80C47(4) YDB

 

CHAPTER 1038. HARDEMAN COUNTY HOSPITAL DISTRICT

SUBCHAPTER A. GENERAL PROVISIONS

Revised Law

Sec. 1038.001.  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 Hardeman County Hospital District. (New.)

Revisor's Note

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

Revised Law

Sec. 1038.002.  AUTHORITY FOR OPERATION. The Hardeman County Hospital District operates and is administered and financed in accordance with Section 9, Article IX, Texas Constitution, and has the rights, powers, and duties provided by this chapter. (Acts 66th Leg., R.S., Ch. 214, Sec. 1 (part).)

Source Law

Sec. 1.  In accordance with the provisions of Article IX, Section 9, of the Texas Constitution this Act authorizes the creation, establishment, administration, maintenance, operation, and financing of a hospital district within this state, … .  The district shall be known as the Hardeman County Hospital District with the rights, powers, and duties provided in this Act.

Revisor's Note

Section 1, Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, authorizes the "creation, establishment, administration, maintenance, operation, and financing" of the district.  The revised law omits "creation" and "establishment" as executed.  The revised law omits "maintenance" because, in this context, the meaning of that term is included in the meaning of "operation."

Revised Law

Sec. 1038.003.  ESSENTIAL PUBLIC FUNCTION. The district performs an essential public function in carrying out the purposes of this chapter. (Acts 66th Leg., R.S., Ch. 214, Sec. 20 (part).)

Source Law

Sec. 20.  In carrying out the purposes of this Act, a district created under this Act will be performing an essential public function, and … .

Revised Law

Sec. 1038.004.  DISTRICT TERRITORY. The boundaries of the district are coextensive with the boundaries of County Commissioners Precincts Nos. 1, 2, and 4 of Hardeman County, Texas, as those boundaries existed on May 17, 1979. (Acts 66th Leg., R.S., Ch. 214, Sec. 1 (part).)

Source Law

Sec. 1.  … the boundaries of which shall include all of the land included in County Commissioner Precinct Nos. 1, 2, and 4 of Hardeman County, Texas, on the effective date of this Act. …

Revisor's Note

Section 1, Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, refers to the boundaries of County Commissioners Precincts Nos. 1, 2, and 4 "on the effective date of this Act."  The act took effect on May 17, 1979, and the revised law is drafted accordingly.

Revised Law

Sec. 1038.005.  DISTRICT SUPPORT AND MAINTENANCE NOT STATE OBLIGATION. The support and maintenance of the district may not become a charge against or obligation of this state. (Acts 66th Leg., R.S., Ch. 214, Sec. 19 (part).)

Source Law

Sec. 19.  The support and maintenance of a hospital district created under this Act shall never become a charge against or obligation of the State of Texas, … .

Revised Law

Sec. 1038.006.  RESTRICTION ON STATE FINANCIAL ASSISTANCE. The legislature may not make a direct appropriation for the construction, maintenance, or improvement of a district facility. (Acts 66th Leg., R.S., Ch. 214, Sec. 19 (part).)

Source Law

Sec. 19.  … nor shall any direct appropriation be made by the legislature for the construction, maintenance, or improvement of any of the facilities of the district.

Revised Law

Sec. 1038.007.  ELECTION DATE.  Except as provided by Section 1038.051, Section 41.001(a), Election Code, does not apply to an election held under this chapter.  (Acts 66th Leg., R.S., Ch. 214, Secs. 3(a) (part), 6(a) (part), 21A(c) (part).)

Source Law

Sec. 3.  (a)  … Section 9b, Texas Election Code, as amended (Article 2.01b, Vernon's Texas Election Code), does not apply to an election held under this Act… .

Sec. 6.  (a)  … Section 41.001(a), Election Code, does not apply to a bond election ordered by the board… .

[Sec. 21A]

(c)  … Section 41.001(a), Election Code, does not apply to an election ordered under this section… .

Revisor's Note

Section 3(a), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, refers to "Section 9b, Texas Election Code, as amended (Article 2.01b, Vernon's Texas Election Code)."  In 1985, Section 9b was codified as Section 41.001(a), Election Code, and the revised law is drafted accordingly.  The revised law adds "[e]xcept as provided by Section 1038.051" because that section provides that Section 41.001, Election Code, applies to an election under Section 1038.051.  Finally, the revised law omits the reference to "as amended" because under Section 311.027, Government Code (Code Construction Act), a reference to a statute applies to all reenactments, revisions, or amendments of that statute unless expressly provided otherwise.

Revisor's Note

(End of Subchapter)

Sections 3(a), (b), (c), and (e) and 7, Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, 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 district and the imposition of the tax were approved at the election, the revised law omits those provisions as executed.  The omitted law reads:

Sec. 3.  (a)  The district shall not be created nor shall any tax be authorized unless and until the creation and the tax are approved by a majority of the qualified electors of the area of the proposed district voting at an election called and held for that purpose.  An election may be ordered by the commissioners court of Hardeman County.  The commissioners court shall order the election within 10 days after a petition signed by 100 or more qualified electors residing within the boundaries of the proposed district is filed.  The commissioners court may choose a date for the election that is not less than 35 nor more than 60 days from the date the election is ordered… .  The order calling the election shall specify the date, place or places of holding the election, the form of ballot, and the presiding judge and alternate judge for each voting place and shall provide for clerks as in county elections.  Notice of election shall be given by the commissioners court by publishing a substantial copy of the election order in a newspaper or newspapers of general circulation in the proposed district once a week for two consecutive weeks, the first publication to appear at least 30 days before the date set for the election.  The failure of the election shall not prohibit the calling and holding of subsequent elections for the same purpose, provided no district confirmation election may be held within 12 months of any preceding election for the same purpose.  If the district is not confirmed at an election held within 60 months from the effective date of this Act, this Act is repealed.

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

(c)  The form of ballot used at the election for the creation of the district shall be in conformity with Section 61, Texas Election Code, as amended (Article 6.05, Vernon's Texas Election Code), so that ballots may be cast for or against the following proposition:  "The creation of the Hardeman County Hospital District of Hardeman County, Texas; providing for the levy of annual taxes for hospital purposes at a rate not to exceed 75 cents on the $100 valuation of all taxable property within the district."

(e)  Within 20 days after the election is held, the commissioners court shall convene and canvass the returns of the election, and if the election results are favorable to the proposition specified in Subsection (c) of this section, the commissioners court shall so find and declare the hospital district created.

Sec. 7.  A petition for an election to create the hospital district as provided in Section 3 of this Act may incorporate a request that a separate proposition be submitted at the election as to whether the board of the district, in the event it is created, shall be authorized to issue bonds for the purposes specified in Section 6 of this Act.  The petition shall specify the maximum amount of bonds to be issued and their maximum maturity, which shall be included in the proposition submitted at the election.  At the election to create the district, the commissioners court may submit a proposition on whether bonds will be issued for the purposes specified in Section 6 of this Act, regardless of whether a petition so requests and regardless of whether a petition is presented.  The commissioners court shall canvass the returns of the bond proposition if one is submitted at the election to create the district.  If the district is authorized to be created and if a majority of the votes cast in the election favor the issuance of the bonds, the board may issue the bonds in the manner provided in this Act for the issuance of district bonds.

[Sections 1038.008-1038.050 reserved for expansion]

SUBCHAPTER B. DISTRICT ADMINISTRATION

Revised Law

Sec. 1038.051.  BOARD ELECTION; TERM.  (a) The board consists of seven directors elected from the district at large.

(b)  The board shall declare the results of the election.

(c)  Directors serve staggered two-year terms unless four-year terms are established under Section 285.081, Health and Safety Code.

(d)  Section 41.001, Election Code, applies to an election held under this section.  (Acts 66th Leg., R.S., Ch. 214, Secs. 3(d) (part), (f) (part).)

Source Law

(d)  … Each voter shall vote for seven persons and the seven receiving the highest number of votes are the first board of directors. Of those elected, the three directors receiving the lowest number of votes shall serve until the first Saturday in May following the election. The four directors receiving the highest number of votes shall serve until the first Saturday in May of the year following the expiration of the terms of the other three directors.

