TLC: Special District Local Laws Code Proposed Chapters

81C115(4) MCK

CHAPTER 1091. RICE HOSPITAL DISTRICT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 1091.001. DEFINITIONS ............................... 3

Sec. 1091.002. AUTHORITY FOR OPERATION ................... 4

Sec. 1091.003. ESSENTIAL PUBLIC FUNCTION ................. 4

Sec. 1091.004. DISTRICT TERRITORY ........................ 4

Sec. 1091.005. DISTRICT SUPPORT OR MAINTENANCE NOT

STATE OBLIGATION ........................ 6

Sec. 1091.006. RESTRICTION ON STATE FINANCIAL

ASSISTANCE .............................. 6

[Sections 1091.007-1091.050 reserved for expansion]

SUBCHAPTER B. DISTRICT ADMINISTRATION

Sec. 1091.051. BOARD ELECTION; TERM ...................... 8

Sec. 1091.052. NOTICE OF ELECTION ........................ 11

Sec. 1091.053. BALLOT PETITION ........................... 11

Sec. 1091.054. QUALIFICATIONS FOR OFFICE ................. 12

Sec. 1091.055. BOND; RECORD OF BOND ...................... 12

Sec. 1091.056. BOARD VACANCY ............................. 12

Sec. 1091.057. OFFICERS .................................. 13

Sec. 1091.058. COMPENSATION; EXPENSES .................... 13

Sec. 1091.059. VOTING REQUIREMENT ........................ 14

Sec. 1091.060. DISTRICT ADMINISTRATOR .................... 14

Sec. 1091.061. GENERAL DUTIES OF DISTRICT

ADMINISTRATOR ........................... 15

Sec. 1091.062. ASSISTANT DISTRICT ADMINISTRATOR;

ATTORNEY ................................ 15

Sec. 1091.063. APPOINTMENT AND RECRUITMENT OF STAFF

AND EMPLOYEES ........................... 15

Sec. 1091.064. RETIREMENT BENEFITS ....................... 16

[Sections 1091.065-1091.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Sec. 1091.101. DISTRICT RESPONSIBILITY ................... 17

Sec. 1091.102. MANAGEMENT, CONTROL, AND ADMINISTRATION ... 17

Sec. 1091.103. RULES ..................................... 18

Sec. 1091.104. PURCHASING AND ACCOUNTING PROCEDURES ...... 18

Sec. 1091.105. DISTRICT PROPERTY, FACILITIES, AND

EQUIPMENT ............................... 18

Sec. 1091.106. EMINENT DOMAIN ............................ 19

Sec. 1091.107. COST OF RELOCATING OR ALTERING PROPERTY ... 20

Sec. 1091.108. GIFTS AND ENDOWMENTS ...................... 21

Sec. 1091.109. CONSTRUCTION CONTRACTS .................... 21

Sec. 1091.110. OPERATING AND MANAGEMENT CONTRACTS ........ 22

Sec. 1091.111. CONTRACTS FOR SERVICES .................... 23

Sec. 1091.112. PROVISION OF CERTAIN HEALTH SERVICES ...... 24

Sec. 1091.113. PAYMENT FOR TREATMENT; PROCEDURES ......... 24

Sec. 1091.114. REIMBURSEMENT FOR SERVICES ................ 27

Sec. 1091.115. AUTHORITY TO SUE AND BE SUED .............. 28

[Sections 1091.116-1091.150 reserved for expansion]

SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS

Sec. 1091.151. BUDGET .................................... 28

Sec. 1091.152. NOTICE; HEARING; ADOPTION OF BUDGET ....... 29

Sec. 1091.153. AMENDMENTS TO BUDGET ...................... 30

Sec. 1091.154. FISCAL YEAR ............................... 30

Sec. 1091.155. ANNUAL AUDIT .............................. 30

Sec. 1091.156. INSPECTION OF ANNUAL AUDIT AND DISTRICT

RECORDS ................................. 30

Sec. 1091.157. FINANCIAL REPORT .......................... 31

Sec. 1091.158. SHORT-TERM FINANCING ...................... 31

Sec. 1091.159. DEPOSITORY ................................ 31

Sec. 1091.160. SPENDING AND INVESTMENT RESTRICTIONS ...... 32

[Sections 1091.161-1091.200 reserved for expansion]

SUBCHAPTER E. BONDS

Sec. 1091.201. GENERAL OBLIGATION BONDS .................. 33

Sec. 1091.202. TAX TO PAY GENERAL OBLIGATION BONDS ....... 34

Sec. 1091.203. GENERAL OBLIGATION BOND ELECTION .......... 35

Sec. 1091.204. REVENUE BONDS ............................. 36

Sec. 1091.205. REFUNDING BONDS ........................... 37

Sec. 1091.206. MATURITY OF BONDS ......................... 39

Sec. 1091.207. EXECUTION OF BONDS ........................ 39

Sec. 1091.208. BONDS EXEMPT FROM TAXATION ................ 40

[Sections 1091.209-1091.250 reserved for expansion]

SUBCHAPTER F. TAXES

Sec. 1091.251. IMPOSITION OF AD VALOREM TAX .............. 43

Sec. 1091.252. TAX RATE .................................. 44

Sec. 1091.253. TAX ASSESSOR-COLLECTOR .................... 45

[Sections 1091.254-1091.300 reserved for expansion]

SUBCHAPTER G. DISSOLUTION

Sec. 1091.301. DISSOLUTION; ELECTION ..................... 46

Sec. 1091.302. NOTICE OF ELECTION ........................ 48

Sec. 1091.303. BALLOT .................................... 48

Sec. 1091.304. ELECTION RESULTS .......................... 49

Sec. 1091.305. SALE OR TRANSFER OF ASSETS AND

LIABILITIES ............................. 50

CHAPTER 1091. RICE HOSPITAL DISTRICT

SUBCHAPTER A. GENERAL PROVISIONS

Revised Law

Sec. 1091.001. 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 Rice Hospital District. (Acts 71st Leg., R.S., Ch. 199, Sec. 1.01.)

Source Law

Sec. 1.01. In this Act:

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

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

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

Revised Law

Sec. 1091.002. AUTHORITY FOR OPERATION. The Rice Hospital District operates and is financed as provided by Section 9, Article IX, Texas Constitution, and by this chapter. (Acts 71st Leg., R.S., Ch. 199, Sec. 1.02.)

Source Law

Sec. 1.02. The Rice Hospital District may be created, maintained, operated, and financed in the manner provided by Article IX, Section 9, of the Texas Constitution and by this Act.

Revisor's Note

Section 1.02, Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, provides that the district "may be created, maintained, operated, and financed" in the manner provided by the Texas Constitution and the act. The revised law omits "created" as executed. The revised law omits "maintained" because, in this context, the meaning of that term is included in the meaning of "operated."

Revised Law

Sec. 1091.003. ESSENTIAL PUBLIC FUNCTION. The district is a public entity performing an essential public function. (Acts 71st Leg., R.S., Ch. 199, Sec. 7.11 (part).)

Source Law

Sec. 7.11. Since the district created under this Act is a public entity performing an essential public function, … .

Revised Law

Sec. 1091.004. DISTRICT TERRITORY. The boundaries of the district are coextensive with the boundaries of Rice Consolidated Independent School District of Colorado County, Texas, as those boundaries existed on May 26, 1989. (Acts 71st Leg., R.S., Ch. 199, Sec. 1.03.)

Source Law

Sec. 1.03. The boundaries of the district are coextensive with the boundaries of Rice Consolidated Independent School District of Colorado County, Texas.

Revisor's Note

Section 1.03, Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, provides that the boundaries of the district are coextensive with the boundaries of the Rice Consolidated Independent School District. Under Chapter 13, Education Code, a school district's boundaries may be changed.

