TLC: Special District Local Laws Code Proposed Chapters

81C428(2) MCK

CHAPTER 1073. NORTH RUNNELS COUNTY HOSPITAL DISTRICT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 1073.001. DEFINITIONS ............................... 4

Sec. 1073.002. AUTHORITY FOR CREATION .................... 4

Sec. 1073.003. ESSENTIAL PUBLIC FUNCTION ................. 4

Sec. 1073.004. DISTRICT TERRITORY ........................ 4

Sec. 1073.005. CORRECTION OF INVALID PROCEDURES .......... 5

Sec. 1073.006. DISTRICT SUPPORT AND MAINTENANCE NOT

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

Sec. 1073.007. RESTRICTION ON STATE FINANCIAL

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

[Sections 1073.008-1073.050 reserved for expansion]

SUBCHAPTER B. DISTRICT ADMINISTRATION

Sec. 1073.051. BOARD ELECTION; TERM ...................... 8

Sec. 1073.052. NOTICE OF ELECTION ........................ 10

Sec. 1073.053. QUALIFICATIONS FOR OFFICE ................. 11

Sec. 1073.054. BOND ...................................... 11

Sec. 1073.055. BOARD VACANCY ............................. 12

Sec. 1073.056. OFFICERS .................................. 12

Sec. 1073.057. COMPENSATION; EXPENSES .................... 13

Sec. 1073.058. DISTRICT ADMINISTRATOR; ASSISTANT

ADMINISTRATOR ........................... 13

Sec. 1073.059. GENERAL DUTIES OF DISTRICT

ADMINISTRATOR ........................... 14

Sec. 1073.060. APPOINTMENT, DISMISSAL, AND RECRUITMENT

OF STAFF AND EMPLOYEES .................. 14

Sec. 1073.061. PERSONNEL CONTRACTS ....................... 16

Sec. 1073.062. SENIORITY ................................. 16

Sec. 1073.063. RETIREMENT BENEFITS ....................... 17

[Sections 1073.064-1073.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Sec. 1073.101. DISTRICT RESPONSIBILITY ................... 18

Sec. 1073.102. RESTRICTION ON POLITICAL SUBDIVISION

TAXATION AND DEBT ....................... 19

Sec. 1073.103. MANAGEMENT, CONTROL, AND ADMINISTRATION ... 20

Sec. 1073.104. HOSPITAL SYSTEM ........................... 20

Sec. 1073.105. RULES ..................................... 22

Sec. 1073.106. PURCHASING AND ACCOUNTING PROCEDURES ...... 22

Sec. 1073.107. DISTRICT PROPERTY, FACILITIES, AND

EQUIPMENT ............................... 22

Sec. 1073.108. EMINENT DOMAIN ............................ 24

Sec. 1073.109. GIFTS AND ENDOWMENTS ...................... 26

Sec. 1073.110. OPERATING AND MANAGEMENT CONTRACTS ........ 27

Sec. 1073.111. CONTRACTS WITH GOVERNMENTAL ENTITIES

FOR HOSPITALIZATION AND TREATMENT ....... 27

Sec. 1073.112. CONTRACTS WITH GOVERNMENTAL ENTITIES

FOR INVESTIGATORY OR OTHER SERVICES ..... 28

Sec. 1073.113. BIDDING REQUIREMENTS ...................... 28

Sec. 1073.114. PROVISION OF SERVICES OUTSIDE DISTRICT .... 28

Sec. 1073.115. PAYMENT FOR TREATMENT; PROCEDURES ......... 29

Sec. 1073.116. AUTHORITY TO SUE AND BE SUED .............. 30

[Sections 1073.117-1073.150 reserved for expansion]

SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS

Sec. 1073.151. BUDGET .................................... 31

Sec. 1073.152. NOTICE; HEARING; ADOPTION OF BUDGET ....... 31

Sec. 1073.153. AMENDMENTS TO BUDGET ...................... 32

Sec. 1073.154. RESTRICTION ON EXPENDITURES ............... 33

Sec. 1073.155. FISCAL YEAR ............................... 33

Sec. 1073.156. ANNUAL AUDIT .............................. 33

Sec. 1073.157. INSPECTION OF ANNUAL AUDIT AND DISTRICT

RECORDS ................................. 33

Sec. 1073.158. FINANCIAL REPORT .......................... 34

Sec. 1073.159. DEPOSITORY ................................ 34

Sec. 1073.160. SPENDING AND INVESTMENT RESTRICTIONS ...... 35

Sec. 1073.161. AUTHORITY TO BORROW MONEY; SECURITY ....... 36

[Sections 1073.162-1073.200 reserved for expansion]

SUBCHAPTER E. BONDS

Sec. 1073.201. GENERAL OBLIGATION BONDS .................. 37

Sec. 1073.202. TAX TO PAY GENERAL OBLIGATION BONDS ....... 37

Sec. 1073.203. GENERAL OBLIGATION BOND ELECTION .......... 38

Sec. 1073.204. REVENUE BONDS ............................. 40

Sec. 1073.205. REFUNDING BONDS ........................... 41

Sec. 1073.206. MATURITY OF BONDS ......................... 43

Sec. 1073.207. EXECUTION OF BONDS ........................ 43

Sec. 1073.208. BONDS EXEMPT FROM TAXATION ................ 45

[Sections 1073.209-1073.250 reserved for expansion]

SUBCHAPTER F. TAXES

Sec. 1073.251. IMPOSITION OF AD VALOREM TAX .............. 47

Sec. 1073.252. TAX RATE .................................. 48

Sec. 1073.253. TAX ASSESSOR-COLLECTOR .................... 49

[Sections 1073.254-1073.300 reserved for expansion]

SUBCHAPTER G. DISSOLUTION

Sec. 1073.301. DISSOLUTION; ELECTION ..................... 50

Sec. 1073.302. NOTICE OF ELECTION ........................ 52

Sec. 1073.303. BALLOT .................................... 53

Sec. 1073.304. ELECTION RESULTS .......................... 53

Sec. 1073.305. TRANSFER OR ADMINISTRATION OF ASSETS ...... 53

Sec. 1073.306. SALE OR TRANSFER OF ASSETS AND

LIABILITIES ............................. 54

Sec. 1073.307. IMPOSITION OF TAX AND RETURN OF SURPLUS

TAXES ................................... 55

Sec. 1073.308. REPORT; DISSOLUTION ORDER ................. 56

CHAPTER 1073. NORTH RUNNELS COUNTY HOSPITAL DISTRICT

SUBCHAPTER A. GENERAL PROVISIONS

Revised Law

Sec. 1073.001. 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 North Runnels 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. 1073.002. AUTHORITY FOR CREATION. The North Runnels County Hospital District is created under the authority of Section 9, Article IX, Texas Constitution, and has the rights, powers, and duties provided by this chapter. (Acts 61st Leg., R.S., Ch. 206, Sec. 1 (part).)

Source Law

Sec. 1. Pursuant to authority granted by the provisions of Section 9, Article IX, of the Texas Constitution, North Runnels County Hospital District is hereby authorized to be created and … possess such rights, powers, and duties as are hereinafter prescribed.

Revised Law

Sec. 1073.003. ESSENTIAL PUBLIC FUNCTION. The district performs an essential public function in carrying out the purposes of this chapter. (Acts 61st Leg., R.S., Ch. 206, Sec. 23 (part).)

Source Law

Sec. 23. In carrying out the purposes of this Act, the district will be performing an essential public function and … .

Revised Law

Sec. 1073.004. DISTRICT TERRITORY. The boundaries of the district are coextensive with the boundaries of County Commissioners Precincts 2 and 3 of Runnels County as those boundaries existed on January 1, 1969. (Acts 61st Leg., R.S., Ch. 206, Sec. 1 (part).)