(f)  The commissioners court shall determine the seven candidates for director receiving the highest number of votes at the creation election and declare those persons elected to the board.  The commissioners court also shall declare the terms of each director.  Successors to the board shall be elected by vote of the qualified electors of the entire district for two-year terms.  A regular election for directors shall be held as provided by Section 41.001, Election Code. … The board shall canvass the returns and declare the results. …

Revisor's Note

(1)  Sections 3(d) and (f), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, prescribe the procedures for electing the initial board.  The revised law omits those provisions as executed but codifies the establishment of a board consisting of seven directors elected from the district at large.  Section 3(d) also establishes staggered two-year terms for the initial elected directors that expire one or two years after the election.  The revised law codifies the provision specifying staggered terms but omits the provision relating to which year the initial terms expire as executed.

(2)  Section 3(d), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, prescribes the balloting procedure for electing the initial board.  The revised law omits the provision as executed.  The omitted law reads:

(d)  At the election to create the district, a separate ballot shall be submitted to the voters containing the names of all qualified persons who filed an application with the commissioners court at least 25 days before the election asking to have their names placed on the ballot for the office of director.  …

(3)  Section 3(f), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provides that directors serve two-year terms. Section 285.081, Health and Safety Code, applicable to this district, provides a mechanism by which the governing board of a hospital district, on its own motion, may order that the members are to be elected in even-numbered years to serve staggered four-year terms.  The revised law is drafted accordingly and adds a reference to Section 285.081, Health and Safety Code, for the convenience of the reader.

(4)  Section 3(f), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provides that "[t]he board shall canvass the returns" of an election of directors.  Throughout this chapter, the revised law omits this requirement because it duplicates Section 67.002, Election Code, which requires the governing body of a political subdivision that orders an election to canvass the returns. Although Section 3(f) does not state that the board orders the election, Section 3.004, Election Code, requires the governing body of a political subdivision that has elective offices to order the general election for those officers.

Revised Law

Sec. 1038.052.  NOTICE OF ELECTION. At least 30 days before the date of an election of directors, the board shall publish notice of the election one time in a newspaper or newspapers that individually or collectively have general circulation in the district.  (Acts 66th Leg., R.S., Ch. 214, Sec. 3(f) (part).)

Source Law

(f)  … The board shall publish notice of each election of directors in a newspaper or newspapers that individually or collectively provide general circulation in the district one time at least 30 days before the date of the election. …

Revised Law

Sec. 1038.053.  QUALIFICATIONS FOR OFFICE. (a)  A person may not be elected or appointed as a director unless the person is:

(1)  a resident of the district; and

(2)  a qualified voter.

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

(1)  the district administrator;

(2)  the attorney for the district; or

(3)  a district employee.  (Acts 66th Leg., R.S., Ch. 214, Sec. 3(h).)

Source Law

(h)  No person shall be elected or appointed as a member of the board unless he or she is a resident of the district and a qualified elector.  Neither the administrator, the attorney, nor any employee of the district shall be eligible to serve as a director.

Revisor's Note

Section 3(h), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provides that a director must be a qualified "elector." Throughout this chapter, the revised law substitutes "voter" for "elector" because the former is the term used in the Election Code.

Revised Law

Sec. 1038.054.  BOND; RECORD OF BOND AND OATH OR AFFIRMATION OF OFFICE. (a)  Each director may be required to execute a good and sufficient bond for $5,000 that is:

(1)  approved by the Commissioners Court of Hardeman County;

(2)  payable to the district; and

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

(b)  The district may provide for a director's bond with district money.

(c)  Each director's bond and constitutional oath or affirmation of office shall be kept in the district's permanent records.  (Acts 66th Leg., R.S., Ch. 214, Secs. 3(a) (part), (g).)

Source Law

Sec. 3.  (a)  … [the commissioners court of Hardeman County] … .

(g)  Each member of the board shall qualify by executing the constitutional oath of office and may be required to execute good and sufficient bond to be approved by the commissioners court for $5,000 payable to the district, conditioned upon the faithful performance of that director's duties as director.  The oath and bond shall be kept in the permanent records of the district.  The district may provide for directors' bonds with district funds.

Revisor's Note

Section 3(g), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, 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 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 the affirmation.

Revised Law

Sec. 1038.055.  BOARD VACANCY. If a vacancy occurs in the office of director, the remaining directors shall appoint a director for the unexpired term. (Acts 66th Leg., R.S., Ch. 214, Sec. 3(f) (part).)

Source Law

(f)  … A vacancy in office shall be filled for the unexpired term by appointment by the remainder of the board of directors.

Revised Law

Sec. 1038.056.  OFFICERS. (a)  The board shall elect:

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

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

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

(c)  The board shall fill a vacancy in a board office for the unexpired term. (Acts 66th Leg., R.S., Ch. 214, Sec. 3(i) (part).)

Source Law

(i)  The board shall organize by electing one of its number as president and one of its number as vice-president.  A secretary, who need not be a director, also shall be elected.  Officers shall be elected for a term of one year and a vacancy shall be filled for the unexpired term by the board.  …

Revised Law

Sec. 1038.057.  COMPENSATION; EXPENSES. A director or officer serves without compensation but may be reimbursed for actual expenses incurred in the performance of official duties.  The expenses must be:

(1)  reported in the district's records; and

(2)  approved by the board. (Acts 66th Leg., R.S., Ch. 214, Sec. 3(i) (part).)

Source Law

(i)  … All members of the board and officers shall serve without compensation but may be reimbursed for actual expenses incurred in the performance of their official duties if those expenses are approved by the board and reported in the minute book of the district or other records of the district.

Revisor's Note

Section 3(i), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, requires that approved expenses be reported in the "minute book of the district or other records of the district."  The revised law omits the reference to the "minute book of the district" because the minute book is a district record.

Revised Law

Sec. 1038.058.  VOTING REQUIREMENT. A concurrence of four directors is sufficient in any matter relating to district business. (Acts 66th Leg., R.S., Ch. 214, Sec. 3(i) (part).)

Source Law

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

Revisor's Note

Section 3(i), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provides that four directors constitute a quorum.  The revised law omits that provision because it duplicates Section 311.013, Government Code (Code Construction Act), which provides that a quorum of a public body is a majority of the number of members fixed by statute.  The omitted law reads:

(i)  … Any four members of the board shall constitute a quorum, and … .

Revised Law

Sec. 1038.059.  DISTRICT ADMINISTRATOR. (a)  The board may appoint a qualified person as district administrator.

(b)  The district administrator serves at the will of the board and is entitled to the compensation determined by the board.

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

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

(2)  contains other conditions the board may require.

(d)  The board may pay for the bond with district money. (Acts 66th Leg., R.S., Ch. 214, Sec. 4(a) (part).)

Source Law

(a)  … The board may appoint qualified persons as administrator of the hospital district, … .  The administrator, … shall serve at the will of the board and shall receive the compensation determined by the board.  The administrator may, on assuming his or her duties, execute a bond payable to the hospital district in an amount to be set by the board, in no event less than $5,000, conditioned that he or she shall perform the duties required of him or her and containing such other conditions as the board may require.  The board may pay for the bond with district funds.  …

Revised Law

Sec. 1038.060.  GENERAL DUTIES OF DISTRICT ADMINISTRATOR. Subject to the limitations prescribed by the board, the district administrator shall:

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

(2)  direct the affairs of the district. (Acts 66th Leg., R.S., Ch. 214, Sec. 4(a) (part).)

Source Law

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

Revised Law

Sec. 1038.061.  ATTORNEY; ASSISTANT DISTRICT ADMINISTRATOR. (a) The board may appoint qualified persons as:

(1)  the attorney for the district; and

(2)  the assistant district administrator.

(b)  The attorney for the district and the assistant district administrator serve at the will of the board and are entitled to the compensation determined by the board. (Acts 66th Leg., R.S., Ch. 214, Sec. 4(a) (part).)