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

Had the legislature intended this result, it could have provided in the statute a method by which the changes in district boundaries could have been made to avoid these constitutional issues. Accordingly, the revised law defines the hospital district boundaries as of the effective date of the act that made the boundaries coextensive with those of the school district.

Revised Law

Sec. 1091.005. DISTRICT SUPPORT OR MAINTENANCE NOT STATE OBLIGATION. The state may not become obligated for the support or maintenance of the district. (Acts 71st Leg., R.S., Ch. 199, Sec. 10.01 (part).)

Source Law

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

Revised Law

Sec. 1091.006. RESTRICTION ON STATE FINANCIAL ASSISTANCE. The legislature may not make a direct appropriation for the construction, maintenance, or improvement of a district facility. (Acts 71st Leg., R.S., Ch. 199, Sec. 10.01 (part).)

Source Law

Sec. 10.01. … nor may the legislature make a direct appropriation for the construction, maintenance, or improvement of a facility of the district.

Revisor's Note

(End of Subchapter)

Article 3, Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, provides procedures for holding an election on the creation of the district and the imposition of an ad valorem tax. Because the creation of the district and the imposition of the tax were approved at such an election in 1995, the revised law omits that article as executed. The omitted law reads:

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

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

(b) On presentation of a petition for a creation election signed by at least 10 percent of the registered voters of the territory of the proposed district, according to the most recent official lists of registered voters, the temporary directors shall order an election to be held. The election shall be called not later than the 60th day after the date the petition is presented to the district.

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

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

(2) the date of the election;

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

(4) the location of the polling places.

Sec. 3.04. The temporary directors shall give notice of the election by publishing a substantial copy of the election order in a newspaper with general circulation in the proposed district once a week for two consecutive weeks. The first publication must appear at least 35 days before the date set for the election.

Sec. 3.05. (a) The election shall be held not less than 45 days nor more than 60 days after the date on which the election is ordered.

(b) Subsection (a), Section 41.001, Election Code, does not apply to an election ordered under this article.

Sec. 3.06. The ballot for an election at which the issuance of bonds is not proposed shall be printed to permit voting for or against the proposition: "The creation of the Rice Hospital District and the levy of annual taxes for hospital purposes at a rate not to exceed 75 cents on each $100 valuation of all taxable property in the district."

Sec. 3.07. (a) The temporary directors of the district shall meet and canvass the returns of the election.

(b) If the temporary directors find that the election results are favorable to the proposition to create the district, they shall issue an order declaring the district created.

(c) If the temporary directors find that the election results are not favorable to the proposition to create the district, another creation election may not be held within 12 months after the date of the election at which voters disapproved the proposition.

Sec. 3.08. If the creation of the district is not approved at an election held within 60 months after the effective date of this Act, this Act expires.

Sec. 3.09. (a) A petition for a creation election under Subsection (b) of Section 3.02 of this Act may include a request that a proposition be submitted at the election to determine whether the board may issue district bonds if the district is created. The petition must specify the maximum amount of bonds to be issued and their maximum maturity date.

(b) Even though a petition does not request submission of a proposition on whether the board may issue bonds or even though the temporary directors have called the election on their own motion under Subsection (a) of Section 3.02 of this Act, the temporary directors may submit a proposition at the creation election on the issuance of bonds.

(c) If a bond proposition is submitted to the voters, the ballot for the election shall be printed to permit voting for or against the proposition: "The creation of the Rice Hospital District, the levy of annual taxes for hospital purposes at a rate not to exceed 75 cents on each $100 valuation of all taxable property in the district, and the issuance of bonds in an amount not to exceed __________ (insert amount) and to mature not later than __________ (insert date)."

(d) The board may issue bonds as provided by this Act if a majority of the votes cast at the election favor the proposition to create the district, authorize a tax, and issue bonds.

[Sections 1091.007-1091.050 reserved for expansion]

SUBCHAPTER B. DISTRICT ADMINISTRATION

Revised Law

Sec. 1091.051. BOARD ELECTION; TERM. (a) The district is governed by a board of nine directors elected from the district at large.

(b) Unless four-year terms are established under Section 285.081, Health and Safety Code:

(1) directors serve staggered two-year terms; and

(2) an election shall be held on the uniform election date in May of each year to elect the appropriate number of directors. (Acts 71st Leg., R.S., Ch. 199, Secs. 4.01(a), 4.03(a), (c) (part).)

Source Law

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

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

(c) … an election shall be held on the first Saturday in May each year, and the appropriate number of successor directors shall be elected for two-year terms.

Revisor's Note

(1) Article 2 and Section 4.01(b), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, provide for temporary directors to serve until elected directors take office and provide for filling a vacancy in the office of temporary director. The revised law omits the provisions as executed. The omitted law reads:

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

(1) B. J. Ashby

(2) Steve Balas

(3) Wayne Corman

(4) Eunice Frnka

(5) William H. Harrison, Sr.

(6) Anthony Kallina

(7) William H. Lehrer

(8) Willard W. Shuart

(9) Raymond R. Thomas, M.D.

Sec. 2.02. The directors remaining after a vacancy in the office of temporary director shall fill the vacancy by appointment by majority vote.

[Sec. 4.01]

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

(2) Sections 4.02 and 4.03(b) and (c), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, prescribe the procedure for electing the initial board. The revised law omits the provisions as executed. The omitted law reads:

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

[Sec. 4.03]

(b) The nine candidates receiving the highest number of votes at the initial election of directors are directors for the district… .

(3) Section 4.03(b), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, provides for staggering the directors' terms by requiring the five directors who receive "the highest number of votes at the initial election [to] serve for a term of two years" and the "remaining directors [to] serve for a term of one year." The revised law omits the provision as executed but codifies the establishment of staggered terms. The omitted law reads:

(b) … The five directors receiving the highest number of votes at the initial election serve for a term of two years. The remaining directors serve for a term of one year.

(4) Section 4.03(c), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, requires board elections to be held on the "first Saturday in May." From 1986 to 2003, Section 41.001, Election Code, provided for a uniform election date for all political subdivisions on the first Saturday in May. In Chapter 1315, Acts of the 78th Legislature, Regular Session, 2003, the legislature amended Section 41.001 by moving the uniform election date in May to the third Saturday. In Chapter 1, Acts of the 78th Legislature, 3rd Called Session, 2003, the legislature amended Section 41.001 by moving the uniform election date in May back to the first Saturday. In Chapter 471, Acts of the 79th Legislature, Regular Session, 2005, the legislature amended Section 41.001 by moving the uniform election date in May to the second Saturday. The revised law substitutes "uniform election date in May" for "first Saturday in May" to reflect these changes while preserving as closely as possible the legislative intent expressed in Section 4.03(c) that the election be held on the first Saturday in May, which was the uniform election date in May.

(5) Section 4.03(c), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, 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 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.

Revised Law

Sec. 1091.052. NOTICE OF ELECTION. At least 35 days before the date of an election of directors, notice of the election shall be published one time in a newspaper with general circulation in the district. (Acts 71st Leg., R.S., Ch. 199, Sec. 4.04.)

Source Law

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

Revised Law

Sec. 1091.053. BALLOT PETITION. A person seeking to have the person's name printed on the ballot as a candidate for director must file with the board secretary a petition requesting that action. The petition must be:

(1) signed by at least 10 registered voters of the district as determined by the most recent official list of registered voters; and

(2) filed not later than the 31st day before the date of the election. (Acts 71st Leg., R.S., Ch. 199, Sec. 4.05.)

Source Law

Sec. 4.05. (a) A person who wishes to have his name printed on the ballot as a candidate for director must file with the secretary of the board of directors a petition signed by at least 10 registered voters of the district asking that his name be placed on the ballot. The determination of whether a person is a registered voter of the district shall be based on the most recent official list of registered voters.

