TLC: Special District Local Laws Code Proposed Chapters

80C4(3) MCK

CHAPTER 1013. CASTRO COUNTY HOSPITAL DISTRICT

SUBCHAPTER A. GENERAL PROVISIONS

Revised Law

Sec. 1013.001. 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 Castro 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 avoid frequent, unnecessary repetition of the substance of the definitions.

Revised Law

Sec. 1013.002. AUTHORITY FOR OPERATION. The Castro County Hospital District operates under the authority of and has the powers and responsibilities provided by Section 11, Article IX, Texas Constitution. (Acts 57th Leg., R.S., Ch. 103, Sec. 1 (part).)

Source Law

Sec. 1. … [Article IX, Section 11, as a part of the Constitution of the State of Texas,] … this Act shall be operative so as to authorize the creation, establishment, maintenance and operation of three (3) hospital districts within the State of Texas, [each district to have boundaries coextensive with the boundaries of one of the following counties, to wit:] … Castro; each of which districts shall have the powers and responsibilities provided by the aforesaid constitutional provision.

Revisor's Note

(1) Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, authorizes the creation of three hospital districts: one in Castro County, one in Hansford County, and one in Ochiltree County. The enabling law for each hospital district is revised in a separate chapter in the Special District Local Laws Code. Therefore, throughout this chapter, provisions that relate to all three districts or counties are revised to apply only to the Castro County Hospital District or Castro County.

(2) Section 1, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, states that the act authorizing the creation of the Castro County Hospital District is operative on adoption of Section 11, Article IX, Texas Constitution. The revised law omits the statement as executed because the constitutional provision was adopted in 1961. The omitted law reads:

Sec. 1. Upon the adoption of Article IX, Section 11, as a part of the Constitution of the State of Texas, as proposed by Senate Joint Resolution No. 22 of the 57th Legislature, Regular Session, 1961, … .

(3) Section 1, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, 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."

(4) Section 2, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, authorizes Castro County to constitute a hospital district. The revised law omits this provision as executed because the district has been created as a separate entity. The omitted law reads:

Sec. 2. Each of the counties to which this Act applies may be constituted a hospital district as hereinafter set out, and … .

Revised Law

Sec. 1013.003. ESSENTIAL PUBLIC FUNCTION; POLITICAL SUBDIVISION. The district is:

(1) a public entity performing an essential public function; and

(2) a political subdivision of this state. (Acts 57th Leg., R.S., Ch. 103, Secs. 6A(c) (part), 18 (part).)

Source Law

[Sec. 6A]

Sec. 18. All hospital districts created under the provisions of this Act shall be and are declared to be political subdivisions of the State of Texas, and … .

Revised Law

Sec. 1013.004. DISTRICT TERRITORY. The boundaries of the district are coextensive with the boundaries of Castro County. (Acts 57th Leg., R.S., Ch. 103, Sec. 1 (part).)

Source Law

Sec. 1. … each district to have boundaries coextensive with the boundaries of one of the following counties, to wit: … Castro; … .

Revised Law

Sec. 1013.005. 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 57th Leg., R.S., Ch. 103, Sec. 19 (part).)

Source Law

Sec. 19. … [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 19, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provides that the act does not violate the federal or state constitution, and requires action under the act to 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. 19. 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. …

Revisor's Note

(End of Subchapter)

Sections 2 and 3, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provide procedures for holding an election on the creation of the district and the imposition of an ad valorem tax. Because the creation of the hospital district and the imposition of the tax were approved at the election, the revised law omits the relevant law as executed. The omitted law reads:

Sec. 2. … provided, however, that such hospital district shall not be created unless and until an election is duly held in such county for such purpose, which said election may be initiated by the Commissioners Court of each of such counties upon its own motion or upon a petition of one hundred (100) resident electors, to be held not less than thirty (30) days from the time said election is ordered by the Commissioners Court. At said election there shall be submitted to the electors the proposition of whether or not a hospital district shall be created in the county; and a majority of the electors participating in said election voting in favor of the proposition shall be necessary. The ballots shall have printed thereon:

"FOR the creation of a hospital district; providing for the levy of a tax not to exceed Seventy-five Cents (75¢) on the One Hundred Dollars ($100.00) valuation"; and

"AGAINST the creation of a hospital district; providing for the levy of a tax not to exceed Seventy-five Cents (75¢) on the One Hundred Dollars ($100.00) valuation."

If such county or city located therein, either or both of them, has any outstanding bonds theretofore issued for hospital purposes (which by the provisions of Section 7 of this Act are required to be assumed by the hospital district), then the ballots for such election shall, instead of the foregoing, have printed thereon:

"FOR the creation of a hospital district; providing for the levy of a tax not to exceed Seventy-five Cents (75¢) on the One Hundred Dollars ($100.00) valuation; and providing for the assumption by such district of all outstanding bonds heretofore issued by ____ County, and by any city in said county for hospital purposes"; and

"AGAINST the creation of a hospital district; providing for the levy of a tax not to exceed Seventy-five Cents (75¢) on the One Hundred Dollars ($100.00) valuation; and providing for the assumption by such district of all outstanding bonds heretofore issued by ____ County, and by any city in said county for hospital purposes."

Sec. 3. (a) Within ten (10) days after such election is held the Commissioners Court in such county shall convene and canvass the returns of the election, and if a majority of the 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 1013.006-1013.050 reserved for expansion]

SUBCHAPTER B. DISTRICT ADMINISTRATION

Revised Law

Sec. 1013.051. BOARD ELECTION; TERM. (a) The board consists of five directors elected from the district at large.

(b) Directors serve staggered three-year terms.

(c) An election shall be held on the uniform election date in May of each year to elect the appropriate number of directors. (Acts 57th Leg., R.S., Ch. 103, Secs. 3(a) (part), (e) (part).)

Source Law

(a) … [the Commissioners Court in such county shall] … appoint five (5) persons as directors of the hospital district to serve until the first Saturday in April following the creation and establishment of the district, at which time five (5) directors shall be elected. The three (3) directors receiving the highest vote at such first election shall serve for two (2) years, the other two (2) directors shall serve for one (1) year. … All directors of the Castro County Hospital District shall serve for a period of three (3) years and until their successor has been duly elected or appointed and qualified, except that the directors elected in 2000 and one of the directors elected in 2001 shall serve for two years and their successor directors shall serve for three-year terms.

(e) A regular election of directors shall be held on the first Saturday in May of each year and … .

Revisor's Note

(1) Section 3(a), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, prescribes the procedures for appointing and electing the initial boards of directors and the terms of the initial directors. The revised law omits those provisions as executed but codifies the establishment of a board consisting of five directors elected from the district at large.

(2) Section 3(a), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, establishes staggered three-year terms for the directors and prescribes the procedure for staggering the terms of the directors first elected under that provision. The revised law codifies the provision specifying staggered terms but omits the provision relating to which year the initial terms expire as executed.

(3) Section 3(a), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provides that the directors serve until their successors are "duly elected or appointed and qualified." The revised law omits that 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.

(4) Section 3, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, was amended in 1997 to require board elections on the "first Saturday in May." From 1986 to 2003, Section 41.001, Election Code, provided for a uniform election date for all political subdivisions on the first Saturday in May. In Chapter 1315, Acts of the 78th Legislature, Regular Session, 2003, the legislature amended Section 41.001 by moving the uniform election date in May to the third Saturday. In Chapter 1, Acts of the 78th Legislature, 3rd Called Session, 2003, the legislature amended Section 41.001 by moving the uniform election date in May back to the first Saturday. In Chapter 471, Acts of the 79th Legislature, Regular Session, 2005, the legislature amended Section 41.001 by moving the uniform election date in May to the second Saturday. The revised law substitutes "uniform election date in May" for "first Saturday in May" to reflect these changes while preserving as closely as possible legislative intent expressed in the 1997 amendment to Section 3 that the election be held on the first Saturday in May, which was at that time the uniform election date in May.

Revised Law

Sec. 1013.052. NOTICE OF ELECTION. Not earlier than the 30th day or later than the 10th day before the date of an election of directors, notice of the election shall be published one time in a newspaper of general circulation in Castro County. (Acts 57th Leg., R.S., Ch. 103, Sec. 3(e) (part).)

Source Law

(e) [A regular election of directors] … notice of such election shall be published in a newspaper of general circulation in the county one (1) time not earlier than the 30th day or later than the 10th day before the date of the election. …

Revisor's Note

Section 3(e), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, requires notice of a director's election to be published "in the county." Throughout this chapter, the revised law substitutes "Castro County" for the quoted language because Castro County is the county in which the district is located.

Revised Law

Sec. 1013.053. QUALIFICATIONS FOR OFFICE. (a) A person may not be elected or appointed as a director unless the person is:

(1) a district resident; and

(2) at least 21 years of age.