Source Law

(a)  … The board may appoint qualified persons as … attorney for the district, and assistant to the administrator… . the attorney, and the assistant administrator, if any, shall serve at the will of the board and shall receive the compensation determined by the board. …

Revised Law

Sec. 1038.062.  APPOINTMENT AND RECRUITMENT OF STAFF AND EMPLOYEES. (a)  The board may appoint to the staff any doctors the board considers necessary for the efficient operation of the district and may make temporary appointments as necessary.

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

(c)  The board may delegate to the district administrator the authority to hire district employees, including technicians and nurses.

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

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

(2)  contractually agrees to become a district employee or independent contractor in return for that assistance.  (Acts 66th Leg., R.S., Ch. 214, Secs. 4(a) (part), (h), 15.)

Source Law

Sec. 4.  (a) … The board may appoint to the staff doctors it may deem necessary for the efficient operation of the district and may provide for temporary appointments to the staff if warranted by circumstances.  The board may delegate to the administrator the authority to employ technicians, nurses, and employees of the district.

(h)  The board may spend district funds to recruit physicians, nurses, and other trained medical personnel.  The board may contract with one or more full-time medical students or other students in a health occupation, each of whom is enrolled in and in good standing at an accredited medical school, college, or university, to pay the student's tuition or other expenses in consideration of the student's agreement to serve as an employee or independent contractor for the district.

Sec. 15.  The district may employ fiscal agents, accountants, architects, and additional attorneys as the board may consider proper.

Revised Law

Sec. 1038.063.  PERSONNEL CONTRACTS. (a) The board may contract to provide administrative or other personnel for the operation of hospital facilities.

(b)  The term of the contract may not exceed 25 years. (Acts 66th Leg., R.S., Ch. 214, Sec. 4(e).)

Source Law

(e)  The board may contract to provide administrative or other personnel for the operation of the hospital facilities.  A contract entered into under this subsection may not have a term longer than 25 years.

Revised Law

Sec. 1038.064.  RETIREMENT BENEFITS. The board may provide retirement benefits for district employees by:

(1)  establishing or administering a retirement program; or

(2)  participating in:

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

(B)  another statewide retirement system in which the district is eligible to participate. (Acts 66th Leg., R.S., Ch. 214, Sec. 4(g).)

Source Law

(g)  The board may provide retirement benefits for district employees by establishing or administering a retirement program or electing to participate in the Texas County and District Retirement System or any other statewide retirement system for which the district is eligible.

Revisor's Note

(End of Subchapter)

Section 3(f), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, 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:

(f)  …  Any person desiring to have his or her name printed on the ballot as a candidate for director shall file an application with the secretary of the board of directors at least 45 days before the election. …

[Sections 1038.065-1038.100 reserved for expansion]

SUBCHAPTER C.  POWERS AND DUTIES

Revised Law

Sec. 1038.101.  DISTRICT RESPONSIBILITY.  The district has full responsibility for:

(1)  operating all hospital facilities; and

(2)  providing medical and hospital care for the district's needy inhabitants. (Acts 66th Leg., R.S., Ch. 214, Sec. 18 (part).)

Source Law

Sec. 18.  … The hospital district shall assume full responsibility for the operation of all hospital facilities and for the furnishing of medical and hospital care for its needy inhabitants. …

Revisor's Note

Section 18, Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provides that the district "shall assume" full responsibility for operating hospital facilities and for providing medical and hospital care for the district's needy inhabitants.  The revised law substitutes "has" for the quoted language because the duty to assume the responsibility is executed.

Revised Law

Sec. 1038.102.  RESTRICTION ON POLITICAL SUBDIVISION TAXATION AND DEBT. A political subdivision located wholly or partly within the district may not impose a tax or issue bonds or other obligations for hospital purposes or to provide medical care for district residents. (Acts 66th Leg., R.S., Ch. 214, Sec. 18 (part).)

Source Law

Sec. 18.  After creation of the hospital district, no county, municipality, or political subdivision wholly or partly within the boundaries of the district may levy taxes or issue bonds or other obligations for hospital purposes or for providing medical care for the residents of the district.  …

Revisor's Note

(1)  Section 18, Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provides that "[a]fter creation of the hospital district," certain political subdivisions may not levy taxes or issue bonds.  The revised law omits the quoted language as executed.  In addition, throughout this chapter, the revised law substitutes "impose" for "levy" because, in this context, the terms are synonymous and the former is more commonly used.

(2)  Section 18, Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, refers to a "county, municipality, or political subdivision."  The revised law omits the references to "county" and "municipality"  because "county" and "municipality" are included in the meaning of "political subdivision."

Revised Law

Sec. 1038.103.  MANAGEMENT, CONTROL, AND ADMINISTRATION. The board shall manage, control, and administer the hospital system and the district's money and resources. (Acts 66th Leg., R.S., Ch. 214, Sec. 4(a) (part).)

Source Law

Sec. 4.  (a) The board shall manage, control, and administer the hospital system and all funds and resources of the district. …

Revised Law

Sec. 1038.104.  HOSPITAL SYSTEM. (a)  The district shall provide for the establishment of a hospital system by:

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

(2)  equipping the buildings; and

(3)  administering the system for hospital purposes.

(b)  The hospital system may include any facilities the board considers necessary for hospital care.  (Acts 66th Leg., R.S., Ch. 214, Secs. 2 (part), 9(a) (part).)

Source Law

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

Sec. 9.  (a) … The hospital system may include facilities deemed necessary for hospital care by the board. …

Revised Law

Sec. 1038.105.  RULES.  The board may adopt rules governing the operation of the hospital, the hospital system, and the district's staff and employees. (Acts 66th Leg., R.S., Ch. 214, Sec. 4(a) (part).)

Source Law

(a)  …  The district through its board … may promulgate rules governing the operation of the hospital, hospital system, its staff, and its employees.  …

Revisor's Note

Section 4(a), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provides that the board may "promulgate rules" to govern the district.  The revised law substitutes "adopt" for "promulgate" because the terms are synonymous and the former is more commonly used.

Revised Law

Sec. 1038.106.  PURCHASING AND ACCOUNTING PROCEDURES. The board may prescribe:

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

(2)  all accounting and control procedures.  (Acts 66th Leg., R.S., Ch. 214, Sec. 9(b) (part).)

Source Law

(b)  The board may prescribe the method and manner of making purchases and expenditures by and for the hospital district and may prescribe all accounting and control procedures.  …

Revised Law

Sec. 1038.107.  DISTRICT PROPERTY, FACILITIES, AND EQUIPMENT. (a)  The board shall determine the type, number, and location of buildings required to maintain an adequate hospital system.

(b)  The board may:

(1)  purchase or lease property, including facilities or equipment, for the district to use in the hospital system; and

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

(c)  The board may lease district hospital facilities to individuals, corporations, or other legal entities.

(d)  The board may sell or otherwise dispose of the district's property.  (Acts 66th Leg., R.S., Ch. 214, Secs. 4(b), (f), 9(a) (part), (b) (part).)

Source Law

[Sec. 4]

(b)  The board may purchase or lease property, including facilities or equipment, for the district to use in the hospital system and may mortgage or pledge the property as security for the payment of the purchase price.

(f)  The board may lease district hospital facilities to individuals, corporations, or other legal entities and may sell or otherwise dispose of the district's property.

Sec. 9.  (a)  The board is given complete discretion as to the type, number, and location of buildings required to establish and maintain an adequate hospital system. …

(b)  …  The district may acquire equipment for use in its hospital system and mortgage or pledge the property acquired as security for the payment of the purchase price. …

Revisor's Note

(1)  Section 9(a), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, authorizes the board to determine the buildings required to "establish and maintain" an adequate hospital system.  The revised law omits the reference to establishing the hospital system as executed.

(2)  Section 9(a), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, originally enacted in 1979 and never amended, authorizes the district to lease district facilities "on terms and conditions considered to be to the best interest of its inhabitants."  Section 9(a) also authorizes the district to sell or otherwise dispose of "any real or personal property or equipment of any nature on terms and conditions found by the board to be in the best interest of its inhabitants."  The revised law omits those provisions as impliedly repealed by Section 4(f), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, codified in this section.  Section 4(f) was added by Section 2, Chapter 499, Acts of the 76th Legislature, Regular Session, 1999, and provides general authority to lease, sell, or otherwise dispose of district property without the limitations prescribed by Section 9(a).  The omitted law reads:

(a)  …  [The district, through the board] … may lease all or part of its facilities on terms and conditions considered to be to the best interest of its inhabitants.  The district may sell or otherwise dispose of any real or personal property or equipment of any nature on terms and conditions found by the board to be in the best interest of its inhabitants.

