TLC: Special District Local Laws Code Proposed Chapters

81C463(2) MCK

CHAPTER 1063. MONTGOMERY COUNTY HOSPITAL DISTRICT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 1063.001. DEFINITIONS ............................... 4

Sec. 1063.002. AUTHORITY FOR OPERATION ................... 4

Sec. 1063.003. ESSENTIAL PUBLIC FUNCTION ................. 5

Sec. 1063.004. DISTRICT TERRITORY ........................ 5

Sec. 1063.005. DISTRICT SUPPORT AND MAINTENANCE NOT

STATE OBLIGATION ........................ 5

Sec. 1063.006. RESTRICTION ON STATE FINANCIAL

ASSISTANCE .............................. 5

[Sections 1063.007-1063.050 reserved for expansion]

SUBCHAPTER B. DISTRICT ADMINISTRATION

Sec. 1063.051. BOARD ELECTION; TERM ...................... 7

Sec. 1063.052. QUALIFICATIONS FOR OFFICE ................. 10

Sec. 1063.053. BALLOT PETITION ........................... 10

Sec. 1063.054. NOTICE OF ELECTION ........................ 11

Sec. 1063.055. RUNOFF ELECTION ........................... 12

Sec. 1063.056. BOARD VACANCY ............................. 13

Sec. 1063.057. OFFICERS .................................. 14

Sec. 1063.058. COMPENSATION .............................. 14

Sec. 1063.059. BOND; RECORD OF BOND ...................... 14

Sec. 1063.060. VOTING REQUIREMENT ........................ 15

Sec. 1063.061. CALLING MEETINGS .......................... 16

Sec. 1063.062. CHIEF ADMINISTRATIVE OFFICER; ASSISTANT

ADMINISTRATOR ........................... 16

Sec. 1063.063. GENERAL DUTIES OF CHIEF ADMINISTRATIVE

OFFICER ................................. 16

Sec. 1063.064. APPOINTMENT OF STAFF AND EMPLOYEES ........ 17

Sec. 1063.065. RETIREMENT BENEFITS ....................... 17

[Sections 1063.066-1063.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Sec. 1063.101. DISTRICT RESPONSIBILITY ................... 18

Sec. 1063.102. RESTRICTION ON POLITICAL SUBDIVISION

TAXATION AND DEBT ....................... 18

Sec. 1063.103. MANAGEMENT, CONTROL, AND ADMINISTRATION ... 19

Sec. 1063.104. HEALTH CARE OR HOSPITAL SYSTEM ............ 20

Sec. 1063.105. RULES ..................................... 21

Sec. 1063.106. PURCHASING AND ACCOUNTING PROCEDURES ...... 21

Sec. 1063.107. DISTRICT PROPERTY, FACILITIES, AND

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

Sec. 1063.108. TAKEOVER OF NONPROFIT HOSPITAL PROPERTY ... 24

Sec. 1063.109. EMINENT DOMAIN ............................ 25

Sec. 1063.110. COST OF RELOCATING OR ALTERING PROPERTY ... 27

Sec. 1063.111. GIFTS AND ENDOWMENTS ...................... 27

Sec. 1063.112. CONSTRUCTION CONTRACTS .................... 28

Sec. 1063.113. OPERATING AND MANAGEMENT CONTRACTS ........ 29

Sec. 1063.114. CONTRACTS WITH GOVERNMENTAL ENTITIES

FOR CARE AND TREATMENT .................. 29

Sec. 1063.115. CONTRACTS FOR HEALTH CARE SERVICES ........ 30

Sec. 1063.116. CONTRACTS WITH GOVERNMENTAL ENTITIES

FOR INVESTIGATORY OR OTHER SERVICES ..... 31

Sec. 1063.117. PAYMENT FOR TREATMENT; PROCEDURES ......... 31

Sec. 1063.118. NONPROFIT CORPORATION ..................... 32

Sec. 1063.119. AUTHORITY TO SUE AND BE SUED .............. 34

[Sections 1063.120-1063.150 reserved for expansion]

SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS

Sec. 1063.151. BUDGET .................................... 34

Sec. 1063.152. NOTICE; HEARING; ADOPTION OF BUDGET ....... 35

Sec. 1063.153. AMENDMENTS TO BUDGET ...................... 36

Sec. 1063.154. RESTRICTION ON EXPENDITURES ............... 36

Sec. 1063.155. FISCAL YEAR ............................... 36

Sec. 1063.156. AUDIT ..................................... 37

Sec. 1063.157. INSPECTION OF AUDIT AND DISTRICT

RECORDS ................................. 37

Sec. 1063.158. FINANCIAL REPORT .......................... 37

Sec. 1063.159. DEPOSITORY ................................ 37

Sec. 1063.160. SPENDING AND INVESTMENT RESTRICTIONS ...... 38

[Sections 1063.161-1063.200 reserved for expansion]

SUBCHAPTER E. BONDS

Sec. 1063.201. GENERAL OBLIGATION BONDS .................. 40

Sec. 1063.202. TAX TO PAY GENERAL OBLIGATION BONDS ....... 40

Sec. 1063.203. GENERAL OBLIGATION BOND ELECTION .......... 41

Sec. 1063.204. MATURITY OF GENERAL OBLIGATION BONDS ...... 43

Sec. 1063.205. EXECUTION OF GENERAL OBLIGATION BONDS ..... 43

Sec. 1063.206. REVENUE BONDS ............................. 45

Sec. 1063.207. REFUNDING BONDS ........................... 47

Sec. 1063.208. BONDS EXEMPT FROM TAXATION ................ 48

Sec. 1063.209. TAX ANTICIPATION NOTES .................... 48

Sec. 1063.210. CERTIFICATES OF OBLIGATION ................ 49

[Sections 1063.211-1063.250 reserved for expansion]

SUBCHAPTER F. TAXES

Sec. 1063.251. IMPOSITION OF AD VALOREM TAX .............. 52

Sec. 1063.252. TAX RATE .................................. 53

Sec. 1063.253. ASSESSMENT AND COLLECTION BY COUNTY TAX

ASSESSOR-COLLECTOR ...................... 54

Sec. 1063.254. ASSESSMENT AND COLLECTION BY

APPOINTMENT OR CONTRACT ................. 57

Sec. 1063.255. PETITION AND ORDER FOR ELECTION TO

REDUCE TAX RATE ......................... 58

[Sections 1063.256-1063.300 reserved for expansion]

SUBCHAPTER G. DISSOLUTION

Sec. 1063.301. DISSOLUTION ELECTION; PETITION ............ 60

Sec. 1063.302. VALIDITY OF PETITION FOR ELECTION ......... 61

Sec. 1063.303. ELECTION DATE ............................. 62

Sec. 1063.304. BALLOT .................................... 63

Sec. 1063.305. ELECTION RESULTS .......................... 64

Sec. 1063.306. TRANSFER, SALE, OR ADMINISTRATION OF

ASSETS IF ELECTION INITIATED BY BOARD ... 65

Sec. 1063.307. IMPOSITION OF TAX AND RETURN OF SURPLUS

TAXES ................................... 66

Sec. 1063.308. REPORT; DISSOLUTION ORDER ................. 67

Sec. 1063.309. TRANSFER, SALE, OR ADMINISTRATION OF

ASSETS IF ELECTION INITIATED BY

DISTRICT PETITION ....................... 68

CHAPTER 1063. MONTGOMERY COUNTY HOSPITAL DISTRICT

SUBCHAPTER A. GENERAL PROVISIONS

Revised Law

Sec. 1063.001. 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 Montgomery 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. 1063.002. AUTHORITY FOR OPERATION. The Montgomery County Hospital District operates and is administered and financed in accordance with Section 9, Article IX, Texas Constitution, and has the rights, powers, and duties provided by this chapter. (Acts 65th Leg., R.S., Ch. 258, Sec. 1 (part).)

Source Law

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

Revisor's Note

Section 1, Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, authorizes the "creation, administration, maintenance, operation, and financing" of the district. The revised law omits "creation" as executed. The revised law omits "maintenance" because, in this context, that term is included in the meaning of "operation."

Revised Law

Sec. 1063.003. ESSENTIAL PUBLIC FUNCTION. The district performs an essential public function in carrying out the purposes of this chapter. (Acts 65th Leg., R.S., Ch. 258, Sec. 22 (part).)

Source Law

Sec. 22. In carrying out the purposes of this Act, the district will be performing an essential public function, and … .

Revised Law

Sec. 1063.004. DISTRICT TERRITORY. The boundaries of the district are coextensive with the boundaries of Montgomery County, Texas. (Acts 65th Leg., R.S., Ch. 258, Sec. 1 (part).)

Source Law

Sec. 1. . . . with boundaries coextensive with the boundaries of Montgomery County, Texas, … .

Revised Law

Sec. 1063.005. DISTRICT SUPPORT AND MAINTENANCE NOT STATE OBLIGATION. The support and maintenance of the district may not become a charge against or obligation of this state. (Acts 65th Leg., R.S., Ch. 258, Sec. 21 (part).)

Source Law

Sec. 21. The support and maintenance of the hospital district shall never become a charge against or obligation of the State of Texas … .

Revised Law

Sec. 1063.006. RESTRICTION ON STATE FINANCIAL ASSISTANCE. The legislature may not make a direct appropriation for the construction, maintenance, or improvement of a district facility. (Acts 65th Leg., R.S., Ch. 258, Sec. 21 (part).)

Source Law

Sec. 21. … nor shall any direct appropriation be made by the legislature for the construction, maintenance, or improvement of any of the facilities of the district.

Revisor's Note

(End of Subchapter)

Section 3, Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, 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. Section 9, Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides for the election to include a proposition authorizing the district to issue bonds. Because the election creating the district has been held, the revised law omits those provisions as executed. The omitted law reads:

Sec. 3. (a) The district shall not be created nor shall any tax in the district be authorized unless and until the creation and tax are approved by a majority of the electors of the area of the proposed district voting at an election called for that purpose. The election may be called by the commissioners court on presentation of a petition therefor signed by at least 50 electors of the area of the proposed district. The 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, and the presiding judge and alternate judge for each voting place and shall provide for clerks as in county elections. Notice of election shall be given by publishing a substantial copy of the election order in a newspaper of general circulation in the county 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 the election shall not operate to prohibit the calling and holding of subsequent elections for the same purpose; provided no district confirmation election shall be held within 12 months of any preceding election for the same purpose. If the district is not confirmed at an election held within 60 months from the effective date of this Act, this Act is repealed.

(b) At the election there shall be submitted to the electors of the area of the proposed district the proposition of whether the hospital district shall be created with authority to levy annual taxes … for the purpose of meeting the requirements of the district's bonds, indebtedness assumed by it, and its maintenance and operating expenses, and a majority of the electors of the area of the proposed district voting at the election in favor of the proposition shall be sufficient for its adoption.

(c) The form of ballot used at the election on the creation of the district shall be in conformity with Section 61, Texas Election Code, as amended (Article 6.05, Vernon's Texas Election Code), so that ballots may be cast on the following proposition: "The creation of Montgomery County Hospital District, providing for the levy of a tax not to exceed 75 cents on each $100 of valuation on all taxable property situated within the hospital district, subject to hospital district taxation, and providing for the assumption by the district of all outstanding bonds and indebtedness previously issued or incurred for hospital purposes within the boundaries of the proposed hospital district by the county and any city or town therein."