(b) An employee or medical staff member of the district may not serve as a director. (Acts 57th Leg., R.S., Ch. 103, Sec. 3(b) (part).)

Source Law

(b) A person may not be appointed or elected as a member of the board of directors of said hospital district unless the person is a resident thereof and, at the time of such election or appointment, the person is more than twenty-one (21) years of age. A person may not be elected or appointed as a member of the board of directors of the Castro County Hospital District unless the person is a resident of the district and is at the time of election or appointment at least 21 years of age. An employee or a medical staff member of the … Castro County Hospital District may not serve as a director of the respective district.

Revised Law

Sec. 1013.054. 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) The district may pay for the directors' bonds with district money.

(c) Each director's bond and constitutional oath or affirmation of office shall be deposited with the district's depository bank for safekeeping. (Acts 57th Leg., R.S., Ch. 103, Sec. 3(c) (part).)

Source Law

(c) 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 One Thousand Dollars ($1,000) payable to said district conditioned upon the faithful performance of the member's duties, and such oaths and bonds shall be deposited with the depository bank of the district for safekeeping. The … Castro County Hospital District may purchase directors' bonds with district funds.

Revisor's Note

Section 3(c), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, requires each director to take the constitutional oath of office. The revised law omits that provision because Section 1, Article XVI, Texas Constitution, requires all officers in this state 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, permits an officer in this state to take either the oath or affirmation.

Revised Law

Sec. 1013.055. 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 three 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 57th Leg., R.S., Ch. 103, Sec. 3(d) (part).)

Source Law

(d) … All vacancies in the office of director shall be filled for the unexpired term by appointment of the remainder of the board of directors. In the event the number of directors shall be reduced to less than three (3) 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. 1013.056. OFFICERS. The board shall elect from among its members a president, vice president, and secretary. (Acts 57th Leg., R.S., Ch. 103, Sec. 3(d) (part).)

Source Law

(d) … The board of directors of the Castro County Hospital District shall organize by electing from the membership of the board one member to serve as president, one member to serve as vice president, and one member to serve as secretary. …

Revised Law

Sec. 1013.057. COMPENSATION; EXPENSES. A director serves without compensation but may be reimbursed for actual expenses incurred in the performance of official duties on approval of the expenses by the entire board. (Acts 57th Leg., R.S., Ch. 103, Sec. 4 (part).)

Source Law

Sec. 4. … [the board of directors of the district] who shall serve without compensation but may be reimbursed for actual expenses incurred in the performance of their official duties upon the approval of such expenses by the entire board of directors. …

Revised Law

Sec. 1013.058. VOTING REQUIREMENT. A concurrence of three directors is sufficient in any matter relating to district business. (Acts 57th Leg., R.S., Ch. 103, Sec. 3(d) (part).)

Source Law

(d) … [members of the board of directors] … a concurrence of three (3) shall be sufficient in all matters pertaining to the business of the district. …

Revisor's Note

Section 3(d), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provides that three 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 majority of a board or commission constitutes a quorum. The omitted law reads:

(d) … Any three (3) members of the board of directors shall constitute a quorum and … .

Revised Law

Sec. 1013.059. 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 receives the compensation determined by the board. (Acts 57th Leg., R.S., Ch. 103, Sec. 8(b) (part).)

Source Law

(b) The board of directors of the … Castro County Hospital District may appoint a qualified person as administrator of the district. The administrator serves at the will of the board of directors and receives compensation as determined by the board of directors. …

Revised Law

Sec. 1013.060. 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 57th Leg., R.S., Ch. 103, Sec. 8(b) (part).)

Source Law

(b) … The administrator shall supervise the work and activities of the district and direct the general affairs of the district subject to the limitations prescribed by the board of directors.

Revised Law

Sec. 1013.061. EMPLOYEES. (a) The board may employ a general manager, attorney, bookkeeper, and architect.

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

(c) The board may delegate to the district administrator the authority to hire employees under Subsection (b). (Acts 57th Leg., R.S., Ch. 103, Secs. 8(a) (part), (c) (part).)

Source Law

(a) [The board] … may employ a general manager, attorney, bookkeeper and architect.

(c) The board of directors of the … Castro County Hospital District may employ technicians, nurses, fiscal agents, accountants, and other necessary employees. The board of directors may delegate to the administrator the authority to employ these persons for the district.

Revised Law

Sec. 1013.062. RECRUITMENT OF MEDICAL STAFF AND EMPLOYEES. The board may spend district money, enter into agreements, and take other necessary action to recruit physicians and other persons to serve as medical staff members or district employees, including:

(1) advertising and marketing;

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

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

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

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

(4) providing on a rent-free basis or subsidizing the cost of office space or other facilities for a health care professional, including a physician. (Acts 57th Leg., R.S., Ch. 103, Sec. 8A(j).)

Source Law

(j) The board of directors may spend district funds, enter into agreements, and take other necessary action to recruit physicians and other persons to serve as medical staff members or employees of the district, including:

(1) advertising and marketing;

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

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

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

Revised Law

Sec. 1013.063. APPOINTMENT AND REMOVAL OF MEDICAL STAFF. (a) The board may appoint to or remove from the medical staff any doctors as necessary for the efficient operation of the district and may make temporary appointments as necessary.

(b) The board may adopt policies relating to the appointment and removal of medical staff members. (Acts 57th Leg., R.S., Ch. 103, Sec. 8(d) (part).)

Source Law

(d) The board of directors of the … Castro County Hospital District may appoint doctors to the medical staff or remove doctors from the medical staff as necessary for the efficient operation of the district. This authority includes the authority to make temporary appointments. The board of directors may adopt policies relating to the appointment and removal of medical staff members.

Revised Law

Sec. 1013.064. HEALTH CARE EDUCATIONAL PROGRAMS. The board may spend district money, enter into an agreement, or take other necessary action to conduct, participate in, or assist in providing health care educational programs for current or prospective medical staff members or employees of the district. (Acts 57th Leg., R.S., Ch. 103, Sec. 8A(k).)

Source Law

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

Revised Law

Sec. 1013.065. RETIREMENT BENEFITS. The board may provide retirement benefits for district employees by:

(1) establishing or administering a retirement program; or

(2) participating in:

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

(B) another statewide retirement system in which the district is eligible to participate. (Acts 57th Leg., R.S., Ch. 103, Sec. 8A(l).)

Source Law

(l) The board of directors may provide retirement benefits for employees of the district by:

(1) establishing or administering a retirement program; or

(2) participating in the Texas County and District Retirement System or in any other statewide retirement system in which the district is eligible to participate.

Revised Law

Sec. 1013.066. LIABILITY INSURANCE; INDEMNIFICATION. (a) The board may defend or indemnify an officer, director, board appointee, medical staff member, or district employee against or from a claim, expense, or liability arising from duties performed in that capacity.

(b) The board may purchase liability insurance coverage or establish a self-insurance program to fund an indemnity obligation under this section. (Acts 57th Leg., R.S., Ch. 103, Sec. 4 (part).)

Source Law

Sec. 4. … The board of directors of the … Castro County Hospital District may defend or indemnify an officer, director, board appointee, medical staff member, or employee of the district against or for liability, claims, or expenses that arise from the performance of a duty in the person's respective capacity as an officer, director, board appointee, medical staff member, or employee of the district. The board of directors may purchase liability insurance coverage or establish a self-insurance program to fund indemnification under this section.

Revised Law

Sec. 1013.067. MAINTENANCE OF RECORDS; PUBLIC INSPECTION. Except as provided by Section 1013.054, all district records, including books, accounts, notices, minutes, and all other matters of the district and the operation of its facilities, shall be:

(1) maintained at the district office; and

(2) open to public inspection at the district office at all reasonable hours. (Acts 57th Leg., R.S., Ch. 103, Sec. 8(e).)

Source Law

(e) All books, records, accounts, notices and minutes and all other matters of the district and the operation of its facilities shall, except as herein provided, be maintained at the office of the district and there be open to public inspection at all reasonable hours.

Revisor's Note

Section 8(e), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, states that records shall be maintained at the district office "except as herein provided." For the convenience of the reader, the revised law substitutes a reference to Section 1013.054, which is the only exception provided in Chapter 103.

Revised Law

Sec. 1013.068. SEAL. The board may adopt a seal for the district. (Acts 57th Leg., R.S., Ch. 103, Sec. 8(a) (part).)

Source Law

(a) [The board of directors of such district] … shall have the power to adopt a seal for such district; and … .