Revised Law

Sec. 1038.108.  EMINENT DOMAIN.  (a)  The district may exercise the power of eminent domain to acquire a fee simple or other interest in any type of property located in district territory if the interest is necessary or convenient for the district to exercise a power, right, or privilege conferred by this chapter.

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

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

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

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

(3)  provide a bond for costs or a supersedeas bond on an appeal or writ of error.  (Acts 66th Leg., R.S., Ch. 214, Sec. 13(a).)

Source Law

Sec. 13.  (a)  The district shall have the right and power of eminent domain for the purpose of acquiring by condemnation any and all property of any kind and character in fee simple, or any lesser interest in property, within the boundaries of the district necessary or convenient to the powers, rights, and privileges conferred by this Act, in the manner provided by the general law with respect to condemnation by counties.  The district shall not be required to make deposits in the registry of the trial court of the sum required by Section 21.021, Property Code, or to make bond as provided in that law.  In condemnation proceedings being prosecuted by the district, the district shall not be required to pay in advance or give bond or other security for costs in the trial court or to give any bond otherwise required for the issuance of a temporary restraining order or a temporary injunction or to give bond for costs or for supersedeas on any appeal or writ of error.

Revisor's Note

(1)  Section 13(a), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, 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 13(a), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provides that the district must exercise the power of eminent domain in the manner provided by "the general law with respect to condemnation by counties."  The revised law substitutes for the quoted language a reference to Chapter 21, Property Code, because that is the general law governing eminent domain for governmental entities, including counties.

Revised Law

Sec. 1038.109.  COST OF RELOCATING OR ALTERING PROPERTY.  In exercising the power of eminent domain, if the board requires relocating, raising, lowering, rerouting, changing the grade of, or altering the construction of any railroad, electric transmission, telegraph or telephone line, conduit, pole, or facility, or pipeline, the district must bear the actual cost of relocating, raising, lowering, rerouting, changing the grade, or altering the construction to provide comparable replacement without enhancement of facilities, after deducting the net salvage value derived from the old facility.  (Acts 66th Leg., R.S., Ch. 214, Sec. 13(b).)

Source Law

(b)  If the board requires the relocating, raising, lowering, rerouting, or change in grade or alteration in the construction of any railroad, electric transmission, telegraph or telephone lines, conduits, poles, or facilities, or pipelines in the exercise of the power of eminent domain, all of the relocating, raising, lowering, rerouting, or changes in grade or alteration of construction due to the exercise of the power of eminent domain shall be at the sole expense of the district.  The term "sole expense" means the actual cost of relocating, raising, lowering, rerouting, or change in grade or alteration of construction to provide comparable replacement without enhancement of facilities, after deducting the net salvage value derived from the old facility.

Revised Law

Sec. 1038.110.  GIFTS AND ENDOWMENTS.  The board may accept for the district a gift or endowment to be held in trust for the purposes and under the directions, limitations, or other provisions prescribed in writing by the donor that are consistent with the proper management and objectives of the district.  (Acts 66th Leg., R.S., Ch. 214, Sec. 17.)

Source Law

Sec. 17.  The board may accept on behalf of the district donations, gifts, and endowments to be held in trust for such purposes and under such directions, limitations, and provisions as may be prescribed in writing by the donor consistent with proper management and object of the hospital district.

Revisor's Note

Section 17, Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, 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. 1038.111.  CONSTRUCTION CONTRACTS.  A construction contract that requires the expenditure of more than the amount provided by Section 271.024, Local Government Code, may be made only after competitive bidding as provided by Subchapter B, Chapter 271, Local Government Code. (Acts 66th Leg., R.S., Ch. 214, Sec. 9(b) (part).)

Source Law

(b)  … A contract for construction that requires expenditures in excess of the amount prescribed by Section 271.O24, Local Government Code, may be made only after competitive bidding as provided by Subchapter B, Chapter 271, Local Government Code… .

Revisor's Note

Section 9(b), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provides that Chapter 2253, Government Code, applies to the district's construction contracts in relation to performance and payment bonds.  The revised law omits the provision because Chapter 2253 applies to hospital districts on its own terms.  The omitted law reads:

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

Revised Law

Sec. 1038.112.  OPERATING AND MANAGEMENT CONTRACTS.  The board may enter into an operating or management contract relating to a district facility. (Acts 66th Leg., R.S., Ch. 214, Sec. 9(a) (part).)

Source Law

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

Revised Law

Sec. 1038.113.  INTERLOCAL AGREEMENT.  The board may enter into an interlocal agreement with another political subdivision to operate the district. (Acts 66th Leg., R.S., Ch. 214, Sec. 4(d).)

Source Law

(d)  The board may enter into an interlocal agreement with another political subdivision to operate the hospital district.

Revised Law

Sec. 1038.114.  CONTRACTS WITH GOVERNMENTAL ENTITIES FOR CARE AND TREATMENT.  (a)  The board may contract with a county or municipality located outside the district's boundaries to reimburse the district for the care and treatment of a sick or injured person of that county or municipality.

(b)  The district may contract with this state or a federal agency for reimbursement for the treatment of a sick or injured person.  (Acts 66th Leg., R.S., Ch. 214, Sec. 4(c) (part).)

Source Law

(c)  The board … may contract with any county or incorporated municipality located outside its boundaries for reimbursement for the care and treatment of the sick, diseased, or injured persons of that county or municipality.  The district may also contract with the state or agencies of the federal government for the reimbursement for the treatment of sick, diseased, or injured persons.

Revisor's Note

(1)  Section 4(c), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, refers to an "incorporated" municipality.  The revised law omits the reference to "incorporated" because under the Local Government Code all municipalities must be incorporated.

(2)  Section 4(c), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, refers to the treatment of "sick, diseased, or injured persons."  The revised law omits the reference to "diseased" because "diseased" is included in the meaning of "sick."

Revised Law

Sec. 1038.115.  CONTRACTS WITH GOVERNMENTAL ENTITIES FOR INVESTIGATORY OR OTHER SERVICES.  The board may contract with a political subdivision or governmental agency for the district to provide investigatory or other services for facilities for the medical care, hospital, or welfare needs of district inhabitants. (Acts 66th Leg., R.S., Ch. 214, Sec. 4(c) (part).)

Source Law

(c)  The board may contract with other political subdivisions or governmental agencies whereby the district will provide investigatory or other services as to facilities for the medical care, hospital, or welfare needs of the inhabitants of the district and … .

Revised Law

Sec. 1038.116.  PAYMENT FOR TREATMENT; PROCEDURES.  (a)  When a patient who resides in the district is admitted to a district facility, the district administrator may have an inquiry made into the circumstances of:

(1)  the patient; and

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

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

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

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

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

(1)  resolve the dispute or doubt; and

(2)  issue a final order.

(f)  A final order of the board may be appealed to the district court. The substantial evidence rule applies to the appeal.  (Acts 66th Leg., R.S., Ch. 214, Sec. 16.)

Source Law

Sec. 16.  Whenever a patient residing within the district is admitted to the facilities of the district, the administrator may have an inquiry made as to his or her circumstances and those of the relatives of the patient legally liable for his or her support.  If the administrator finds that the patient or his or her relatives are able to pay for his or her care and treatment in whole or in part, an order shall be made directing the patient or his or her relatives to pay to the hospital district for the care and support of the patient a specified sum per week in proportion to their financial ability.  The administrator may collect these sums from the estate of the patient or his or her relatives legally liable for support in the manner provided by law for collection of expenses in the last illness of a deceased person.  If the administrator finds that the patient or his or her relatives are not able to pay either in whole or in part for care and treatment in the hospital, they shall become a charge on the hospital district as to the amount of the inability to pay.  Should there be a dispute as to the ability to pay or doubt in the mind of the administrator, the board shall hear and resolve the dispute and issue its final order after calling witnesses.  Appeals from a final order of the board shall lie to the district court.  The substantial evidence rule shall apply.