Sec. 9. A petition for an election to create the hospital district, as provided in Section 3 of this Act, may incorporate a request that a separate proposition be submitted at such election as to whether the board of directors of the district, in the event same is created, shall be authorized to issue bonds for the purposes specified in Section 8 of this Act. Such petition shall specify the maximum amount of bonds to be issued and their maximum maturity, and same shall be included in the proposition submitted at the election.

[Sections 1063.007-1063.050 reserved for expansion]

SUBCHAPTER B. DISTRICT ADMINISTRATION

Revised Law

Sec. 1063.051. BOARD ELECTION; TERM. (a) The board consists of seven directors elected as follows:

(1) one director elected from each county commissioners precinct; and

(2) three directors elected from the district at large by position.

(b) A district voter may vote on the directors to be elected at large and on the director to be elected from the precinct in which the voter resides.

(c) An election shall be held on the uniform election date in May of each even-numbered year to elect the appropriate number of directors.

(d) Directors serve staggered four-year terms that expire on the second Tuesday in June. (Acts 65th Leg., R.S., Ch. 258, Secs. 4(a) (part), (c) (part); Acts 72nd Leg., R.S., Ch. 511, Sec. 6.)

Source Law

[Acts 65th Leg., R.S., Ch. 258]

Sec. 4. (a) The district is governed by a board of seven directors. Three of the directors shall be elected at large from the entire district, and the remaining four directors each shall be elected from a different commissioner's precinct in the district, and … . Candidates to represent the district at large shall run by position. A qualified elector is entitled to vote for the directors to be elected at large and for the director to be elected from the precinct in which the elector resides. Directors shall serve for terms of four years expiring on the second Tuesday in June… .

[Acts 72nd Leg., R.S., Ch. 511]

Sec. 6. (a) The election of the board of directors scheduled before the effective date of this Act to be held in May 1992 shall be held, and the directors elected at that election shall serve two-year terms.

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

Revisor's Note

(1) Section 4(a), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, refers to "a qualified elector." Throughout this chapter, 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. Throughout this chapter, the revised law substitutes "voter" for "elector" because the former is the term used in the Election Code.

(2) Section 4(c), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, was amended in 1991 to require board elections to be held 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 1991 amendment to Section 4(c) that the election be held on the first Saturday in May, which was then the uniform election date in May.

(3) Section 6, Chapter 511, Acts of the 72nd Legislature, Regular Session, 1991, prescribes the procedure for staggering the terms of the directors first elected under that act. The revised law revises the provision specifying staggered terms but omits the provision relating to which year the initial terms expire as executed.

Revised Law

Sec. 1063.052. QUALIFICATIONS FOR OFFICE. (a) A person may not be elected or appointed as a director unless the person:

(1) is more than 21 years of age at the time of the appointment or election;

(2) is a resident of the district; and

(3) is a qualified voter.

(b) A director who represents a county commissioners precinct must be a resident of that precinct.

(c) A person may not be elected or appointed as a director if the person holds another appointed or elected public office of honor, trust, or profit.

(d) A person who holds another public office of honor, trust, or profit and seeks to be appointed or elected as a director automatically vacates the first office. (Acts 65th Leg., R.S., Ch. 258, Sec. 4(a) (part).)

Source Law

(a) … each shall be a resident of the precinct he represents… . No person may be appointed or elected as a member of the board of directors of the hospital district unless he is a resident of the district and a qualified elector and unless at the time of such election or appointment he shall be more than 21 years of age. No person may be appointed or elected as a director of the hospital district if he holds another appointed or elected public office of honor, trust, or profit. A person holding another public office of honor, trust, or profit who seeks to be appointed or elected a director automatically vacates the first office… .

Revised Law

Sec. 1063.053. BALLOT PETITION. A person who wants to have the person's name printed on the ballot as a candidate for director must file with the board secretary a petition requesting that action. The petition must be:

(1) signed by at least 10 registered voters; and

(2) filed at least 25 days before the date of the election. (Acts 65th Leg., R.S., Ch. 258, Sec. 4(c) (part).)

Source Law

(c) … Any person desiring his name to be printed on the ballot as a candidate for director shall file a petition, signed by not less than 10 legally qualified electors asking that such name be printed on the ballot, with the secretary of the board of directors of the district. Such petitions shall be filed with such secretary at least 25 days prior to the date of election.

Revisor's Note

Section 4(c), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, refers to "legally qualified electors" in the district. Throughout this chapter, the revised law substitutes "voters" for "electors" because the former is the term used in the Election Code. The revised law substitutes "registered" for "legally qualified" because in the context of eligibility to sign a petition, Section 277.0021, Election Code, provides that "qualified voter" means a "registered voter."

Revised Law

Sec. 1063.054. NOTICE OF ELECTION. At least 10 days before the date of a regular election of directors, notice of the election shall be published one time in a newspaper of general circulation in Montgomery County. (Acts 65th Leg., R.S., Ch. 258, Sec. 4(c) (part).)

Source Law

(c) [A regular election of directors] … notice of such election shall be published in a newspaper of general circulation in the county one time at least 10 days prior to the date of election… .

Revisor's Note

Section 4(c), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, requires notice of a directors' election to be published in "the county." Throughout this chapter, the revised law substitutes "Montgomery County" for the quoted language because Montgomery County is the county in which the district is located.

Revised Law

Sec. 1063.055. RUNOFF ELECTION. (a) If no candidate for a particular director position at a regular directors' election receives a majority of the votes of the voters voting in that race, the board shall order a runoff election.

(b) At least seven days before the date of a runoff election, the board shall publish notice of the election one time in a newspaper or newspapers that individually or collectively have general circulation in the area of the runoff election.

(c) Of the names printed on the ballot at a runoff election, the name of the candidate who received the higher number of votes at the general election of directors must be printed first on the ballot. (Acts 65th Leg., R.S., Ch. 258, Sec. 4(d) (part).)

Source Law

(d) If no candidate for director from a particular commissioner's precinct or no candidate for a district at-large position receives a majority of the votes of the qualified voters voting in that race at the regular election of directors, the board shall order a runoff election … The board shall publish notice of the runoff election in a newspaper or newspapers that individually or collectively provide general circulation in the area of the runoff election one time at least seven days before the date of the runoff election. Of the names printed on the ballot at the runoff election, the name of the candidate who received the higher number of votes at the regular election shall be printed first on the ballot… .

Revisor's Note

Section 4(d), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides procedures for a runoff election. The revised law omits the provisions as superseded by the 1985 enactment of the Election Code, applicable to the district under Section 1.002, Election Code. Section 2.023, Election Code, governs which candidates for office will participate in a runoff election. Sections 145.095 and 145.096, Election Code, govern the procedures to be followed if a candidate for a runoff election dies or withdraws from the election. The omitted law reads:

(d) … [the board shall order a runoff election] between the two candidates from the precinct or from the at-large position who received the highest number of votes in that race at the regular election. … If before the date of the runoff election a candidate who is eligible to participate in the runoff dies or files a written request with the secretary of the board to have his name omitted from the ballot at the runoff election, the other candidate eligible to participate in the runoff election is considered elected and the runoff election shall be canceled by order of the board.

Revised Law

Sec. 1063.056. BOARD VACANCY. (a) If a vacancy occurs in the office of director, the remaining directors shall appoint a director for the unexpired term.

(b) If the number of directors is reduced to fewer than four for any reason, the remaining directors shall immediately call a special election to fill the vacancies. If the remaining directors do not call the election, a district court, on application of a district voter or taxpayer, may order the directors to hold the election. (Acts 65th Leg., R.S., Ch. 258, Sec. 4(b) (part).)

Source Law

(b) … All vacancies in the office of director shall be filled for the unexpired term by appointment by the remainder of the board of directors. In the event the number of directors shall be reduced to less than four for any reason, the remaining directors shall immediately call a special election to fill said vacancies, and upon failure to do so a district court may, upon application of any voter or taxpayer of the district, issue a mandate requiring that such election be ordered by the remaining directors.

Revisor's Note

Section 4(b), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides that if there are fewer than four directors, a district court may "issue a mandate requiring that such election [to fill vacancies in directors' offices] be ordered by the remaining directors." The revised law substitutes "order the directors to hold the election" for the quoted language because a mandate requiring directors to order an election is necessarily an order for directors to hold the election. See generally Titles 1 and 4 through 7, Election Code, providing that the authority ordering an election is the authority responsible for holding the election.

Revised Law

Sec. 1063.057. OFFICERS. The board shall elect from among its members a presiding officer, assistant presiding officer, treasurer, and secretary. (Acts 65th Leg., R.S., Ch. 258, Sec. 4(b) (part).)

Source Law

(b) The board of directors shall organize by electing from among its membership a chairman, vice-chairman, treasurer, and secretary… .

Revisor's Note

Section 4(b), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, refers to a "chairman" and a "vice-chairman." Throughout this chapter, the revised law substitutes "presiding officer" and "assistant presiding officer," respectively, for those terms because, in context, the terms have the same meaning and "presiding officer" is more commonly used and is gender neutral.

Revised Law

Sec. 1063.058. COMPENSATION. A director serves without compensation. (Acts 65th Leg., R.S., Ch. 258, Sec. 4(a) (part).)

Source Law

(a) … Each member of the board of directors shall serve without compensation and … .

Revised Law

Sec. 1063.059. BOND; RECORD OF BOND. (a) Each director shall execute a good and sufficient bond for $1,000 that is:

(1) payable to the district; and

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

(b) Each director's bond shall be deposited with the district's depository bank for safekeeping. (Acts 65th Leg., R.S., Ch. 258, Sec. 4(a) (part).)

Source Law

(a) … [Each member of the board of directors] … shall execute a good and sufficient bond for $1,000 payable to the district conditioned upon the faithful performance of his duties, and the bonds shall be deposited with the depository bank of the district for safekeeping.

Revisor's Note

Section 4(a), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, 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:

(a) … [Each member of the board of directors] … shall qualify by executing the constitutional oath of office and … .

Revised Law

Sec. 1063.060. VOTING REQUIREMENT. A concurrence of a majority of the directors present is sufficient in any matter relating to district business. (Acts 65th Leg., R.S., Ch. 258, Sec. 4(b) (part).)

Source Law

(b) … a concurrence of a majority of the directors present is sufficient in all matters pertaining to the business of the district… .

Revisor's Note

Section 4(b), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides that four directors constitute a quorum. The revised law omits that provision because it duplicates Section 311.013, Government Code (Code Construction Act), which provides that a quorum of a public body is a majority of the number of members fixed by statute. The omitted law reads:

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

Revised Law

Sec. 1063.061. CALLING MEETINGS. The presiding officer or any four directors may call a board meeting. (Acts 65th Leg., R.S., Ch. 258, Sec. 4(b) (part).)

Source Law

(b) … A meeting of the board of directors may be called by the chairman or any four directors… .

Revised Law

Sec. 1063.062. CHIEF ADMINISTRATIVE OFFICER; ASSISTANT ADMINISTRATOR. (a) The board shall appoint a qualified person as the district's chief administrative officer. That officer shall be known as the district president or by another title selected by the board.

(b) The board may appoint one or more assistant administrators. An assistant administrator shall be known as the district vice president or by another title selected by the board.