Source Law

Sec. 1. … [the district] as created shall have boundaries coextensive with the boundaries of Commissioners Precincts 2 and 3 of Runnels County, as constituted on January 1, 1969, and … .

Revised Law

Sec. 1073.005. CORRECTION OF INVALID PROCEDURES. If a court holds that any procedure under this chapter violates the constitution of this state or of the United States, the district by resolution may provide an alternative procedure that conforms with the constitution. (Acts 61st Leg., R.S., Ch. 206, Sec. 24 (part).)

Source Law

Sec. 24. … [Federal or State Constitutions] … . Where any procedure hereunder may be held by any court to be violative of either of such constitutions, the District shall have the power by resolution to provide an alternative procedure conformable with such constitutions. …

Revisor's Note

Section 24, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provides that the act does not violate the federal or state constitution and requires that action under the act comply with the constitutions. The revised law omits the reference to the federal constitution because, under the Supremacy Clause of the United States Constitution (Clause 2, Article VI), federal law always takes precedence over a state statute. The revised law also omits the reference to the Texas Constitution because the state cannot modify constitutional requirements by statute. The omitted law reads:

Sec. 24. Nothing in this Act shall be construed to violate any provision of the Federal or State Constitutions, and all acts done under this Act shall be in such manner as will conform thereto, whether expressly provided or not… .

Revised Law

Sec. 1073.006. DISTRICT SUPPORT AND MAINTENANCE NOT STATE OBLIGATION. The support and maintenance of the district may not become a charge against or obligation of this state. (Acts 61st Leg., R.S., Ch. 206, Sec. 22 (part).)

Source Law

Sec. 22. The support and maintenance of the hospital district shall never become a charge against or obligation of the State of Texas, … .

Revised Law

Sec. 1073.007. RESTRICTION ON STATE FINANCIAL ASSISTANCE. The legislature may not make a direct appropriation for the construction, maintenance, or improvement of a district facility. (Acts 61st Leg., R.S., Ch. 206, Sec. 22 (part).)

Source Law

Sec. 22. … nor shall any direct appropriation be made by the Legislature for the construction, maintenance, or improvement of any of the facilities of such district.

Revisor's Note

(End of Subchapter)

Section 3, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provides procedures for holding an election on the creation of the district, the imposition of an ad valorem tax, and the assumption of certain debt. Because the creation of the district and the imposition of the tax were approved at the described election, the revised law omits that section as executed. The omitted law reads:

Sec. 3. (a) The district shall not be created, nor shall any tax therein be authorized unless and until such creation and such tax are approved by a majority of the qualified property taxpaying electors of the area of the proposed district voting at an election called for that purpose. Such election may be called by the commissioners court of Runnels County or shall be called by said commissioners court upon presentation of a petition therefor signed by at least 100 qualified property taxpaying electors of the area of the proposed district. Such election shall be held not less than 35 nor more than 60 days from the date the election is ordered. The order calling the election shall specify the date, place or places of holding the election, the form of ballot, the presiding judge and alternate judge for each voting place, and provide for clerks as in county elections. The election order may provide that the entire district shall constitute one election precinct or the county election precincts may be combined for elections. Notice of election shall be given by publishing a substantial copy of the election order in a newspaper or newspapers which individually or collectively provide general circulation in the county or district once a week for two consecutive weeks, the first publication to appear at least 30 days prior to the date established for the election. The failure of such election shall not operate to prohibit the calling and holding of subsequent elections for the same purpose; provided, however, that no district election for confirmation can be held within 12 months of any preceding district election for confirmation, and, further provided, if this district is not confirmed within 60 months from the effective date of this Act, this Act is hereby repealed.

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

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

(d) Within 10 days after such election is held, the commissioners court of the county shall convene and canvass the returns of the election, and if a majority of the qualified property taxpaying electors voting at said election vote in favor of the proposition, they shall so find and declare the hospital district established and created.

[Sections 1073.008-1073.050 reserved for expansion]

SUBCHAPTER B. DISTRICT ADMINISTRATION

Revised Law

Sec. 1073.051. BOARD ELECTION; TERM. (a) The board consists of seven directors elected from the district.

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

(1) directors serve two-year terms; and

(2) a directors' election shall be held on the uniform election date in May of each year.

(c) The election order must state the time, place, and purpose of the election. (Acts 61st Leg., R.S., Ch. 206, Secs. 4(a), (b) (part).)

Source Law

Sec. 4. (a) The board of directors consists of seven directors. All directors shall serve for a period of two years and until their successors have been duly elected and have qualified.

(b) A regular election for directors shall be held on the first Saturday in May of each year. … The election order must state the time, place, and purpose of the election. …

Revisor's Note

(1) Section 4(a), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provides that directors serve two-year terms. Section 285.081, Health and Safety Code, applicable to this hospital 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.

(2) Section 4(a), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provides that the directors serve until their successors are "duly elected and have qualified." The revised law omits that provision because it duplicates Section 17, Article XVI, Texas Constitution, which provides that an officer in this state is to continue to perform the officer's official duties until a successor has qualified.

(3) Section 4(b), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, was amended in 1999 to require board elections on the "first Saturday in May." From 1987 to 2003, Section 41.001, Election Code, provided for a uniform election date for all political subdivisions on the first Saturday in May. In Chapter 1315, Acts of the 78th Legislature, Regular Session, 2003, the legislature amended Section 41.001 by moving the uniform election date in May to the third Saturday. In Chapter 1, Acts of the 78th Legislature, 3rd Called Session, 2003, the legislature amended Section 41.001 by moving the uniform election date in May back to the first Saturday. In Chapter 471, Acts of the 79th Legislature, Regular Session, 2005, the legislature amended Section 41.001 by moving the uniform election date in May to the second Saturday. The revised law substitutes "uniform election date in May" for "first Saturday in May" to reflect these changes while preserving as closely as possible the legislative intent expressed in the 1999 amendment to Section 4(b) that the election be held on the first Saturday in May, which was at that time the uniform election date in May.

(4) Section 4(b), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provides that the board shall order the election of directors and shall issue the order not later than the 45th day before the date of the election. The revised law omits the provision requiring the board to order the election because it duplicates Section 3.004, Election Code, applicable to the district under Section 1.002, Election Code. Section 3.004 requires the governing body of a political subdivision that has elective officers to order the general election for those officers. The revised law also omits the provision stating that the board shall issue the order not later than the 45th day before the election date as superseded by Section 3.005, Election Code, also 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:

(b) … The directors shall order the regular election for directors not later than the 45th day before election day. …

Revised Law

Sec. 1073.052. NOTICE OF ELECTION. Not earlier than the 30th day or later than the 10th day before the date of an election of directors, notice of the election shall be published one time in a newspaper or newspapers that individually or collectively have general circulation in the district. (Acts 61st Leg., R.S., Ch. 206, Sec. 4(b) (part).)

Source Law

(b) … Notice of each such election shall be published in a newspaper or newspapers which individually or collectively provide general circulation in the district one time not earlier than the 30th day or later than the 10th day prior to the date of the election. …

Revised Law

Sec. 1073.053. QUALIFICATIONS FOR OFFICE. (a) A person may not be 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) a district employee; or

(3) a member of the hospital staff. (Acts 61st Leg., R.S., Ch. 206, Sec. 4(c).)

Source Law

(c) No person shall be appointed as a member of the board of directors unless that person is a resident of the district and a qualified voter. Neither the administrator, an employee of the district, nor a member of the staff of the hospital shall be eligible to serve as a director.