Revisor's Note

(End of Subchapter)

(1) Section 3(e), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, 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:

(e) . . . A person who wishes to have the person's name printed on the ballot as a candidate for director of the Castro County Hospital District must file an application with the secretary of the board of the Castro County Hospital District not later than the 45th day before the date of the election. …

(2) Sections 3A(a)-(d), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provide procedures regarding write-in voting for director elections. The revised law omits those provisions because they mostly duplicate Section 285.131, Health and Safety Code, which, according to its terms, applies to all hospital districts created under general or special law. The portion of the provision regarding the deadline for filing a declaration of write-in candidacy is superseded by amendments made to Section 285.131, Health and Safety Code, by Section 11, Chapter 925, Acts of the 78th Legislature, Regular Session, 2003, and by Section 34, Chapter 1109, Acts of the 79th Legislature, Regular Session, 2005. In addition, this conclusion conforms to the actual practice of the district, which follows the guidelines established by the secretary of state. The omitted law reads:

Sec. 3A. (a) This section applies only to the … Castro County hospital districts.

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

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

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

(3) Section 3A(e), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provides that Subchapter C, Chapter 2, Election Code, applies to the election of unopposed director candidates. The revised law omits the provision because Section 285.131, Health and Safety Code (requiring write-in candidates to file a declaration of candidacy), makes Subchapter C, Chapter 2, apply to the district. The omitted law reads:

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

[Sections 1013.069-1013.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Revised Law

Sec. 1013.101. DISTRICT RESPONSIBILITY. The district has full responsibility for providing medical and hospital care for the district's needy and indigent residents. (Acts 57th Leg., R.S., Ch. 103, Sec. 13 (part).)

Source Law

Sec. 13. … such hospital district shall be deemed to have assumed full responsibility for the furnishing of medical and hospital care for the needy and indigent persons residing in said hospital district from the date that taxes are collected for the hospital district… .

Revisor's Note

Section 13, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provides that the district "shall be deemed to have assumed full responsibility" for providing medical and hospital care for the district's needy and indigent residents. The revised law substitutes "has" for the quoted language because the duty to assume the responsibility is executed.

Revised Law

Sec. 1013.102. RESTRICTION ON COUNTY OR MUNICIPALITY TAXATION. Castro County or a municipality in Castro County may not impose a tax for hospital purposes. (Acts 57th Leg., R.S., Ch. 103, Sec. 13 (part).)

Source Law

Sec. 13. Except as herein provided, no county that has been constituted a hospital district, and no city therein, shall thereafter levy any tax for hospital purposes; and … .

Revisor's Note

(1) Section 13, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provides that a county constituted as a hospital district and any city in the county may not levy a tax for hospital purposes "except as herein provided." The only provision that authorizes a city or county to levy a tax is Section 15. Since Section 15 is omitted from the revised law as explained in Revisor's Note (4), the revised law omits "except as herein provided" as unnecessary.

(2) Section 13, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provides that a "county that has been constituted a hospital district, and no city therein" may levy taxes for hospital purposes. The revised law substitutes "Castro County" for "county that has been constituted a hospital district" because the district is wholly located in Castro County. Additionally, the revised law substitutes "municipality" for "city" to conform to the terminology used in the Local Government Code. Finally, throughout this chapter the revised law substitutes "impose" for "levy" because, in this context, the terms are synonymous and "impose" is more commonly used.

(3) Section 6(f), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, prohibits Castro County or a city located in Castro County from selling bonds that have been authorized to provide hospital facilities but that have not been sold on the date the district is created. The revised law omits that provision as executed. The omitted law reads:

(f) If the county in which the district is located or any city within such county has voted bonds to provide hospital facilities, but such bonds have not been sold and delivered at the date of the creation of the hospital district, the authority for such bonds shall be canceled and they shall not be sold.

(4) Section 15, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, authorizes Castro County to impose an additional tax to assist in the operation of the district and authorizes the county and district to contract for the provision of medical care to the county's needy residents. The revised law omits those provisions as unconstitutional under Section 11, Article IX, Texas Constitution, which prohibits a municipality or political subdivision in a hospital district from imposing taxes for medical or hospital care for needy individuals after creation of the district and provides that the hospital district's tax must be "sufficient to discharge obligations, liabilities, and responsibilities and to maintain and operate the hospital system." The omitted law reads:

Sec. 15. The county in which the hospital district is located and which has the same boundaries of such hospital district may levy and collect a tax of Ten Cents (10¢) on the One Hundred Dollars ($100.00) valuation of property in such county to aid in the operation of the district or the payment of the debts of such district, such tax to be in addition to other taxes permitted by the Constitution of Texas to be levied, all as provided in the aforesaid Constitutional provision authorizing the creation of hospital districts for … Castro Counties; and such county and hospital district may contract whereby the district will assume all obligations of the county in respect to the care of indigents within such county in exchange for such funds of the county. No such contract shall extend for a period in excess of five (5) years, but may be renewed for a similar term or terms upon conditions satisfactory to the contracting parties, and during the term that the hospital district assumes all responsibilities, obligations and liabilities of the county, no tax may be levied by the county other than as specified herein.

Revised Law

Sec. 1013.103. MANAGEMENT AND CONTROL. The management and control of the district is vested in the board. (Acts 57th Leg., R.S., Ch. 103, Sec. 4 (part).)

Source Law

Sec. 4. The management and control of each hospital district created pursuant to the provisions of this Act is hereby vested in the board of directors of the district … .

Revised Law

Sec. 1013.104. HOSPITAL SYSTEM. (a) The district may provide for the establishment of a hospital or hospital system to provide medical and hospital care to the district's needy residents.

(b) The hospital system may include:

(1) facilities and equipment for domiliciary care and treatment of sick, injured, or geriatric patients;

(2) outpatient clinics;

(3) convalescent home facilities;

(4) physicians' offices; and

(5) any other facilities or equipment the board considers necessary for hospital purposes. (Acts 57th Leg., R.S., Ch. 103, Secs. 2 (part), 8A(a) (part).)

Source Law

Sec. 2. … hospital district … may provide for the establishment of a hospital or hospital system to furnish medical and hospital care to needy persons residing in said hospital district; … .

Sec. 8A. (a) … The hospital system may include facilities and equipment to provide for domiciliary care and treatment of sick, injured, or geriatric patients, outpatient clinics, convalescent home facilities, physicians' offices, or any other facility or equipment the board considers necessary for hospital purposes. …

Revised Law

Sec. 1013.105. RULES. (a) The board may adopt rules governing the operation of the district, including district facilities.

(b) On approval by the board, the rules may be published in booklet form at district expense and made available to any taxpayer on request. (Acts 57th Leg., R.S., Ch. 103, Sec. 8(f).)

Source Law

(f) The board of directors is specifically empowered to adopt rules and regulations governing the operation of such district and its facilities which rules and regulations shall supplement but shall not contravene any of the provisions of this Act. Such rules and regulations may, upon approval of the board of directors, be published in booklet or pamphlet form at the expense of the district and may be made available to any taxpayer upon request.

Revisor's Note

(1) Section 8(f), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, refers to "rules and regulations." The revised law omits the references to "regulations" because under Section 311.005(5), Government Code (Code Construction Act), a rule is defined to include a regulation.

(2) Section 8(f), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provides that the board may adopt rules that "shall supplement but shall not contravene any of the provisions of this Act." The revised law omits the quoted language because, under established principles of law, the board is not authorized to take any action contrary to the laws of this state.

(3) Section 8(f), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, refers to publishing rules in "booklet or pamphlet form." The revised law omits "pamphlet" because, in context, the meaning of "pamphlet" is included in the meaning of "booklet."

Revised Law

Sec. 1013.106. PURCHASING AND ACCOUNTING PROCEDURES. (a) The board may prescribe the method and manner of making purchases and expenditures by and for the district.

(b) The board shall prescribe:

(1) all accounting and control procedures; and

(2) the method of purchasing necessary supplies, materials, and equipment. (Acts 57th Leg., R.S., Ch. 103, Sec. 8(a) (part).)

Source Law

Sec. 8. (a) 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 also shall prescribe all accounting and control procedures; the method of purchasing necessary supplies, materials and equipment; and … .

Revised Law

Sec. 1013.107. MOBILE EMERGENCY MEDICAL SERVICE. The district may operate or provide for the operation of a mobile emergency medical service as part of the hospital system. (Acts 57th Leg., R.S., Ch. 103, Sec. 8A(a) (part).)

Source Law

(a) … The district also may operate or provide for the operation of a mobile emergency medical service as part of the hospital system.

Revised Law

Sec. 1013.108. DISTRICT PROPERTY, FACILITIES, AND EQUIPMENT. (a) The board shall determine:

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

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

(b) The board may:

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

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

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

(e) The district may operate any facility covered by this section or contract with any person to operate the facility. (Acts 57th Leg., R.S., Ch. 103, Secs. 8A(a) (part), (b), (c), (d), (e).)