(c) The chief administrative officer and any assistant administrator serve at the will of the board and are entitled to the compensation determined by the board. (Acts 65th Leg., R.S., Ch. 258, Sec. 5(a) (part).)

Source Law

(a) … The board of directors shall appoint a qualified person as the chief administrative officer of the district to be known as the president of the hospital district or by another title selected by the board. The board may appoint assistants to the chief administrative officer to be known as vice-presidents of the hospital district or by another title selected by the board. The chief administrative officer and any assistant shall serve at the will of the board and shall receive such compensation as may be fixed by the board… .

Revised Law

Sec. 1063.063. GENERAL DUTIES OF CHIEF ADMINISTRATIVE OFFICER. Subject to the limitations prescribed by the board, the chief administrative officer shall:

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

(2) direct the affairs of the district. (Acts 65th Leg., R.S., Ch. 258, Sec. 5(a) (part).)

Source Law

(a) … The chief administrative officer shall supervise all the work and activities of the district and shall have general direction of the affairs of the district, subject to limitations prescribed by the board… .

Revised Law

Sec. 1063.064. APPOINTMENT OF STAFF AND EMPLOYEES. (a) The board may appoint to the staff any doctors the board considers necessary for the efficient operation of the district and may make temporary appointments as warranted.

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

(c) The board may delegate to the chief administrative officer the authority to hire district employees, including technicians and nurses. (Acts 65th Leg., R.S., Ch. 258, Secs. 5(a) (part), 17.)

Source Law

Sec. 5. (a) … The board of directors shall have the authority to appoint to the staff such doctors as 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 chief administrative officer the authority to employ technicians, nurses, and employees of the district… .

Sec. 17. The district may employ fiscal agents, accountants, architects, and attorneys as the board may consider proper.

Revised Law

Sec. 1063.065. RETIREMENT BENEFITS. The board may provide retirement benefits for district employees by:

(1) establishing or administering a retirement program; or

(2) participating in:

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

(B) another statewide retirement system in which the district is eligible to participate. (Acts 65th Leg., R.S., Ch. 258, Sec. 6.)

Source Law

Sec. 6. The board of directors may provide retirement benefits for employees of the hospital district. The board may provide the benefits by establishing or administering a retirement program or by electing to participate in the Texas County and District Retirement System or in any other statewide retirement system in which the district is eligible to participate.

[Sections 1063.066-1063.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Revised Law

Sec. 1063.101. DISTRICT RESPONSIBILITY. The district has full responsibility for providing medical and hospital care for the district's needy inhabitants. (Acts 65th Leg., R.S., Ch. 258, Sec. 20 (part).)

Source Law

Sec. 20. … The hospital district shall assume full responsibility for the furnishing of medical and hospital care for its needy inhabitants… .

Revisor's Note

Section 20, Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides that the district "shall assume" full responsibility for providing medical and hospital care for the district's needy inhabitants. The revised law substitutes "has" for the quoted language because the duty to assume the responsibility is executed.

Revised Law

Sec. 1063.102. RESTRICTION ON POLITICAL SUBDIVISION TAXATION AND DEBT. A political subdivision located wholly or partly within the district may not impose a tax or issue bonds or other obligations for hospital or health care purposes or to provide medical care for district residents. (Acts 65th Leg., R.S., Ch. 258, Sec. 20 (part).)

Source Law

Sec. 20. After creation of the hospital district, no county, municipality, or political subdivision wholly or partly within the boundaries of the district shall have the power to levy taxes or issue bonds or other obligations for hospital or health care purposes or for providing medical care for the residents of the district… .

Revisor's Note

(1) Section 20, Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, 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 20, Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, refers to a "county, municipality, or political subdivision." The revised law omits the references to "municipality" and "county" because "municipality" and "county" are included in the meaning of "political subdivision."

Revised Law

Sec. 1063.103. MANAGEMENT, CONTROL, AND ADMINISTRATION. The board shall manage, control, and administer the health care or hospital system and the district's money and resources. (Acts 65th Leg., R.S., Ch. 258, Sec. 5(a) (part).)

Source Law

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

Revised Law

Sec. 1063.104. HEALTH CARE OR HOSPITAL SYSTEM. (a) The district shall provide for:

(1) the establishment of a health care or hospital system by:

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

(B) equipping the buildings; and

(2) the administration of the system for health care or hospital purposes.

(b) The health care or hospital system may include:

(1) domiciliary care and treatment of the sick, injured, or geriatric;

(2) hospitals;

(3) outpatient clinics;

(4) dispensaries;

(5) convalescent home facilities;

(6) necessary nurses;

(7) domiciliaries and training centers;

(8) blood banks;

(9) community mental health centers;

(10) research centers or laboratories;

(11) ambulance services; and

(12) any other facilities the board considers necessary for health or hospital care. (Acts 65th Leg., R.S., Ch. 258, Secs. 2 (part), 11(a) (part).)

Source Law

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

Sec. 11. (a) … The health care or hospital system may include domiciliary care and treatment of the sick, wounded, and injured, hospitals, outpatient clinic or clinics, dispensaries, geriatric domiciliary care and treatment, convalescent home facilities, necessary nurses, domiciliaries and training centers, blood banks, community mental health centers and research centers or laboratories, ambulance services, and any other facilities deemed necessary for health or hospital care by the directors… .

Revisor's Note

Section 11(a), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, refers to the care and treatment 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. 1063.105. RULES. The board may adopt rules governing the operation of the hospital, the health care or hospital system, and the district's staff and employees. (Acts 65th Leg., R.S., Ch. 258, Sec. 5(a) (part).)

Source Law

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

Revisor's Note

Section 5(a), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, 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. 1063.106. 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 65th Leg., R.S., Ch. 258, Sec. 11(c) (part).)

Source Law

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

Revised Law

Sec. 1063.107. DISTRICT PROPERTY, FACILITIES, AND EQUIPMENT. (a) The board shall determine the type, number, and location of buildings required to maintain an adequate health care or hospital system.

(b) The board may lease all or part of the district's buildings and other facilities on terms considered to be in the best interest of the district's inhabitants. Except as provided by Subsection (c), the term of a lease may not exceed 25 years from the date entered.

(1) finds that the land is not necessary for health care or hospital purposes;

(2) complies with any indenture securing the payment of district bonds; and

(3) receives not less than the current market value for the lease.

(d) The district may acquire equipment for use in the district's health care or hospital system and mortgage or pledge the property as security for the payment of the purchase price. A contract entered into under this subsection must provide that the entire obligation be retired not later than the fifth anniversary of the date of the contract.

(e) The district may sell or otherwise dispose of any property, including equipment, on terms the board finds are in the best interest of the district's inhabitants. The board must comply with Section 272.001, Local Government Code, when selling district land other than land the district is authorized to sell or exchange under Subsection (f).

(f) The district may sell or exchange a hospital, including real property necessary or convenient for the operation of the hospital and real property that the board finds may be useful in connection with future expansions of the hospital, on terms the board determines to be in the district's best interests. The district must comply with the procedures prescribed by Sections 285.051 and 285.052, Health and Safety Code. (Acts 65th Leg., R.S., Ch. 258, Secs. 11(a) (part), (b), (c) (part), 15(c), (d).)

Source Law

Sec. 11. (a) 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 health care or hospital system. … The district, through its board of directors, … may lease all or part of its buildings and facilities on terms and conditions considered to be to the best interest of its inhabitants. Except as provided by Subsection (c) of Section 15 of this Act, the term of a lease may not exceed 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 on terms and conditions found by the board to be in the best interest of its inhabitants.

(b) The district may sell or exchange a hospital, including real property necessary or convenient for the operation of the hospital and real property that the board of directors finds may be useful in connection with future expansions of the hospital, on terms and conditions the board determines to be in the best interests of the district, by complying with the procedures prescribed by Sections 285.051 and 285.052, Health and Safety Code, and any subsequent amendments.

(c) … The district may acquire equipment for use in its health care or 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. …

[Sec. 15]

(1) finds that the land is not necessary for health care or hospital purposes;

(2) complies with any indenture securing the payment of bonds issued by the district; and

(3) receives on behalf of the district not less than the current market value for the lease.

(d) Land of the district, other than land that the district is authorized to sell or exchange under Subsection (b) of Section 11 of this Act, may not be sold unless the board of directors complies with Section 272.001, Local Government Code.

Revisor's Note

(1) Section 11(a), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, requires the board to determine the buildings required to "establish and maintain" an adequate health care or hospital system. The revised law omits the reference to establishing the health care or hospital system as executed.

(2) Sections 11(a) and (b), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, refer to "terms and conditions." Throughout this chapter, the revised law omits the references to "conditions" because "conditions" is included in the meaning of "terms."

(3) Section 11(a), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, refers to "any property, real or personal." The revised law omits the reference to "real or personal" property because under Section 311.005, Government Code (Code Construction Act), "property" means "real and personal property."

(4) Section 11(b), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, refers to Sections 285.051 and 285.052, Health and Safety Code, "and any subsequent amendments." Throughout this chapter, the revised law omits references to "subsequent amendments" and "as amended" because under Section 311.027, Government Code (Code Construction Act), a reference to a statute applies to all reenactments, revisions, or amendments of that statute unless expressly provided otherwise.

Revised Law

Sec. 1063.108. TAKEOVER OF NONPROFIT HOSPITAL PROPERTY. The district may take over and may accept title to land, buildings, improvements, and equipment of a nonprofit hospital in the district if the governing authority of the hospital and district agree to the transfer. (Acts 65th Leg., R.S., Ch. 258, Sec. 2 (part).)

Source Law

Sec. 2. … The district may take over and may accept title to land, buildings, improvements, and equipment of a nonprofit hospital within the district if the governing authority or authorities of the hospital and district agree to the transfer… .

Revised Law

Sec. 1063.109. EMINENT DOMAIN. (a) The district may exercise the power of eminent domain to acquire a fee simple or other interest in any type of property located in district territory if the interest is necessary or convenient for the district to exercise a power, right, or privilege conferred by this chapter.

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

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

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

(3) provide a bond for costs or a supersedeas bond on an appeal or petition for review. (Acts 65th Leg., R.S., Ch. 258, Sec. 15(a).)

Source Law

Sec. 15. (a) The district shall have the right and power of eminent domain for the purpose of acquiring by condemnation any and all property of any kind and character in fee simple, or any lesser interest therein, within the boundaries of the district necessary or convenient to the powers, rights, and privileges conferred by this Act, in the manner provided by the general law with respect to condemnation by counties; provided that the district shall not be required to make deposits in the registry of the trial court of the sum required by Paragraph 2 of Article 3268, Revised Civil Statutes of Texas, 1925, as amended, 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 15(a), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, 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 15(a), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, 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 15(a), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, refers to "Paragraph 2 of Article 3268, Revised Civil Statutes of Texas, 1925, as amended." That statute was codified in 1983 as Section 21.021(a), Property Code, and the revised law is drafted accordingly.

(4) Section 15(a), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, refers to a "writ of error." The revised law substitutes "petition for review" for "writ of error" because, effective September 1, 1997, the Texas Supreme Court replaced the writ of error procedure with the petition for review procedure. See Rule 53.1, Texas Rules of Appellate Procedure.