Revised Law

Sec. 1073.054. BOND. (a) The board may require all district officers and employees charged with handling money to furnish a good bond for not less than $5,000 that is:

(1) payable to the district;

(2) conditioned on the faithful performance of the officer's or employee's duties; and

(3) signed by a surety company authorized to do business in this state.

(b) The board may pay for the bond with district money.

Source Law

(b) … the directors may require all officers and employees charged with handling funds to furnish good bonds payable to the district and conditioned upon the faithful performance of their duties, but in no event shall such bond be for less than $5,000. The board may pay for the bond with district funds. The bonds submitted by officers and employees shall be signed by surety companies authorized to do business in the state and the premiums on the bonds shall be paid by the district. …

Revisor's Note

Section 4(b), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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. The omitted law reads:

(b) … Directors of the district shall subscribe to the constitutional oath of office and …

Revised Law

Sec. 1073.055. BOARD VACANCY. If a vacancy occurs in the office of director, the remaining directors shall appoint a director for the unexpired term. (Acts 61st Leg., R.S., Ch. 206, Sec. 4(b) (part).)

Source Law

(b) … Vacancies in office shall be filled for the unexpired term by the remainder of the directors. …

Revised Law

Sec. 1073.056. 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 61st Leg., R.S., Ch. 206, Sec. 4(d) (part).)

Source Law

(d) The board of directors shall organize by electing one of their number as president and one of their number as vice president. A secretary, who need not be a director, shall be appointed. Officers shall be elected for a term of one year and vacancies shall be filled for the unexpired term by the board of directors. …

Revised Law

Sec. 1073.057. 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 61st Leg., R.S., Ch. 206, Sec. 4(d) (part).)

Source Law

(d) … All members of the board of directors and officers shall serve without compensation, but may be reimbursed for actual expenses incurred in the performance of their official duties upon the approval of such expenses by the board of directors and so reported in the minute book of the district or other records of the district.

Revisor's Note

Section 4(d), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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. 1073.058. DISTRICT ADMINISTRATOR; ASSISTANT ADMINISTRATOR. (a) The board may appoint a qualified person as district administrator.

(b) The board may appoint one or more assistant administrators.

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

(d) Before assuming the duties of district administrator, the board may require the administrator to 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 faithful performance of the administrator's duties; and

(2) contains other conditions the board may require.

(e) The board may pay for the bond with district money. (Acts 61st Leg., R.S., Ch. 206, Sec. 5(b) (part).)

Source Law

(b) The board of directors may appoint a qualified person to be known as the administrator of the hospital district and may in its discretion appoint an assistant or assistants to the administrator. Such administrator and assistant administrator, if any, shall serve at the will of the board and shall receive such compensation as may be fixed by the board. The board may require the administrator before assuming the administrator's duties to execute a bond payable to the hospital district in an amount to be set by the board of directors, in no event less than $5,000 conditioned on the faithful performance of the administrator's duties and containing such other conditions as the board may require. The board may pay for the bond with district funds… .

Revised Law

Sec. 1073.059. 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 61st Leg., R.S., Ch. 206, Sec. 5(b) (part).)

Source Law

(b) … 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. 1073.060. APPOINTMENT, DISMISSAL, AND RECRUITMENT OF STAFF AND EMPLOYEES. (a) The board, with the district administrator, may appoint doctors to or dismiss doctors from the staff as considered necessary for the efficient operation of the district and may make temporary appointments as warranted.

(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 61st Leg., R.S., Ch. 206, Secs. 5(b) (part), (h), 18.)

Source Law

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

(h) The board of directors 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 who are enrolled in good standing in an accredited medical school, college, or university, to pay the student's tuition or other expenses in consideration of the student's contractual agreement to serve as an employee or independent contractor for the district under terms prescribed by the contract.

Sec. 18. The district may employ fiscal agents, accountants, architects, and attorneys as the board may consider proper.

Revisor's Note

Section 5(h), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provides that a student who receives assistance from the district must become a district employee "under terms prescribed by the contract." The revised law omits the quoted language because the provisions of a contract between the board and a student apply by their own terms.

Revised Law

Sec. 1073.061. PERSONNEL CONTRACTS. (a) The board may contract to provide administrative or other personnel for the operation of hospital facilities.

(b) The term of a contract may not exceed 25 years. (Acts 61st Leg., R.S., Ch. 206, Sec. 5(f) (part).)

Source Law

(f) The board may enter into one or more contracts to provide administrative and other personnel for the operation of the hospital facilities. The term of a contract may not exceed 25 years from the date on which the contract is entered… .

Revised Law

Sec. 1073.062. SENIORITY. The board may:

(1) adopt rules related to the seniority of district employees, including rules for a retirement plan based on seniority; and

(2) give effect to previous years of service for district employees continuously employed in the operation or management of hospital facilities acquired or constructed by the district. (Acts 61st Leg., R.S., Ch. 206, Sec. 5(a) (part).)

Source Law

(a) … The board is given full authority to establish rules and regulations relating to seniority of employees of the district (including a retirement plan based thereon) and may give effect to previous years of service for those employees who have been continuously employed in the operation or management of the hospital facilities acquired (including those acquired upon the creation thereof by reason of Section 2 of this Act) or constructed by the district. …

Revisor's Note

(1) Section 5(a), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, refers to "rules and regulations" established by the board. Throughout this chapter, the revised law omits references to "regulations" because under Section 311.005(5), Government Code (Code Construction Act), a rule is defined to include a regulation.

(2) Section 5(a), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, refers to facilities "including those acquired upon the creation thereof by reason of Section 2 of this Act." The revised law omits the quoted language because the relevant portions of Section 2 were omitted for the reason stated in End of Chapter Revisor's Note (1).

Revised Law

Sec. 1073.063. 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 61st Leg., R.S., Ch. 206, Sec. 5(g).)

Source Law

(g) The board may provide retirement benefits for the employees of the district 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 in which the district is eligible to participate.

Revisor's Note

(End of Subchapter)

(1) Section 4(b), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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:

(b) … Any person desiring to have his name printed on the ballot as a candidate for director shall file an application with the secretary of the board of directors at least 31 days prior to the date of the election… .

(2) Section 4(b), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provides that a majority of the directors constitutes a quorum. The revised law omits that provision because it duplicates Section 311.013, Government Code (Code Construction Act), which provides that a quorum of a public body is a majority of the number of members fixed by statute. The omitted law reads:

(b) … A majority of the directors shall constitute a quorum.

[Sections 1073.064-1073.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Revised Law

Sec. 1073.101. DISTRICT RESPONSIBILITY. The district has full responsibility for:

(1) operating all hospital facilities for providing medical and hospital care for the district's needy inhabitants; and

(2) providing medical and hospital care for the district's needy inhabitants. (Acts 61st Leg., R.S., Ch. 206, Secs. 2 (part), 21 (part).)

Source Law

Sec. 2. … Such district shall assume full responsibility for providing medical and hospital care for its needy inhabitants and … .

Sec. 21. … The said hospital district shall assume full responsibility for the operation of all hospital facilities for the furnishing of medical and hospital care for its needy inhabitants.

Revisor's Note

Sections 2 and 21, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provide that the district "shall assume" full responsibility for providing medical and hospital care for the district's needy inhabitants and for operating hospital facilities. The revised law substitutes "has" for the quoted language because the duty to assume the responsibility is executed.

Revised Law

Sec. 1073.102. RESTRICTION ON POLITICAL SUBDIVISION TAXATION AND DEBT. A political subdivision that is located within the district or that has the same boundaries as the district may not impose a tax or issue bonds or other obligations for hospital purposes or to provide medical care. (Acts 61st Leg., R.S., Ch. 206, Sec. 21 (part).)