Source Law

Sec. 8A. (a) The board of directors of the Castro County Hospital District shall determine the type, number, and location of facilities required to establish and maintain an adequate hospital system and the type of equipment necessary for hospital care… .

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

(d) The district may operate any facilities covered by this section or may enter into a contract with any person to operate any of those facilities.

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

Revisor's Note

Section 8A(a), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, requires the board to determine the facilities 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. 1013.109. 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, real, personal, or mixed, located in district territory, if the interest is necessary or convenient for the district to exercise a right, power, privilege, or function conferred on the district 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 57th Leg., R.S., Ch. 103, Sec. 10.)

Source Law

Sec. 10. A hospital district organized in pursuance of this Act shall have the right and power of eminent domain for the purpose of acquiring by condemnation any and all property of any kind or character, real, personal or mixed, or any interest therein, including outright ownership of such property in fee simple absolute, within the boundaries of the said district, necessary or convenient to the exercise of the rights, power, privileges and functions conferred upon it by this Act, in the manner provided by General Law with respect to condemnation; provided that the said District shall not be required to make deposits in the registry of the trial court of the sum required by paragraph No. 2 in Article 3268, V.C.A., 1925, or to make the bond required therein. In condemnation proceedings being prosecuted by the said district, the district shall not be required to pay in advance or to 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 relating to a condemnation proceeding, nor to give bond for costs or for supersedeas on any appeal or writ of error proceeding to any Court of Civil Appeals, or to the Supreme Court.

Revisor's Note

(1) Section 10, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, 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 10, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provides that the district must exercise the power of eminent domain in the "manner provided by General Law with respect to condemnation." The revised law substitutes for "General Law" a reference to Chapter 21, Property Code, because that is the general law governing eminent domain.

(3) Section 10, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, refers to "paragraph No. 2 in Article 3268, V.C.A., 1925." That statute was codified in 1983 as Section 21.021(a), Property Code. The revised law is drafted accordingly.

(4) Section 10, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provides that the district is not required to provide bond on any appeal or writ of error proceedings to "any Court of Civil Appeals, or to the Supreme Court." The revised law omits the references to the courts because those are the only courts to which the district may appeal or apply for a writ of error.

Revised Law

Sec. 1013.110. 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 provisions prescribed in writing by the donor that are not inconsistent with the proper management and objectives of the district. (Acts 57th Leg., R.S., Ch. 103, Sec. 16.)

Source Law

Sec. 16. Said board of directors of the hospital district is authorized on behalf of said hospital district to accept donations, gifts and endowments for the hospital district 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 donor, not inconsistent with proper management and objects of hospital district.

Revisor's Note

Section 16, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, refers to "donations" and "gifts." The revised law omits the reference to "donations" because "donations" is included in the meaning of "gifts."

Revised Law

Sec. 1013.111. CONTRACTS FOR CARE AND TREATMENT. (a) The board may contract with a hospital, hospital authority, or political subdivision of this state located outside the district's boundaries to reimburse the district for the care and treatment of a sick or injured person of that entity.

(b) The board may contract with this state or a federal agency for the state or agency to reimburse the district for the treatment of a sick or injured person. (Acts 57th Leg., R.S., Ch. 103, Sec. 8A(g) (part).)

Source Law

(g) [The board of directors] … may contract with a hospital, hospital authority, hospital district, emergency services district, county, municipality, or other political subdivision of this state that is located outside its boundaries to be reimbursed for the care and treatment of the sick, diseased, or injured persons of that entity. The board of directors may also contract with the state or agencies of the federal government to be reimbursed for the treatment of sick, diseased, or injured persons.

Revisor's Note

(1) Section 8A(g), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, refers to a "hospital district, emergency services district, county, municipality, or other political subdivision of this state." The revised law omits the reference to a "hospital district, emergency services district, county, [and] municipality" because those terms are included in the meaning of "political subdivision."

(2) Section 8A(g), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, refers to the treatment of a "sick, diseased, or injured" person. Throughout this chapter, the revised law omits the references to "diseased" because "diseased" is included in the meaning of "sick."

Revised Law

Sec. 1013.112. CONTRACTS WITH GOVERNMENTAL ENTITIES FOR INVESTIGATORY OR OTHER SERVICES. The board may contract with a political subdivision or governmental agency to provide investigatory or other services related to facilities for the medical care, hospital, or welfare needs of district inhabitants. (Acts 57th Leg., R.S., Ch. 103, Sec. 8A(g) (part).)

Source Law

(g) The board of directors may contract with a political subdivision or governmental agency to provide investigatory or other services related to facilities for the medical care, hospital, or welfare needs of the inhabitants of the district and … .

Revised Law

Sec. 1013.113. PROVISION OF SERVICES OUTSIDE DISTRICT. Subject to board approval the district may provide primary care, emergency services, preventative medical services, and other health-related services outside the district, provided that the services serve the purpose of the district as established by this chapter. (Acts 57th Leg., R.S., Ch. 103, Sec. 8A(f).)

Source Law

(f) The district, subject to the approval of the board of directors, may provide primary care, emergency services, preventative medical services, and other health-related services outside the district, provided that the services serve the purpose of the district as established by this Act.

Revised Law

Sec. 1013.114. JOINT ADMINISTRATION OR DELIVERY OF HEALTH CARE SERVICES. (a) To provide joint administration or delivery of health care services, the district may contract with, affiliate with, or enter into another arrangement with:

(1) a managed care system;

(2) a preferred provider organization;

(3) a health maintenance organization;

(4) another provider of an alternative health care or delivery system; or

(5) a private hospital.

(b) The district may spend district money to establish and maintain a partnership, corporation, or other entity involved in the delivery of health care services. (Acts 57th Leg., R.S., Ch. 103, Sec. 8A(h).)

Source Law

(h) The district may contract with, affiliate with, or enter into another arrangement with a managed care system, a preferred provider organization, a health maintenance organization, another provider of alternative health care or delivery system, or a private hospital to jointly administer or deliver health care services. The district may spend district funds to establish and maintain partnerships, corporations, or other entities involved in the delivery of health care services.

Revised Law

Sec. 1013.115. PAYMENT FOR TREATMENT; PROCEDURES. (a) When a patient who resides in Castro County is admitted to a district facility, the board shall 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 an agent designated by the district to handle the inquiry determines that the patient or those relatives cannot pay all or part of the costs of the patient's care and treatment in the hospital, the amount of the costs that cannot be paid becomes a charge against the district.

(c) If it is determined that the patient or those relatives are liable to 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 to the district's treasurer a specified amount each week for the patient's support. The amount ordered must be proportionate to the person's financial ability and may not exceed the actual per capita cost of maintenance.

(d) The district 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's designated agent, the board shall hold a hearing and, after calling witnesses, shall:

(1) resolve the dispute or doubt; and

(2) issue an appropriate order.

(f) Either party to the dispute may appeal the order to the district court. (Acts 57th Leg., R.S., Ch. 103, Sec. 14.)

Source Law

Sec. 14. Whenever a patient has been admitted to the facilities of the hospital district from the county in which the district is situated, the directors shall cause inquiry to be made as to the patient's circumstances, and of the relatives of such patient legally liable for the patient's support. If the patient finds that such patient or said relatives are liable to pay for the patient's care and treatment in whole or in part, an order shall be made directing such patient, or said relatives, to pay to the treasurer of the hospital district for the support of such patient a specified sum per week, in proportion to their financial ability, but such sum shall not exceed the actual per capita cost of maintenance. The district shall have power and authority to collect such sum from the estate of the patient, or the patient's relatives 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. If the agent designated by the district to handle such affairs finds that such patient or said relatives are not able to pay, either in whole or in part, for the patient's care and treatment in such hospital, the same shall become a charge upon the hospital district. Should there be a dispute as to the ability to pay, or doubt in the mind of the person designated as aforesaid, the district's directors shall hear and determine same, after calling witnesses, and shall make such order as may be proper, from which appeal shall lie to the district court by either party to the dispute.

Revisor's Note

Section 14, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, refers to the patient making the determination of liability for the patient's care and treatment. The revised law omits this reference because it is clear from the context of the source law that the patient does not make the determination.

Revised Law

Sec. 1013.116. REIMBURSEMENT FOR SERVICES. (a) The board shall require a county, municipality, or public hospital located outside the district to reimburse the district for the district's care and treatment of a sick or injured person for whom that county, municipality, or public hospital has an obligation to provide care, as provided by Chapter 61, Health and Safety Code.

(b) The board shall seek reimbursement under Article 104.002, Code of Criminal Procedure, for the district's care and treatment of a person who is confined in a Castro County jail facility and is not a district resident. (Acts 57th Leg., R.S., Ch. 103, Secs. 14A(a) (part), (b).)

