74(R) SB 1241 Senate Committee Report

BILL ANALYSIS

S.B. 1241
By: Haywood
Intergovernmental Relations
03-30-95
Committee Report (Unamended)
BACKGROUND

The legislation creating the Muenster Hospital District, originally
enacted in 1965, was amended in 1967 and 1975. Changes in the
legislation are necessary in order to update the provisions to
bring them into compliance with the general hospital district
statute under Chapter 286, Health and Safety Code.

PURPOSE

As proposed, S.B. 1241 amends provisions relating to the creation,
operation, and dissolution of the Muenster Hospital District.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 2, Chapter 477, Acts of the 59th
Legislature, Regular Session, 1965, to require the created Muenster
Hospital District (district) to provide for the establishment,
administration, maintenance, operation, and financing of a hospital
or hospital system within its boundaries and authorizes the
district to provide any services or facilities necessary for
certain hospital or medical care. Deletes text regarding the
Muenster Hospital Authority.

SECTION 2. Amends Section 4, Chapter 477, Acts of the 59th
Legislature, Regular Session, 1965, as follows:

Sec. 4. (a) Provides that the Board of Directors of Muenster
Hospital District (board) consists of nine directors who are
elected at elections held after May 1997 and who serve
staggered three-year terms. Requires a regular election for
directors to be held on the first Saturday in May, rather than
April, of each year. Requires the regular election for
directors to be ordered at least 45, rather than 15, days
prior to the date on which it is to be held. Requires any
person desiring his or her name to be printed on the ballot as
a candidate for director to file an application, rather than
a petition, with the secretary of the board of the district at
least 31, rather than 25, days prior to the date of election.
Requires notice of the election to be published one time in a
generally circulated area newspaper at least 36, rather than
five, days before the election. Deletes names of original
directors.

(b) Provides that a director is entitled to receive actual
expenses incurred in attending to the district's business if
such expenses are reported in the district's minute book or
other district records and board-approved. Sets forth
eligibility requirements for a director. Requires the board
to elect from its number a president and vice president and
to appoint a secretary who need not be a director. Requires
each officer to serve for a term of one year.

SECTION 3. Amends Section 5, Chapter 477, Acts of the 59th
Legislature, Regular Session, 1965, as follows:

Sec. 5. (a) Requires the board to manage, control, and
administer the hospital, hospital system, and the business,
funds, and resources of the district. Authorizes the board to
require the administrator before assuming the administrator's
duties to execute a bond payable to the hospital district in
an amount to be set by the board and conditioned on the
faithful performance of the administrator's duties.
Authorizes the board to pay for the bond with district funds.
Makes conforming changes.

(b) Provides that the board and the administrator have the
authority to appoint to the staff doctors the board
considers necessary for the efficient operation of the
district. Authorizes the board to employ certain medical
employees as necessary.

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

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

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

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

(h) Authorizes the board to institute a suit to enforce the
payment of taxes and to foreclose liens to secure the
payment of taxes due to the district.

SECTION 4. Amends Section 6, Chapter 477, Acts of the 59th
Legislature, Regular Session, 1965, to require the district to be
operated on a fiscal year established by the board, rather than
within certain dates. Prohibits the fiscal year from being changed
when revenue bonds are outstanding or more than one time in a 24-month period. Requires the board to cause an annual audit to be
made of the financial condition of the district. Deletes text
regarding an administrator.

SECTION 5. Amends Section 6(b), Chapter 477, Acts of the 59th
Legislature, Regular Session, 1965, to make a conforming change.