Revised Law

Sec. 1038.117.  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 district money 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 66th Leg., R.S., Ch. 214, Sec. 4(j).)

Source Law

(j)  The district may sponsor and create a nonprofit 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 on behalf of the corporation.  The corporation may use district funds only to provide health care or other services the district is authorized to provide under this Act.  The board shall establish adequate controls to ensure that the corporation uses its funds in accordance with this subsection.  The corporation may invest corporation funds in any manner that the district may invest funds, including investments authorized under Chapter 2256, Government Code.

Revisor's Note

Section 4(j), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, 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 those statutes in accordance with their effective dates or on election by a business entity.

Revised Law

Sec. 1038.118.  AUTHORITY TO SUE AND BE SUED.  The district, through the board, may sue and be sued.  (Acts 66th Leg., R.S., Ch. 214, Sec. 4(a) (part).)

Source Law

(a)  …  The district through its board may sue and be sued and … .

[Sections 1038.119-1038.150 reserved for expansion]

SUBCHAPTER D.  GENERAL FINANCIAL PROVISIONS

Revised Law

Sec. 1038.151.  BUDGET.  (a)  The district administrator shall prepare an annual budget for approval by the board.

(b)  The proposed budget must contain a complete financial statement of:

(1)  the outstanding obligations of the district;

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

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

(4)  the money available to the district from all sources during the ensuing year;

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

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

(7)  the estimated tax rate required.  (Acts 66th Leg., R.S., Ch. 214, Sec. 5 (part).)

Source Law

Sec. 5.  …  The administrator shall prepare an annual budget for approval by the board.  The budget shall also contain a complete financial statement of the district showing all outstanding obligations of the district, the cash on hand to the credit of each fund of the district, the funds received from all sources during the previous year, the funds available from all sources during the ensuing year, the balances expected at the end of the year in which the budget is being prepared, estimated revenues and balances available to cover the proposed budget, and the estimated tax rate that will be required… .

Revised Law

Sec. 1038.152.  NOTICE; HEARING; ADOPTION OF BUDGET.  (a)  The board shall hold a public hearing on the proposed annual budget.

(b)  The board shall publish notice of the hearing in accordance with Subchapter C, Chapter 551, Government Code.

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

(d)  At the conclusion of the hearing, the board shall adopt a budget by acting on the budget proposed by the district administrator.  The board may make any changes in the proposed budget that the board judges to be in the interests of the taxpayers and that the law warrants.  (Acts 66th Leg., R.S., Ch. 214, Sec. 5 (part).)

Source Law

Sec. 5.  … A public hearing on the annual budget shall be held by the board after notice has been given in the manner provided by Subchapter C, Chapter 551, Government Code.  Any person residing in the district is entitled to be present and participate in the hearing.  At the conclusion of the hearing, the budget, as proposed by the administrator, shall be acted on by the board.  The board shall have authority to make changes in the budget that in its judgment the law warrants and the interest of the taxpayers demands. … the annual budget and … shall be approved by the board. …

Revised Law

Sec. 1038.153.  AMENDMENTS TO BUDGET.  The budget may be amended as required by circumstances.  The board must approve all amendments.  (Acts 66th Leg., R.S., Ch. 214, Sec. 5 (part).)

Source Law

Sec. 5.  …  The annual budget may be amended from time to time as the circumstances may require, but … all amendments to it shall be approved by the board. …

Revisor's Note

Section 5, Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, states that the board may amend the budget "from time to time."  The revised law omits the quoted language because the authority to take an action implies the authority to do so at any time.

Revised Law

Sec. 1038.154.  RESTRICTION ON EXPENDITURES.  Money may be spent only for an expense included in the budget or an amendment to the budget.  (Acts 66th Leg., R.S., Ch. 214, Sec. 5 (part).)

Source Law

Sec. 5.  …  No expenditure may be made for any expense not included in the annual budget or an amendment to it… .

Revised Law

Sec. 1038.155.  FISCAL YEAR.  (a)  The district operates according to a fiscal year established by the board.

(b)  The fiscal year may not be changed:

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

(2)  more than once in a 24-month period.  (Acts 66th Leg., R.S., Ch. 214, Sec. 5 (part).)

Source Law

Sec. 5.  The district shall be operated on the basis of a fiscal year established by the board, provided the fiscal year may not be changed during the time revenue bonds of the district are outstanding or more than once in any 24-month period… .

Revised Law

Sec. 1038.156.  ANNUAL AUDIT.  The board annually shall have an audit made of the district's financial condition.  (Acts 66th Leg., R.S., Ch. 214, Sec. 5 (part).)

Source Law

Sec. 5.  …  The board shall have an annual audit made of the financial condition of the district, … .

Revised Law

Sec. 1038.157.  INSPECTION OF ANNUAL AUDIT AND DISTRICT RECORDS.  The annual audit and other district records shall be open to inspection at the district's principal office.  (Acts 66th Leg., R.S., Ch. 214, Sec. 5 (part).)

Source Law

Sec. 5.  …  [The board shall have an annual audit made of the financial condition of the district,] which together with other records of the district shall be open to inspection at the principal office of the district… .

Revised Law

Sec. 1038.158.  FINANCIAL REPORT.  As soon as practicable after the close of each fiscal year, the district administrator shall prepare for the board:

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

(2)  a complete account of the disbursements of that money.  (Acts 66th Leg., R.S., Ch. 214, Sec. 5 (part).)

Source Law

Sec. 5.  …  As soon as practicable after the close of each fiscal year, the administrator shall prepare for the board a full sworn statement of all money belonging to the district and a full account of the disbursements of same.

Revised Law

Sec. 1038.159.  DEPOSITORY.  (a)  The board shall select one or more banks inside or outside the district to serve as a depository for district money.

(b)  District money, other than money invested as provided by Section 1038.160(b) and money transmitted to a bank for payment of bonds or obligations issued or assumed by the district, shall be deposited as received with the depository bank and shall remain on deposit.

(c)  This chapter, including Subsection (b), does not limit the power of the board to place a part of district money on time deposit or to purchase certificates of deposit.

(d)  The district may not deposit money with a bank in an amount that exceeds the maximum amount secured by the Federal Deposit Insurance Corporation unless the bank first executes a bond or other security in an amount sufficient to secure from loss the district money that exceeds the amount secured by the Federal Deposit Insurance Corporation.  (Acts 66th Leg., R.S., Ch. 214, Sec. 10.)

Source Law

Sec. 10.  (a)  The board shall name one or more banks within or without its boundaries to serve as depository for the funds of the district.  All funds of the district, except those invested as provided in Section 4 of this Act and those transmitted to a bank or banks of payment for bonds or obligations issued or assumed by the district, shall be deposited as received with the depository bank and shall remain on deposit, provided that nothing in this Act shall limit the power of the board to place a portion of the funds on time deposit or purchase certificates of deposit.

(b)  Before the district deposits funds in any bank in an amount that exceeds the maximum amount secured by the Federal Deposit Insurance Corporation, the bank shall be required to execute a bond or other security in an amount sufficient to secure from loss the district funds that exceed the amount secured by the Federal Deposit Insurance Corporation.

Revised Law

Sec. 1038.160.  SPENDING AND INVESTMENT RESTRICTIONS.  (a)  Except as otherwise provided by this chapter, the district may not incur an obligation payable from district revenue other than the revenue on hand or to be on hand in the current and following district fiscal years.

(b)  The board shall invest operating, depreciation, or building reserves in accordance with Chapter 2256, Government Code.  (Acts 66th Leg., R.S., Ch. 214, Secs. 4(a) (part), 9(b) (part).)

Source Law

Sec. 4.  (a)  …  The board shall invest any operating, depreciation, or building reserves in accordance with Chapter 2256, Government Code… .

[Sec. 9]

(b)  …  Except as permitted in the preceding sentence and Sections 6, 7, and 8 of this Act, the district may incur no obligation payable from revenues of the district, tax or otherwise, except those on hand or to be on hand within the then current and following fiscal years of the district.