Source Law

Sec. 21. After creation of the hospital district, no municipality or political subdivision within or having the same boundaries of the district shall have the power to levy taxes or issue bonds or other obligations for hospital purposes or for providing medical care… .

Revisor's Note

(1) Section 21, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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 21, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, refers to a "municipality or political subdivision." The revised law omits the reference to "municipality" because "municipality" is included in the meaning of "political subdivision."

Revised Law

Sec. 1073.103. MANAGEMENT, CONTROL, AND ADMINISTRATION. The board shall manage, control, and administer:

(1) the hospital and hospital system; and

(2) the district's business, money, and resources. (Acts 61st Leg., R.S., Ch. 206, Sec. 5(a) (part).)

Source Law

Sec. 5. (a) The board of directors shall manage, control, and administer the hospital and the hospital system and the business, funds, and resources of the district, but … .

Revised Law

Sec. 1073.104. HOSPITAL SYSTEM. (a) The district shall provide for the establishment, administration, maintenance, operation, and financing of a hospital system, including any component specified by Subsection (b) or a service or facility specified by Subsection (c), by:

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

(2) equipping the buildings; and

(3) administering the system, service, or facility for hospital purposes.

(b) The hospital system may include:

(1) a medical care system;

(2) rural health clinics;

(3) outpatient clinics and facilities for outpatient clinics;

(4) nursing homes;

(5) home health services;

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

(7) pharmacies;

(8) convalescent home facilities;

(9) necessary nurses domiciliaries and training centers;

(10) blood banks;

(11) community mental health centers;

(12) research centers or laboratories; and

(13) any other facilities the board considers necessary for hospital care.

(1) hospital agencies;

(2) extended care facilities; and

(3) assisted living or personal care facilities, including retirement benefits, housing, and medical office buildings. (Acts 61st Leg., R.S., Ch. 206, Secs. 2 (part), 11 (part).)

Source Law

Sec. 2. … it shall provide for the establishment, administration, maintenance, operation, and financing of a hospital system that may include a medical care system, rural health clinics, outpatient clinics, nursing homes, and home health services, and may provide any services or facilities necessary for hospital agencies, extended care facilities, and assisted living or personal care facilities, including retirement benefits, housing, and medical office buildings by the purchase, construction, acquisition, repair, or renovation of buildings and equipment and the equipping of same and the administration thereof for hospital purposes… .

Sec. 11. … The hospital system may include facilities for domiciliary care of the sick, wounded, and injured, facilities for out-patient clinic or clinics, pharmacies, facilities for geriatric domiciliary care, convalescent home facilities, necessary nurses domiciliaries and training centers, blood banks, community mental health centers, and research centers or laboratories, and any other facilities deemed necessary for hospital care by the directors… .

Revisor's Note

Section 11, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, refers to the care of the "sick, wounded, and injured." The revised law omits the reference to "wounded" because "wounded" is included in the meaning of "injured."

Revised Law

Sec. 1073.105. RULES. The board may adopt rules governing the operation of the hospital, the hospital system, and the district's staff and employees. (Acts 61st Leg., R.S., Ch. 206, Sec. 5(a) (part).)

Source Law

(a) … The district, through its board of directors, shall have the power and authority … to promulgate rules and regulations governing the operation of the hospital, hospital system, its staff and its employees.

Revisor's Note

Section 5(a), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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. 1073.106. 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 61st Leg., R.S., Ch. 206, Sec. 12 (part).)

Source Law

Sec. 12. The board of directors of such district shall have the power to prescribe the method and manner of making purchases and expenditures by and for such hospital district, and shall also be authorized to prescribe all accounting and control procedures… .

Revised Law

Sec. 1073.107. 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 and 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.

(d) The board may sell or otherwise dispose of the district's property, including facilities and equipment. (Acts 61st Leg., R.S., Ch. 206, Secs. 5(e), (f) (part), 11 (part).)

Source Law

[Sec. 5]

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

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

Sec. 11. The board of directors is hereby given complete discretion as to the type of buildings, both as to number and location, required to establish and maintain an adequate hospital system… .

Revisor's Note

(1) Section 11, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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.

(2) Section 11, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, authorizes the district to lease district facilities "upon terms and conditions considered to be to the best interest of its inhabitants, provided that in no event shall any lease be for a period in excess of 25 years from the date entered." Section 11 also authorizes the district to sell or otherwise dispose of "any property, real or personal, or equipment of any nature upon terms and conditions found by the board to be in the best interest of its inhabitants." Section 12, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, authorizes the district to "acquire equipment" by using the equipment as security if the contract requires "the entire obligation of the district to be retired within five years from the date of the contract." The revised law omits those provisions as impliedly repealed by Sections 5(e) and (f), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, revised in this section. Sections 5(e) and (f) were added by Section 3, Chapter 359, Acts of the 76th Legislature, Regular Session, 1999, and provide general authority to lease, sell, or otherwise dispose of district property without the limitations prescribed by Sections 11 and 12. The omitted law reads:

Sec. 11. … [The district] … may lease all or part of its buildings and facilities upon terms and conditions considered to be to the best interest of its inhabitants, provided that in no event shall any lease be for a period in excess of 25 years from the date entered. The district shall be empowered to sell or otherwise dispose of any property, real or personal, or equipment of any nature upon terms and conditions found by the board to be in the best interest of its inhabitants.

Sec. 12. … The district may acquire equipment for use in its hospital system and mortgage or pledge the property so acquired as security for the payment of the purchase price, but any such contract shall provide for the entire obligation of the district to be retired within five years from the date of the contract. …

Revised Law

Sec. 1073.108. EMINENT DOMAIN. (a) The district may exercise the power of eminent domain to acquire a fee simple or other interest in any type of property located in district territory if the interest is necessary for the district to exercise a power, right, or privilege conferred by this chapter.

(b) The district must exercise the power of eminent domain in the manner provided by Chapter 21, Property Code, except the district is not required to deposit in the trial court money or a bond as provided by Section 21.021, 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 61st Leg., R.S., Ch. 206, Sec. 16.)

Source Law

Sec. 16. 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 lessor interest therein, within the boundaries of the district necessary to the powers, rights, and privileges conferred by this Act, in the manner provided by the general law with respect to condemnation by counties, provided that the district shall not be required to make deposits in the registry of the trial court of the sum required by Section 21.021, Property Code, or to make bond as therein provided. In condemnation proceedings being prosecuted by the district, the district shall not be required to pay in advance or give bond or other security for costs in the trial court, nor to give any bond otherwise required for the issuance of a temporary restraining order or a temporary injunction nor to give bond for costs or for supersedeas on any appeal or writ of error.

Revisor's Note

(1) Section 16, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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 16, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provides that the district must exercise the power of eminent domain in the manner provided by "the general law with respect to condemnation by counties." The revised law substitutes for the quoted language a reference to Chapter 21, Property Code, because that is the general law governing eminent domain for governmental entities, including counties.

(3) Section 16, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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, Rules of Appellate Procedure.

Revised Law

Sec. 1073.109. GIFTS AND ENDOWMENTS. The board may accept for the district a gift or endowment to be held in trust and administered by the board for the purposes and under the directions, limitations, or other provisions prescribed in writing by the donor that are not inconsistent with the proper management and objectives of the district. (Acts 61st Leg., R.S., Ch. 206, Sec. 20.)

Source Law

Sec. 20. The board of directors of the hospital district is authorized on behalf of such district to accept donations, gifts, and endowments to be held in trust and administered by the board of directors for such purposes and under such directions, limitations, and provisions as may be prescribed in writing by the donor not inconsistent with proper management and object of the hospital district.

Revisor's Note

Section 20, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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. 1073.110. OPERATING AND MANAGEMENT CONTRACTS. The board may enter into an operating or management contract relating to a district facility. (Acts 61st Leg., R.S., Ch. 206, Sec. 11 (part).)