(b) The petition must be filed with the secretary not later than the 31st day before the date of the election.

Revised Law

Sec. 1091.054. QUALIFICATIONS FOR OFFICE. (a) To be eligible to be a candidate for or to serve as a director, a person must be:

(1) a resident of the district; and

(2) a qualified voter.

(b) A district employee may not serve as a director. (Acts 71st Leg., R.S., Ch. 199, Sec. 4.06.)

Source Law

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

(1) a resident of the district; and

(2) a qualified voter.

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

Revised Law

Sec. 1091.055. BOND; RECORD OF BOND. (a) Before assuming the duties of office, each director must execute a bond for $5,000 that is:

(1) payable to the district; and

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

(b) The board may pay for directors' bonds with district money.

Source Law

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

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

Revised Law

Sec. 1091.056. BOARD VACANCY. If a vacancy occurs in the office of director, the remaining directors shall appoint a director for the unexpired term. (Acts 71st Leg., R.S., Ch. 199, Sec. 4.08.)

Source Law

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

Revised Law

Sec. 1091.057. OFFICERS. (a) The board shall elect a president and a vice president from among its members.

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

(d) The board shall fill a vacancy in a board office for the unexpired term. (Acts 71st Leg., R.S., Ch. 199, Secs. 4.09, 4.10.)

Source Law

Sec. 4.09. The board shall elect from among its members a president and a vice-president. The board shall also appoint a secretary. The secretary need not be a director.

Sec. 4.10. (a) Each officer of the board serves for a term of one year.

(b) The board shall fill a vacancy in a board office for the unexpired term.

Revised Law

Sec. 1091.058. COMPENSATION; EXPENSES. A director or officer serves without compensation but may be reimbursed for actual expenses incurred in the performance of official duties. The expenses must be:

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

(2) approved by the board. (Acts 71st Leg., R.S., Ch. 199, Sec. 4.11.)

Source Law

Sec. 4.11. Directors and officers serve without compensation but may be reimbursed for actual expenses incurred in the performance of official duties. Those expenses must be reported in the district's minute book or other district records and must be approved by the board.

Revisor's Note

Section 4.11, Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, requires that approved expenses be reported in the "district's minute book or other district records." The revised law omits the reference to the "district's minute book" because the minute book is a district record.

Revised Law

Sec. 1091.059. VOTING REQUIREMENT. A concurrence of a majority of the directors voting is necessary in any matter relating to district business. (Acts 71st Leg., R.S., Ch. 199, Sec. 4.12.)

Source Law

Sec. 4.12. A concurrence of a majority of the members of the board voting is necessary in matters relating to the business of the district.

Revised Law

Sec. 1091.060. 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 compensation as determined by the board.

(c) Before assuming the duties of district administrator, the administrator must execute a bond in an amount determined by the board of not less than $5,000 that is:

(1) payable to the district; and

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

(d) The board may pay for the bond with district money. (Acts 71st Leg., R.S., Ch. 199, Secs. 4.13(a) (part), (b) (part), (c) (part), (d).)

Source Law

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

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

(d) Before assuming his duties, the administrator shall execute a bond payable to the hospital district in the amount of not less than $5,000, as determined by the board, conditioned on the faithful performance of his duties under this Act. The board may pay for the bond with district funds.

Revised Law

Sec. 1091.061. GENERAL DUTIES OF DISTRICT ADMINISTRATOR. Subject to the limitations prescribed by the board, the district administrator shall:

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

(2) direct the general affairs of the district. (Acts 71st Leg., R.S., Ch. 199, Sec. 4.16.)

Source Law

Sec. 4.16. The administrator shall supervise the work and activities of the district and shall direct the general affairs of the district, subject to the limitations prescribed by the board.

Revised Law

Sec. 1091.062. ASSISTANT DISTRICT ADMINISTRATOR; ATTORNEY. (a) The board may appoint qualified persons as:

(1) the assistant district administrator; and

(2) the attorney for the district.

(b) The assistant district administrator and the attorney for the district serve at the will of the board and are entitled to compensation as determined by the board. (Acts 71st Leg., R.S., Ch. 199, Secs. 4.13(a) (part), (b) (part), (c) (part).)

Source Law

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

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

Revised Law

Sec. 1091.063. APPOINTMENT AND RECRUITMENT OF STAFF AND EMPLOYEES. (a) The board may:

(1) appoint to the staff any doctors whose appointment the board considers necessary for the efficient operation of the district;

(2) make temporary appointments as the board considers necessary; and

(3) after due process remove from the medical staff any doctor whose removal the board considers necessary for the efficient operation of the district.

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

(d) Except as prohibited by applicable law, the board may spend money to recruit physicians, nurses, and other personnel. (Acts 71st Leg., R.S., Ch. 199, Secs. 4.14, 4.15, 5.04(c).)

Source Law

Sec. 4.14. The board may:

(1) appoint to the staff any doctors it considers necessary for the efficient operation of the district;

(2) make temporary appointments as considered necessary; and

(3) remove from the medical staff, after due process, any doctors it considers necessary to remove for the efficient operation of the district.

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

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

[Sec. 5.04]

Revised Law

Sec. 1091.064. 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 71st Leg., R.S., Ch. 199, Sec. 4.17.)

Source Law

Sec. 4.17. The board may provide retirement benefits for employees of the district by establishing or administering a retirement program or by electing to participate in the Texas County and District Retirement System or in any other statewide retirement system in which the district is eligible to participate.

[Sections 1091.065-1091.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Revised Law

Sec. 1091.101. DISTRICT RESPONSIBILITY. The district has full responsibility for:

(1) operating hospital facilities; and

(2) providing medical and hospital care for the district's needy inhabitants. (Acts 71st Leg., R.S., Ch. 199, Sec. 5.01 (part).)

Source Law

Sec. 5.01. On creation of the district, the district:

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

Revisor's Note

Section 5.01, Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, provides that "[o]n creation of the district," the district "assumes" certain responsibilities. The revised law omits "[o]n creation of the district," as executed. The revised law substitutes "has" for "assumes" because the obligation to assume the responsibility is executed.

Revised Law

Sec. 1091.102. MANAGEMENT, CONTROL, AND ADMINISTRATION. The board shall manage, control, and administer the hospital system and the money and resources of the district. (Acts 71st Leg., R.S., Ch. 199, Sec. 5.02.)

Source Law

Sec. 5.02. The board shall manage, control, and administer the hospital system and the funds and resources of the district.

Revised Law

Sec. 1091.103. RULES. The board may adopt rules governing:

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

(2) the duties, functions, and responsibilities of district staff and employees. (Acts 71st Leg., R.S., Ch. 199, Sec. 5.03.)

Source Law

Sec. 5.03. The board may adopt rules governing the operation of the hospital and hospital system and the duties, functions, and responsibilities of district staff and employees.

Revised Law

Sec. 1091.104. PURCHASING AND ACCOUNTING PROCEDURES. The board may prescribe:

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

(2) accounting and control procedures for the district. (Acts 71st Leg., R.S., Ch. 199, Secs. 5.04(a), (b).)

Source Law

Sec. 5.04. (a) The board may prescribe the method of making purchases and expenditures by and for the district.

(b) The board may prescribe accounting and control procedures for the district.

Revised Law

Sec. 1091.105. DISTRICT PROPERTY, FACILITIES, AND EQUIPMENT. (a) The board shall determine:

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

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

(b) The board may:

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

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

(d) The board may sell or otherwise dispose of property, including facilities or equipment, for the district. (Acts 71st Leg., R.S., Ch. 199, Sec. 5.05.)