Revisor's Note

Section 9(b), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, states that "[e]xcept as permitted in the preceding sentence and Sections 6, 7, and 8 of this Act," the district may not incur certain obligations.  Section 7 is omitted from the revised law for the reason stated in the revisor's note at the end of Subchapter A.  The other referenced provisions are codified in Section 1038.107 and in Subchapter E.  However, other provisions of the source law, including Section 14A, codified as Section 1038.161, clearly give the district the authority to incur additional obligations.  Therefore, the revised law substitutes "[e]xcept as otherwise provided by this chapter" for the quoted language.

Revised Law

Sec. 1038.161.  AUTHORITY TO BORROW MONEY; SECURITY.  (a)  The board may borrow money 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 66th Leg., R.S., Ch. 214, Sec. 14A.)

Source Law

Sec. 14A.  (a)  The board may borrow money for district obligations at the time the loan is made.

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

(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-month period that are not pledged to pay the principal of or interest on district bonds; or

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

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

[Sections 1038.162-1038.200 reserved for expansion]

SUBCHAPTER E.  BONDS

Revised Law

Sec. 1038.201.  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 66th Leg., R.S., Ch. 214, Sec. 6(a) (part).)

Source Law

Sec. 6.  (a)  The board may issue and sell its bonds in the name and on the faith and credit of the hospital district for any purpose related to the purchase, construction, acquisition, repair, and renovation of buildings and improvements and equipping the same for hospital purposes… .

Revisor's Note

Section 6(a), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provides that the board may issue and sell bonds in the name and on the faith and credit of the district.  Because the type of bonds described by Section 6(a) are known as "general obligation bonds," the revised law is drafted accordingly.

Revised Law

Sec. 1038.202.  TAX TO PAY GENERAL OBLIGATION BONDS.  (a)  At the time general obligation bonds are issued by the district under Section 1038.201, the board shall impose an ad valorem tax at a rate sufficient to create an interest and sinking fund to pay the principal of and interest on the bonds as the bonds mature.

(b)  The tax required by this section together with any other ad valorem tax the district imposes may not in any year exceed the limit approved by the voters at the election authorizing the imposition of the tax.  (Acts 66th Leg., R.S., Ch. 214, Sec. 6(a) (part).)

Source Law

(a)  …  At the time of the issuance of any bonds payable from taxation, a tax shall be levied by the board sufficient to create an interest and sinking fund to pay the interest on and principal of the bonds as they mature, providing that the tax together with any other taxes levied for the district shall not exceed the limit approved by the voters at the election authorizing the levy of taxes. …

Revisor's Note

Section 6(a), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, 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. 1038.203.  BOND ELECTION.  (a)  The district may issue bonds, other than refunding bonds, wholly or partly secured by an ad valorem tax only if the bonds are authorized by a majority of the district voters voting at an election held in the district.

(b)  Except as otherwise provided by this chapter, the election shall be conducted in accordance with Chapter 1251, Government Code.  (Acts 66th Leg., R.S., Ch. 214, Secs. 6(a) (part), 8A (part).)

Source Law

Sec. 6.  (a)  …  No bonds may be issued by the hospital district … until authorized by a majority of the qualified electors of the district… .  A bond election shall be conducted in accordance with Chapter 1251, Government Code, except as otherwise provided by this Act.

Sec. 8A.  …  Bonds, other than refunding bonds, that the board proposes to secure wholly or partly by an ad valorem tax must be approved at an election held in the district in accordance with Section 6 of this Act.

Revisor's Note

Section 6(a), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, refers to a majority vote of the qualified electors.  The revised law omits "qualified" as unnecessary in this context because Chapter 11, Election Code, governs eligibility to vote in an election in this state and allows only "qualified" voters who are residents of the territory covered by the election to vote in an election.

Revised Law

Sec. 1038.204.  MATURITY OF GENERAL OBLIGATION BONDS.  District general obligation bonds must mature not later than 40 years after the date of issuance.  (Acts 66th Leg., R.S., Ch. 214, Sec. 6(c) (part).)

Source Law

(c)  Bonds of the district shall mature within 40 years of their date, … .

Revised Law

Sec. 1038.205.  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 in the manner provided by Chapter 618, Government Code.  (Acts 66th Leg., R.S., Ch. 214, Sec. 6(c) (part).)

Source Law

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

Revisor's Note

(1)  Section 6(c), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provides that district bonds must bear interest at a rate not to exceed that provided by Chapter 1204, Government Code.  The revised law omits the provision because Section 1204.006 applies to the district on its own terms by application of Section 1204.001, Government Code.  The omitted law reads:

(c)  [Bonds of the district] … shall bear interest at a rate not to exceed that prescribed by Chapter 1204, Government Code, and … .

(2)  Section 6(c), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provides that district bonds are subject to the law governing counties that relates to bond approval by the attorney general and registration of the bonds by the comptroller.  Section 6(c) also provides that after approval and registration the bonds are "incontestable for any cause."  The revised law omits those provisions as superseded by Chapter 1202, Government Code (enacted as Article 3, Chapter 53, Acts of the 70th Legislature, 2nd Called Session, 1987).  Section 1202.003(a), Government Code, requires bonds to be submitted to the attorney general.  Section 1202.003(b), Government Code, provides for approval of the bonds by the attorney general and requires the attorney general to submit the approved bonds to the comptroller for registration.  Section 1202.005, Government Code, requires registration of the bonds by the comptroller. Section 1202.006, Government Code, provides that after approval and registration the bonds are incontestable and binding obligations.  Chapter 1202, Government Code, applies to district bonds by application of Section 1202.001, Government Code.  The omitted law reads:

(c)  [Bonds of the district] … shall be subject to the same requirements in the manner of approval by the attorney general and registration by the comptroller of public accounts as are by law provided for approval and registration of bonds issued by counties.  On the approval of the bonds by the attorney general and registration by the comptroller, the bonds shall be incontestable for any cause.

Revised Law

Sec. 1038.206.  REVENUE BONDS.  (a)  The board may issue revenue bonds to:

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

(2)  acquire sites to be used for hospital purposes.

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

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

(d)  The bonds must be issued in the manner and in accordance with the procedures and requirements prescribed by Sections 264.042, 264.043, and 264.046-264.049, Health and Safety Code, for issuance of revenue bonds by a county hospital authority. (Acts 66th Leg., R.S., Ch. 214, Sec. 8 (part).)

Source Law

Sec. 8.  In addition to the power to issue bonds payable from taxes levied by the district as contemplated by Section 6 of this Act, the board may issue revenue bonds and … for purchasing, constructing, acquiring, repairing, equipping, or renovating buildings and improvements for hospital purposes, and for acquiring sites for hospital purposes.  The bonds shall be payable from and secured by a pledge of all or any part of the revenues of the district to be derived from the operation of its hospital or hospitals, and the bonds may be additionally secured by a mortgage or deed of trust lien on any part or all of its property.  The bonds shall be issued in the manner and in accordance with the procedures and requirements specified for the issuance of revenue bonds by county hospital authorities in Sections 264.042, 264.043, 264.046, 264.047, 264.048, and 264.049, Health and Safety Code.

Revised Law

Sec. 1038.207.  REFUNDING BONDS.  (a)  The board may, without an election, issue refunding bonds to refund outstanding indebtedness issued or assumed by the district.

(b)  Refunding bonds may be:

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

(2)  exchanged wholly or partly for not less than a similar principal amount of outstanding indebtedness.

(c)  A refunding bond must mature not later than the 40th anniversary of the date of issuance.  (Acts 66th Leg., R.S., Ch. 214, Secs. 6(a) (part), (b) (part), 8 (part), 14B(b) (part).)

Source Law

Sec. 6.  (a)  …  [No bonds may be issued by the hospital district] except refunding bonds [until authorized by a majority of the qualified electors of the district.] …

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

Sec. 8.  … the board may … refund any previously issued revenue bonds … .

[Sec. 14B]

(b)  …  Refunding bonds … must mature not later than the 40th anniversary of the date of issuance.