SECTION 6. Amends Section 7, Chapter 477, Acts of the 59th
Legislature, Regular Session, 1965, to authorize the district to
issue revenue bonds for the purpose of purchasing, constructing,
repairing, renovating, or acquiring buildings or improvements,
acquiring sites to be used for hospital purposes, or for operating
a mobile emergency medical service to assist the district in
carrying out its hospital purposes. Deletes text authorizing bonds
to be issued payable only from certain revenues and taxation.
Requires the bonds to be payable from and secured by a pledge of
all or part of the revenues derived from the operation of the
district's hospital system. Authorizes the bonds to be
additionally secured by a mortgage or deed of trust on all or part
of district property. Requires the revenue bonds to be issued in
the manner provided by certain sections of the Health and Safety
Code for the issuance of revenue bonds by county hospital
authorities.

SECTION 7. Amends Section 8, Chapter 477, Acts of the 59th
Legislature, Regular Session, 1965, to require refunding bonds to
be issued as provided by Article 717k-3, V.T.C.S.

SECTION 8. Amends Section 9, Chapter 477, Acts of the 59th
Legislature, Regular Session, 1965, as follows:

Sec. 9. (a) Requires a tax to be levied by the board
sufficient to create an interest and sinking fund and to pay
the interest on and principal of a bond or bonds provided that
such tax together with any other taxes levied for the district
does not exceed the limit approved by the voters at the
election authorizing the levy of taxes. Authorizes the
district to issue general obligation bonds only if the bonds
are authorized by a majority of the qualified voters of the
district voting at an election called and held for that
purpose. Authorizes the board to order a bond election. Sets
forth required information to be stated in an order calling
the election. Requires notice of a bond election to be given
as provided for by Article 704, V.T.C.S. Requires the board
to canvass the returns and declare the results of the
election. Deletes text regarding taxation.

(b) Authorizes the board to issue and sell general
obligation bonds authorized by an election in the name and
on the faith and credit of the district to purchase,
construct, acquire, repair or renovate buildings or
improvements; equip buildings for hospital purposes; or
acquire and operate a mobile EMS or air ambulance service.

(d) Requires district bonds to mature no later than the
40th anniversary of the date of issuance and to bear a rate
of interest that does not exceed the amount provided by
Article 717k-2, V.T.C.S.

SECTION 9. Amends Section 13, Chapter 477, Acts of the 59th
Legislature, Regular Session, 1965, to make a conforming change.

SECTION 10. Amends Section 16, Chapter 477, Acts of the 59th
Legislature, Regular Session, 1965, to authorize the board to
annually impose property taxes in an amount not to exceed the limit
approved by the voters at the election authorizing the levy of
taxes. Prohibits the tax rate for all purposes from exceeding 75
cents on each $100 valuation of all taxable property in the
district. Authorizes the taxes to be used to pay for indebtedness
issued or assumed by the district and for the maintenance and
operating expenses of the district. Prohibits the district from
imposing taxes to pay the principal of or interest on revenue
bonds. Provides that the Tax Code governs the appraisal,
assessment, and collection of taxes as provided by the Tax Code.
Deletes text regarding the assessor and collector of Cooke County.

SECTION 11. Amends Section 19, Chapter 477, Acts of the 59th
Legislature, Regular Session, 1965, as follows:

Sec. 19. (a) Requires the board of the hospital district to
cause to be prepared an annual budget before September 1 of
each year or as provided by Section 6(b) of this Act.
Requires the board to adopt a budget by taking action on the
budget proposed by the administrator. Provides that the
budget is effective only after the adoption by the board.
Authorizes the annual budget to be amended on the board's
approval after adoption.

(b) Requires the board to publish notice of tax rates, give
notice and conduct a public hearing as required by Chapter
26, Tax Code, and enter an order levying taxes on all
property in the district that is subject to hospital
district taxation before September 1 of each year. Deletes
text regarding bonds.

SECTION 12. Amends Chapter 477, Acts of the 59th Legislature,
Regular Session, 1965, by adding Sections 20a and 20b, as follows:

Sec. 20a. (a) Authorizes the board to borrow money at a rate
not to exceed the maximum annual percentage rate allowed by
law for district obligations at the time of the loan if the
board declares funds are insufficient to pay authorized
obligations of the district and that an emergency exists.