Source Law

Sec. 5.05. (a) The board shall determine the type, number, and location of buildings required to establish and maintain an adequate hospital system and the type of equipment necessary for hospital care.

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

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

Revisor's Note

Section 5.05(a), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, requires the board to determine the buildings required to "establish and maintain" an adequate hospital system. The revised law omits the reference to establishing the hospital system as executed.

Revised Law

Sec. 1091.106. EMINENT DOMAIN. (a) The district may exercise the power of eminent domain to acquire a fee simple or other interest in property located in district territory if the interest is necessary for the district to exercise a right or authority conferred by this chapter.

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

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

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

(3) provide a bond for costs or a supersedeas bond on an appeal or petition for review. (Acts 71st Leg., R.S., Ch. 199, Sec. 5.08.)

Source Law

Sec. 5.08. (a) The district may exercise the power of eminent domain to acquire by condemnation a fee simple or other interest in property located in the territory of the district if the property interest is necessary to the exercise of the rights or authority conferred by this Act.

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

(c) In a condemnation proceeding brought by the district, the district is not required to pay in advance or give bond or other security for costs in the trial court, to give bond for the issuance of a temporary restraining order or a temporary injunction, or to give bond for costs or supersedeas on an appeal or writ of error.

Revisor's Note

Section 5.08, Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, refers to a "writ of error." The revised law substitutes "petition for review" for "writ of error" because, effective September 1, 1997, the Texas Supreme Court replaced the writ of error procedure with the petition for review procedure. See Rule 53.1, Texas Rules of Appellate Procedure.

Revised Law

Sec. 1091.107. COST OF RELOCATING OR ALTERING PROPERTY. In exercising the power of eminent domain, if the board requires relocating, raising, lowering, rerouting, changing the grade of, or altering the construction of any railroad, highway, pipeline, or electric transmission and electric distribution, telegraph, or telephone line, conduit, pole, or facility, the district must bear the actual cost of relocating, raising, lowering, rerouting, changing the grade, or altering the construction to provide comparable replacement, without enhancement of facilities, after deducting the net salvage value derived from the old facility. (Acts 71st Leg., R.S., Ch. 199, Sec. 5.09.)

Source Law

Sec. 5.09. In exercising the power of eminent domain, if the board requires relocating, raising, lowering, rerouting, changing the grade, or altering the construction of any railroad, highway, pipeline, or electric transmission and electric distribution, telegraph, or telephone lines, conduits, poles, or facilities, the district must bear the actual cost of relocating, raising, lowering, rerouting, changing the grade, or altering the construction to provide comparable replacement without enhancement of facilities, after deducting the net salvage value derived from the old facility.

Revised Law

Sec. 1091.108. GIFTS AND ENDOWMENTS. The board may accept for the district a gift or endowment to be held in trust for any purpose and under any direction, limitation, or other provision prescribed in writing by the donor that is consistent with the proper management of the district. (Acts 71st Leg., R.S., Ch. 199, Sec. 5.13.)

Source Law

Sec. 5.13. On behalf of the district, the board may accept gifts and endowments to be held in trust for any purpose and under any direction, limitation, or provision prescribed in writing by the donor that is consistent with the proper management of the district.

Revised Law

Sec. 1091.109. CONSTRUCTION CONTRACTS. (a) The board may enter into construction contracts for the district.

(b) The board may enter into a construction contract that involves the expenditure of more than the amount provided by Section 271.024, Local Government Code, only after competitive bidding as provided by Subchapter B, Chapter 271, Local Government Code. (Acts 71st Leg., R.S., Ch. 199, Sec. 5.06(a).)

Source Law

Sec. 5.06. (a) The board may enter into construction contracts on behalf of the district; however, the board may enter into construction contracts that involve spending more than $10,000 only after competitive bidding as provided by Subchapter B, Chapter 271, Local Government Code.

Revisor's Note

(1) Section 5.06(a), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, provides that the district may enter into construction contracts that involve spending more than $10,000 only after competitive bidding as provided by Subchapter B, Chapter 271, Local Government Code. The revised law omits the reference to the $10,000 amount as superseded by Section 5, Chapter 115, Acts of the 77th Legislature, Regular Session, 2001, which amended Section 271.024, Local Government Code, to increase the contract amount for which competitive bidding is required to $25,000.

(2) Section 5.06(b), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, provides that Article 5160, Revised Statutes, applies to the district's construction contracts in relation to performance and payment bonds. The revised law omits the provision because Article 5160 was codified as Chapter 2253, Government Code, and that chapter applies to hospital districts on its own terms. The omitted law reads:

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

Revised Law

Sec. 1091.110. OPERATING AND MANAGEMENT CONTRACTS. The board may enter into an operating or management contract for the district relating to a hospital facility. (Acts 71st Leg., R.S., Ch. 199, Sec. 5.07.)

Source Law

Sec. 5.07. The board may enter into operating or management contracts relating to hospital facilities on behalf of the district.

Revised Law

Sec. 1091.111. CONTRACTS FOR SERVICES. (a) The board may contract with a public or private hospital, a political subdivision of this state, or a state or federal agency for the district to provide a mobile emergency medical service or other health care services needed to provide for the investigatory or welfare needs of district inhabitants.

(b) The board may contract with any person to receive or supply the services the board considers necessary for the effective operation of the district. (Acts 71st Leg., R.S., Ch. 199, Sec. 5.12.)

Source Law

Sec. 5.12. (a) The board may contract with a city, county, special district, public or private hospital, or other political subdivision of the state or with a state or federal agency for the district to furnish a mobile emergency medical service or other health care services needed to provide for the investigatory or welfare needs of inhabitants of the district.

(b) The board may contract with individuals, governmental entities, private corporations, associations, partnerships, cooperatives, and foreign governments to receive or to supply the services the board considers necessary for the effective operation of the district.

Revisor's Note

(1) Section 5.12(a), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, refers to a "city, county, special district, public or private hospital, or other political subdivision of the state." Throughout this chapter, the revised law omits references to "city," "county," and "special district" in this context because those terms are included in the meaning of "political subdivision of the state."

(2) Section 5.12(b), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, refers to "individuals, governmental entities, private corporations, associations, partnerships, cooperatives, and foreign governments." The revised law substitutes "any person" for the quoted language because Section 311.005, Government Code (Code Construction Act), applicable to the revised law, defines "person" to include "corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity."

Revised Law

Sec. 1091.112. PROVISION OF CERTAIN HEALTH SERVICES. The district may:

(1) operate or provide for the operation of a mobile emergency medical service; and

(2) operate or provide for home health services, long-term care, skilled nursing care, intermediate nursing care, hospice care, or any other reasonable or appropriate medical care or medical services. (Acts 71st Leg., R.S., Ch. 199, Sec. 5.01 (part).)

Source Law

Sec. 5.01. … the district:

…

(3) may operate or provide for the operation of a mobile emergency medical service; and

(4) may operate or provide for home health services, long-term care, skilled nursing care, intermediate nursing care, hospice care, or any other reasonable or appropriate medical care or medical services.

Revised Law

Sec. 1091.113. PAYMENT FOR TREATMENT; PROCEDURES. (a) If an individual who resides in the district is admitted as a patient to a district facility, the district administrator may have an inquiry made into the financial circumstances of:

(1) the patient; and

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

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

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

(d) The district administrator may collect money owed to the district from the patient's estate or from that of a relative legally responsible for the patient's support in the manner provided by law for the collection of expenses in the last illness of a deceased person.

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

(1) call witnesses;

(2) hear and resolve the question; and

(3) issue a final order.

(f) A final order of the board may be appealed only to a district court in Colorado County. The substantial evidence rule applies to the appeal. (Acts 71st Leg., R.S., Ch. 199, Secs. 5.10(b), (c), (d), (e), (f).)