Source Law

Sec. 11. … The district, through its board of directors, is further authorized to enter into an operating or management contract with regard to its facilities or a part thereof, or … .

Revised Law

Sec. 1073.111. CONTRACTS WITH GOVERNMENTAL ENTITIES FOR HOSPITALIZATION AND TREATMENT. (a) The board may contract with a county or municipality located outside the district's boundaries for the hospitalization of a sick or injured person of that county or municipality.

(b) The district may contract with this state or a federal agency for the hospital treatment of a sick or injured person. (Acts 61st Leg., R.S., Ch. 206, Sec. 5(c) (part).)

Source Law

(c) [Such board] … shall be authorized to contract with any county or incorporated municipality located outside its boundaries for the hospitalization of the sick, diseased, or injured persons of any such county or municipality, and shall have the authority to contract with the State of Texas or agencies of the federal government for the hospital treatment of sick, diseased, or injured persons.

Revisor's Note

(1) Section 5(c), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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 5(c), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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. 1073.112. 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 the hospital or welfare needs of district inhabitants. (Acts 61st Leg., R.S., Ch. 206, Sec. 5(c) (part).)

Source Law

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

Revised Law

Sec. 1073.113. BIDDING REQUIREMENTS. The district shall comply with the bidding requirements prescribed by Chapter 271, Local Government Code. (Acts 61st Leg., R.S., Ch. 206, Sec. 12 (part).)

Source Law

Sec. 12. … The hospital district shall comply with the bidding requirements prescribed by Chapter 271, Local Government Code. …

Revised Law

Sec. 1073.114. PROVISION OF SERVICES OUTSIDE DISTRICT. The district may provide services outside the district's boundaries. (Acts 61st Leg., R.S., Ch. 206, Sec. 5(j).)

Source Law

(j) The hospital district may provide services outside the boundaries of the district.

Revised Law

Sec. 1073.115. 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 estate of the patient, or from any relative who is legally liable for the patient's support, in the manner provided by law for the collection of expenses of the last illness of a deceased person.

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

(1) resolve the dispute or doubt; and

(2) issue any appropriate orders.

(f) A final order of the board may be appealed to the district court. The substantial evidence rule applies to the appeal. (Acts 61st Leg., R.S., Ch. 206, Sec. 19.)

Source Law

Sec. 19. Whenever a patient residing within the district has been admitted to the facilities thereof, the administrator may cause inquiry to be made as to the patient's circumstances and those of the relatives of such patient legally liable for the patient's support. If the administrator finds that such patient or said relatives are able to pay for the patient's care and treatment in whole or in part, an order shall be made directing such patient or said relatives to pay to the hospital district for the care and support of such patient a specified sum per week in proportion to their financial ability. The administrator shall have power and authority to collect such sums from the estate of the patient or the patient's relatives legally liable for the patient's support in the manner provided by law for collection of expenses in the last illness of a deceased person. If the administrator finds that such patient or said relatives are not able to pay either in whole or in part for the patient's care and treatment in such hospital, same shall become a charge upon the hospital district as to the amount of the inability to pay. Should there be any dispute as to the ability to pay or doubt in the mind of the administrator, the board of directors shall hear and determine same after calling witnesses, and shall make such order or orders as may be proper. Appeals from the final order of the board shall lie to the district court. The substantial evidence rule shall apply.

Revised Law

Sec. 1073.116. AUTHORITY TO SUE AND BE SUED. (a) The district, through the board, may sue and be sued.

(b) The district is entitled to all causes of action and defenses to which similar authorities are entitled. (Acts 61st Leg., R.S., Ch. 206, Sec. 5(a) (part).)

Source Law

(a) … The district, through its board of directors, shall have the power and authority to sue and be sued, and shall be entitled to all causes of action and defenses enjoyed by similar authorities, … .

Revisor's Note

(End of Subchapter)

Section 12, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provides that the provisions of Chapter 2253, Government Code, apply to the district's construction contracts in relation to performance and payment bonds. The revised law omits the reference to Chapter 2253, Government Code, because that chapter applies to the district on its own terms. The omitted law reads:

Sec. 12. … The provisions of Chapter 2253, Government Code, relating to performance and payment bonds shall apply to construction contracts let by the district. …

[Sections 1073.117-1073.150 reserved for expansion]

SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS

Revised Law

Sec. 1073.151. BUDGET. (a) The district administrator shall prepare an annual budget for approval by the board.

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

(1) the outstanding obligations of the district;

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

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

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

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

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

(7) the estimated tax rate required; and

(8) the proposed expenditures and disbursements and the estimated receipts and collections for the following fiscal year. (Acts 61st Leg., R.S., Ch. 206, Sec. 6 (part).)

Source Law

Sec. 6. … The administrator shall prepare an annual budget for approval by the board of directors. The budget shall also contain a complete financial statement of the district showing all outstanding obligations of the district, the cash on hand to the credit of each and every fund of the district, the funds received from all sources during the previous year, the funds available from all sources during the ensuing year, with balances expected at end of the year in which the budget is being prepared, and estimated revenues and balances available to cover the proposed budget and the estimated tax rate which will be required, and the proposed expenditures and disbursements and the estimated receipts and collections for the following fiscal year. …

Revised Law

Sec. 1073.152. 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 Chapter 551, Government Code.

(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 district's residents and that the law warrants. (Acts 61st Leg., R.S., Ch. 206, Sec. 6 (part).)

Source Law

Sec. 6. … A public hearing on the annual budget shall be held by the board of directors after notice of such hearing has been published in accordance with the open meetings law, Chapter 551, Government Code. Any resident of the district shall have the right to be present and participate in said hearing. At the conclusion of the hearing, the budget, as proposed by the administrator, shall be acted upon by the board of directors. The board of directors shall have authority to make such changes in the budget as in their judgment the law warrants and the interest of the residents demand. … the annual budget, and … shall be approved by the board of directors. …

Revised Law

Sec. 1073.153. AMENDMENTS TO BUDGET. The budget may be amended as required by circumstances. The board must approve all amendments. (Acts 61st Leg., R.S., Ch. 206, Sec. 6 (part).)

Source Law

Sec. 6. … The annual budget may be amended from time to time as the circumstances may require, but … all amendments thereto, shall be approved by the board of directors. …

Revisor's Note

Section 6, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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. 1073.154. RESTRICTION ON EXPENDITURES. Money may be spent only for an expense included in the budget or an amendment to the budget. (Acts 61st Leg., R.S., Ch. 206, Sec. 6 (part).)

Source Law

Sec. 6. … No expenditure may be made for any expense not included in the annual budget or an amendment thereto. …

Revised Law

Sec. 1073.155. FISCAL YEAR. (a) The district operates according to a fiscal year established by the board.

(b) The fiscal year may not be changed:

(1) when revenue bonds of the district are outstanding; or

(2) more than once in a 24-month period. (Acts 61st Leg., R.S., Ch. 206, Sec. 6 (part).)

Source Law

Sec. 6. The district shall be operated on the basis of a fiscal year established by the board of directors. The fiscal year may not be changed when revenue bonds are outstanding or more than one time in a 24-month period. …

Revised Law

Sec. 1073.156. ANNUAL AUDIT. The board annually shall have an audit made of the district's financial condition. (Acts 61st Leg., R.S., Ch. 206, Sec. 6 (part).)

Source Law

Sec. 6. … The board shall cause an annual audit to be made of the financial condition of said district, … .

Revised Law

Sec. 1073.157. 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 61st Leg., R.S., Ch. 206, Sec. 6 (part).)