Revisor's Note

(1)  Sections 6(b) and 14B(b), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provide that refunding bonds must be issued in accordance with 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]

(b)  …  Refunding bonds shall be issued in accordance with Chapter 1207, Government Code.

[Sec. 14B]

(b)  …  [Refunding bonds] must be issued in accordance with Chapter 1207, Government Code, and … .

(2)  Sections 14B(a) and (b), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, validate certain acts or attempted acts of the district "before the effective date of this section" and authorize the refunding of obligations validated under those sections.  The revised law omits the validation provisions as executed and omits the refunding authorization because it duplicates the board's general authority to refund any district obligation under Chapter 1207, Government Code.  The omitted law reads:

Sec. 14B.  (a)  The following are validated in all respects as though they were originally and duly authorized, issued, accomplished, validated, ratified, approved, and confirmed:

(1)  all proceedings, resolutions, orders, and other acts or attempted acts of the district before the effective date of this section that relate to the issuance of notes, warrants, and other obligations evidencing borrowings of the district;

(2)  all proceedings of the district before the effective date of this section authorizing the issuance, execution, and delivery of notes, warrants, and other obligations evidencing borrowings of the district; and

(3)  all notes, warrants, and other obligations issued before the effective date of this section evidencing borrowings of the district.

(b)  Notes, warrants, and other obligations evidencing borrowings of the district that are validated under this section may be refunded by refunding bonds payable from and secured by a source authorized by Section 6, 8, or 8A of this Act. …

Revised Law

Sec. 1038.208.  ADDITIONAL MEANS OF SECURING REPAYMENT OF BONDS.  In addition to the authority to issue general obligation bonds and revenue bonds under this subchapter, the board may provide for the security and payment of district bonds from a pledge of a combination of ad valorem taxes as authorized by Section 1038.202 and revenue and other sources as authorized by Section 1038.206.  (Acts 66th Leg., R.S., Ch. 214, Sec. 8A (part).)

Source Law

Sec.  8A.  In addition to the power to issue bonds payable solely from and secured by taxes imposed by the district as authorized by Section 6 of this Act and the power to issue bonds payable from and secured by revenues and other sources as authorized by Section 8 of this Act, the board may provide for the security and payment of district bonds from a pledge of a combination of ad valorem taxes, as authorized by Section 6 of this Act, and the revenues and other sources authorized by Section 8 of this Act.  …

Revised Law

Sec. 1038.209.  USE OF BOND PROCEEDS.  The district may use the proceeds of bonds issued under this subchapter to pay:

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

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

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

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

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

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

(5)  costs related to the bond issuance;

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

(7)  costs of construction of a project or facility to be provided through the bonds, including the payment of related professional services and expenses.  (Acts 66th Leg., R.S., Ch. 214, Sec. 8B.)

Source Law

Sec. 8B.  (a)  The district may use the proceeds of bonds described by Section 6, 8, or 8A of this Act to pay:

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

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

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

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

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

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

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

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

Revised Law

Sec. 1038.210.  BONDS EXEMPT FROM TAXATION.  The following are exempt from taxation by this state or a political subdivision of this state:

(1)  bonds issued by the district;

(2)  the transfer and issuance of the bonds; and

(3)  profits made in the sale of the bonds.  (Acts 66th Leg., R.S., Ch. 214, Sec. 20 (part).)

Source Law

Sec. 20.  … any bonds issued by it and their transfer and issuance by the district, including any profits made in the sale of the bonds, shall at all times be free from taxation by the state or any municipality or political subdivision of the state.

Revisor's Note

Section 20, Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, refers to "any municipality or political subdivision of the state."  The revised law omits "municipality" because that term is included in the meaning of "political subdivision of the state."

Revisor's Note

(End of Subchapter)

(1)  Section 12, Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provides that district bonds are legal and authorized investments for certain entities.  The revised law omits the provision as unnecessary.  As to several of the entities listed, Section 12 has been superseded and impliedly repealed.  Investments in securities by banks are regulated by Section 34.101, Finance Code (enacted in 1995 as Section 5.101, Texas Banking Act (Article 342-5.101, Vernon's Texas Civil Statutes)).  Investments in securities by savings banks are regulated by Section 93.001(c)(10), Finance Code (enacted in 1993 as Section 7.15(10), Texas Savings Bank Act (Article 489e, Vernon's Texas Civil Statutes)).  Investments in securities by trust companies are regulated by Section 184.101, Finance Code (enacted in 1997 as Section 5.101, Texas Trust Company Act (Article 342a-5.101, Vernon's Texas Civil Statutes)).  Investments in securities by savings and loan associations are regulated by Sections 63.002 and 64.001, Finance Code.  As to the remaining entities listed, Section 12 is superseded by Section 1201.041, Government Code (enacted as Section 9, Bond Procedures Act of 1981 (Article 717k-6, Vernon's Texas Civil Statutes)).  Section 1201.041, Government Code, applies to district bonds by application of Section 1201.002, Government Code.  The revised law omits the reference to sinking funds of this state because it has been superseded by Section 404.024, Government Code (enacted in 1985 as Section 2.014, Treasury Act (Article 4393-1, Vernon's Texas Civil Statutes)), which governs the investment of state funds. Section 404.024(b)(10), Government Code, authorizes the investment of state funds in obligations of political subdivisions, including hospital districts. The omitted law reads:

Sec. 12.  All bonds issued and indebtedness assumed by the district shall be and are hereby declared to be legal and authorized investments of banks, savings banks, trust companies, building and loan associations, savings and loan associations, insurance companies, trustees, and sinking funds of cities, towns, villages, counties, school districts, or other political subdivisions or corporations of the State of Texas, and public funds of the State of Texas or cities, towns, villages, counties, school districts, or other political subdivisions or corporations of the State of Texas and … .

(2)  Section 12, Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, effectively provides that district bonds may secure certain deposits.  Although Section 12 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. 12.  … shall be lawful and sufficient security for those deposits to the extent of their value when accompanied by all unmatured coupons appurtenant thereto.

[Sections 1038.211-1038.250 reserved for expansion]

SUBCHAPTER F.  TAXES

Revised Law

Sec. 1038.251.  IMPOSITION OF AD VALOREM TAX.  (a)  The board may impose a tax on all property in the district subject to district taxation.

(b)  The tax may be used to pay:

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

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

(c)  The board may not impose a tax to pay the principal of or interest on revenue bonds issued under this chapter.  (Acts 66th Leg., R.S., Ch. 214, Secs. 11(a) (part), 14(a) (part), (c), (d).)

Source Law

Sec. 11.  (a)  The board may annually levy a tax … for the purpose of paying:

(1)  the indebtedness assumed or issued by the district, but no tax may be levied to pay principal of or interest on revenue bonds issued under the provisions of Section 8 of this Act; and

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

Sec. 14.  (a)  …  Hospital tax shall be levied on all taxable property within the district subject to hospital district taxation.

(c)  The taxes may be used to pay:

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

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

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

Revised Law

Sec. 1038.252.  TAX RATE.  (a)  The board may impose the tax at a rate not to exceed the limit approved by the voters at the election authorizing the imposition of the tax.

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

(c)  In setting the tax rate, the board shall consider the income of the district from sources other than taxation.  (Acts 66th Leg., R.S., Ch. 214, Secs. 11(a) (part), (b) (part), 14(b).)

Source Law

Sec. 11.  (a)  [The board may annually levy a tax] not to exceed the amount permitted by this Act … .

(b)  In setting the tax rate, the board shall take into consideration the income of the district from sources other than taxation.  …

[Sec. 14]

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

Revisor's Note

Section 11(b), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, requires the board to levy the tax and to certify the tax rate to the tax assessor-collector.  The revised law omits that provision because Section 26.05(a), Tax Code, requires the governing body of a taxing unit to adopt a tax rate for the current tax year and to notify the tax assessor of that rate.  The omitted law reads:

(b)  …  On determination of the amount of tax required to be levied, the board shall make the levy and certify it to the tax assessor-collector.