Source Law

Sec. 14A. (a) This section applies only to the … Castro County hospital districts.

(b) The board of directors of the district shall seek reimbursement, in the manner provided by Chapter 61, Health and Safety Code, from a county, municipality, or public hospital located outside the boundaries of the district for the district's care for or treatment of a sick, diseased, or injured person for whom that county, municipality, or public hospital has an obligation to provide care. The board of directors shall seek reimbursement under Article 104.002, Code of Criminal Procedure, for the district's care for or treatment of a person who is not a resident of the district and who is confined in a county jail facility.

Revised Law

Sec. 1013.117. NONPROFIT CORPORATION. (a) The district may create and sponsor a nonprofit corporation under the Business Organizations Code and may contribute money to or solicit money for the corporation.

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

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

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

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

(e) This subsection and Subsection (a-1) expire December 31, 2009. (Acts 57th Leg., R.S., Ch. 103, Sec. 8A(i).)

Source Law

(i) The district may sponsor and create a non-profit corporation under the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes) and may contribute funds to or solicit funds for the corporation. The corporation may use funds, other than funds paid by the corporation to the district, only to provide health care or other services the district may provide under this Act. The board of directors of the hospital district shall establish adequate controls to ensure that the corporation uses its funds as required by this subsection. The corporation may invest corporation funds in any manner in which the district may invest funds, including investing funds as authorized by Chapter 2256, Government Code.

Revisor's Note

Section 8A(i), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, refers to the Texas Non-Profit Corporation Act. That act was codified in various chapters of the Business Organizations Code by Chapter 182, Acts of the 78th Legislature, Regular Session, 2003. The Business Organizations Code took effect January 1, 2006, and applies only to domestic business entities formed on or after that date, to domestic business entities formed before that date that elect to have that code govern their operations, and to certain foreign business entities. On January 1, 2010, the Texas Non-Profit Corporation Act expires, and the Business Organizations Code will apply to all business entities without regard to date of formation or whether an entity is a foreign or domestic business entity. The revised law is drafted to reflect the applicability of these statutes in accordance with their effective dates or on election by a business entity.

Revised Law

Sec. 1013.118. AUTHORITY TO SUE AND BE SUED. As a governmental agency, the district may sue and be sued in its own name in any court of this state. (Acts 57th Leg., R.S., Ch. 103, Sec. 18 (part).)

Source Law

Sec. 18. [All hospital districts created under the provisions of this Act] … as a governmental agency may sue and be sued in any and all courts of this state in the name of such district.

Revisor's Note

(End of Subchapter)

Section 12, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provides authority for the "State Board of Health or any State Board of Charities (or Public Welfare)" to inspect hospital district facilities and records. The revised law omits Section 12 because various state laws, including Chapters 222 and 241, Health and Safety Code, provide the necessary inspection authority to appropriate state agencies. The omitted law reads:

Sec. 12. All hospital districts established or maintained under provisions of this Act shall be subject to inspection by any duly authorized representative of the State Board of Health or any State Board of Charities (or Public Welfare) that may hereafter be created, and resident officers shall admit such representatives into all hospital district facilities and give them access on demand to all records, reports, books, papers and accounts pertaining to the hospital district.

[Sections 1013.119-1013.150 reserved for expansion]

SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS

Revised Law

Sec. 1013.151. BUDGET. The board annually shall require a budget to be prepared for the next fiscal year that includes:

(1) proposed expenditures and disbursements;

(2) estimated receipts and collections; and

(3) the amount of taxes required to be imposed for the year. (Acts 57th Leg., R.S., Ch. 103, Sec. 9(b) (part).)

Source Law

(b) The board of directors shall each year cause a budget to be prepared showing the proposed expenditures and disbursements and the estimated receipts and collections for the following fiscal year and … . The proposed budget shall also show the amount of taxes required to be levied and collected during such fiscal year and … .

Revisor's Note

Section 9(b), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, refers to the levy and collection of a tax. The revised law substitutes "imposed" for "levied and collected" because "imposed" is the term generally used in Title 1, Tax Code, and includes the levying and collection of an ad valorem tax.

Revised Law

Sec. 1013.152. PROPOSED BUDGET: NOTICE AND HEARING. (a) The board shall hold a public hearing on the proposed budget.

(b) Notice of the hearing must be published at least once in a newspaper of general circulation in Castro County not later than the 10th day before the date of the hearing.

(1) appear at the time and place designated in the notice; and

(2) be heard regarding any item included in the proposed budget. (Acts 57th Leg., R.S., Ch. 103, Sec. 9(b) (part).)

Source Law

(b) [The board of directors] … shall hold a public hearing on the proposed budget after publication of a notice of hearing in a newspaper of general circulation in the county at least once not less than ten (10) days prior to the date set for the hearing. Any person who is a taxpayer of the district shall have the right to appear at the time and place designated in the notice and be heard with reference to any item shown in the proposed budget. …

Revised Law

Sec. 1013.153. FISCAL YEAR. The district operates according to a fiscal year established by the board. (Acts 57th Leg., R.S., Ch. 103, Sec. 9(a) (part).)

Source Law

(a) … The Castro County Hospital District shall operate on the fiscal year established by the board of directors of that district… .

Revised Law

Sec. 1013.154. ANNUAL AUDIT. (a) The board annually shall have an independent audit made of the district's books and records for the fiscal year.

(b) Not later than December 31 each year, the audit shall be filed:

(1) with the comptroller; and

(2) at the district office. (Acts 57th Leg., R.S., Ch. 103, Sec. 9(a) (part).)

Source Law

(a) … The district directors shall cause an annual independent audit to be made of the books and records of the district, such audit to be made covering such fiscal year, and the same shall be filed with the Comptroller of Public Accounts of the State of Texas and at the office of the district not later than December 31st of each year.

Revisor's Note

Section 9(a), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, refers to "the Comptroller of Public Accounts of the State of Texas." The revised law substitutes "comptroller" for the quoted language because Section 403.001, Government Code, defines "comptroller" in any state statute to mean the comptroller of public accounts of the State of Texas.

Revised Law

Sec. 1013.155. DEPOSITORY OR TREASURER. (a) The board by resolution shall designate a bank or banks in Castro County as the district's depository or treasurer. A designated bank serves for three years and until a successor is named.

(b) All district money shall be secured in the manner provided for securing county funds. (Acts 57th Leg., R.S., Ch. 103, Sec. 11.)

Source Law

Sec. 11. Within thirty (30) days after appointment and qualification of the board of directors of a hospital district, the said directors shall by resolution designate a bank or banks within the county in which the district is located as the district's depository or treasurer and all funds of the district shall be secured in the manner now provided for the security of county funds. The depository shall serve for a period of three (3) years and until a successor has been named.

Revisor's Note

Section 11, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, requires the board to select a depository "[w]ithin thirty (30) days after appointment and qualification of the board of directors of a hospital district." The revised law omits the quoted language as executed.

Revised Law

Sec. 1013.156. AUTHORITY TO BORROW MONEY; SECURITY. (a) The board may borrow money for district purposes on district credit or secured by district revenue. The rate may not exceed the maximum annual percentage rate allowed by law for district obligations at the time the loan is made.

(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. (Acts 57th Leg., R.S., Ch. 103, Secs. 6B (part), 16A.)

Source Law

Sec. 6B. The board of directors of the . . . Castro County Hospital District may borrow money for district purposes on the credit of the district or secured by revenues of the district.

Sec. 16A. (a) This section applies only to the Castro County Hospital District.

(b) The board of directors may borrow money at a rate not to exceed the maximum annual percentage rate allowed by law for district obligations at the time of the loan.

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

(2) taxes to be levied by the district in the next 12 months 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.

(d) A loan for which taxes or bonds are pledged must mature not later than the first anniversary of the date on which the loan was made. A loan for which district revenues are pledged must mature not later than the fifth anniversary of the date on which the loan was made.

[Sections 1013.157-1013.200 reserved for expansion]

SUBCHAPTER E. BONDS

Revised Law

Sec. 1013.201. 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 57th Leg., R.S., Ch. 103, Sec. 6(a).)

Source Law

Sec. 6. (a) The board of directors shall have the power and authority to issue and sell as the obligations of such hospital district, and in the name and upon the faith and credit of such hospital district, general obligation bonds 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.

Revised Law

Sec. 1013.202. TAX TO PAY GENERAL OBLIGATION BONDS. (a) At the time general obligation bonds are issued by the district under Section 1013.201, 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 75 cents on each $100 valuation of all taxable property in the district. (Acts 57th Leg., R.S., Ch. 103, Sec. 6(b) (part).)