Source Law

Sec. 6. … [The board shall cause an annual audit to be made of the financial condition of said district,] which, together with other records of the district, shall be open to inspection at the principal office of the district. …

Revised Law

Sec. 1073.158. 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 61st Leg., R.S., Ch. 206, Sec. 6 (part).)

Source Law

Sec. 6. … 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. 1073.159. DEPOSITORY. (a) The board shall select one or more banks to serve as a depository for district money.

(b) District money, other than money invested as provided by Section 1073.160(b), and money transmitted to a bank for payment of bonds or obligations issued 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) Membership on the district's board of an officer or director of a bank does not disqualify the bank from being designated as a depository bank. (Acts 61st Leg., R.S., Ch. 206, Sec. 13.)

Source Law

Sec. 13. The board of directors of the district shall name one or more banks to serve as depository for the funds of the district. All funds of the district, except those invested as provided in Section 5, and those transmitted to a bank or banks as payment for bonds or obligations issued by the district, shall be deposited as received with the depository bank and shall remain on deposit, provided that nothing herein shall limit the power of the board to place a portion of such funds on time deposit or purchase certificates of deposit. Membership on the board of directors of an officer or director of a bank shall not disqualify such bank from being designated as depository.

Revised Law

Sec. 1073.160. 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 may invest operating, depreciation, or building reserves only in securities described by Subchapter A, Chapter 1505, Government Code, or in accordance with Chapter 2256, Government Code. (Acts 61st Leg., R.S., Ch. 206, Secs. 5(a) (part), 12 (part).)

Source Law

Sec. 5. (a) … in no event shall any operating, depreciation, or building fund reserves be invested in any funds or securities other than those specified in Articles 835 or 837, Revised Statutes or Chapter 2256, Government Code. …

Sec. 12. … Except as permitted in the preceding sentence and as permitted by Sections 9 and 10, the district may incur no obligation payable from any revenues of the district, taxes or otherwise except those on hand or to be on hand within the then current and following fiscal year of the district.

Revisor's Note

(1) Section 5(a), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, refers to "Articles 835 or 837, Revised Statutes." Article 835 was revised in 1999 as Subchapter A, Chapter 1505, Government Code. Article 837 was 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. The revised law is drafted accordingly.

(2) Section 12, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, states that "[e]xcept as permitted in the preceding sentence and … Sections 9 and 10," the district may not incur certain obligations. The "preceding sentence" is omitted from the revised law for the reason stated in Revisor's Note (2) to Section 1073.107. The other referenced provisions are revised in Subchapter E. However, other provisions of the source law, including Section 20a (revised in this chapter as Section 1073.161), 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. 1073.161. AUTHORITY TO BORROW MONEY; SECURITY. (a) The board may borrow money at a rate not to exceed the maximum annual percentage rate allowed by law for district obligations at the time the loan is made.

(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 following the date of the pledge 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 61st Leg., R.S., Ch. 206, Sec. 20a.)

Source Law

Sec. 20a. (a) The board may borrow money at a rate not to exceed the maximum annual percentage rate allowed by law for district obligations at the time of the loan.

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

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

(2) district taxes to be levied by the district during the 12-month period following the date of the pledge 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 shall mature not later than the first anniversary of the date on which the loan is made. A loan for which district revenues are pledged shall mature not later than the fifth anniversary of the date on which the loan is made.

[Sections 1073.162-1073.200 reserved for expansion]

SUBCHAPTER E. BONDS

Revised Law

Sec. 1073.201. GENERAL OBLIGATION BONDS. The board may issue 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 or air ambulance service. (Acts 61st Leg., R.S., Ch. 206, Sec. 9(a).)

Source Law

Sec. 9. (a) The board of directors may issue general obligation bonds in the name and upon the faith and credit of such 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 or air ambulance service.

Revised Law

Sec. 1073.202. TAX TO PAY GENERAL OBLIGATION BONDS. (a) At the time general obligation bonds are issued by the district under Section 1073.201, 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 rate approved by the voters at the election authorizing the imposition of the tax. (Acts 61st Leg., R.S., Ch. 206, Sec. 9(b) (part).)

Source Law

(b) At the time of the issuances of any general obligation bonds by the district a tax shall be levied by the board sufficient to create an interest and sinking fund to pay the interest on and principal of said bonds as same mature, providing such tax, together with any other taxes levied for said district, shall not exceed the rate of tax approved by the voters at the election authorizing the levy of taxes. …

Revisor's Note

Section 9(b), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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. 1073.203. 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 61st Leg., R.S., Ch. 206, Sec. 9(b) (part).)

Source Law

(b) … 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 the purpose. The board may order a bond election. The order calling the election shall state the nature and date of the election, the hours during which the polls will be open, the location of the polling places, the amounts of the bonds to be authorized, and the maximum maturity of the bonds. Notice of a bond election shall be given as provided for by Article 704, Revised Statutes. The board shall canvass the returns and declare the results of the election. The election shall be conducted in accordance with the general laws of Texas pertaining to general elections, except as modified by the provisions of this Act.

Revisor's Note

(1) Section 9(b), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, refers to a majority vote of the "qualified" voters. 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 9(b), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, refers to an election "called and held." 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 9(b), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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.

(4) Section 9(b), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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.

(5) Section 9(b), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provides that an election under Section 9(b) "shall be conducted in accordance with the general laws of Texas pertaining to general elections, except as modified by the provisions of this Act." The revised law omits the quoted language because Section 1.002, Election Code, provides that the Election Code applies to all elections held in this state. An exception to the application of the Election Code would apply by its own terms.

Revised Law

Sec. 1073.204. REVENUE BONDS. (a) The board may issue revenue bonds to:

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

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

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

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

(d) The bonds must be issued in the manner and in accordance with the procedures and requirements prescribed by Sections 264.042, 264.043, 264.046, 264.047, 264.048, and 264.049, Health and Safety Code, for issuance of revenue bonds by a county hospital authority. (Acts 61st Leg., R.S., Ch. 206, Secs. 9(c), 10 (part).)

Source Law

[Sec. 9]

(c) The district may issue revenue bonds for a purpose described by Subsection (a) of this section. The bonds shall be payable from and secured by a pledge or 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 on all or part of the district's property. The revenue bonds shall be issued in the manner provided by Sections 264.042, 264.043, 264.046, 264.047, 264.048, and 264.049, Health and Safety Code, for the issuance of revenue bonds by county hospital authorities.

Sec. 10. In addition to the power to issue bonds payable from taxes levied by the district, as contemplated by the preceding section, the board of directors is further authorized to issue and … revenue bonds for purchasing, constructing, acquiring, repairing, equipping, or renovating buildings and improvements for hospital purposes, and for acquiring sites therefor, such bonds to be payable from and secured by a pledge of all or any part of the revenues of the district to be derived from the operation of its hospital or hospitals, and such bonds may be additionally secured by a mortgage or deed of trust lien on any part or all of its properties. Such bonds shall be issued in the manner and in accordance with the procedures and requirements specified for the issuance of revenue bonds by county hospital authorities in Sections 264.042, 264.043, 264.046, 264.047, and 264.048, Health and Safety Code.

Revised Law

Sec. 1073.205. REFUNDING BONDS. (a) The board may issue refunding bonds to refund outstanding bonds issued by the district.

(b) A refunding bond 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 61st Leg., R.S., Ch. 206, Secs. 9(d) (part), 10 (part).)

Source Law

[Sec. 9]

(d) Refunding bonds of the district may be issued for the purpose of refunding and paying off any outstanding indebtedness issued. Such refunding bonds may be sold and the proceeds therefrom applied to the payment of outstanding indebtedness, or may be exchanged in whole or in part for not less than a like principal amount of such outstanding indebtedness … .