Revised Law

Sec. 1038.253.  TAX ASSESSOR-COLLECTOR.  The board may provide for the appointment of a tax assessor-collector for the district or may contract for the assessment and collection of taxes as provided by the Tax Code.  (Acts 66th Leg., R.S., Ch. 214, Sec. 14(f).)

Source Law

(f)  The board may provide for the appointment of a tax assessor-collector for the district or may contract for the assessment and collection of taxes as provided by the Tax Code.

Revisor's Note

Section 14(a), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provides that district taxes are imposed "on county tax values as provided in Subsection (b) of this section" unless the board votes to have the taxes collected by the district's tax assessor-collector.  The revised law omits the provision relating to the taxes being imposed on county tax values because it was repealed by Section 6(b), Chapter 841, Acts of the 66th Legislature, Regular Session, 1979, which repealed all "general, local, and special laws" that conflicted with that act.  The 1979 act enacted the Property Tax Code (Title 1, Tax Code), a comprehensive, substantive codification of property tax law.  Title 1, Tax Code, provides the exclusive procedures for the appraisal of property for taxation by a taxing unit, including a hospital district.  The revised law omits the provision relating to the  board voting to have taxes collected by the district's tax assessor-collector as impliedly repealed by a 1999 amendment to Section 14.  Section 8, Chapter 499, Acts of the 76th Legislature, Regular Session, 1999, added Section 14(f), codified in this section, which authorizes the district to appoint or contract for a tax assessor-collector.  The omitted law reads:

(a)  …  All taxes of the district shall be assessed and collected on county tax values as provided in Subsection (b) of this section unless the board by majority vote elects to have taxes assessed and collected by its own tax assessor-collector under this section.  An election may be held annually before December 1 and shall govern the manner in which taxes are subsequently assessed and collected until changed by a similar resolution.  …

Revisor's Note

(End of Subchapter)

(1)  Section 4(i), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, authorizes the board to institute a suit to enforce the payment of taxes and to foreclose liens to secure that payment.  The revised law omits that provision because it duplicates Chapter 33, Tax Code, which authorizes a taxing unit of government to file suit to enforce the payment of taxes and to foreclose a lien to secure that payment.  The omitted law reads:

(i)  The board may institute a suit to enforce the payment of taxes and to foreclose liens to secure the payment of taxes due to the district.

(2)  Section 14(a), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provides that the district may impose taxes for the entire year in which the district is created.  The revised law omits that provision as executed.  The omitted law reads:

(a)  The board may levy taxes for the entire year in which the district is created as a result of the election provided in this Act. …

(3)  Section 14(e), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provides that the Tax Code governs the appraisal, assessment, and collection of district taxes.  The revised law omits that provision because Section 1.02, Tax Code, requires all taxing units of government to administer the assessment and collection of an ad valorem tax in conformity with Title 1, Tax Code.  The omitted law reads:

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

[Sections 1038.254-1038.300 reserved for expansion]

SUBCHAPTER G.  DISSOLUTION

Revised Law

Sec. 1038.301.  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 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.  (Acts 66th Leg., R.S., Ch. 214, Secs. 21A(a), (b), (c) (part).)

Source Law

Sec. 21A.  (a)  The district may be dissolved only if the dissolution is approved by a majority of the qualified voters of the district voting in an election called and held for that purpose.

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

(c)  …  The order calling the election shall state:

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

(2)  the date of the election;

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

(4)  the location of the polling places.

Revisor's Note

(1)  Section 21A(a), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provides for dissolution of the district if approved by a majority of the "qualified" voters.  The revised law omits "qualified"  for the reason stated in the revisor's note to Section 1038.203.

(2)  Section 21A(a), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provides that the district may be dissolved if authorized at an election "called and held" for that purpose.  The revised law omits the reference to "calling" an election 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 21A(c), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, states that the election must be held not later than the 60th day after the date the election is ordered.  The revised law omits the provision as superseded by Section 3.005, Election Code, applicable to the district under Section 1.002, Election Code.  Section 3.005, as amended by Chapter 925, Acts of the 78th Legislature, Regular Session, 2003, requires an election order issued by the authority of a political subdivision to be issued not later than the 62nd day before election day and provides that Section 3.005 supersedes a law outside the Election Code to the extent of any conflict.  The omitted law reads:

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

Revised Law

Sec. 1038.302.  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 66th Leg., R.S., Ch. 214, Sec. 21A(d) (part).)

Source Law

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

Revised Law

Sec. 1038.303.  BALLOT.  The ballot for an election under this subchapter must be printed to permit voting for or against the proposition: "The dissolution of the Hardeman County Hospital District."  (Acts 66th Leg., R.S., Ch. 214, Sec. 21A(d) (part).)

Source Law

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

Revised Law

Sec. 1038.304.  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 66th Leg., R.S., Ch. 214, Sec. 21A(e).)

Source Law

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

Revised Law

Sec. 1038.305.  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 Hardeman County or another governmental agency in Hardeman 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 66th Leg., R.S., Ch. 214, Secs. 21A(f), (g).)

Source Law

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

(1)  transfer the land, buildings, improvements, equipment, and other assets that belong to the district to a county or other governmental 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.

(g)  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.

Revisor's Note

Section 21A(f)(1), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, refers to a "county in which the district is located."  Because the district is wholly located in Hardeman County, the revised law substitutes "Hardeman County" for the quoted language.

Revised Law

Sec. 1038.306.  SALE OR TRANSFER OF ASSETS AND LIABILITIES.  (a)  Notwithstanding any other provision of this subchapter, 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 66th Leg., R.S., Ch. 214, Secs. 21A(m), (n).)

Source Law

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

(n)  The sale or transfer of the district's assets and liabilities must satisfy the debt and bond obligation of the district in a manner that protects the interests of the residents of the district, including the residents' collective property rights in the district's assets.  A grant from federal funds is an obligation to be repaid in satisfaction.  The district may not transfer or dispose of the district's assets except for due compensation unless the transfer is made to 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 21A(m), Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, 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. 1038.307.  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 66th Leg., R.S., Ch. 214, Secs. 21A(h), (i), (j).)

Source Law

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

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

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

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

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

Revised Law

Sec. 1038.308.  REPORT; DISSOLUTION ORDER.  (a)  After the district has paid all district debts and has disposed of all district money and other assets as prescribed by this subchapter, the board shall file a written report with the Commissioners Court of Hardeman County summarizing the board's actions in dissolving the district.

(b)  Not later than the 10th day after the date the Commissioners Court of Hardeman 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 66th Leg., R.S., Ch. 214, Secs. 21A(k), (l).)

Source Law

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

(l)  Not later than the 10th day after the date it receives the report and determines that the requirements of this section have been fulfilled, the Commissioners Court of Hardeman 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)  Sections 2 and 18, Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provide for the transfer of certain land, buildings, improvements, 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 those provisions as executed.  The omitted law reads:

Sec. 2.  [The district] shall take over and there shall be transferred to it title to all land, buildings, improvements, and equipment pertaining to the hospitals or hospital system which may be located wholly within the district and owned by Hardeman County or any city or town within the district and … .  The district shall assume the outstanding indebtedness incurred by Hardeman County or any city or town within the district to provide medical care for residents of the district prior to the creation of the district.

Sec. 18.  …  When the district is created and established, Hardeman County and all towns and cities located wholly or partly in the district shall convey and transfer to the district:

(1)  title to all land, buildings, improvements, and equipment in any way pertaining to a hospital or hospital system located wholly within the district that may be jointly or separately owned by the county, city, or town;

(2)  operating funds and reserves for operating expenses that are on hand and funds that have been budgeted to provide medical care for residents of the district by the county, city, or town for the remainder of the fiscal year in which the district is established;

(3)  taxes levied for hospital purposes by the county, city, or town for the current year; and

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

(2)  Section 21, Chapter 214, Acts of the 66th Legislature, Regular Session, 1979, provides that public notice of enactment of the statute was provided in a manner that satisfies the requirements of the Texas Constitution.  The revised law omits that section as executed.  The omitted law reads:

Sec. 21.  The legislature finds publication of the notice required in the enactment of this law under the provisions of Article IX, Section 9, of the Texas Constitution has been made in the manner and form provided by law pertaining to the enactment of local and special laws.