Source Law

(b) At the time of issuance of any general obligation bond, a sufficient tax shall be levied to create an interest and sinking fund to pay the interest and principal as same matures provided said tax together with any other taxes levied for said district shall not exceed Seventy-five Cents (75¢) on each $100 valuation of taxable property in any one year. …

Revisor's Note

Section 6(b), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, 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. 1013.203. GENERAL OBLIGATION BOND ELECTION. (a) The district may issue general obligation bonds only if the bonds are authorized by a majority of the district voters voting at an election held for that purpose.

(b) The board may order the election on its own motion.

(1) the location of the polling places;

(2) the presiding election officers;

(3) the purpose of the bond issuance;

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

(5) the maximum interest rate of the bonds; and

(6) the maximum maturity of the bonds.

(d) Notice of a bond election shall be given by publishing a substantial copy of the order calling the election in a newspaper of general circulation in Castro County once a week for two consecutive weeks before the date of the election. The first publication must occur at least 14 days before the date of the election. (Acts 57th Leg., R.S., Ch. 103, Sec. 6(d) (part).)

Source Law

(d) Except as provided by Section 6A, no bonds shall be issued by such hospital district [(except refunding bonds)] until authorized by a majority vote of the electors residing in such hospital district, voting at an election called and held for such purpose. Such election may be called by the board of directors of its own motion, shall specify the place or places where the election shall be held, the presiding officers thereof, the purpose for which the bonds are to be issued, the amount thereof, maximum interest rate (not to exceed six (6%) per cent per annum) and the maximum maturity date of such bonds … . Notice of election shall be given by publishing a substantial copy of the order calling the election in a newspaper of general circulation in such county once a week for two (2) consecutive weeks prior to the date of election, the date of the first publication being at least fourteen (14) full days prior to the date set for the election. …

Revisor's Note

(1) Section 6(d), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, refers to a majority vote of the "electors residing in such hospital district." The revised law substitutes "voter" for "elector" because the former is the term used in the Election Code.

(2) Section 6(d), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, refers to an election "called and held." The revised law omits the reference to "calling" an election because, in this context, "calling" an election is included in the meaning of "holding" an election. Under Chapter 3, Election Code, all elections must be ordered (called) before they may be held.

(3) Section 6(d), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provides that the ballot proposition must include the maximum interest rate "(not to exceed six (6%) per cent per annum)." The revised law omits the quoted language for the reason stated in Revisor's Note (1) to Section 1013.207.

(4) Section 6(d), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, requires the district to pay the costs of elections. The revised law omits the provision because Section 1.014, Election Code, applicable to the district under Section 1.002 of that code, requires the district to pay the costs of an election. The omitted law reads:

(d) … The costs of such election shall be paid by the hospital district.

Revised Law

Sec. 1013.204. MATURITY OF GENERAL OBLIGATION BONDS. District general obligation bonds must mature not later than 40 years after the date of issuance. (Acts 57th Leg., R.S., Ch. 103, Sec. 6(d) (part).)

Source Law

(d) . . . [such election may be called by the board of directors of its own motion, shall specify] … the maximum maturity date of such bonds (not to exceed forty (40) years from their date of issuance). …

Revised Law

Sec. 1013.205. EXECUTION OF GENERAL OBLIGATION BONDS. (a) The board president shall execute the general obligation bonds in the district's name.

(b) The board secretary shall countersign the bonds. (Acts 57th Leg., R.S., Ch. 103, Sec. 6(c) (part).)

Source Law

(c) General obligation bonds shall be executed in the name of the hospital district and on its behalf by the president of the board of directors, and countersigned by the secretary of the board of directors, and … .

Revisor's Note

Section 6(c), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provides that the general obligation 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 6(c) also provides that after approval 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 bonds issued under this chapter by application of Section 1202.001, Government Code. The omitted law reads:

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

Revised Law

Sec. 1013.206. REVENUE BONDS. (a) The board may issue revenue bonds in the name and on the faith and credit of the district to:

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

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

(3) acquire real property 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.

(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 57th Leg., R.S., Ch. 103, Sec. 6A(d).)

Source Law

(d) The board of directors of the Castro County Hospital District may issue revenue bonds in the name and on the faith and credit of the district to purchase, construct, repair, renovate, or acquire buildings or improvements, equip buildings and improvements for hospital purposes, and acquire real property for hospital purposes. The revenue bonds issued under this subsection must be payable from and secured by a pledge of all or part of the Castro County Hospital District's revenues from operations of the hospital system. The bonds may also be secured by a mortgage or deed of trust on all or part of the district's property. The revenue bonds must be issued in the manner provided by Sections 264.042, 264.043, 264.046, 264.047, 264.048, and 264.049, Health and Safety Code, for the issuance of revenue bonds by county hospital authorities.

Revised Law

Sec. 1013.207. REFUNDING BONDS. (a) The board may, without an election, issue refunding bonds to refund outstanding bonds issued or assumed by the district.

(b) A refunding bond may be:

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

(2) exchanged wholly or partly for not less than a similar amount of outstanding bonds and the unpaid matured interest on the bonds. (Acts 57th Leg., R.S., Ch. 103, Secs. 6(d) (part), (e) (part).)

Source Law

[Sec. 6]

(d) [Except as provided by Section 6A, no bonds shall be issued by such hospital district] (except refunding bonds) [until authorized by a majority vote of the electors residing in such hospital district] … .

(e) The bonds of such hospital district may, without the necessity of any election therefor, be issued for the purpose of refunding and paying off any bonded indebtedness theretofore assumed by such hospital district and any bonds therefore issued by such hospital district. … The refunding bonds may be sold and the proceeds thereof applied to the payment of any such outstanding bonds or may be exchanged in whole or in part for not less than a like amount of said outstanding bonds and interest matured thereon, but unpaid; … .

Revisor's Note

(1) Sections 6(e) and 6A(a), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, limit the interest rate for refunding bonds and other bonds issued by the district. The revised law omits the part of Section 6(e) that relates to interest rates as impliedly repealed by Section 2(a), Chapter 3, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes), which was revised in 1999 as Section 1204.006(a), Government Code. Section 1204.006(a) permits a public agency, including a hospital district, to issue bonds at a net effective interest rate not to exceed 15 percent and applies to bonds issued under this chapter by application of Section 1204.001, Government Code. The revised law omits the part of Section 6A(a) that refers to interest rates because it duplicates Section 1204.006. The omitted law reads:

[Sec. 6]

(e) … provided the average interest cost per annum on the refunding bonds, computed in accordance with recognized standard bond interest cost tables, shall not exceed the average interest cost per annum so computed, upon the bonds to be discharged out of the proceeds of the refunding bonds, unless the total interest cost on the refunding bonds, computed to their respective maturity dates, is less than the total interest cost so computed on the bonds to be discharged out of such proceeds. In the foregoing computations, any premium or premiums required to be paid upon the bonds to be refunded as a condition to payment in advance of their stated maturity dates shall be taken into account as an addition to the net interest cost to the hospital district of the refunding bonds.

Sec. 6A. (a) … The interest rate for district bonds may not exceed the maximum rate allowed under Chapter 3, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes).

(2) Sections 6(e) and 6A(a), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, 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:

[Sec. 6]

(e) … Refunding bonds issued by the Castro County Hospital District 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)… .

Sec. 6A. (a) In selling and reissuing bonds, and in making payments of outstanding indebtedness, the … Castro County hospital districts shall comply with Chapter 503, Acts of the 54th Legislature, Regular Session, 1955 (Article 717k, Vernon's Texas Civil Statutes), and Chapter 784, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-3, Vernon's Texas Civil Statutes). …

Revised Law

Sec. 1013.208. BONDS EXEMPT FROM TAXATION. The following are exempt from taxation by this state or a political subdivision of this state:

(1) bonds issued by the district;

(2) any transaction relating to the bonds; and

(3) profits made in the sale of the bonds. (Acts 57th Leg., R.S., Ch. 103, Sec. 6A(c) (part).)

Source Law

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

Revisor's Note

Section 6A(c), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, refers to "any city, county, special district, or other political subdivision of the state." The revised law omits "city," "county," and "special district" because those terms are included in the meaning of "political subdivision of the state."

Revisor's Note

(End of Subchapter)

(1) Section 17, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provides that bonds issued under that act are authorized investments for certain entities. The revised law omits the provision as unnecessary. As to several of the entities listed, Section 17 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 building and loan associations (now called savings and loan associations) are regulated by Sections 63.002 and 64.001, Finance Code. As to the remaining entities listed, Section 17 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 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)), 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. 17. All bonds issued by or assumed by the districts authorized to be established and created under the provisions of this Act shall be and are declared to be legal and authorized investments for banks, savings banks, trust companies, building and loan associations, insurance companies, fiduciaries, trustees, guardians, and for the sinking funds of cities, towns, villages, counties, school districts, or other political corporations or subdivisions of the State of Texas; and … .

