1-1                                   AN ACT
 1-2     relating to the Castro County and Ochiltree County hospital
 1-3     districts.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Chapter 103, Acts of the 57th Legislature,
 1-6     Regular Session, 1961, is amended by amending Sections 3, 4, 6, 8,
 1-7     and 9 and by adding Sections 3A, 6A, 6B, 8B, and 14A to read as
 1-8     follows:
 1-9           Sec. 3.  Within ten (10) days after such election is held the
1-10     Commissioners Court in such county shall convene and canvass the
1-11     returns of the election, and if a majority of the qualified
1-12     property taxpaying electors voting at said election voted in favor
1-13     of the proposition, the court shall so find and declare the
1-14     hospital district established and created and appoint five (5)
1-15     persons as directors of the hospital district to serve until the
1-16     first Saturday in April following the creation and establishment of
1-17     the district at which time five (5) directors shall be elected.
1-18     The three (3) directors receiving the highest vote at such first
1-19     election shall serve for two (2) years, the other two (2) directors
1-20     shall serve for one (1) year.  Thereafter, all directors shall
1-21     serve for a period of two (2) years and until their successor has
1-22     been duly elected or appointed and qualified.  No person shall be
1-23     appointed or elected as a member of the board of directors of said
1-24     hospital district unless he is a resident thereof and owns land
 2-1     subject to taxation therein and unless at the time of such election
 2-2     or appointment he shall be more than twenty-one (21) years of age.
 2-3     A person may not be elected or appointed as a member of the board
 2-4     of directors of the Castro County Hospital District unless the
 2-5     person is a resident of the district and is at the time of election
 2-6     or appointment at least 21 years of age.  An employee or a medical
 2-7     staff member of the Ochiltree County Hospital District may not
 2-8     serve as a director of that district.  Each member of the board of
 2-9     directors shall qualify by executing the constitutional oath of
2-10     office and shall execute a good and sufficient bond for One
2-11     Thousand Dollars ($1,000) payable to said district conditioned upon
2-12     the faithful performance of his duties, and such oaths and bonds
2-13     shall be deposited with the depository bank of the district for
2-14     safekeeping. The Ochiltree County Hospital District may purchase
2-15     directors' bonds with district funds.
2-16           The board of directors shall organize by electing one (1) of
2-17     their number as president and one (1) of their number as secretary.
2-18     Any three (3) members of the board of directors shall constitute a
2-19     quorum and a concurrence of three (3) shall be sufficient in all
2-20     matters pertaining to the business of the district.  All vacancies
2-21     in the office of director shall be filled for the unexpired term by
2-22     appointment of the remainder of the board of directors.  In the
2-23     event the number of directors shall be reduced to less than three
2-24     (3) for any reason, the remaining directors shall immediately call
2-25     a special election to fill said vacancies, and upon failure to do
2-26     so a district court may, upon application of any voter or taxpayer
2-27     of the district, issue a mandate requiring that such election be
 3-1     ordered by the remaining directors.
 3-2           A regular election of directors shall be held on the first
 3-3     Saturday in May [April] of each year and notice of such election
 3-4     shall be published in a newspaper of general circulation in the
 3-5     county one (1) time at least ten (10) days prior to the date of
 3-6     election.  A person who wishes to have the person's name printed on
 3-7     the ballot as a candidate for director of the Castro County
 3-8     Hospital District must file an application with the secretary of
 3-9     the board of the Castro County Hospital District not later than the
3-10     45th day before the date of the election.  Any person desiring his
3-11     name to be printed on the ballot as a candidate for director of the
3-12     Ochiltree County Hospital District shall file a petition, signed by
3-13     not less than twenty-five (25) qualified voters asking that such
3-14     name be printed on the ballot, with the secretary of the board of
3-15     directors of the district[.  Such petition shall be filed with such
3-16     secretary] at least twenty-five (25) days prior to the date of
3-17     election.
3-18           Sec. 3A.  (a)  This section applies only to the Ochiltree
3-19     County Hospital District.
3-20           (b)  In a general or special election of directors, a
3-21     write-in vote may not be counted unless the name written in appears
3-22     on the list of write-in candidates.
3-23           (c)  To be entitled to a place on the list of write-in
3-24     candidates, a candidate must make a declaration of write-in
3-25     candidacy.
3-26           (d)  A declaration of write-in candidacy must be filed with
3-27     the secretary of the board of directors not later than 5 p.m. of
 4-1     the 25th day before election day.  However, if a candidate whose
 4-2     name is to appear on the ballot dies or is declared ineligible
 4-3     after the 28th day before election day, a declaration of write-in
 4-4     candidacy for the office sought by the deceased or ineligible
 4-5     candidate may be filed not later than 5 p.m. of the 22nd day before
 4-6     election day.
 4-7           (e)  Subchapter C, Chapter 2, Election Code, applies to the
 4-8     election of unopposed candidates for the board of directors.
 4-9           Sec. 4.  The management and control of each hospital district
4-10     created pursuant to the provisions of this Act is hereby vested in
4-11     the board of directors of the district who shall serve without
4-12     compensation but may be reimbursed for actual expenses incurred in
4-13     the performance of their official duties upon the approval of such
4-14     expenses by the entire board of directors.  The board of directors
4-15     of the Ochiltree County Hospital District may defend or indemnify
4-16     an officer, director, board appointee, medical staff member, or
4-17     employee of the district against or for liability, claims, or
4-18     expenses that arise from the performance of a duty in the person's
4-19     respective capacity as an officer, director, board appointee,
4-20     medical staff member, or employee of the district.  The board of
4-21     directors may purchase liability insurance coverage or establish a
4-22     self-insurance program to fund indemnification under this section.