Source Law

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

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

(d) The administrator may collect money owed to the district from the estate of the patient or from that of a relative who was legally responsible for the patient's support in the manner provided by law for collection of expenses in the last illness of a deceased person.

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

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

Revisor's Note

(1) Section 5.10(a), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, requires the district to adopt an application procedure for assistance eligibility. The revised law omits the provision because it duplicates provisions in Sections 61.053(a) and (b), Health and Safety Code, which apply to the district and detail the application procedure. The omitted law reads:

Sec. 5.10. (a) Not later than the beginning of each operating year, the district shall adopt an application procedure to determine eligibility for assistance, as provided by Section 10.03, Indigent Health Care and Treatment Act (Article 4438f, Vernon's Texas Civil Statutes).

(2) Section 5.10(f), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, authorizes the appeal of a final order to be made to the district court "in the county in which the district is located." The revised law substitutes "Colorado County" for the quoted language because Colorado County is the county in which the district is located.

Revised Law

Sec. 1091.114. REIMBURSEMENT FOR SERVICES. (a) The board shall require a county, municipality, or public hospital located outside the district to reimburse the district for the district's care and treatment of a sick or injured person of that county, municipality, or public hospital, as provided by Chapter 61, Health and Safety Code.

(b) The board shall require the sheriff of Colorado County or the police chief of the City of Eagle Lake, as applicable, to reimburse the district for the district's care and treatment of a person who is confined in a jail facility of Colorado County or the City of Eagle Lake and is not a district resident.

(c) The board may contract with the state or federal government for that government to reimburse the district for treatment of a sick or injured person. (Acts 71st Leg., R.S., Ch. 199, Sec. 5.11.)

Source Law

Sec. 5.11. (a) The board shall require reimbursement from a county, city, or public hospital located outside the boundaries of the district for the district's care and treatment of a sick, diseased, or injured person of that county, city, or public hospital as provided by the Indigent Health Care and Treatment Act (Article 4438f, Vernon's Texas Civil Statutes).

(b) The board shall require reimbursement from the sheriff of Colorado County for the district's care and treatment of a person confined in a jail facility of Colorado County who is not a resident of the district.

(c) The board shall require reimbursement from the police chief of the City of Eagle Lake for the district's care and treatment of a person confined in a jail facility of the City of Eagle Lake who is not a resident of the district.

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

Revisor's Note

(1) Section 5.11(a), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, refers to a "city." The revised law substitutes "municipality" for "city" because that is the term used in the Local Government Code.

(2) Sections 5.11(a) and (d), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, refer to a "sick, diseased, or injured person." The revised law omits the references to "diseased" because "diseased" is included in the meaning of "sick."

(3) Section 5.11(a), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, refers to the Indigent Health Care and Treatment Act (Article 4438f, Vernon's Texas Civil Statutes). That statute was codified in 1989 as Chapter 61, Health and Safety Code. The revised law is drafted accordingly.

Revised Law

Sec. 1091.115. AUTHORITY TO SUE AND BE SUED. The board may sue and be sued on behalf of the district. (Acts 71st Leg., R.S., Ch. 199, Sec. 5.14.)

Source Law

Sec. 5.14. The board may sue and be sued on behalf of the district.

[Sections 1091.116-1091.150 reserved for expansion]

SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS

Revised Law

Sec. 1091.151. BUDGET. (a) The district administrator shall prepare a proposed annual budget for the district.

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

(1) the outstanding obligations of the district;

(2) the amount of cash on hand to the credit of each district fund;

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

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

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

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

(7) the estimated tax rate to be required. (Acts 71st Leg., R.S., Ch. 199, Sec. 6.04.)

Source Law

Sec. 6.04. (a) The administrator of the district shall prepare a proposed annual budget for the district.

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

(1) the outstanding obligations of the district;

(2) the amount of cash on hand to the credit of each fund of the district;

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

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

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

(6) the estimated amount of revenues and balances available to cover the proposed budget; and

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

Revised Law

Sec. 1091.152. NOTICE; HEARING; ADOPTION OF BUDGET. (a) The board shall hold a public hearing on the proposed annual budget.

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

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

(e) The budget is effective only after adoption by the board. (Acts 71st Leg., R.S., Ch. 199, Sec. 6.05.)

Source Law

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

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

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

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

Revised Law

Sec. 1091.153. AMENDMENTS TO BUDGET. After the annual budget is adopted, the budget may be amended on the board's approval. (Acts 71st Leg., R.S., Ch. 199, Sec. 6.06.)

Source Law

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

Revised Law

Sec. 1091.154. FISCAL YEAR. (a) The district operates according to a fiscal year established by the board.

(b) The fiscal year may not be changed:

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

(2) more than once in a 24-month period. (Acts 71st Leg., R.S., Ch. 199, Sec. 6.01.)

Source Law

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

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

Revised Law

Sec. 1091.155. ANNUAL AUDIT. The board annually shall have an audit made of the district's financial condition. (Acts 71st Leg., R.S., Ch. 199, Sec. 6.02.)

Source Law

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

Revised Law

Sec. 1091.156. INSPECTION OF ANNUAL AUDIT AND DISTRICT RECORDS. The annual audit and other district records are open to inspection during regular business hours at the district's principal office. (Acts 71st Leg., R.S., Ch. 199, Sec. 6.03.)

Source Law

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

Revised Law

Sec. 1091.157. FINANCIAL REPORT. As soon as practicable after the close of the fiscal year, the district administrator shall prepare for the board:

(1) a sworn statement of the amount of district money; and

(2) an account of the disbursements of that money. (Acts 71st Leg., R.S., Ch. 199, Sec. 6.08.)

Source Law

Sec. 6.08. As soon as practicable after the close of the fiscal year, the administrator shall prepare for the board a sworn statement of the amount of money that belongs to the district and an account of the disbursements of that money.

Revised Law

Sec. 1091.158. SHORT-TERM FINANCING. The district may borrow money through short-term financing. (Acts 71st Leg., R.S., Ch. 199, Sec. 6.07.)

Source Law

Sec. 6.07. Money may be borrowed through short-term financing.

Revised Law

Sec. 1091.159. DEPOSITORY. (a) The board shall select at least one bank to serve as a depository for district money.

(b) District money, other than money invested as provided by Section 1091.160(b) and money transmitted to a bank for payment of bonds or obligations issued or assumed by the district, shall be deposited as received with the depository bank and must remain on deposit. This subsection does not limit the power of the board to place a part of district money on time deposit or to purchase certificates of deposit.

(c) The district may not deposit money with a bank in an amount that exceeds the maximum amount secured by the Federal Deposit Insurance Corporation unless the bank first executes a bond or other security in an amount sufficient to secure from loss the district money that exceeds the amount secured by the Federal Deposit Insurance Corporation. (Acts 71st Leg., R.S., Ch. 199, Sec. 6.10.)

Source Law

Sec. 6.10. (a) The board shall name at least one bank to serve as depository for district funds.

(b) District funds, other than those invested as provided by Subsection (b) of Section 6.09 of this Act and those transmitted to a bank of payment for bonds or obligations issued or assumed by the district, shall be deposited as received with the depository bank and must remain on deposit. This subsection does not limit the power of the board to place a portion of district funds on time deposit or to purchase certificates of deposit.

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

Revised Law

Sec. 1091.160. SPENDING AND INVESTMENT RESTRICTIONS. (a) Except as provided by Sections 1091.109, 1091.201, 1091.204, and 1091.205, the district may not incur a debt payable from district revenue other than the revenue on hand or to be on hand in the current fiscal year and the immediately following fiscal year of the district.