(2) Section 17, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provides that bonds issued under that chapter may secure certain deposits. Although Section 17 does not specifically mention the deposits the bonds are eligible to secure, the only deposits the bonds could secure are deposits of public funds of this state or political subdivisions of this state. Therefore, the revised law omits the provision 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. 17. … such bonds shall be lawful and sufficient security for deposits to the extent of their face value when accompanied by all unmatured coupons appurtenant thereto.

[Sections 1013.209-1013.250 reserved for expansion]

SUBCHAPTER F. TAXES

Revised Law

Sec. 1013.251. IMPOSITION OF AD VALOREM TAX. (a) On final approval of the annual budget, the board may impose a tax on all property in the district subject to district taxation.

(b) The tax may be used to pay:

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

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

(c) The district may not impose a tax to pay the principal of or interest on revenue bonds issued by the district. (Acts 57th Leg., R.S., Ch. 103, Secs. 5A(a), (b) (part), (c) (part), (d), (e), 9(b) (part).)

Source Law

Sec. 5A. (a) This section applies only to the Castro County Hospital District.

(b) The board of directors annually may impose property taxes … .

(d) The taxes may be used to pay:

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

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

(e) The district may not impose taxes to pay the principal of or interest on revenue bonds issued by the district.

[Sec. 9]

(b) … upon final approval of the budget, the board of directors shall levy such tax as may be required and … .

Revisor's Note

Section 5A(f), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provides that the Tax Code governs the appraisal, assessment, and collection of district taxes. The revised law omits this 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:

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

Revised Law

Sec. 1013.252. TAX RATE. (a) The board may impose the tax at a rate not to exceed the limit approved by the voters at the election authorizing the imposition of the tax.

(b) The tax rate for all purposes may not exceed 75 cents on each $100 valuation of all taxable property in the district. (Acts 57th Leg., R.S., Ch. 103, Secs. 5A(b) (part), (c), 6(b) (part).)

Source Law

[Sec. 5A]

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

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

[Sec. 6]

(b) … Taxes levied by the Castro County Hospital District may not exceed the limit approved by the voters at the election authorizing the levy of taxes… .

Revised Law

Sec. 1013.253. TAX ASSESSOR-COLLECTOR. (a) 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.

(b) The tax assessor-collector shall assess and collect taxes imposed by the district. (Acts 57th Leg., R.S., Ch. 103, Secs. 5A(g), 9(b) (part).)

Source Law

[Sec. 5A]

(g) The board of directors 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.

[Sec. 9]

(b) … it shall be the duty of the said tax assessor and collector to assess and collect such tax.

Revisor's Note

Section 9(b), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, requires the board to certify the tax rate to the tax assessor-collector. The revised law omits that provision because Section 26.05(a), Tax Code, requires the governing body of a taxing unit to adopt a tax rate for the current year and to notify the tax assessor of that rate. The omitted law reads:

(b) … [the board of directors shall] … certify the tax rate for such year to the county tax assessor and collector as provided in Section 5 hereof, and … .

Revisor's Note

(End of Subchapter)

Section 13, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provides that the delinquent taxes owed to Castro County or a city in Castro County at the time of enactment of that section shall be paid to the district. Section 33.02, Tax Code, provides that a person may pay delinquent taxes over a 36-month period. Section 33.05, Tax Code, prohibits a taxing unit from filing a suit to collect a tax on real property that has been delinquent more than 20 years. Therefore, the revised law omits the provision as executed. The omitted law reads:

Sec. 13. … That portion of delinquent taxes owed cities and counties or levied for present city and county hospital systems under Acts of the 48th Legislature, 1943, Chapter 383, page 691, shall continue to be paid to the hospital district by the city and county as collected, and applied by the hospital district to the purposes for which such taxes originally were levied.

[Sections 1013.254-1013.300 reserved for expansion]

SUBCHAPTER G. DISSOLUTION

Revised Law

Sec. 1013.301. DISSOLUTION; ELECTION. (a) The district may be dissolved only on approval of a majority of the district voters voting in an election held for that purpose.

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

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

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

(e) The order calling the election must state:

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

(2) the date of the election;

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

(4) the location of the polling places.

(f) Section 41.001(a), Election Code, does not apply to an election ordered under this section. (Acts 57th Leg., R.S., Ch. 103, Secs. 21(a), (b), (c), (d).)

Source Law

Sec. 21. (a) This section applies only to the Castro County Hospital District.

(b) The district may be dissolved only if the dissolution is approved by a majority of the voters of the district voting in an election called and held for that purpose.

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

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

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

(2) the date of the election;

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

(4) the locations of the polling places.

Revisor's Note

Section 21(b), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provides that the district may be dissolved if authorized at an election "called and held" for that purpose. The revised law omits references to "calling" an election for the reason stated in Revisor's Note (2) to Section 1013.203.

Revised Law

Sec. 1013.302. NOTICE OF ELECTION. (a) The board shall give notice of an election under this subchapter by publishing once a week for two consecutive weeks the election order in a newspaper with general circulation in the district.

(b) The first publication of the notice must appear not later than the 35th day before the date set for the election. (Acts 57th Leg., R.S., Ch. 103, Sec. 21(e) (part).)

Source Law

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

Revised Law

Sec. 1013.303. BALLOT. The ballot for an election under this subchapter must be printed to permit voting for or against the proposition: "The dissolution of the Castro County Hospital District." (Acts 57th Leg., R.S., Ch. 103, Sec. 21(e) (part).)

Source Law

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

Revised Law

Sec. 1013.304. ELECTION RESULTS. (a) If a majority of the votes in an election under this subchapter favor dissolution, the board shall find that the district is dissolved.

(b) If a majority of the votes in the election do not favor dissolution, the board shall continue to administer the district and another election on the question of dissolution may not be held before the first anniversary of the date of the most recent election to dissolve the district. (Acts 57th Leg., R.S., Ch. 103, Sec. 21(f).)

Source Law

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

Revised Law

Sec. 1013.305. TRANSFER OR ADMINISTRATION OF ASSETS. (a) If a majority of the votes in the election held under this subchapter favor dissolution, the board shall:

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

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

(b) If the board makes the transfer under Subsection (a)(1), the county or agency assumes all debts and obligations of the district at the time of the transfer, and the district is dissolved. (Acts 57th Leg., R.S., Ch. 103, Secs. 21(g), (h).)

Source Law

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

(1) transfer the land, buildings, improvements, equipment, and other assets that belong to the district to a county or other governmental agency in the county in which the district is located; or

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

(h) If the district transfers the land, buildings, improvements, equipment, and other assets to a county or other governmental agency, the county or agency assumes all debts and obligations of the district at the time of the transfer, and the district is dissolved.

Revised Law

Sec. 1013.306. SALE OR TRANSFER OF ASSETS AND LIABILITIES. (a) The district may not be dissolved unless the board provides for the sale or transfer of the district's assets and liabilities to another person.

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

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

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

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

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

(e) A grant from federal funds is an obligation to be repaid in satisfaction. (Acts 57th Leg., R.S., Ch. 103, Secs. 21(n), (o).)

Source Law

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

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

Revisor's Note

Section 21(n), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, refers to "another person or entity." The revised law omits "entity" because "entity" is included in the meaning of "person" under Section 311.005(2), Government Code (Code Construction Act).

Revised Law

Sec. 1013.307. IMPOSITION OF TAX AND RETURN OF SURPLUS TAXES. (a) After the board finds that the district is dissolved, the board shall:

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

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

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

(c) A taxpayer may request that the taxpayer's share of surplus tax money be credited to the taxpayer's county taxes. If a taxpayer requests the credit, the board shall direct the secretary to transmit the money to the county tax assessor-collector. (Acts 57th Leg., R.S., Ch. 103, Secs. 21(i), (j), (k).)

Source Law

(i) After the board of directors finds that the district is dissolved, the board shall:

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

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

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

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

Revised Law

Sec. 1013.308. REPORT; DISSOLUTION ORDER. (a) After the district has paid all its debts and has disposed of all its money and other assets as prescribed by this subchapter, the board shall file a written report with the Commissioners Court of Castro County summarizing the board's actions in dissolving the district.

(b) Not later than the 10th day after the date the Commissioners Court of Castro County receives the report and determines that the requirements of this subchapter have been fulfilled, the commissioners court shall enter an order dissolving the district and releasing the board from any further duty or obligation. (Acts 57th Leg., R.S., Ch. 103, Secs. 21(l), (m).)