Sec. 10. … [the board of directors is further authorized to issue and] to refund any previously issued [revenue bonds] … .

Revisor's Note

(1) Section 9(d), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provides that refunding bonds must bear interest at the same or a lower rate than the debt refunded unless a savings is shown. The revised law omits the provision because it has been superseded by the enactment of the maximum interest rate provision found in Section 1204.006, Government Code. That section reflects the 1981 amendment of Chapter 3, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes, now Chapter 1204, Government Code), by Section 1, Chapter 61, Acts of the 67th Legislature, Regular Session, 1981, and permits a public agency, including a hospital district, to issue public securities at any net effective interest rate of 15 percent or less. Section 1204.006, Government Code, applies to district bonds by application of Section 1204.001, Government Code. The omitted law reads:

(d) … provided that, if refunding bonds are to be exchanged for a like amount of said outstanding indebtedness, such refunding bonds shall bear interest at the same or lower rate than borne by the debt refunded, unless it is shown mathematically that a saving will result in the total amount of interest to be paid on said refunding bonds, and provided further that … .

(2) Section 9(d), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provides that refunding bonds sold to pay outstanding indebtedness must be issued and payments made in the manner specified by Chapter 503, Acts of the 54th Legislature, Regular Session, 1955, as amended (Article 717k, Vernon's Texas Civil Statutes). Article 717k was codified in 1999 as Chapter 1207, Government Code. The revised law omits the provision because Chapter 1207, Government Code, applies to the district by its own terms under Section 1207.001, Government Code. The omitted law reads:

(d) … if such refunding bonds are to be sold and the proceeds thereof applied to the payment of any such outstanding indebtedness, same shall be issued and payments made in the manner specified by Chapter 503, Acts of the 54th Legislature, Regular Session, 1955, as amended (Article 717k, Vernon's Texas Civil Statutes).

Revised Law

Sec. 1073.206. MATURITY OF BONDS. District bonds must mature not later than 40 years after the date of issuance. (Acts 61st Leg., R.S., Ch. 206, Sec. 9(e) (part).)

Source Law

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

Revised Law

Sec. 1073.207. EXECUTION OF BONDS. (a) The board president shall execute district bonds in the district's name.

(b) The board secretary shall countersign district bonds in the manner provided by Chapter 618, Government Code. (Acts 61st Leg., R.S., Ch. 206, Sec. 9(e) (part).)

Source Law

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

Revisor's Note

(1) Section 9(e), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, refers to Chapter 204, Acts of the 57th Legislature, Regular Session, 1961, as amended (Article 717j-1, Vernon's Texas Civil Statutes). That statute was codified in 1999 as Chapter 618, Government Code, and the revised law is drafted accordingly.

(2) Section 9(e), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provides that district bonds must bear interest at a rate not to exceed that provided by Chapter 3, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes). The revised law omits that provision because the maximum interest rate noted in Chapter 3 was revised in 1999 as Section 1204.006, Government Code, and Section 1204.006 applies to the district by its own terms by application of Section 1204.001, Government Code. The omitted law reads:

(e) [Bonds of the district] shall bear interest not to exceed the amount provided by Chapter 3, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes), … .

(3) Section 9(e), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provides that the district bonds are subject to the law governing counties that relates to bond approval by the attorney general and registration of the bonds by the comptroller. Section 9(e) 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 district 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:

(e) [Bonds of the district] … shall be subject to the same requirements in the matter of approval by the Attorney General of Texas and registration by the Comptroller of Public Accounts of the State of Texas as are by law provided for approval and registration of bonds issued by counties. Upon the approval of such bonds by the attorney general and registration by the comptroller, the same shall be incontestable for any cause.

Revised Law

Sec. 1073.208. BONDS EXEMPT FROM TAXATION. The following are exempt from taxation by this state or a political subdivision of this state:

(1) bonds issued or assumed by the district;

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

(3) profits made in the sale of the bonds. (Acts 61st Leg., R.S., Ch. 206, Sec. 23 (part).)

Source Law

Sec. 23. … any bonds issued or assumed by it and their transfer and the issuance therefrom, including any profits made in the sale thereof, shall at all times be free from taxation by the state or any municipality or political subdivision thereof.

Revisor's Note

Section 23, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, refers to "any municipality or political subdivision." The revised law omits "municipality" because that term is included in the meaning of "political subdivision."

Revisor's Note

(End of Subchapter)

(1) Section 15, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provides that district bonds are authorized investments for certain entities. The revised law omits the provision as unnecessary. As to several of the entities listed, Section 15 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 15 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 public 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. 15. All bonds issued hereunder by the district shall be and are hereby declared to be legal and authorized investments of banks, savings banks, trust companies, building and loan associations, savings and loan associations, insurance companies, trustees, and sinking funds of cities, towns, villages, counties, school districts, or other political subdivisions of the State of Texas, and for all public funds of the State of Texas or its agencies including the state permanent school fund… .

(2) Section 15, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provides that district bonds may secure deposits of public funds of this state or political subdivisions of this state. The revised law omits the provisions as impliedly repealed by Section 404.0221, Government Code (enacted in 1995), which lists eligible collateral for deposits of state funds by the comptroller, and by Chapter 2257, Government Code (enacted in 1989 as Article 2529d, Vernon's Texas Civil Statutes), which governs eligible collateral for deposits of funds of other public agencies, including political subdivisions. The omitted law reads:

Sec. 15. … Such bonds and indebtedness shall be eligible to secure deposit of public funds of the State of Texas and public funds of cities, towns, villages, counties, school districts, or other political subdivisions or corporations of the State of Texas, and shall be lawful and sufficient security for said deposits to the extent of their value when accompanied by all unmatured coupons appurtenant thereto.

[Sections 1073.209-1073.250 reserved for expansion]

SUBCHAPTER F. TAXES

Revised Law

Sec. 1073.251. IMPOSITION OF AD VALOREM TAX. (a) The board may impose a tax on all property in the district subject to district taxation.

(b) The board may impose the tax to:

(1) pay the interest on and create a sinking fund for bonds and other obligations issued or assumed by the district for hospital purposes;

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

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

(4) acquire necessary sites for the hospital system by purchase, lease, or condemnation.

(c) The board may not impose a tax to pay the principal of or interest on revenue bonds. (Acts 61st Leg., R.S., Ch. 206, Secs. 14 (part), 17(b) (part).)

Source Law

Sec. 14. The board of directors shall annually levy a tax … for the purpose of (1) paying the interest on and creating a sinking fund for bonds and other obligations which may be issued or assumed by the hospital district for hospital purposes as herein provided; (2) providing for the operation and maintenance of the hospital district and hospital system; and (3) for the purpose of making further improvements and additions to the hospital system, and for the acquisition of necessary sites therefor by purchase, lease or condemnation. …

[Sec. 17]

(b) The board of directors may annually impose property taxes … of all taxable property in the district. The taxes may be used to pay for indebtedness issued or assumed by the district and for the maintenance and operating expenses of the district. The district may not impose taxes to pay the principal of or interest on revenue bonds. …

Revised Law

Sec. 1073.252. 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 61st Leg., R.S., Ch. 206, Secs. 14 (part), 17(b) (part).)

Source Law

Sec. 14. [The board of directors shall annually levy a tax] not to exceed the amount hereinabove permitted … . In setting such tax rate the board shall take into consideration the income of the district from sources other than taxation. …

[Sec. 17]

(b) … [The board may impose 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 14, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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. 14. … Upon determination of the amount of tax required to be levied, the board shall make such levy and certify the same to the tax assessor-collector of said district.

Revised Law

Sec. 1073.253. 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 61st Leg., R.S., Ch. 206, Sec. 17(b) (part).)