Revised Law

Sec. 1063.110. COST OF RELOCATING OR ALTERING PROPERTY. In exercising the power of eminent domain, if the board requires the relocation, raising, lowering, rerouting, or change in grade or alteration in the construction of any railroad, electric transmission, telegraph or telephone lines, conduits, poles, or facilities or pipelines, the board must bear the actual cost of the relocation, raising, lowering, rerouting, or change in grade or alteration of construction to provide comparable replacement without enhancement of facilities, after deducting the net salvage value derived from the old facility. (Acts 65th Leg., R.S., Ch. 258, Sec. 15(b).)

Source Law

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

Revised Law

Sec. 1063.111. 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 65th Leg., R.S., Ch. 258, Sec. 19.)

Source Law

Sec. 19. The board of directors of the hospital district is authorized on behalf of the 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 19, Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, 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. 1063.112. CONSTRUCTION CONTRACTS. A construction contract that involves the expenditure of more than $10,000 may be made only after advertising in the manner provided by Chapter 252 and Subchapter C, Chapter 262, Local Government Code. (Acts 65th Leg., R.S., Ch. 258, Sec. 11(c) (part).)

Source Law

(c) … All contracts for construction involving the expenditure of more than $10,000 may be made only after advertising in the manner provided by Chapter 163, Acts of the 42nd Legislature, Regular Session, 1931, as amended (Article 2368a, Vernon's Texas Civil Statutes)… .

Revisor's Note

(1) Section 11(c), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, permits construction contracts involving more than $10,000 only after advertising in the manner provided by "Chapter 163, Acts of the 42nd Legislature, Regular Session, 1931, as amended (Article 2368a, Vernon's Texas Civil Statutes)." Article 2368a was amended by Chapter 641, Acts of the 69th Legislature, Regular Session, 1985, which transferred provisions relating to advertising for bids by counties to the County Purchasing Act (V.A.C.S. Article 2368a.5). The County Purchasing Act was codified in 1987 as Subchapter C, Chapter 262, Local Government Code. The provisions of Article 2368a relating to advertising for bids by municipalities were codified in 1987 as Chapter 252, Local Government Code. The revised law is drafted accordingly.

(2) Section 11(c), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides that the provisions of Article 5160, Revised Civil Statutes of Texas, 1925, apply to the district's construction contracts in relation to performance and payment bonds. The revised law omits that provision as unnecessary because Article 5160 was codified as Chapter 2253, Government Code, and that chapter applies to hospital districts on its own terms. The omitted law reads:

(c) … The provisions of Article 5160, Revised Civil Statutes of Texas, 1925, as amended, relating to performance and payment bonds shall apply to construction contracts let by the district… .

Revised Law

Sec. 1063.113. OPERATING AND MANAGEMENT CONTRACTS. The board may enter into an operating or management contract relating to a district facility. (Acts 65th Leg., R.S., Ch. 258, Sec. 11(a) (part).)

Source Law

(a) … [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. 1063.114. CONTRACTS WITH GOVERNMENTAL ENTITIES FOR CARE AND TREATMENT. (a) The board may contract with a county or municipality located outside the district's boundaries for the care and treatment of a sick or injured person of that county or municipality.

(b) The board may contract with this state or a federal agency for the treatment of a sick or injured person. (Acts 65th Leg., R.S., Ch. 258, Sec. 5(a) (part).)

Source Law

(a) … The board … shall be authorized to contract with any county or incorporated municipality located outside its boundaries for the care and treatment 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 treatment of sick, diseased, or injured persons.

Revisor's Note

(1) Section 5(a), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, 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(a), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, refers to the treatment of "sick, diseased, or injured persons." The revised law omits the references to "diseased" because "diseased" is included in the meaning of "sick."

Revised Law

Sec. 1063.115. CONTRACTS FOR HEALTH CARE SERVICES. (a) As permitted by the Texas Constitution and Chapter 61, Health and Safety Code, the district may:

(1) enter into a contract relating to the provision of health care services on terms the board determines to be in the district's best interests; and

(2) make payments under the contract.

(b) The term of a contract under this section may not exceed 15 years. (Acts 65th Leg., R.S., Ch. 258, Sec. 5(b).)

Source Law

(b) The district may enter into contracts, and make payments thereunder, relating to or arranging for the provision of health care services as permitted by the Texas Constitution and Chapter 61, Health and Safety Code, and its subsequent amendments, on terms and conditions as the board of directors determines to be in the best interests of the district. The term of a contract entered into under this subsection may not exceed 15 years.

Revised Law

Sec. 1063.116. 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 medical, health care, hospital, or welfare needs of district inhabitants. (Acts 65th Leg., R.S., Ch. 258, Sec. 5(a) (part).)

Source Law

(a) … The 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 medical, health care, hospital, or welfare needs of the inhabitants of the district and … .

Revised Law

Sec. 1063.117. PAYMENT FOR TREATMENT; PROCEDURES. (a) When a patient who resides in the district is admitted to a district facility, the chief administrative officer 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 chief administrative officer determines that the patient or those relatives cannot pay all or part of the costs of the care and treatment in the district facility, the amount of the costs that cannot be paid becomes a charge against the district.

(c) If the chief administrative officer 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 chief administrative officer 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 chief administrative officer, 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 65th Leg., R.S., Ch. 258, Sec. 18.)

Source Law

Sec. 18. Whenever a patient residing within the district has been admitted to the facilities of the district, the chief administrative officer may cause inquiry to be made as to his circumstances and those of the relatives of the patient legally liable for his support. If he finds that the patient or his relatives are able to pay for his care and treatment in whole or in part, an order shall be made directing the patient or his relatives to pay to the hospital district for the care and support of the patient a specified sum per week in proportion to their financial ability. The chief administrative officer shall have the power and authority to collect these sums from the estate of the patient or his relatives legally liable for his support in the manner provided by law for collection of expenses in the last illness of a deceased person. If the chief administrative officer finds that the patient or his relatives are not able to pay either in whole or in part for his care and treatment in the facilities of the district, same shall become a charge on 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 chief administrative officer, 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 a final order of the board shall lie to the district court. The substantial evidence rule shall apply.

Revised Law

Sec. 1063.118. NONPROFIT CORPORATION. (a) The district may create and sponsor a nonprofit corporation under the Business Organizations Code and may contribute or cause to be contributed available funds to the corporation. A corporation under this section must be a nonmember, nonstock corporation.

(b) The board of directors of the corporation shall be composed of seven district residents appointed by the district's board. The district's board may remove any director of the corporation at any time with or without cause.

(c) The corporation may use money, other than money the corporation pays to the district, only to provide or pay the costs of providing or costs related to providing indigent health care or other services the district is required or authorized to provide under the constitution or state law.

(d) The district's board shall establish controls to ensure that the corporation uses its money as required by Subsection (c).

(e) The corporation may invest the corporation's money in any manner in which the district may invest the district's money, including investing money as authorized by Chapter 2256, Government Code. (Acts 65th Leg., R.S., Ch. 258, Sec. 19A.)

Source Law

Sec. 19A. (a) The district may sponsor and create a nonstock, nonmember corporation under the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes) and its subsequent amendments and may contribute or cause to be contributed available funds to the corporation.

(b) The funds of the corporation, other than funds paid by the corporation to the district, may be used by the corporation only to provide, to pay the costs of providing, or to pay the costs related to providing indigent health care or other services that the district is required or permitted to provide under the constitution or laws of this state. The board of directors of the hospital district shall establish adequate controls to ensure that the corporation uses its funds as required by this subsection.

(c) The board of directors of the corporation shall be composed of seven residents of the district appointed by the board of directors of the district. The board of directors of the district may remove any director of the corporation at any time with or without cause.

(d) The corporation may invest funds in any investment in which the district is authorized to invest funds of the district, including investments authorized by the Public Funds Investment Act of 1987 (Article 842a-2, Vernon's Texas Civil Statutes) and its subsequent amendments.

Revisor's Note

(1) Section 19A, Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, refers to a corporation under the Texas Non-Profit Corporation Act. The only type of corporation that may be formed under that act is a nonprofit corporation. That act was codified in various chapters of the Business Organizations Code by Chapter 182, Acts of the 78th Legislature, Regular Session, 2003. On January 1, 2010, the Texas Non-Profit Corporation Act expires, and, as of that date, the Business Organizations Code applies to all business entities. The revised law is drafted accordingly.

(2) Section 19A(d), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, refers to the "Public Funds Investment Act of 1987 (Article 842a-2, Vernon's Texas Civil Statutes)." That act was codified in 1993 as Chapter 2256, Government Code. The revised law is drafted accordingly.

Revised Law

Sec. 1063.119. AUTHORITY TO SUE AND BE SUED. The district, through the board, may sue and be sued. (Acts 65th Leg., R.S., Ch. 258, 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, … .

[Sections 1063.120-1063.150 reserved for expansion]

SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS

Revised Law

Sec. 1063.151. BUDGET. (a) The chief administrative officer shall prepare an annual budget for approval by the board.

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

(1) the outstanding obligations of the district;

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

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

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

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

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

(7) the estimated tax rate required. (Acts 65th Leg., R.S., Ch. 258, Sec. 7 (part).)

Source Law

Sec. 7. … The chief administrative officer 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 year-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… .

Revised Law

Sec. 1063.152. NOTICE; HEARING; ADOPTION OF BUDGET. (a) The board shall hold a public hearing on the proposed annual budget.

(b) Notice of the hearing must be published one time at least 10 days before the date of the hearing.

(d) At the conclusion of the hearing, the board shall adopt a budget by acting on the budget proposed by the chief administrative officer. The board may make any changes in the proposed budget that the board judges to be in the interests of the taxpayers and that the law warrants. (Acts 65th Leg., R.S., Ch. 258, Sec. 7 (part).)

Source Law

Sec. 7. … A public hearing on the annual budget shall be held by the board of directors after notice of such hearing has been published one time at least 10 days before the date set therefor. Any person residing in the district shall have the right to be present and participate in the hearing. At the conclusion of the hearing, the budget, as proposed by the chief administrative officer, shall be acted on 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 taxpayers demands… . the annual budget, and … shall be approved by the board of directors… .

Revised Law

Sec. 1063.153. AMENDMENTS TO BUDGET. The budget may be amended as required by circumstances. The board must approve all amendments. (Acts 65th Leg., R.S., Ch. 258, Sec. 7 (part).)

Source Law

Sec. 7. … 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 7, Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, 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. 1063.154. RESTRICTION ON EXPENDITURES. Money may be spent only for an expense included in the budget or an amendment to the budget. (Acts 65th Leg., R.S., Ch. 258, Sec. 7 (part).)

Source Law

Sec. 7. … No expenditure may be made for any expense not included in the annual budget or an amendment to it… .

Revised Law

Sec. 1063.155. FISCAL YEAR. (a) The district operates according to a fiscal year established by the board.

(b) The fiscal year may not be changed:

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

(2) more than once in a 24-month period. (Acts 65th Leg., R.S., Ch. 258, Sec. 7 (part).)

Source Law

Sec. 7. The district shall be operated on the basis of a fiscal year as established by the board of directors; provided such fiscal year may not be changed during the time revenue bonds of the district are outstanding or more than once in any 24-month period… .

Revised Law

Sec. 1063.156. AUDIT. The board shall have an audit made of the district's financial condition. (Acts 65th Leg., R.S., Ch. 258, Sec. 7 (part).)

Source Law

Sec. 7. … The board shall have an audit made of the financial condition of the district, … .