Source Law

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

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

Revisor's Note

(End of Chapter)

(1) Section 2, Chapter 173, Acts of the 58th Legislature, Regular Session, 1963, validates the actions of the commissioners court of a county that created a hospital district under that act and validates the actions of the board. The revised law omits the provisions as executed. The omitted law reads:

Sec. 2. The organization and creation of Hospital Districts created or voted to be created by authority of Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, and heretofore established or attempted to be established by the Commissioners Court of the county to which said law applies are hereby ratified, validated and confirmed in all respects to the same extent and to like effect as if duly and legally established in the first instance. All acts of the Commissioners Court of the counties of such districts in ordering an election or elections, submitting to a vote of the resident qualified property taxpaying voters who had duly rendered their property for taxation, the proposition of whether or not a hospital district with boundaries coexistent with the limits of the county should be created and established with authority to levy a tax not to exceed Seventy-five Cents (75¢) on the One Hundred Dollars ($100) valuation; and providing for the assumption by such district of all outstanding bonds heretofore issued by such county, and by any city in said city for hospital purposes, are hereby validated and confirmed. Such election or elections and all acts of the Commissioners Court in such counties in declaring the results thereof are hereby ratified, validated and confirmed. The fact that by inadvertence or oversight any act was omitted by the Commissioners Court or any official of any such county in ordering an election or elections or in giving sufficient statutory notice thereof or in declaring the results thereof shall in no wise invalidate any of such proceedings or the creation of the hospital district sought to be created by such proceedings, provided, however, that the provisions of this Section 2 shall not apply to validate any hospital district which on the effective date of this Act is involved in litigation in any district court of this state, the Court of Civil Appeals, or the Supreme Court of Texas, at the effective date of this Act, in which litigation the validity of the organization or creation of such hospital district is attacked, if such litigation is ultimately determined against the validity of the organization or creation of the hospital district.

(2) Sections 2 and 7, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, allow for the district's assumption of certain hospitals or hospital systems, provide for the transfer of land, buildings, equipment, 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. … may take over the hospital or hospital system, either owned separately by a county or jointly with a city within such county, or … .

Sec. 7. (a) Any lands, buildings or equipment that may be jointly or separately owned by the county and city within the boundaries of the district and by which medical services or hospital care, including geriatric care, are furnished to needy persons of the city and county, shall become the property of the hospital district; and title thereto shall vest in the hospital; and any funds of such city and county, or either, which are the proceeds of any bonds assumed by the hospital district, as hereby provided, shall become the funds of the hospital district; and title thereto shall vest in the hospital district; and there shall vest in the hospital district and become the funds of the hospital district the unspent portions of any funds theretofore set up or appropriated by budget or otherwise by such city or the county, or either of them, for the support and maintenance of the hospital facilities for the year within which the hospital district comes into existence, thereby providing such hospital district with funds with which to maintain and operate such facilities for the remainder of such year. All obligations under contract legally incurred by such city or county, or either of them, for the building of, or the support and maintenance of, hospital facilities, prior to the creation of the said district but outstanding at the time of the creation of the district, shall be assumed and discharged by the hospital district without prejudice to the rights of third parties, provided that the management and control of the property and affairs of the present hospital system shall continue in the board of managers of such system until appointment and organization of the board of directors of the hospital district, at which time the board of managers of the present hospital system or systems shall turn over all records, property and affairs of said hospital system to the board of directors of the hospital district and shall cease to exist.

(b) Any outstanding bonded indebtedness incurred by such city or county, either or both of them, in the acquisition of such lands, buildings and equipment, or in the construction and equipping of such hospital facilities, together with any other outstanding bonds issued by either of them for hospital purposes, and the proceeds of which are in whole or in part still unspent, shall be assumed by the hospital district and become the obligation of the hospital district; and the city or county, either or both of them, that issued such bonds, shall be by the hospital district relieved of any further liability for the payment thereof, or for providing interest and sinking fund requirements thereon; … .

(c) The Commissioners Court and the city, where a hospital or hospital system is jointly operated, or the Commissioners Court, where the county owns the hospital or hospital system, as the case may be, as soon as the hospital district is created and authorized at the election hereinabove provided, and there have been appointed and qualified the board of hospital managers as hereinbefore provided, shall execute and deliver to the hospital district, to-wit: to its said board of directors, an instrument in writing conveying to said hospital district the hospital property, including lands, buildings and equipment; and shall transfer to said hospital district the funds hereinabove provided to become vested in the hospital district, upon being furnished the certificate of the chairman of the board to the fact that a depository for the district's funds has been selected and has qualified; which funds shall, in the hands of the hospital district and of its board of directors be used for all or any of the same purposes as, and for no other purposes than, the purposes for which the county or the city transferring such funds could lawfully have used the same had they remained the property and funds of such county or city.

(3) Section 7(b), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, provides that the transfer of facilities and money to the hospital district by Castro County or a city located in Castro County does not affect the rights of bond holders. The revised law omits the provision because Section 16, Article I, Texas Constitution, prohibits any law that impairs the obligations of a contract. The omitted law reads:

(b) … provided that nothing herein contained shall limit or affect any of the rights of any of the holders of such bonds against the city or the county, as the case may be, in the event of default in the payment of the principal or interest on any of such bonds in accordance with their respective terms.

(4) Section 19, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, 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. 19. … If any provision of this Act should be invalid, such fact shall not affect the authorization for the creation of the districts or the validity of any other provision of this Act, and the Legislature here 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.

(5) Chapter 49, Acts of the 59th Legislature, Regular Session, 1965, validates various election procedures in 1961, various bond and tax provisions arising out of that election, and actions taken by the hospital district established by the election. The revised law omits the provision as executed. The omitted law reads:

Sec. 1. All hospital districts, created or purporting to have been created by authority of Chapter 103, Acts of the 57th Legislature, Regular Session, 1961 (codified as Article 4494q-4 of Vernon's Texas Civil Statutes), and pursuant to orders of the Commissioners Courts of the counties to which said law applies declaring or attempting to declare such districts created, are hereby ratified, validated and confirmed in all respects and to the same extent and with like effect as if duly and legally established in the first instance; and each such district is hereby declared to be, from and after the date of the entering of such order by the proper Commissioners Court, a valid and subsisting political subdivision of the State of Texas acting under the aforesaid law and fully possessed of all rights, powers, duties and responsibilities granted and imposed thereby and granted and imposed by Article 9, Section 11 of the Constitution of this State.

Sec. 2. Without in any way limiting the generalization of the provisions of Section 1 hereof, all creation and organizational acts and proceedings of the Commissioners Courts of the counties to which said law applies which acts and proceedings created and organized or attempted to create and organize hospital districts pursuant to said law are hereby ratified, validated and confirmed in all respects to the same extent and with like effect as if duly and legally established in the first instance. All acts and proceedings of the Commissioners Courts of said counties in ordering and holding elections wherein the question of the levy of a tax not to exceed seventy-five cents (75¢) on the one hundred dollar valuation and/or question of assumption of any bonds was or were submitted to a vote of the resident qualified property taxpaying electors who had duly rendered their property for taxation, irrespective of whether or not the questions of the levy of such tax and the assumption of such bonds were joined together or were severally or jointly joined with any other matters in a single proposition, are hereby validated and confirmed; and all acts, proceedings and orders of said Commissioners Courts declaring or attempting to declare the results of said election are hereby in all respects ratified, validated and confirmed. The fact that by inadvertence or oversight any act was omitted by the Commissioners Court of any such county in ordering an election or in giving sufficient statutory notice or in declaring the results thereof shall in no wise invalidate any of such proceedings nor the creation or organization of any such hospital district sought to be created thereby.

Sec. 3. All acts and proceedings of the board of directors of any such districts in organizing the districts and in electing officers or other matters and in ordering and holding a bond election or elections, declaring the results thereof, and all acts and proceedings levying, attempting or purporting to levy taxes for and on behalf of such hospital districts, and all bonds issued and outstanding and all bonds heretofore voted but not yet issued, are hereby in all respects ratified, validated and confirmed. The fact that by inadvertence or oversight any act of the board of directors of any such district or by the officers thereof in ordering and holding such election or elections, or in declaring the results thereof, or in levying the taxes for such district or in the issuance of the bonds thereof, shall not invalidate any of such acts and proceedings or any bonds so issued or authorized to be so issued by such districts.

Sec. 4. All acts and proceedings of such hospital districts in assuming full responsibility for the furnishing of medical and hospital care for the needy and indigent persons residing within said respective districts, as required by said law, are hereby in all respects ratified, validated and confirmed.

Sec. 5. This Act does not apply to litigation pending before the effective date of this Act.

Sec. 6. If any word, phrase, clause, sentence, paragraph, section or other part of this Act or the application thereof to any person or circumstance shall ever be held to be invalid or unconstitutional by a court of competent jurisdiction in this State, the remainder of the Act and the application of such word, phrase, clause, sentence, paragraph, section or other part of this Act to other persons or circumstances shall not be affected thereby.


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