(b) The board may invest operating, depreciation, or building reserves only in funds or securities specified by Chapter 2256, Government Code. (Acts 71st Leg., R.S., Ch. 199, Sec. 6.09.)

Source Law

Sec. 6.09. (a) Except as provided by Subsection (a) of Section 5.06 and Sections 7.01, 7.04, and 7.05 of this Act, the district may not incur a debt payable from revenues of the district other than the revenues on hand or to be on hand in the current and immediately following fiscal year of the district.

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

Revisor's Note

Section 6.09(b), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, refers to Articles 836 and 837, Revised Statutes. Those articles were impliedly repealed by the enactment of the Public Funds Investment Act of 1987 (Article 842a-2, Vernon's Texas Civil Statutes), which was revised in 1993 as Chapter 2256, Government Code. Chapter 2256 defines "local government" to include hospital districts and applies to the district by its own terms. The revised law therefore substitutes a reference to Chapter 2256, Government Code, for the reference to Articles 836 and 837.

[Sections 1091.161-1091.200 reserved for expansion]

SUBCHAPTER E. BONDS

Revised Law

Sec. 1091.201. GENERAL OBLIGATION BONDS. If authorized by an election, the board may issue and sell general obligation bonds in the name and on the faith and credit of the district to:

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

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

(3) acquire and operate a mobile emergency medical service. (Acts 71st Leg., R.S., Ch. 199, Sec. 7.01.)

Source Law

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

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

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

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

Revisor's Note

Section 7.01, Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, provides that the board may issue and sell bonds in the name and on the faith and credit of the district. Because the type of bonds described by Section 7.01 are known as "general obligation bonds," the revised law is drafted accordingly.

Revised Law

Sec. 1091.202. TAX TO PAY GENERAL OBLIGATION BONDS. (a) At the time general obligation bonds are issued by the district under Section 1091.201, the board shall impose an ad valorem tax at a rate sufficient to create an interest and sinking fund to pay the principal of and interest on the bonds as the bonds mature.

(b) The tax required by this section together with any other ad valorem tax the district imposes may not in any year exceed the limit approved by the voters at the election authorizing the imposition of the tax. (Acts 71st Leg., R.S., Ch. 199, Sec. 7.02.)

Source Law

Sec. 7.02. (a) At the time the bonds are issued by the district, the board shall levy a tax.

(b) The tax must be sufficient to create an interest and sinking fund to pay the principal of and interest on the bonds as they mature.

(c) In any year, the tax together with any other tax the district levies may not exceed the limit approved by the voters at the election authorizing the levy of taxes.

Revisor's Note

Section 7.02, Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, requires the district to levy a tax to pay the principal of and interest on bonds. The revised law specifies that the tax is an "ad valorem" tax because it is clear from the source law that the tax is a property tax and "ad valorem" is the term most commonly used to refer to a property tax. In addition, throughout this chapter, the revised law substitutes "impose" for "levy" because, in this context, the terms are synonymous and the former is more commonly used.

Revised Law

Sec. 1091.203. GENERAL OBLIGATION BOND ELECTION. (a) The district may issue general obligation bonds only if the bonds are authorized by a majority of the district voters voting at an election held for that purpose.

(b) The board may order a bond election. The order calling the election must specify:

(1) the nature and date of the election;

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

(3) the location of the polling places;

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

(5) the maximum maturity of the bonds.

(d) The board shall declare the results of the election. (Acts 71st Leg., R.S., Ch. 199, Sec. 7.03.)

Source Law

Sec. 7.03. (a) The district may issue general obligation bonds only if the bonds are authorized by a majority of the qualified voters of the district voting at an election called and held for that purpose.

(b) The board may order a bond election. The order calling the election must state the nature and date of the election, the hours during which the polls will be open, the location of the polling places, the amount of bonds to be authorized, and the maximum maturity of the bonds.

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

Revisor's Note

(1) Section 7.03(a), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, refers to a majority vote of the "qualified" voters of the district. The revised law omits "qualified" as unnecessary in this context because Chapter 11, Election Code, governs eligibility to vote in an election in this state and allows only "qualified" voters who are residents of the territory covered by the election to vote in an election.

(2) Section 7.03(a), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, refers to an election "called and held." Throughout this chapter, the revised law omits references to "calling" an election because, in this context, "calling" an election is included in the meaning of "holding" an election. Under Chapter 3, Election Code, all elections must be ordered (called) before they may be held.

(3) Section 7.03(c), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, refers to Article 704, Revised Statutes, which specifies certain notice requirements for a bond election. That provision was codified in 1999 as Section 1251.003, Government Code. The revised law is drafted accordingly.

(4) Section 7.03(d), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, provides that "[t]he board shall canvass the returns" of a bond election. The revised law omits this requirement because it duplicates Section 67.002, Election Code, which requires the governing body of a political subdivision that orders an election to canvass the returns.

Revised Law

Sec. 1091.204. REVENUE BONDS. (a) The board may issue revenue bonds to:

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

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

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

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

(d) The bonds must be issued in the manner provided by Sections 264.042, 264.043, 264.046, 264.047, 264.048, and 264.049, Health and Safety Code, for issuance of revenue bonds by a county hospital authority. (Acts 71st Leg., R.S., Ch. 199, Sec. 7.04.)

Source Law

Sec. 7.04. (a) The board may issue revenue bonds to:

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

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

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

(b) The bonds must be payable from and secured by a pledge of all or part of the revenues derived from the operation of the district's hospital system. The bonds may be additionally secured by a mortgage or deed of trust lien on all or part of district property.

(c) The bonds must be issued in the manner provided by Sections 8, 10, 11, 12, and 13, County Hospital Authority Act (Article 4494r, Vernon's Texas Civil Statutes), for issuance of revenue bonds by county hospital authorities.

Revisor's Note

Section 7.04(c), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, refers to Sections 8, 10, 11, 12, and 13, County Hospital Authority Act (Article 4494r, Vernon's Texas Civil Statutes). Those provisions were codified in 1989 as Sections 264.042, 264.043, 264.046, 264.047, 264.048, and 264.049, Health and Safety Code. The revised law is drafted accordingly.

Revised Law

Sec. 1091.205. REFUNDING BONDS. (a) The board may issue refunding bonds to refund outstanding indebtedness issued or assumed by the district.

(b) Refunding bonds may be:

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

(2) exchanged wholly or partly for not less than a similar principal amount of outstanding indebtedness. (Acts 71st Leg., R.S., Ch. 199, Secs. 7.05(a), (c) (part).)

Source Law

Sec. 7.05. (a) Refunding bonds of the district may be issued to refund and pay off an outstanding indebtedness the district has issued or assumed.

(c) The refunding bonds may be sold and the proceeds applied to the payment of outstanding indebtedness or may be exchanged in whole or in part for not less than a similar principal amount of outstanding indebtedness. …

Revisor's Note

Sections 7.05(b) and (c), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, require the district to issue refunding bonds in the manner prescribed by Article 717k-3 (Vernon's Texas Civil Statutes), and, for refunding bonds that will be sold, to issue the bonds and to make payments on the bonds in the manner prescribed by Article 717k (Vernon's Texas Civil Statutes). Articles 717k and 717k-3 were codified in 1999 as Chapter 1207, Government Code. The revised law omits the provisions because Chapter 1207, Government Code, applies to the district by its own terms under Section 1207.001, Government Code. The omitted law reads:

(b) The bonds must be issued in the manner provided by Chapter 784, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-3, Vernon's Texas Civil Statutes).

(c) … If the refunding bonds are to be sold and the proceeds applied to the payment of outstanding indebtedness, the refunding bonds must be issued and payments made in the manner provided by Chapter 503, Acts of the 54th Legislature, Regular Session, 1955 (Article 717k, Vernon's Texas Civil Statutes).