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) Section 5(i), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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 17(a), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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:

Sec. 17. (a) The directors shall have the authority to levy taxes for the entire year in which the district is established as the result of the election herein provided. …

(3) Section 17(a), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provides that district taxes "shall be assessed and collected as provided" by Section 17(b). Section 17(b) provides that the Tax Code governs the appraisal, assessment, and collection of district taxes. The revised law omits those provisions 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:

(a) … All taxes of the district shall be assessed and collected as provided in Subsection (b) hereof.

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

[Sections 1073.254-1073.300 reserved for expansion]

SUBCHAPTER G. DISSOLUTION

Revised Law

Sec. 1073.301. 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.

(e) Section 41.001(a), Election Code, does not apply to an election ordered under this section. (Acts 61st Leg., R.S., Ch. 206, Secs. 20b(a), (b), (c) (part).)

Source Law

Sec. 20b. (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) … Section 41.001(a), Election Code, does not apply to an election ordered under this section. The order calling the election shall state:

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

(2) the date of the election;

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

(4) the location of the polling places.

Revisor's Note

(1) Section 20b(a), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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 Revisor's Note (1) to Section 1073.203.

(2) Section 20b(a), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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 for the reason stated in Revisor's Note (2) to Section 1073.203.

(3) Section 20b(c), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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:

Revised Law

Sec. 1073.302. 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 not later than the 35th day before the date set for the election. (Acts 61st Leg., R.S., Ch. 206, Sec. 20b(d) (part).)

Source Law

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

Revised Law

Sec. 1073.303. BALLOT. The ballot for an election under this subchapter must be printed to permit voting for or against the proposition: "The dissolution of the North Runnels County Hospital District." (Acts 61st Leg., R.S., Ch. 206, Sec. 20b(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 North Runnels County Hospital District."

Revised Law

Sec. 1073.304. 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 61st Leg., R.S., Ch. 206, Sec. 20b(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. 1073.305. 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 Runnels County or another governmental entity in Runnels 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 entity assumes all debts and obligations of the district at the time of the transfer and the district is dissolved. (Acts 61st Leg., R.S., Ch. 206, Secs. 20b(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 Runnels County or another governmental entity in Runnels County; 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 entity, the county or entity assumes all debts and obligations of the district at the time of the transfer, and the district is dissolved.

Revised Law

Sec. 1073.306. SALE OR TRANSFER OF ASSETS AND LIABILITIES. (a) Notwithstanding any other provision of this chapter, 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 entity 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 61st Leg., R.S., Ch. 206, Secs. 20b(m), (n).)

Source Law

(m) Notwithstanding any other provisions of this Act, 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 and liabilities to another person or entity 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 obligations of the district in a manner that protects the interests of the residents of the district, including the residents' collective property rights in the district's assets. A grant from federal funds is an obligation to be repaid in satisfaction. The district may not transfer or dispose of the district's assets except for due compensation unless the transfer is made to another governmental entity 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 20b(m), Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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. 1073.307. 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 61st Leg., R.S., Ch. 206, Secs. 20b(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. 1073.308. 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 Runnels County summarizing the board's actions in dissolving the district.

(b) Not later than the 10th day after the date the Commissioners Court of Runnels 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 61st Leg., R.S., Ch. 206, Secs. 20b(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 Runnels 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 Runnels County shall enter an order dissolving the district and releasing the board from any further duty or obligation.

Revisor's Note

(End of Chapter)

(1) Sections 2, 5(d), 7, and 8, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provide for the sale or 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 herein authorized to be created shall take over and there shall be transferred to it the title to all lands, buildings, improvements, and equipment in anywise pertaining to hospitals owned by the county or by any city or town within the district, and thereafter … . shall assume the outstanding indebtedness which shall have been incurred by Runnels County, and any city or town therein for hospital purposes prior to the creation of the district.

[Sec. 5]

(d) The hospital district created by this Act is authorized to purchase from any city hospital within the district, and each said authority is hereby authorized to sell to said hospital district, any and all hospital facilities, including all lands, buildings, equipment, and properties owned by them upon such terms and for such prices as they may mutually agree. If any such hospital authority sells its facilities to the district, that authority shall no longer be authorized to perform hospital services within the boundaries of the district herein authorized nor issue bonds therefor.

Sec. 7. All lands, buildings, and equipment within the district at the time of the creation of the district which are owned by Runnels County, Texas, or by any city or town therein and which were acquired by them for the purpose of providing hospital service or care for patients of such county or city, shall become the property of North Runnels County Hospital District and the Commissioners Court of Runnels County and the governing body of any such city or town shall provide by order that all property so owned shall be conveyed to the North Runnels County Hospital District in consideration of the hospital district assuming all debts and obligations arising from the acquisition, construction and operation of such county and city or town hospital facilities. The hospital district, through its board of directors, shall by resolution accept said properties and shall assume all the liabilities and obligations, including bonds and warrants incurred by Runnels County or such city or town for such hospital purposes.

Sec. 8. Any funds remaining in the hands of the county or any city or town therein, as the proceeds of bonds assumed by the district, as herein provided, shall forthwith be transferred to and become the funds of the hospital district and title thereto shall vest in such district. There shall also vest in said district and become the funds thereof the unspent portion of any other funds theretofore set up or appropriated by budget or otherwise by Runnels County or any city or town thereof for the support and maintenance of hospital facilities for the year within which the hospital district is created, thereby providing such hospital district with funds with which to maintain and operate such facilities for the remainder of such year. Any uncollected or delinquent taxes levied for hospital purposes by Runnels County or any city or town thereof, as collected, shall be paid to the district and applied by it to the purpose for which such taxes originally were levied. Any and all obligations under contracts legally incurred by Runnels County or any city or town therein for the building or the support and maintenance of hospital facilities prior to the creation of said district but outstanding at the time of its creation shall be assumed and discharged by such district without prejudice to the rights of third parties. It is provided that the management and control of the property and affairs of any hospital system or systems owned and operated by Runnels County or any city or town thereof shall continue in the existing board of managers until appointment and organization of the board of directors of the hospital district, at which time the board of managers of the present hospital or hospital system shall turn over all records, property and affairs of said hospital system to the board of directors of the district and shall cease to exist as a board of managers of the existing hospital system.

The Commissioners Court of Runnels County and the governing body of any city therein owning the hospital or hospital system, as the case may be, as soon as the hospital district is created and authorized at the election hereinabove provided, and there have been appointed and qualified the board of hospital directors above provided for, shall execute and deliver to the hospital district, to-wit: to its board of directors, an instrument in writing conveying to said hospital district the hospital properties including management, buildings, and equipment, and shall transfer to said hospital district the funds hereinabove provided to be vested in the hospital district. Such funds, in the hands of the hospital district and its board of directors shall be used for all or any of the same purposes and for no other purposes than the purposes for which the county or city transferring such funds could lawfully have used the same had they remained the property and funds of such county or city.

(2) Section 24, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, provides that the act is severable. The revised law omits that provision because it duplicates Section 311.032, Government Code (Code Construction Act), which provides that a provision of a statute is severable from each other provision of the statute that can be given effect. The omitted law reads:

Sec. 24. … If any provision of this Act should be invalid, such fact shall not affect the authorization for the creation of the District or the validity of any other provisions of this Act, and the Legislature hereby declares that it would have created the District and enacted the valid provisions of this Act notwithstanding the invalidity of any other provision or provisions hereof.

(3) Section 25, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, 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. 25. Proof of publication of the notice required in the enactment hereof under the provisions of Article IX, Section 9, of the Texas Constitution has been made in the manner and form provided by law pertaining to the enactment of local and special laws, and such notice is hereby found and declared proper and sufficient to satisfy such requirement.


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