or to assess no tax at all.

(b)  The tax rate for all purposes may not exceed 12 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 12, Acts of the 70th Legislature, 2nd Called Session, 1987, requires the board to levy the tax and to certify the tax rate to the tax assessor-collector.  The revised law omits that provision because Section 26.05(a), Tax Code, requires the governing body of a taxing unit to adopt a tax rate for the current tax year and to notify the tax assessor of that rate.  The omitted law reads:

Sec. 8.03.  …  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. 1015.253.  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 70th Leg., 2nd C.S., Ch. 12, 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 12, Acts of the 70th Legislature, 2nd Called Session, 1987, 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 12, Acts of the 70th Legislature, 2nd Called Session, 1987, 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 1015.254-1015.300 reserved for expansion]

SUBCHAPTER G.  DISSOLUTION

Revised Law

Sec. 1015.301.  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 that a dissolution election be held.

(c)  The board shall order an election if the board receives a petition requesting an election that is signed by at least 10 percent of the registered voters in the district.  The board shall order the election not later than the 60th day after the date the petition is presented to the district.

(d)  The election shall be held not earlier than the 45th day and 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 70th Leg., 2nd C.S., Ch. 12, Secs. 9.01, 9.02, 9.03, 9.05.)

Source Law

Sec. 9.01.  The district may be dissolved only if the dissolution is approved by a majority of the qualified voters of the district voting at an election called and held for that purpose.

Sec. 9.02.  (a)  The board may order a dissolution election to be held.

(b)  On presentation of a petition for a dissolution election signed by at least 10 percent of the qualified voters in the district, the board shall order an election to be held. The board shall order the election not later than the 60th day after the date the petition is presented to the district.

Sec. 9.03.  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. 9.05.  (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.

Revisor's Note

(1)  Section 9.01, Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, provides for dissolution of the district if approved by a majority of the "qualified" voters of the district.  The revised law omits "qualified" for the reason stated in Revisor's Note (1) to Section 1015.203.

(2)  Section 9.02(b), Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, refers to "qualified voters" in the district.  The revised law substitutes "registered voters" for the quoted language because in the context of eligibility to sign a petition, Section 277.0021, Election Code, provides that "qualified voter" means a "registered voter."

Revised Law

Sec. 1015.302.  NOTICE OF ELECTION.  (a)  The board shall give notice of an election under this subchapter by publishing once a week for two consecutive weeks a substantial copy of the election order in a newspaper with general circulation in the district.

(b)  The first publication of the notice must appear at least 35 days before the date set for the election.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 9.04.)

Source Law

Sec. 9.04.  The board shall give notice of the election by publishing a substantial copy of the election order in a newspaper with general circulation in the district once a week for two consecutive weeks.  The first publication must appear at least 35 days before the date set for the election.

Revised Law

Sec. 1015.303.  BALLOT.  The ballot for an election under this subchapter must be printed to permit voting for or against the proposition: "The dissolution of the Fairfield Hospital District."  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 9.06.)

Source Law

Sec. 9.06.  The ballot for the election shall be printed to permit voting for or against the proposition: "The dissolution of the Fairfield Hospital District."

Revised Law

Sec. 1015.304.  ELECTION RESULTS.  (a)  If the board finds that the election results favor the proposition to dissolve the district, the board shall:

(1)  issue an order declaring the district be dissolved; and

(2)  specify in the order the date the dissolution takes effect.

(b)  If the board finds that the election results do not favor the proposition to dissolve the district, another dissolution election may not be held before the first anniversary of the date of the election at which the voters disapproved the proposition.  (Acts 70th Leg., 2nd C.S., Ch. 12, Secs. 9.07(b), (c).)

Source Law

(b)  If the board finds that the election results are favorable to the proposition to dissolve the district, the board shall issue an order declaring that the district be dissolved and shall specify in the order the date that the dissolution is to become effective.

(c)  If the board finds that the election results are not favorable to the proposition to dissolve the district, another dissolution election may not be held within 12 months after the date of the election at which voters disapproved the proposition.

Revisor's Note

Section 9.07(a), Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, provides that the board shall "meet and canvass the returns of the election."  The revised law omits that requirement for the reason stated in Revisor's Note (4) to Section 1015.203.  The omitted law reads:

Sec. 9.07.  (a)  The board shall meet and canvass the returns of the election.

Revised Law

Sec. 1015.305.  DIRECTORS IN OFFICE AFTER DISSOLUTION.  The directors in office on the date of the dissolution shall continue in office, without further election, until:

(1)  the affairs of the district are effectively concluded; and

(2)  all duties or acts required of the board are completed.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 9.08(c).)

Source Law

(c)  The directors in office on the date of the dissolution shall continue in office, without further election, until the affairs of the district are effectively concluded and all duties or acts required of the board of the district have been completed.

Revised Law

Sec. 1015.306.  IMPOSITION OF TAX; TRANSFER OF DEBTS.  After issuing the dissolution order, the board shall determine the debt owed by the district and shall:

(1)  impose on property subject to taxation in the district a tax in proportion of the debt to the property value and use the tax revenue to pay the district's bonds or satisfy other district debts; or

(2)  transfer the district's debts to any governmental entity assuming responsibility after dissolution of the district for providing hospital care in the territory included in the district.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 9.08(a).)