Revised Law

Sec. 1091.206. MATURITY OF BONDS. District bonds must mature not later than 50 years after the date of issuance. (Acts 71st Leg., R.S., Ch. 199, Sec. 7.06 (part).)

Source Law

Sec. 7.06. District bonds must mature not more than 50 years after the date of their issuance and … .

Revisor's Note

Section 7.06, Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, provides that district bonds must bear interest at a rate that does not exceed the rate provided by Chapter 3, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes). The revised law omits that provision because the maximum interest rate noted in Chapter 3 was revised in 1999 as Section 1204.006, Government Code, and Section 1204.006 applies to the district by its terms under Section 1204.001, Government Code. The omitted law reads:

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

Revised Law

Sec. 1091.207. EXECUTION OF BONDS. (a) The board president shall execute the district's bonds in the district's name.

(b) The board secretary shall countersign the bonds in the manner provided by Chapter 618, Government Code. (Acts 71st Leg., R.S., Ch. 199, Sec. 7.07.)

Source Law

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

Revisor's Note

Section 7.07, Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, refers to the Texas Uniform Facsimile Signature of Public Officials Act (Article 717j-1, Vernon's Texas Civil Statutes). That statute was codified in 1999 as Chapter 618, Government Code, and the revised law is drafted accordingly.

Revised Law

Sec. 1091.208. BONDS EXEMPT FROM TAXATION. The following are exempt from taxation by this state or a political subdivision of this state:

(1) bonds issued by the district;

(2) any transaction relating to the bonds; and

(3) profits made in the sale of the bonds. (Acts 71st Leg., R.S., Ch. 199, Sec. 7.11 (part).)

Source Law

Sec. 7.11. … bonds issued by the district, any transaction relating to the bonds, and profits made in the sale of the bonds are free from taxation by the state or by any city, county, special district, or other political subdivision of the state.

Revisor's Note

(End of Subchapter)

(1) Section 7.08, Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, provides that district bonds are subject to the laws governing counties that relate to bond approval by the attorney general and registration of the bonds by the comptroller. Section 7.08 also states that after approval and registration the bonds are "incontestable for any cause." The revised law omits these provisions because they duplicate, in substance, Chapter 1202, Government Code. Section 1202.003(a), Government Code, requires that bonds be submitted to the attorney general. Section 1202.003(b), Government Code, provides for approval of the bonds by the attorney general and requires the attorney general to submit the approved bonds to the comptroller for registration. Section 1202.005, Government Code, requires registration of the bonds by the comptroller. Section 1202.006, Government Code, provides that after approval and registration the bonds are incontestable and binding obligations. Chapter 1202, Government Code, applies to district bonds by application of Section 1202.001, Government Code. The omitted law reads:

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

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

(2) Section 7.09, Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, provides that district bonds are legal and authorized investments for certain entities. The revised law omits the provision as unnecessary. As to several of the entities listed, Section 7.09 has been superseded and impliedly repealed or it duplicates existing law. Investments in securities by banks are regulated by Section 34.101, Finance Code (enacted in 1995 as Section 5.101, Texas Banking Act (Article 342-5.101, Vernon's Texas Civil Statutes)). Investments in securities by savings banks are regulated by Section 93.001(c)(10), Finance Code (enacted in 1993 as Section 7.15(10), Texas Savings Bank Act (Article 489e, Vernon's Texas Civil Statutes)). Investments in securities by trust companies are regulated by Section 184.101, Finance Code (enacted in 1997 as Section 5.101, Texas Trust Company Act (Article 342a-5.101, Vernon's Texas Civil Statutes)). Investments in securities by savings and loan associations are regulated by Sections 63.002 and 64.001, Finance Code. As to the remaining entities listed, Section 7.09 duplicates Section 1201.041, Government Code, enacted as Section 9, Bond Procedures Act of 1981 (Article 717k-6, Vernon's Texas Civil Statutes). While Section 7.09 lists "guardians" and Section 1201.041 does not, the latter statute includes "fiduciaries," and a guardian is a fiduciary. Section 1201.041, Government Code, applies to district bonds by application of Section 1201.002, Government Code. The revised law omits the reference to sinking funds of this state because it has been superseded by Section 404.024, Government Code (enacted in 1985 as Section 2.014, Treasury Act (Article 4393-1, Vernon's Texas Civil Statutes), and last amended in 2003), which governs the investment of state funds. Section 404.024(b)(10), Government Code, authorizes the investment of state funds in obligations of political subdivisions, including hospital districts. The omitted law reads:

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

(1) banks;

(2) savings banks;

(3) trust companies;

(4) savings and loan associations;

(5) insurance companies;

(6) fiduciaries;

(7) trustees;

(8) guardians; and

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

(3) Section 7.10, Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, provides that district bonds may secure deposits of public funds of this state or political subdivisions of this state. The revised law omits the provisions relating to deposits of state funds by the comptroller as impliedly repealed by Section 404.0221, Government Code (enacted in 1995), which lists eligible collateral for deposits of state funds by the comptroller. As to deposits of other funds, this provision duplicates Chapter 2257, Government Code, which governs eligible collateral for deposits of funds of other public agencies, including political subdivisions, and permits those deposits to be secured by obligations issued by hospital districts. The omitted law reads:

Sec. 7.10. District bonds are eligible to secure deposits of public funds of the state and of cities, counties, school districts, and other political subdivisions of the state. The bonds are lawful and sufficient security for deposits to the extent of their value if accompanied by all unmatured coupons.

[Sections 1091.209-1091.250 reserved for expansion]

SUBCHAPTER F. TAXES

Revised Law

Sec. 1091.251. 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. (Acts 71st Leg., R.S., Ch. 199, Secs. 8.01(a) (part), (c), 8.02(b).)

Source Law

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

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

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

[Sec. 8.02]

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

Revised Law

Sec. 1091.252. TAX RATE. (a) The board may impose the tax at a rate not to exceed the limit approved by the voters at the election authorizing the imposition of the tax.

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

(c) In setting the tax rate, the board shall consider the income of the district from sources other than taxation. (Acts 71st Leg., R.S., Ch. 199, Secs. 8.01(a) (part), (b), 8.03 (part).)

Source Law

Sec. 8.01. (a) [The board may annually levy taxes] in an amount not to exceed the limit approved by the voters at the election authorizing the levy of taxes.

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

Sec. 8.03. In setting the tax rate, the board shall take into consideration the income of the district from sources other than taxation… .

Revisor's Note

Section 8.03, Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, requires the board to levy the tax and to certify the tax rate to the tax assessor-collector. The revised law omits that provision because Section 26.05(a), Tax Code, requires the governing body of a taxing unit to adopt a tax rate for the current tax year and to notify the tax assessor of that rate. The omitted law reads:

Sec. 8.03. … On determination of the amount of tax required to be levied, the board shall make the levy and certify it to the tax assessor-collector.

Revised Law

Sec. 1091.253. TAX ASSESSOR-COLLECTOR. The board may provide for the appointment of a tax assessor-collector for the district or may contract for the assessment and collection of taxes as provided by the Tax Code. (Acts 71st Leg., R.S., Ch. 199, Sec. 8.04(b).)

Source Law

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

Revisor's Note

(End of Subchapter)

(1) Sections 8.02(a) and (c), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, provide respectively that the district may impose taxes for the entire year in which the district is created and that Section 26.12(d), Tax Code, does not apply to the district. The revised law omits those provisions as executed. The omitted law reads:

Sec. 8.02. (a) The board may levy taxes for the entire year in which the district is created.

(c) Subsection (d), Section 26.12, Tax Code, does not apply to the district. If the district is created after June 30, the district may impose taxes as provided by the Tax Code as if the district had existed on January 1 of the year in which it is created.