Revised Law

Sec. 1063.157. INSPECTION OF AUDIT AND DISTRICT RECORDS. The audit and other district records shall be open to inspection at the district's principal office. (Acts 65th Leg., R.S., Ch. 258, Sec. 7 (part).)

Source Law

Sec. 7. … [The board shall have] an audit [made of the financial condition of the district,] which together with other records of the district shall be open to inspection at the principal office of the district… .

Revised Law

Sec. 1063.158. FINANCIAL REPORT. As soon as practicable after the close of each fiscal year, the chief administrative officer shall prepare for the board:

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

(2) a complete account of the disbursements of district money. (Acts 65th Leg., R.S., Ch. 258, Sec. 7 (part).)

Source Law

Sec. 7. … As soon as practicable after the close of each fiscal year, the chief administrative officer 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. 1063.159. DEPOSITORY. (a) The board shall select one or more banks in the district to serve as a depository for district money.

(b) District money, other than money invested as provided by Section 1063.160, and money transmitted to a bank for payment of bonds or obligations issued or assumed by the district, shall be deposited as received with the depository bank and shall remain on deposit.

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

(d) The district may not deposit money with a bank in an amount that exceeds the maximum amount secured by the Federal Deposit Insurance Corporation unless the bank first executes a bond or other security in an amount sufficient to secure from loss the amount of district money that exceeds the amount secured by the Federal Deposit Insurance Corporation. (Acts 65th Leg., R.S., Ch. 258, Sec. 12.)

Source Law

Sec. 12. (a) The board of directors of the district shall name one or more banks within its boundaries to serve as depository for the funds of the district. All funds of the district, except those invested as provided in Section 5 of this Act and those transmitted to a bank or banks of payment for bonds or obligations issued or assumed by the district, shall be deposited as received with the depository bank and shall remain on deposit; provided that nothing in this Act shall limit the power of the board to place a portion of such funds on time deposit or purchase certificates of deposit.

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

Revised Law

Sec. 1063.160. SPENDING AND INVESTMENT RESTRICTIONS. (a) Except as otherwise provided by Section 1063.107(d) and by Subchapter E, 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 funds or securities specified by Chapter 2256, Government Code. (Acts 65th Leg., R.S., Ch. 258, Secs. 5(a) (part), 11(c) (part).)

Source Law

Sec. 5. (a) … in no event shall any operating, depreciation, or building reserves be invested in any funds or securities other than those specified in Article 836 or 837, Revised Civil Statutes of Texas, 1925, as amended… .

[Sec. 11]

(c) … Except as permitted in the preceding sentence and as permitted by Sections 5, 8, 9, and 10 of this Act, the district may incur no obligation payable from any revenues of the district, 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 258, Acts of the 65th Legislature, Regular Session, 1977, refers to "Article 836 or 837, Revised Civil Statutes of Texas, 1925, as amended." Those articles were impliedly repealed by the enactment of the Public Funds Investment Act of 1987 (Article 842a-2, Vernon's Texas Civil Statutes), which was revised in 1993 as Chapter 2256, Government Code. Chapter 2256 defines "local government" to include hospital districts and applies to the district by its own terms. The revised law therefore substitutes a reference to Chapter 2256, Government Code, for the references to Articles 836 and 837.

(2) Section 11(c), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, states that "[e]xcept as permitted in the preceding sentence and as permitted by Sections 5, 8, 9, and 10," the district may not incur certain obligations. The "preceding sentence" in Section 11(c) is revised in Section 1063.107(d). Section 5 does not include any authority for the district to incur obligations. As explained in the revisor's note to the end of Subchapter A, Section 9 is omitted from the revised law as executed. Sections 8 and 10 are revised in Subchapter E. The revised law is drafted accordingly.

[Sections 1063.161-1063.200 reserved for expansion]

SUBCHAPTER E. BONDS

Revised Law

Sec. 1063.201. GENERAL OBLIGATION BONDS. The board may issue and sell general obligation bonds in the name and on the faith and credit of the district for any purpose relating to:

(1) the purchase, construction, acquisition, repair, or renovation of buildings or improvements; and

(2) equipping buildings or improvements for health care or hospital purposes. (Acts 65th Leg., R.S., Ch. 258, Sec. 8(a) (part).)

Source Law

Sec. 8. (a) The board of directors shall have the power and authority to issue and sell its bonds in the name and on the faith and credit of the hospital district for the purchase, construction, acquisition, repair, or renovation of buildings and improvements and equipping the same for health care or hospital purposes, and for any or all such purposes… .

Revisor's Note

Section 8(a), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides that the board has the power and authority to issue and sell bonds in the name and on the faith and credit of the district. Because the type of bonds described by Section 8(a) are known as "general obligation bonds," the revised law is drafted accordingly.

Revised Law

Sec. 1063.202. TAX TO PAY GENERAL OBLIGATION BONDS. (a) At the time general obligation bonds are issued by the district under Section 1063.201, the board shall impose an ad valorem tax at a rate sufficient to create an interest and sinking fund to pay the principal of and interest on the bonds as the bonds mature.

(b) The tax required by this section together with any other ad valorem tax the district imposes may not in any year exceed 75 cents on each $100 valuation of all taxable property in the district subject to hospital district taxation. (Acts 65th Leg., R.S., Ch. 258, Sec. 8(a) (part).)

Source Law

(a) … At the time of the issuance of any 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 the tax together with any other taxes levied for the district shall not exceed 75 cents on each $100 valuation of all taxable property situated in the district subject to hospital district taxation in any one year… .

Revisor's Note

Section 8(a), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, 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. 1063.203. 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.

(b) The election order must provide for clerks as in county elections and must specify:

(1) the date of the election;

(2) the location of the polling places;

(3) the presiding and alternate election judges for each polling place;

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

(5) the maximum maturity of the bonds.

(c) Notice of a bond election shall be given as provided by Section 1251.003, Government Code. (Acts 65th Leg., R.S., Ch. 258, Sec. 8(a) (part).)

Source Law

(a) … No bonds shall be issued by such hospital district … until authorized by a majority of the electors of the district. The order for bond election shall specify the date of the election, the amount of bonds to be authorized, the maximum maturity of the bonds, the place or places where the election shall be held, the presiding judge and alternate judge for each voting place, and provide for clerks as in county elections. Notice of any bond election … shall be given as provided in Article 704, Revised Civil Statutes of Texas, 1925, as amended, and shall be conducted in accordance with the Texas Election Code, as amended, except as modified by the provisions of this Act.

Revisor's Note

(1) Section 8(a), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides that notice of a bond election under Section 9 must be given as provided under Section 3. As explained in the revisor's note to the end of Subchapter A, the relevant provisions of Sections 3 and 9, Chapter 258, are executed. The revised law therefore omits the provision. The omitted law reads:

(a) … [Notice of any bond election] except one held under the provisions of Section 9 of this Act, in which instance notice shall be given as provided in Section 3 of this Act, … .

(2) Section 8(a), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, 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.

(3) Section 8(a), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides that a bond election "shall be conducted in accordance with the Texas Election Code, as amended, 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. 1063.204. MATURITY OF GENERAL OBLIGATION BONDS. District general obligation bonds must mature not later than 40 years after the date of issuance. (Acts 65th Leg., R.S., Ch. 258, Sec. 8(c) (part).)

Source Law

Revised Law

Sec. 1063.205. EXECUTION OF GENERAL OBLIGATION BONDS. (a) The board president shall execute the general obligation bonds in the district's name.

(b) The board secretary shall countersign the bonds in the manner provided by Chapter 618, Government Code. (Acts 65th Leg., R.S., Ch. 258, Sec. 8(c) (part).)

Source Law

(c) [Bonds of the district] … shall be executed in the name of the hospital district and on 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), … .

Revisor's Note

(1) Section 8(c), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, 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 8(c), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides that general obligation bonds issued under Chapter 258 must bear interest at a rate not to exceed that provided by Chapter 3, Acts of the 61st Legislature, Regular Session, 1969, as amended (Article 717k-2, Vernon's Texas Civil Statutes). The maximum interest rate noted in Chapter 3 was revised in 1999 as Section 1204.006, Government Code. Section 1204.006, Government Code, permits a public agency, including a hospital district, to issue public securities at any net effective interest rate of 15 percent or less and applies to the district under Section 1204.001, Government Code. The revised law omits the reference because it duplicates Section 1204.006, Government Code. The omitted law reads:

(c) [Bonds of the district] … shall bear interest at a rate not to exceed that prescribed by Chapter 3, Acts of the 61st Legislature, Regular Session, 1969, as amended (Article 717k-2, Vernon's Texas Civil Statutes), and … .

(3) Section 8(c), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides that the general obligation bonds are subject to the law governing counties that relates to bond approval by the attorney general and registration of the bonds by the comptroller. Section 8(c) also provides that after approval and registration the bonds are "incontestable for any cause." The revised law omits those provisions as superseded by Chapter 1202, Government Code (enacted as Article 3, Chapter 53, Acts of the 70th Legislature, 2nd Called Session, 1987). Section 1202.003(a), Government Code, requires bonds to be submitted to the attorney general. Section 1202.003(b), Government Code, provides for approval of the bonds by the attorney general and requires the attorney general to submit the approved bonds to the comptroller for registration. Section 1202.005, Government Code, requires registration of the bonds by the comptroller. Section 1202.006, Government Code, provides that after approval and registration the bonds are incontestable and binding obligations. Chapter 1202, Government Code, applies to bonds issued under this chapter by application of Section 1202.001, Government Code. The omitted law reads:

(c) [Bonds of the district] … shall be subject to the same requirements in the manner of approval by the Attorney General 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. On the approval of the bonds by the attorney general and registration by the comptroller, the same shall be incontestable for any cause.

Revised Law

Sec. 1063.206. REVENUE BONDS. (a) The district may issue revenue bonds or certificates of obligation or may incur or assume any other debt only if authorized by a majority of the district voters voting in an election held for that purpose. This subsection does not apply to refunding bonds or other debt incurred solely to refinance an outstanding debt.

(b) The board may issue revenue bonds to:

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

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

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

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

(e) 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 65th Leg., R.S., Ch. 258, Secs. 9A, 10 (part).)

Source Law

Sec. 9A. The district may issue revenue bonds or certificates of obligation or may incur or assume any other debt only if authorized by a majority of the voters of the district voting in an election held for that purpose. This section does not apply to refunding bonds or other debt incurred solely to refinance an outstanding debt.

Sec. 10. In addition to the power to issue bonds payable from taxes levied by the district, as contemplated by Section 8 of this Act, the board of directors is further authorized to issue and … revenue bonds for purchasing, constructing, acquiring, repairing, equipping, or renovating buildings and improvements for health care or hospital purposes and for acquiring sites for health care or hospital purposes, the 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 health care facilities. The bonds may be additionally secured by a mortgage or deed of trust lien on any part or all of its properties. The bonds shall be issued in the manner and in accordance with the procedures and requirements specified for the issuance of revenue bonds by county hospital authorities in Sections 8 and 10 through 13 of Chapter 122, Acts of the 58th Legislature, 1963 (Article 4494r, Vernon's Texas Civil Statutes).

Revisor's Note

(1) Section 10, Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides that the district has the authority to issue revenue bonds "[i]n addition to the power to issue bonds payable from taxes levied by the district, as contemplated by Section 8 of this Act." The revised law omits the quoted language as unnecessary because an accepted general principle of statutory construction requires a statute to be given cumulative effect with other statutes unless it provides otherwise or unless the statutes are in conflict. The general principle applies to this revision.