Source Law

Sec. 9.08.  (a)  After issuing the dissolution order, the board shall determine the full debt owed by the district and shall:

(1)  levy and collect a tax on the property subject to taxation in the district in proportion of the debt to the value of the property and shall use the tax revenue to pay bonds or to satisfy other debts of the hospital district; or

(2)  transfer the debts of the district to any governmental entity assuming responsibility for providing hospital care in the territory included in the district after dissolution of the district.

Revisor's Note

Section 9.08(a), Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, refers to the levy and collection of a tax.  The revised law substitutes "impose" for "levy and collect" because "impose" is the term generally used in Title 1, Tax Code, and includes the levying and collection of a tax.

Revised Law

Sec. 1015.307.  DISPOSITION OR TRANSFER OF ASSETS AND DEBTS.  (a)  The board may not dispose of or transfer the district's assets except for due compensation unless:

(1)  the debts are transferred to another governmental entity embracing the district; and

(2)  the transferred assets are used for the benefit of citizens formerly in the district.

(b)  If the board transfers the district's debts to another governmental entity, the board shall also transfer to that governmental entity:

(1)  title to land, buildings, improvements, and equipment related to the hospital system owned by the district; and

(2)  operating money and reserves for operating expenses and money budgeted by the district to provide medical care for district residents for the remainder of the fiscal year in which the district is dissolved. (Acts 70th Leg., 2nd C.S., Ch. 12, Secs. 9.08(b), (d) (part).)

Source Law

(b)  If the board transfers the debts of the district to another governmental entity, the board shall also transfer to that governmental entity:

(1)  title to land, buildings, improvements, and equipment related to the hospital system owned by the district; and

(2)  operating funds and reserves for operating expenses and funds that have been budgeted by the district to provide medical care for residents of the district for the remainder of the fiscal year in which the district is dissolved.

(d) … In addition, the board may not dispose of or transfer the assets of the hospital district except for due compensation unless the debts are transferred to another governmental entity embracing the district and the transferred assets are used in a way to benefit the citizens formerly in the district.

Revised Law

Sec. 1015.308.  SPENDING RESTRICTIONS.  After the effective date of the district's dissolution, the board may not spend any money except:

(1)  as authorized by law; and

(2)  as necessary to pay reasonable dissolution expenses and the district's legal debts incurred before that date.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 9.08(d) (part).)

Source Law

(d)  After the effective date of the dissolution of the district, the board may not pay out any funds except as authorized by law and any funds necessary to pay the reasonable expenses of dissolution and legal debts of the district created before the effective date of dissolution… .

Revised Law

Sec. 1015.309.  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 Freestone County summarizing the board's actions in dissolving the district.  The report must include a summary of the district's debts.

(b)  Not later than the 10th day after the date the Commissioners Court of Freestone County receives the report, the commissioners court shall:

(1)  determine whether the board has fulfilled the requirements of this subchapter; and

(2)  if the commissioners court determines the board has fulfilled its duties, enter an order to that effect.

(c)  On entry of an order under Subsection (b)(2), the directors are discharged from liability under their bonds.  (Acts 70th Leg., 2nd C.S., Ch. 12, Sec. 9.08(e).)

Source Law

(e)  After all debts have been paid and all assets and funds have been disposed of in accordance with this article, the board shall file a written report with the commissioners court of Freestone County that provides a summary of the action taken by the directors and a summary of the debts.  Not later than the 10th day after the date the report is received, the commissioners court shall make a determination of whether the board has fulfilled its duties under this article, and if the court determines that the board has fulfilled its duties, the court shall enter an order to that effect.  On entry of the order, the directors of the district are discharged from liability under their bonds.

Revisor's Note

(End of Chapter)

(1)  Sections 5.01(a) and 5.02(2), Chapter 12, Acts of the 70th Legislature, 2nd Called Session, 1987, require the transfer of certain land, buildings, improvements, equipment, funds, and reserves 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. 5.01.  (a)  On creation of the district, the City of Fairfield and the Fairfield Hospital Authority shall convey or transfer to the district:

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

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

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

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

…

(2)  assumes any outstanding indebtedness incurred by the City of Fairfield or the Fairfield Hospital Authority in providing hospital care for residents of the territory of the district before the district's creation.

(2)  Section 3, Chapter 112, Acts of the 72nd Legislature, Regular Session, 1991, relates to the terms of district directors elected at the director elections held in 1992, 1993, 1994, and 1996.  The revised law omits Section 3 of that chapter as executed.  The omitted law reads:

Sec. 3.  (a)  The election of the board of directors scheduled before the effective date of this Act to be held in May 1992 shall be held, and the directors elected at that election shall serve two-year terms.

(b)  The election of the board of directors scheduled before the effective date of this Act to be held in May 1993 shall be held, and the directors elected at that election shall serve until the directors elected in May 1996 take office.

(c)  The directors elected at the elections to be held in May 1994 and May 1996 shall serve four-year terms.