(2) Section 8.04(a), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, provides that the Tax Code governs the appraisal, assessment, and collection of district taxes. The revised law omits this provision as unnecessary because Title 1, Tax Code, governs the appraisal of property for and the assessment and collection of ad valorem taxes by all taxing units in this state, including hospital districts. See Section 1.02, Tax Code. The omitted law reads:

Sec. 8.04. (a) The Tax Code governs the appraisal, assessment, and collection of district taxes.

[Sections 1091.254-1091.300 reserved for expansion]

SUBCHAPTER G. DISSOLUTION

Revised Law

Sec. 1091.301. DISSOLUTION; ELECTION. (a) The district may be dissolved and the district's assets and liabilities sold or transferred to another person only on approval of a majority of the district voters voting in an election held for that purpose.

(b) A majority of the directors of the district may order an election on the question of dissolution of the district and the transfer of the district's assets and liabilities.

(c) The board shall order an election under this section if the board receives a petition requesting an election that is signed by at least 300 registered district voters according to the most recent official list of registered voters. The board shall call the election not later than the 60th day after the date the petition is presented to the district.

(d) An order calling an election under this section 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.

(e) Section 41.001(a), Election Code, does not apply to an election ordered under this section. (Acts 71st Leg., R.S., Ch. 199, Secs. 9.01, 9.02, 9.03, 9.05(b).)

Source Law

Sec. 9.01. The district may be dissolved and its assets and liabilities sold or transferred to another entity or person only if the dissolution and the transfer are approved by a majority of the qualified voters of the territory of the district voting at an election called and held for that purpose.

Sec. 9.02. (a) A majority of the directors of the district may order an election on the question of dissolution of the district and transfer of its assets and liabilities to be held.

(b) On presentation of a petition for a dissolution election signed by at least 300 of the registered voters of the territory of the proposed district, according to the most recent official list of registered voters, the directors shall order an election on the question of dissolution of the district and transfer of its assets and liabilities to be held. The election shall be called not later than the 60th day after the date the petition is presented to the district.

Sec. 9.03. The order calling the election must state:

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

(2) the date of the election;

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

(4) the location of the polling places.

[Sec. 9.05]

(b) Subsection (a), Section 41.001, Election Code, does not apply to an election ordered under this article.

Revisor's Note

(1) Section 9.01, Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, refers to "another entity or person." Throughout this chapter, the revised law omits "entity" because in this context "entity" is included in the meaning of "person" under Section 311.005(2), Government Code (Code Construction Act).

(2) Section 9.01, Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, provides for dissolution of the district if approved by a majority of the "qualified" voters of the district. The revised law omits "qualified" for the reason stated in Revisor's Note (1) to Section 1091.203.

(3) Section 9.02(b), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, refers to the registered voters of the "proposed" district. Throughout this subchapter, the revised law omits "proposed" as executed because the district has been created.

(4) Section 9.05(a), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, states that the election must be held not less than 45 nor more than 60 days 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:

Sec. 9.05. (a) The election shall be held not less than 45 days nor more than 60 days after the date on which the election is ordered.

Revised Law

Sec. 1091.302. NOTICE OF ELECTION. (a) The board shall give notice of an election under this subchapter by publishing once a week for two consecutive weeks a substantial copy of the election order in a newspaper with general circulation in the district.

(b) The first publication of the notice must appear at least 35 days before the date set for the election. (Acts 71st Leg., R.S., Ch. 199, Sec. 9.04.)

Source Law

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

Revised Law

Sec. 1091.303. BALLOT. The ballot for an election under this subchapter must be printed to permit voting for or against the proposition: "The dissolution of the Rice Hospital District and the sale or transfer of its assets and liabilities in the following manner: ____________ (insert provisions for transfer)." (Acts 71st Leg., R.S., Ch. 199, Sec. 9.06.)

Source Law

Sec. 9.06. The ballot for an election at which dissolution of the district is proposed shall be printed to permit voting for or against the proposition: "The dissolution of the Rice Hospital District and the sale or transfer of its assets and liabilities in the following manner: ____________ (insert provisions for transfer)."

Revised Law

Sec. 1091.304. ELECTION RESULTS. (a) If the board finds that the election results favor the proposition to dissolve the district, the board shall:

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

(2) proceed with the sale or transfer of the district's assets and liabilities according to the plan proposed on the ballot.

(b) If the board finds that the election results do not favor the proposition to dissolve the district, another dissolution election may not be held before the first anniversary of the date of the election in which the voters disapproved the proposition. (Acts 71st Leg., R.S., Ch. 199, Secs. 9.07(b), (c).)

Source Law

(b) If the directors find that the election results are favorable to the proposition to dissolve the district and transfer its assets and liabilities, they shall issue an order declaring the district dissolved and shall proceed with the sale or transfer of its assets and liabilities according to the plan proposed on the ballot.

(c) If the directors find that the election results are not favorable to the proposition to dissolve the district and transfer its assets and liabilities, another dissolution election may not be held within 12 months after the date of the election at which voters disapproved the proposition.

Revisor's Note

Section 9.07(a), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, requires the board to canvass the election returns. The revised law omits this requirement for the reason stated in Revisor's Note (4) to Section 1091.203. The omitted law reads:

Sec. 9.07. (a) The directors of the district shall canvass the returns of the election.

Revised Law

Sec. 1091.305. 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:

(1) contravene a trust indenture or bond resolution relating to the district's outstanding bonds; or

(2) 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 citizens, including the citizens' collective property rights in the district's assets.

(d) The district may transfer or sell the district's assets only for due compensation, unless the transfer is made to another governmental agency embracing the district and using the transferred assets for the benefit of the citizens formerly in the district.

(e) A grant from federal funds is an obligation to be repaid in satisfaction. (Acts 71st Leg., R.S., Ch. 199, Sec. 9.08.)

Source Law

Sec. 9.08. (a) Notwithstanding any other provision of this article, the district may not be dissolved unless the board of directors provides for the sale or transfer of the district's assets and liabilities to another entity or person. The dissolution of the district and the sale or transfer of the district's assets and liabilities may not contravene a trust indenture or bond resolution relating to the outstanding bonds of the district. In addition, the dissolution and sale or transfer may not diminish or impair the rights of the holders of any outstanding bonds, warrants, or other obligations of the district.

(b) The sale or transfer of the district's assets and liabilities must satisfy the debt and bond obligations of the district in a manner that protects the interests of the citizens within the district, including their collective property rights in the district's assets. Any grant from federal funds shall be considered an obligation to be repaid in satisfaction. No sale or transfer of the district's assets may be made except for due compensation unless the transfer is made to another governmental agency embracing such district and using such transferred assets for the benefit of citizens formerly within the district.

Revisor's Note

(End of Chapter)

(1) Section 5.01(2), Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, provides for the assumption of debt from the Eagle Lake Community Hospital by the district on creation. The revised law omits the provisions as executed. The omitted law reads:

Sec. 5.01. [On creation of the district, the district:]

…

(2) assumes any outstanding indebtedness incurred by Eagle Lake Community Hospital in providing hospital care for residents of the territory of the district before the district's creation;

…

(2) Section 10.02, Chapter 199, Acts of the 71st Legislature, Regular Session, 1989, provides that the act is severable and that an invalid provision of the act does not affect the creation of the district. The revised law omits the provision regarding severability because it duplicates Section 311.032, Government Code (Code Construction Act), which provides that a provision of a statute is severable from each other provision of the statute that can be given effect. The revised law omits the provision regarding creation of the district as executed. The omitted law reads:

Sec. 10.02. If any provision of this Act or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are declared to be severable.


Home \| Return to Proposed Chapters main page \| Top
This web page is published by the Texas Legislative Council and was last updated January 6, 2009.