(2) Section 10, Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, refers to Sections 8 and 10 through 13 of Chapter 122, Acts of the 58th Legislature, 1963 (Article 4494r, Vernon's Texas Civil Statutes). Those provisions were codified in 1989 as Sections 264.042, 264.043, 264.046, 264.047, 264.048, and 264.049, Health and Safety Code. The revised law is drafted accordingly.

Revised Law

Sec. 1063.207. REFUNDING BONDS. (a) The board may, without an election, issue refunding bonds to refund outstanding indebtedness issued or assumed by the district.

(b) A refunding bond may be:

(1) sold, with the proceeds of the refunding bond 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 65th Leg., R.S., Ch. 258, Secs. 8(a) (part), (b) (part), 10 (part).)

Source Law

Sec. 8. (a) … [No bonds shall be issued by such hospital district] except refunding bonds [until authorized by a majority of the electors of the district]… .

(b) Refunding bonds of the district may be issued for the purpose of refunding and paying off any outstanding indebtedness it has issued or assumed. Such refunding bonds may be sold and the proceeds thereof 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 outstanding indebtedness… .

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

Revisor's Note

Section 8(b), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, 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). In addition, the section provides that refunding bonds must be issued in conformity with Chapter 784, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-3, Vernon's Texas Civil Statutes). Articles 717k and 717k-3 were codified in 1999 as Chapter 1207, Government Code. The revised law omits the provisions because Chapter 1207, Government Code, applies to the district by its own terms under Section 1207.001, Government Code. The omitted law reads:

(b) … If the refunding bonds are to be sold and the proceeds applied to the payment of any outstanding indebtedness, the refunding bonds shall be issued and payments made in the manner specified by Chapter 503, Acts of the 54th Legislature, 1955, as amended (Article 717k, Vernon's Texas Civil Statutes). Refunding bonds shall be issued in conformity with Chapter 784, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-3, Vernon's Texas Civil Statutes).

Revised Law

Sec. 1063.208. BONDS EXEMPT FROM TAXATION. The following are exempt from taxation by this state or a political subdivision of this state:

(1) bonds issued by the district;

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

(3) profits made in the sale of the bonds. (Acts 65th Leg., R.S., Ch. 258, Sec. 22 (part).)

Source Law

Sec. 22. … any bonds issued 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 22, Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, refers to "any municipality or political subdivision" of this state. The revised law omits "municipality" because that term is included in the meaning of "political subdivision" of this state.

Revised Law

Sec. 1063.209. TAX ANTICIPATION NOTES. (a) The board may:

(1) declare an emergency because money is not available to:

(A) pay the principal of and interest on any district bonds payable wholly or partly from taxes; or

(B) meet any other needs of the district; and

(2) issue negotiable tax anticipation notes to borrow the money the district needs.

(b) Tax anticipation notes may be issued for any purpose for which the district may impose taxes.

(d) Tax anticipation notes must mature not later than one year after the date of issuance.

(e) Tax anticipation notes must be secured by the proceeds of taxes to be imposed by the district in the succeeding 12-month period.

(f) The board may covenant with the note purchasers that the board will impose a sufficient tax in the following fiscal year to pay the principal of and interest on the notes and pay the costs of collecting the taxes. (Acts 65th Leg., R.S., Ch. 258, Sec. 11(d).)

Source Law

(d) The board may declare an emergency in the matter of funds not being available to pay principal of and interest on any bonds of the district payable in whole or in part from taxes or to meet any other needs of the district and may issue negotiable tax anticipation notes to borrow the money needed by the district. Tax anticipation notes may bear interest at any rate or rates authorized by general law and must mature within one year of their date. Tax anticipation notes may be issued for any purpose for which the district is authorized to levy taxes, and tax anticipation notes shall be secured with the proceeds of taxes to be levied by the district in the succeeding 12-month period. The board may covenant with the purchasers of the notes that the board will levy a sufficient tax in the following fiscal year to pay principal of and interest on the notes and pay the costs of collecting the taxes.

Revised Law

Sec. 1063.210. CERTIFICATES OF OBLIGATION. (a) The district may issue and sell certificates of obligation for a purpose permitted under this chapter.

(b) The certificates of obligation must be issued and sold in conformity with and in the manner specified for a municipality or county by Subchapter C, Chapter 271, Local Government Code. (Acts 65th Leg., R.S., Ch. 258, Sec. 8(d).)

Source Law

(d) The district shall have the same power and authority as cities and counties under The Certificate of Obligation Act of 1971 (Article 2368a.1, Vernon's Texas Civil Statutes) to issue and sell certificates of obligation for permitted purposes under this Act in accordance with the provisions of The Certificate of Obligation Act. Certificates of obligation shall be issued in conformity with and in the manner specified in The Certificate of Obligation Act, as it may be amended from time to time.

Revisor's Note

(1) Section 8(d), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, refers to "[t]he Certificate of Obligation Act" (Article 2368a.1, Vernon's Texas Civil Statutes). That statute was codified in 1987 as Subchapter C, Chapter 271, Local Government Code, and the revised law is drafted accordingly.

(2) Section 8(d), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, refers to the Certificate of Obligation Act "as it may be amended from time to time." The revised law omits the quoted language for the reason stated in Revisor's Note (4) to Section 1063.107.

Revisor's Note

(End of Subchapter)

(1) Section 14, Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides that bonds issued under that act are authorized investments for certain entities. The revised law omits the provision as unnecessary. As to several of the entities listed, Section 14 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 14 is superseded by Section 1201.041, Government Code, enacted as Section 9, Bond Procedures Act of 1981 (Article 717k-6, Vernon's Texas Civil Statutes). Section 1201.041, Government Code, applies to bonds issued under this chapter by application of Section 1201.002, Government Code. The revised law omits the reference to 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. 14. All bonds issued and indebtedness assumed by the district shall be and are hereby declared to be legal and authorized investments of banks, savings banks, trust companies, building and loan associations, savings and loan associations, insurance companies, trustees, and sinking funds of cities, towns, villages, counties, school districts, or other political subdivisions of the State of Texas, and for all public funds of the State of Texas or its agencies including the Permanent School Fund… .

(2) Section 14, Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, effectively provides that bonds issued under that chapter may secure deposits of public funds of this state or political subdivisions of this state. The revised law omits the provision as impliedly repealed by Section 404.0221, Government Code (enacted in 1995), which lists eligible collateral for deposits of state funds by the comptroller, and by Chapter 2257, Government Code (enacted in 1989 as Article 2529d, Vernon's Texas Civil Statutes), which governs eligible collateral for deposits of funds of other public agencies, including political subdivisions. The omitted law reads:

Sec. 14. … 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 1063.211-1063.250 reserved for expansion]

SUBCHAPTER F. TAXES

Revised Law

Sec. 1063.251. IMPOSITION OF AD VALOREM TAX. (a) The board shall impose an ad valorem tax on all taxable property in the district subject to district taxation.

(b) The board shall impose the tax to pay:

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

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

(c) The board may not impose a tax to pay the principal of or interest on revenue bonds issued under this chapter. (Acts 65th Leg., R.S., Ch. 258, Secs. 13(a) (part), 16(a) (part).)

Source Law

Sec. 13. (a) The board of directors shall annually levy a tax … for the purpose of paying:

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

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

Sec. 16. (a) … Hospital tax shall be levied upon all taxable property within the district subject to hospital district taxation.

Revisor's Note

Section 16(a), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides that the district may impose taxes for the entire year in which the district is established. The revised law omits that provision as executed. The omitted law reads:

Sec. 16. (a) The directors shall have the authority to levy taxes for the entire year in which the district is created as the result of the election herein provided… .

Revised Law

Sec. 1063.252. TAX RATE. (a) The board may impose the tax at a rate not to exceed 75 cents on each $100 valuation of taxable property in the district subject to district taxation.

(b) In setting the tax rate, the board shall consider the income of the district from sources other than taxation. (Acts 65th Leg., R.S., Ch. 258, Secs. 3(b) (part), 13(a) (part), (b) (part).)

Source Law

[Sec. 3]

(b) … [hospital district shall be created with authority to levy annual taxes] at a rate not to exceed 75 cents on the $100 valuation on all taxable property situated within the hospital district, subject to hospital district taxation, … .

Sec. 13. (a) [The board of directors shall annually levy a tax] not to exceed the amount hereinabove permitted … .

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

Revisor's Note

Section 13(b), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, 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 for the unit of that rate. The omitted law reads:

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

Revised Law

Sec. 1063.253. ASSESSMENT AND COLLECTION BY COUNTY TAX ASSESSOR-COLLECTOR. (a) This section applies unless the board elects to have district taxes assessed and collected under Section 1063.254.

(b) The tax assessor-collector of Montgomery County shall assess and collect taxes imposed by the district. (Acts 65th Leg., R.S., Ch. 258, Secs. 16(a) (part), (b) (part).)

Source Law

(a) … unless the directors, by majority vote, elect to have taxes assessed and collected by its own tax assessor-collector under Subsection (c) of this section… .

(b) … The tax assessor-collector of the county in which the district is situated shall be charged and required to accomplish the assessment and collection of all taxes levied by and on behalf of the district… .

Revisor's Note

(1) Sections 16(a) and (b), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, refer to the assessment and collection of district taxes on county tax values. The revised law omits those provisions because they were repealed by Section 6(b), Chapter 841, Acts of the 66th Legislature, Regular Session, 1979, which repealed all "general, local, and special laws" that conflicted with that act. The 1979 act enacted the Property Tax Code (Title 1, Tax Code), a comprehensive, substantive codification of property tax law. Title 1, Tax Code, provides the exclusive procedures for the appraisal of property for taxation by a taxing unit, including a hospital district. The omitted law reads:

(a) … All taxes of the district shall be assessed and collected on county tax values as provided in Subsection (b) of this section … .

(b) Under this subsection, district taxes shall be assessed and collected on county tax values in the same manner as provided by law with relation to county taxes… .

(2) Section 16(b), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, refers to the tax assessor-collector "of the county in which the district is situated." The revised law substitutes "Montgomery County" for the quoted language because that is the county in which the district is located.

(3) Section 16(b), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides that the county tax assessor-collector may charge a fee for the assessment and collection of district taxes. The revised law omits that provision because it was repealed by Section 6(b), Chapter 841, Acts of the 66th Legislature, Regular Session, 1979. See Revisor's Note (1). Section 6.27(b), Tax Code, provides for the compensation of a county tax assessor-collector assessing and collecting taxes for another taxing unit. The omitted law reads:

(b) … The assessor-collector of taxes shall charge and deduct from payments to the hospital district an amount as fees for assessing and collecting the taxes at a rate of one percent of the taxes assessed and one percent of the taxes collected but in no event shall the amount paid exceed $5,000 in any one calendar year. Such fees shall be deposited in the officers salary fund of the county and reported as fees of office of the county tax assessor-collector… .

(4) Section 16(b), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides that interest and penalties on district taxes and discounts are the same as for county taxes. The revised law omits those provisions as unnecessary. Section 1.02, Tax Code, requires all taxing units of government to administer the assessment, collection, and enforcement of taxes in conformity with Title 1, Tax Code. Chapter 33, Tax Code, provides for the assessment of penalties and interest on delinquent taxes, and Section 31.05, Tax Code, provides for local option discounts on the early payment of taxes. The omitted law reads:

(b) … Interest and penalties on taxes paid to the hospital district shall be the same as in the case of county taxes. Discounts shall be the same as allowed by the county… .