(b) Sets forth certain pledges a board is authorized to
make to secure a loan.

(c) Requires a loan for which taxes or bonds are pledged to
mature no later than the first anniversary of the date on
which the loan is made. Requires a loan for which the
district revenues are pledged to mature no later than the
fifth anniversary of the date on which the loan is made.

(d) Prohibits the board from spending money obtained from
a loan under this section for any purpose other than the
purpose for which the board declared an emergency.
Prohibits the board from spending the loan proceedings other
than for the purpose for which the taxes were levied or the
bonds were authorized if taxes or bonds are pledged to pay
the loan.

Sec. 20b. (a) Authorizes the district to be dissolved only
if the dissolution is approved by a majority of the qualified
voters of the district voting in an election called and held
for that purpose.

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

(c) Requires the election to be held no later than the 60th
day after the date the election is ordered. Provides that
Section 41.001(a), Election Code, does not apply to an
election ordered under this section. Requires the order
calling the election to state certain information.

(d) Requires the board to give notice of the election by
publishing a substantial copy of the election order in a
generally circulated newspaper in the district once a week
for two consecutive weeks. Requires the first publication
to appear no less than 35 days before the date set for the
election. Sets forth the required language for the ballot
for the election.

(e) Requires the board to find that the district is
dissolved if a majority of the votes in the election favor
dissolution. Requires the board to continue to administer
the district if a majority of the votes in the election do
not favor dissolution and prohibits another election on the
question of dissolution from being held before the first
anniversary of the most recent election to dissolve the
district.

(f) Requires the board to transfer all assets that belong
to the district to a county or another governmental entity
in the county in which the district is located or administer
the property, assets, and debts until all funds have been
disposed of and all district debts have been paid or settled
if dissolution is favored by a majority of the election
voters.

(g) Provides that a county or entity assumes all debts and
obligations of the district at the time of the transfer and
the district is dissolved if the district transfers all
assets to a county.

(h) Requires the board to determine the debt owed by the
district and impose on the property included in the
district's tax rolls a tax that is in proportion of the debt
to the property value, after the board finds that the
district is dissolved.

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

(j) Authorizes a taxpayer to request that the taxpayer's
share of surplus tax money be credited to the taxpayer's
county taxes. Requires the board to direct the secretary to
transmit the funds to the county tax assessor-collector if
a taxpayer requests the credit.

(k) Requires the board to file a written report with the
commissioners court of Cooke County setting forth a summary
of the board's actions in dissolving the district after the
district has paid all its debts and has disposed of all its
assets and funds as prescribed by this section.

(l) Requires the commissioners court of Cooke County to
enter an order dissolving the district and releasing the
board of the district from any further duty or obligation no
later than the 10th day after the date it receives the
report and determines that the requirements of this section
have been fulfilled.

(m) Prohibits the district from being dissolved unless the
board provides for the sale or transfer of the district's
assets and liabilities to another person or entity.
Prohibits a dissolution of the district and the sale or
transfer of the district's assets and liabilities from
contravening a trust indenture or bond resolution relating
to the outstanding bonds of the district. Provides that the
dissolution and sale or transfer does not diminish or impair
the rights of a holder of an outstanding bond, warrant, or
other obligation of the district.

(n) Requires the sale or transfer of the district's assets
and liabilities to satisfy the debt and bond obligations of
the district in a manner that protects the interests of the
residents of the district. Provides that a grant from
federal funds is an obligation to be repaid in satisfaction.
Prohibits the district from transferring or disposing of the
district's assets except for due compensation with an
exception.

SECTION 13. Repealer: Sections 4a, 6(a), and 10, Chapter 477,
Acts of the 59th Legislature, Regular Session, 1965.

SECTION 14. Sets forth the election schedule of directors before
and after the effective date of this Act.

SECTION 15. Emergency clause.
Effective date: upon passage.