(5) Section 16(b), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides that tax revenue shall be deposited in the district's depository. The revised law omits the provision because Section 31.10, Tax Code, requires the tax assessor-collector of a taxing unit to deposit taxes collected in the unit's depository. The omitted law reads:

(b) … The residue of tax collections after deduction of discounts and fees for assessing and collecting shall be deposited in the district's depository… .

(6) Section 16(b), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides that the bond of the county tax assessor-collector is security for the performance of district duties unless the board determines that an additional bond is necessary. The revised law omits that provision because it duplicates Section 6.29(b), Tax Code, which authorizes a taxing unit for which the county tax assessor-collector collects a tax to require that collector to post an additional bond. The omitted law reads:

(b) … The bond of the county tax assessor-collector shall stand as security for the proper performance of his duties as assessor-collector of the district, or if in the judgment of the district board of directors it is necessary, additional bond payable to the district may be required. …

(7) Section 16(b), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, states that the tax assessor-collector may act in accordance with state law relating to the assessment, collection, and enforcement of state and county taxes. The revised law omits that provision as unnecessary. The state law relating to the assessment, collection, and enforcement of all ad valorem taxes is Title 1, Tax Code. Section 1.02, Tax Code, requires all taxing units of government to administer the assessment, collection, and enforcement of taxes in conformity with that title. The omitted law reads:

(b) … In all matters pertaining to the assessment, collection, and enforcement of taxes for the district, the county tax assessor-collector shall be authorized to act in all respects according to the laws of the State of Texas relating to state and county taxes.

Revised Law

Sec. 1063.254. ASSESSMENT AND COLLECTION BY APPOINTMENT OR CONTRACT. (a) The board may elect to:

(1) appoint a tax assessor-collector to assess and collect district taxes; or

(2) contract for the assessment and collection of taxes as provided by the Tax Code.

(b) An election under this section must be made by December 1 and governs the manner in which taxes are assessed and collected, until changed by a similar resolution.

(1) the term of employment; and

(2) compensation. (Acts 65th Leg., R.S., Ch. 258, Secs. 16(a) (part), (c) (part).)

Source Law

(a) … Any such election may be made prior to December 1 annually and shall govern the manner in which taxes are subsequently assessed and collected until changed by a similar resolution… .

(c) Under this subsection, taxes may be assessed and collected by a tax assessor-collector appointed by the directors, who shall also fix the term of his employment, compensation, and … or the district may contract for the assessment and collection of taxes as provided by the Tax Code.

Revisor's Note

Section 16(c), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, requires the board to set a bond amount of not less than $5,000 as security for the appointed tax assessor-collector. The revised law omits the provision because it was repealed by Section 6(b), Chapter 841, Acts of the 66th Legislature, Regular Session, 1979. See Revisor's Note (1) to Section 1063.253. Section 6.29(a), Tax Code, authorizes the governing body of a taxing unit, including a hospital district, to require the unit's tax assessor-collector to post bond without limiting the amount. The omitted law reads:

(c) … [directors, who shall also fix the] . . . requirement for bond to assure the faithful performance of his duties, but in no event shall such bond be for less than $5,000, … .

Revised Law

Sec. 1063.255. PETITION AND ORDER FOR ELECTION TO REDUCE TAX RATE. (a) Notwithstanding Section 26.07(b)(3), Tax Code, a petition to require an election under Section 26.07, Tax Code, on reducing the district's tax rate to the rollback tax rate shall be submitted to the Montgomery County elections administrator instead of to the board.

(b) Notwithstanding Section 26.07(c), Tax Code, not later than the 20th day after the date a petition is submitted under Subsection (a), the elections administrator shall:

(1) determine whether the petition is valid under Section 26.07, Tax Code; and

(2) certify the determination of the petition's validity to the board.

(c) If the elections administrator fails to act within the time allowed, the petition is treated as if it had been found valid.

(d) Notwithstanding Section 26.07(d), Tax Code, if the elections administrator certifies to the board that the petition is valid or fails to act within the time allowed, the board shall order that an election under Section 26.07, Tax Code, to determine whether to reduce the district's tax rate to the rollback rate be held in the district in the manner prescribed by Section 26.07(d) of that code.

(e) The district shall reimburse the elections administrator for reasonable costs incurred in performing the duties required by this section. (Acts 65th Leg., R.S., Ch. 258, Sec. 13A.)

Source Law

Sec. 13A. (a) Notwithstanding Section 26.07(b)(3), Tax Code, a petition to require an election under Section 26.07, Tax Code, on reducing the district's tax rate to the rollback tax rate shall be submitted to the county elections administrator of Montgomery County instead of to the board of directors of the district.

(b) Notwithstanding Section 26.07(c), Tax Code, not later than the 20th day after the day a petition is submitted under Subsection (a) of this section, the county elections administrator shall:

(1) determine whether the petition is valid under Section 26.07, Tax Code; and

(2) certify the determination of the petition's validity to the board of directors of the district.

(c) If the county elections administrator fails to act within the time allowed, the petition is treated as if it had been found valid.

(d) Notwithstanding Section 26.07(d), Tax Code, if the county elections administrator certifies to the board of directors that the petition is valid or fails to act within the time allowed, the board of directors shall order that an election under Section 26.07, Tax Code, to determine whether to reduce the district's tax rate to the rollback rate be held in the district in the manner prescribed by Section 26.07(d) of that code.

(e) The district shall reimburse the county elections administrator for reasonable costs incurred in performing the duties required by this section.

[Sections 1063.256-1063.300 reserved for expansion]

SUBCHAPTER G. DISSOLUTION

Revised Law

Sec. 1063.301. DISSOLUTION ELECTION; PETITION. (a) The board may order an election on the question of dissolving the district and disposing of the district's assets and obligations.

(b) The board shall order an election on the question of dissolving the district and disposing of the district's assets and obligations if the board receives a petition by district residents requesting an election that:

(1) is certified as valid by the Montgomery County elections administrator under Section 1063.302; or

(2) the Montgomery County elections administrator fails to act on within the time allowed by Section 1063.302.

(1) state that it is intended to request an election in the district on the question of dissolving the district and disposing of the district's assets and obligations;

(2) be signed by a number of district residents equal to at least 15 percent of the total vote received by all candidates for governor in the most recent gubernatorial general election in the district that occurs more than 30 days before the date the petition is submitted; and

(3) be submitted to the Montgomery County elections administrator. (Acts 65th Leg., R.S., Ch. 258, Secs. 23A(a), 23B(a), (a-3).)

Source Law

Sec. 23A. (a) The board of directors may order an election on the question of dissolving the district and disposing of the district's assets and obligations.

Sec. 23B. (a) The residents of the district by petition may request the board of directors to order an election on the question of dissolving the district and disposing of the district's assets and obligations. A petition must:

(1) state that it is intended to request an election in the district on the question of dissolving the district and disposing of the district's assets and obligations;

(2) be signed by a number of residents of the district equal to at least 15 percent of the total vote received by all candidates for governor in the most recent gubernatorial general election in the district that occurs more than 30 days before the date the petition is submitted; and

(3) be submitted to the county elections administrator of Montgomery County.

(a-3) If the county elections administrator certifies to the board of directors that the petition is valid or fails to act within the time allowed, the board of directors shall order that a dissolution election be held in the district in the manner prescribed by this section.

Revised Law

Sec. 1063.302. VALIDITY OF PETITION FOR ELECTION. (a) Not later than the 30th day after the date a petition requesting the dissolution of the district is submitted under Section 1063.301, the Montgomery County elections administrator shall:

(1) determine whether the petition is valid; and

(2) certify the determination of the petition's validity to the board.

(b) If the elections administrator fails to act within the time allowed, the petition is treated as if it had been found valid.

(c) If a petition submitted under Section 1063.301 does not contain the necessary number of valid signatures, the district residents may not submit another petition under Section 1063.301 before the third anniversary of the date the invalid petition was submitted.

(d) The district shall reimburse the county elections administrator for reasonable costs incurred in performing the duties required by this section. (Acts 65th Leg., R.S., Ch. 258, Secs. 23B(a-1), (a-2), (a-4), (a-5).)

Source Law

(a-1) Not later than the 30th day after the date a petition requesting the dissolution of the district is submitted under Subsection (a) of this section, the county elections administrator shall:

(1) determine whether the petition is valid; and

(2) certify the determination of the petition's validity to the board of directors of the district.

(a-2) If the county elections administrator fails to act within the time allowed, the petition is treated as if it had been found valid.

(a-4) If a petition submitted under Subsection (a) of this section does not contain the necessary number of valid signatures, the residents of the district may not submit another petition under Subsection (a) of this section before the third anniversary of the date the invalid petition was submitted.

(a-5) The district shall reimburse the county elections administrator for reasonable costs incurred in performing the duties required by this section.

Revised Law

Sec. 1063.303. ELECTION DATE. An election under this subchapter shall be held on the earlier of the following dates that occurs at least 90 days after the date on which the election is ordered:

(1) the uniform election date in May; or

(2) the date of the general election for state and county officers. (Acts 65th Leg., R.S., Ch. 258, Secs. 23A(b), 23B(b).)

Source Law

[Sec. 23A]

(b) The election shall be held on the earlier of the following dates that occurs at least 90 days after the date on which the election is ordered:

(1) the first Saturday in May; or

(2) the date of the general election for state and county officers.

[Sec. 23B]

(b) The election shall be held on the earlier of the following dates that occurs at least 90 days after the date on which the election is ordered:

(1) the first Saturday in May; or

(2) the date of the general election for state and county officers.

Revisor's Note

Sections 23A(b) and 23B(b), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, as added by Chapter 747, Acts of the 76th Legislature, Regular Session, 1999, provide for an election under either section to be held on the first Saturday in May or the date of the general election for state and county officers. The revised law substitutes "uniform election date in May" for "first Saturday in May" for the reason stated in Revisor's Note (2) to Section 1063.051.

Revised Law

Sec. 1063.304. BALLOT. The ballot for an election under this subchapter must be printed to permit voting for or against the proposition: "The dissolution of the Montgomery County Hospital District." (Acts 65th Leg., R.S., Ch. 258, Secs. 23A(c) (part), 23B(c) (part).)

Source Law

[Sec. 23A]

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

[Sec. 23B]

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

Revisor's Note

Sections 23A(c) and 23B(c), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, require an election on the dissolution of the district to be held in accordance with the applicable provisions of the Election Code. The revised law omits the requirement because it duplicates Section 1.002, Election Code, which provides that the Election Code applies to all elections held in this state. The omitted law reads:

[Sec. 23A]

[Sec. 23B]

Revised Law

Sec. 1063.305. 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:

(1) the fourth anniversary of the date of the most recent election to dissolve the district if the board called the election under Section 1063.301(a); or

(2) the third anniversary of the date of the most recent election to dissolve the district if the board called the election under Section 1063.301(b). (Acts 65th Leg., R.S., Ch. 258, Secs. 23A(d), 23B(d).)

Source Law

[Sec. 23A]

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

[Sec. 23B]

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

Revisor's Note

Sections 23A(d) and 23B(d), Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provide timelines for subsequent elections on the question of dissolution in the event that the majority of votes in an election do not favor dissolution. The timelines vary according to the method of calling the election. Those methods are revised in Subsections (a) and (b) of Section 1063.301, and the revised law is drafted accordingly.

Revised Law

Sec. 1063.306. TRANSFER, SALE, OR ADMINISTRATION OF ASSETS IF ELECTION INITIATED BY BOARD. (a) This section, Section 1063.307, and Section 1063.308 apply to an election called under Section 1063.301(a).

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

(1) transfer the ambulance service and related equipment, any vehicles, and any mobile clinics and related equipment that belong to the district to Montgomery County not later than the 45th day after the date on which the election is held; and

(2) transfer the land, buildings, improvements, equipment not described by Subdivision (1), and other assets that belong to the district to Montgomery County or administer the property, assets, and debts in accordance with Subsection (e) and Sections 1063.307 and 1063.308.

(c) The county assumes all debts and obligations of the district relating to the ambulance service and related equipment, any vehicles, and any mobile clinics and related equipment at the time of the transfer.

(d) If the district makes the transfer under Subsection (b)(2), the county assumes all debts and obligations of the district relating to those assets at the time of the transfer, and the district is dissolved.

(e) If the board finds that the district is dissolved but does not transfer the land, buildings, improvements, equipment, and other assets to Montgomery County under Subsection (b)(2), the board shall continue to control and administer that property and those assets and the related district debts until all money has been disposed of and all district debts have been paid or settled.

(f) The county shall use all transferred assets to:

(1) pay the outstanding debts and obligations of the district relating to the assets at the time of the transfer; or

(2) provide medical and hospital care for needy county residents. (Acts 65th Leg., R.S., Ch. 258, Secs. 23A(e), (f), (g).)

Source Law

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

(2) transfer the land, buildings, improvements, equipment not described by Subdivision (1) of this subsection, and other assets that belong to the district to Montgomery County or administer the property, assets, and debts in accordance with Subsections (g)-(k) of this section.

(f) The county assumes all debts and obligations of the district relating to the ambulance service and related equipment, any vehicles, and any mobile clinics and related equipment at the time of the transfer. If the district also transfers the land, buildings, improvements, equipment, and other assets to Montgomery County under Subsection (e)(2) of this section, the county assumes all debts and obligations of the district relating to those assets at the time of the transfer and the district is dissolved. The county shall use all transferred assets to:

(1) pay the outstanding debts and obligations of the district relating to the assets at the time of the transfer; or

(2) furnish medical and hospital care for the needy residents of the county.

(g) If the board of directors finds that the district is dissolved but does not transfer the land, buildings, improvements, equipment, and other assets to Montgomery County under Subsection (e)(2) of this section, the board of directors shall continue to control and administer that property and those assets and the related debts of the district until all funds have been disposed of and all district debts have been paid or settled.

Revised Law

Sec. 1063.307. 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 on 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:

(1) to each district taxpayer the taxpayer's pro rata share of all unused tax money; and

(2) to Montgomery County all unused district money from any other source.

(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 send the money to the county tax assessor-collector.

(d) Montgomery County shall use unused district money received under this section to provide medical and hospital care for needy county residents.

(e) The board may institute a suit to enforce payment of taxes under this section and to foreclose liens to secure the payment of the taxes. (Acts 65th Leg., R.S., Ch. 258, Secs. 23A(h), (i), (j).)

Source Law

(h) After the board of directors finds that the district is dissolved, the board of directors 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) The board of directors may institute a suit to enforce payment of taxes and to foreclose liens to secure the payment of taxes due the district.

(j) When all outstanding debts and obligations of the district are paid, the board of directors shall order the secretary to return the pro rata share of all unused tax money to each district taxpayer and all unused district money from any other source to Montgomery County. A taxpayer may request that the taxpayer's share of surplus tax money be credited to the taxpayer's county taxes. If a taxpayer requests the credit, the board of directors shall direct the secretary to transmit the funds to the county tax assessor-collector. Montgomery County shall use unused district money received under this section to furnish medical and hospital care for the needy residents of the county.

Revised Law

Sec. 1063.308. 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 Montgomery County summarizing the board's actions in dissolving the district.

(b) Not later than the 10th day after the date the Commissioners Court of Montgomery 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. (Acts 65th Leg., R.S., Ch. 258, Sec. 23A(k).)

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 of directors shall file a written report with the Commissioners Court of Montgomery County setting forth a summary of the board of directors' actions in dissolving the district. Not later than the 10th day after it receives the report and determines that the requirements of this section have been fulfilled, the commissioners court shall enter an order dissolving the district.

Revised Law

Sec. 1063.309. TRANSFER, SALE, OR ADMINISTRATION OF ASSETS IF ELECTION INITIATED BY DISTRICT PETITION. (a) This section applies to an election called under Section 1063.301(b).

(b) If a majority of the votes in the election favor dissolution, the board shall transfer the land, buildings, improvements, equipment, and other assets that belong to the district to Montgomery County not later than the 45th day after the date on which the election is held.

(c) The county assumes all debts and obligations of the district at the time of the transfer, and the district is dissolved.

(d) The county should use all transferred assets in a manner that benefits county residents residing in territory formerly constituting the district.

(e) The county shall use all transferred assets to:

(1) pay the outstanding debts and obligations of the district relating to the assets at the time of the transfer; or

(2) provide medical and hospital care for needy county residents. (Acts 65th Leg., R.S., Ch. 258, Sec. 23B(e).)

Source Law

(e) If a majority of the votes in the election favor dissolution, the board of directors shall transfer the land, buildings, improvements, equipment, and other assets that belong to the district to Montgomery County not later than the 45th day after the date on which the election is held. The county assumes all debts and obligations of the district at the time of the transfer and the district is dissolved. The county should use all transferred assets in a manner that benefits residents of the county residing in territory formerly constituting the district. The county shall use all transferred assets to:

(1) pay the outstanding debts and obligations of the district relating to the assets at the time of the transfer; or

(2) furnish medical and hospital care for the needy residents of the county.

Revisor's Note

(End of Subchapter)

Section 2, Chapter 529, Acts of the 78th Legislature, Regular Session, 2003, and Section 3, Chapter 476, Acts of the 79th Legislature, Regular Session, 2005, provide transition procedures related to petitions to dissolve the district. The revised law omits those provisions as executed. The omitted law reads:

[Acts 78th Leg., R.S., Ch. 529]

Sec. 2. This Act takes effect September 1, 2004, and applies only to a petition requesting the dissolution of the district filed on or after that date.

[Acts 79th Leg., R.S., Ch. 476]

Sec. 3. The change in law made by this Act applies only to a petition filed on or after the effective date of this Act. A petition filed before the effective date of this Act is governed by the law in effect on the date the petition was filed, and the former law is continued in effect for that purpose.

Revisor's Note

(End of Chapter)

(1) Sections 2 and 20, Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provide for the transfer of certain land, buildings, improvements, equipment, funds, and taxes to the district after the district is created and provide for the assumption of debt by the district on creation. The revised law omits the provisions as executed. The omitted law reads:

Sec. 2. [The district] shall take over and there shall be transferred to it title to all land, buildings, improvements, and equipment pertaining to the hospitals or hospital system owned by the county or any city or town within the boundaries of the proposed district and … . The district shall assume the outstanding indebtedness incurred by any city or town within the district or by the county for hospital purposes within the boundaries of the district.

Sec. 20. … When the district is created and established, the county and all towns and cities located wholly or partly therein shall convey and transfer to the district title to all land, buildings, improvements, and equipment in anywise pertaining to a hospital or hospital system located wholly within the district which may be jointly or separately owned by the county or any city or town within the district. Operating funds and reserves for operating expenses which are on hand and funds which have been budgeted for hospital purposes by the county or any city or town therein for the remainder of the fiscal year in which the district is created shall likewise be transferred to the district, as shall taxes previously levied for hospital purposes for the current year, and all sinking funds established for payment of indebtedness assumed by the district.

(2) Section 23, Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides legislative intent regarding the creation of the district and the determination of qualified electors. The revised law omits that section as executed. The omitted law reads:

Sec. 23. The legislature hereby recognizes there is some confusion as to the proper qualification of electors in the light of recent court decisions. It is the intention of this Act to provide a procedure for the creation of the hospital district and to allow the district, when created, to issue bonds payable from taxation, but that in each instance the authority shall be predicated on the expression of the will of the majority of those who cast valid ballots at an election called for the purpose. Should the body calling an election determine that all qualified electors, including those who own taxable property which has been duly rendered for taxation, should be permitted to vote at an election by reason of the aforesaid court decisions nothing herein shall be construed as a limitation on the power to call and hold an election; provided provision is made for the voting, tabulating, and counting of the ballots of the resident qualified property taxpaying electors separately from those who are qualified electors, and in any election so called a majority vote of the resident qualified property taxpaying voters and a majority vote of the qualified electors, including those who own taxable property which has been duly rendered for taxation, shall be required to sustain the proposition.

(3) Section 24, Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides for that act to expire if the district has not been created before a certain date. The revised law omits the provision as executed. The omitted law reads:

Sec. 24. If a hospital district has not been created under this Act by January 1, 1982, then the Act will no longer be in effect.

(4) Section 25, Chapter 258, Acts of the 65th Legislature, Regular Session, 1977, provides that public notice 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 the notice is hereby found and declared proper and sufficient to satisfy the requirement.

(5) Section 3, Chapter 479, Acts of the 67th Legislature, Regular Session, 1981, validates all proceedings and actions relating to the creation of the district and certain other matters related to the district. The revised law omits the provisions as executed. The omitted law reads:

Sec. 3. (a) The election and all proceedings and actions relating to the creation of the Montgomery County Hospital District are validated, notwithstanding that the election, proceedings, and actions may not have been conducted in accordance with law.

(b) The elections of the boards of directors of the Montgomery County Hospital District are validated, notwithstanding that the elections may not have been conducted in accordance with law.

(c) All proceedings and actions of the Montgomery County Hospital District's boards of directors concerning any aspect of the maintenance, operation, and financing of the district are validated, notwithstanding that the proceedings or actions may not have been conducted in accordance with law or that the elections of directors may not have been conducted in accordance with law.

(d) This Act does not validate an election, proceeding, or action the validity of which is contested in litigation pending at the time this Act becomes effective, if the litigation is ultimately determined against the validity of the election, proceeding, or action.

(6) Sections 8 and 9, Chapter 267, Acts of the 73rd Legislature, Regular Session, 1993, contain legislative findings relating to the performance of all requirements of the Texas Constitution and to the authority of the legislature to enact Chapter 267. The revised law omits those provisions as executed. The omitted law reads:

Sec. 8. The legislature finds that all of the requirements of the Texas Constitution have been performed or accomplished as required, and in the time and order required, and that the legislature has the power and authority to enact this Act.

Sec. 9. The legislature hereby declares that the enactment of this Act is in fulfillment of authority conferred on it by Article IX, Section 9, of the Texas Constitution; that the Montgomery County Hospital District and the indigent health care services and other health care services and facilities that it is able to provide or arrange for the provision of are essential to and operate on a subject in which the state and public at large are interested; and that the provisions of this Act therefore operate on a subject in which the state and the public are interested. All the terms and provisions of this Act are to be liberally construed to effectuate the purposes set forth herein.


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