4-23           Sec. 6.  The board of directors shall have the power and
4-24     authority to issue and sell as the obligations of such hospital
4-25     district, and in the name and upon the faith and credit of such
4-26     hospital district, bonds for the purchase, construction,
4-27     acquisition, repair or renovation of buildings and improvements and
 5-1     equipping the same for hospital purposes and for any or all of such
 5-2     purposes; provided, that a sufficient tax shall be levied to create
 5-3     an interest and sinking fund to pay the interest and principal as
 5-4     same matures provided said tax together with any other taxes levied
 5-5     for said district shall not exceed Seventy-five Cents (75 ) on each
 5-6     $100 valuation of taxable property in any one year.  The Ochiltree
 5-7     County Hospital District may also issue and sell bonds for health
 5-8     care purposes subject to the requirements of this section.  Such
 5-9     bonds shall be executed in the name of the hospital district and on
5-10     its behalf by the president of the board of directors, and
5-11     countersigned by the secretary of the board of directors, and shall
5-12     be subject to the same requirements in the matter of approval
5-13     thereof by the Attorney General of the State of Texas and the
5-14     registration thereof by the Comptroller of Public Accounts of the
5-15     State of Texas as are by law provided for such approval and
5-16     registration of bonds of such county.  Upon the approval of such
5-17     bonds by the Attorney General of Texas the same shall be
5-18     incontestable for any cause.  Except as provided by Section 6A, no
5-19     [No] bonds shall be issued by such hospital district (except
5-20     refunding bonds) until authorized by a majority vote of the legally
5-21     qualified property taxpaying electors, residing in such hospital
5-22     district, voting at an election called and held for such purpose.
5-23     Such election may be called by the board of directors of its own
5-24     motion, shall specify the place or places where the election shall
5-25     be held, the presiding officers thereof, the purpose for which the
5-26     bonds are to be issued, the amount thereof, maximum interest rate
5-27     (not to exceed six (6%) per cent per annum) and the maximum
 6-1     maturity date of such bonds (not to exceed forty (40) years from
 6-2     their date of issuance).  Notice of election shall be given by
 6-3     publishing a substantial copy of the order calling the election in
 6-4     a newspaper of general circulation in such county once a week for
 6-5     two (2) consecutive weeks prior to the date of election, the date
 6-6     of the first publication being at least fourteen (14) full days
 6-7     prior to the date set for the election.  The costs of such election
 6-8     shall be paid by the hospital district.
 6-9           In the manner hereinabove provided, the bonds of such
6-10     hospital district may, without the necessity of any election
6-11     therefor, be issued for the purpose of refunding and paying off any
6-12     bonded indebtedness theretofore assumed by such hospital district
6-13     and any bonds therefore issued by such hospital district; such
6-14     refunding bonds may be sold and the proceeds thereof applied to the
6-15     payment of any such outstanding bonds or may be exchanged in whole
6-16     or in part for not less than a like amount of said outstanding
6-17     bonds and interest matured thereon, but unpaid; provided the
6-18     average interest cost per annum on the refunding bonds, computed in
6-19     accordance with recognized standard bond interest cost tables,
6-20     shall not exceed the average interest  cost per annum so computed,
6-21     upon the bonds to be discharged out of the proceeds of the
6-22     refunding bonds, unless the total interest cost on the refunding
6-23     bonds, computed to their respective maturity dates, is less than
6-24     the total interest cost so computed on the bonds to be discharged
6-25     out of such proceeds.  In the foregoing computations, any premium
6-26     or premiums required to be paid upon the bonds to be refunded as a
6-27     condition to payment in advance of their stated maturity dates
 7-1     shall be taken into account as an addition to the net interest cost
 7-2     to the hospital district of the refunding bonds.
 7-3           If the county in which the district is located or any city
 7-4     within such county has voted bonds to provide hospital facilities;
 7-5     but such bonds have not been sold and delivered at the date of the
 7-6     creation of the hospital district, the authority for such bonds
 7-7     shall be canceled and they shall not be sold.
 7-8           Sec. 6A.  (a)  In selling and reissuing bonds, and in making
 7-9     payments of outstanding indebtedness, the Ochiltree County Hospital
7-10     District shall comply with Chapter 503, Acts of the 54th
7-11     Legislature, Regular Session, 1955 (Article 717k, Vernon's Texas
7-12     Civil Statutes), and Chapter 784, Acts of the 61st Legislature,
7-13     Regular Session, 1969 (Article 717k-3, Vernon's Texas Civil
7-14     Statutes).  The interest rate for district bonds may not exceed the
7-15     maximum rate allowed under Chapter 3, Acts of the 61st Legislature,
7-16     Regular Session, 1969 (Article 717k-2, Vernon's Texas Civil
7-17     Statutes).
7-18           (b)  The board of directors of the Ochiltree County Hospital
7-19     District may issue revenue bonds to purchase, construct, acquire,
7-20     repair, equip, or renovate buildings or improvements for or to
7-21     acquire sites for hospital or health care purposes.  The board of
7-22     directors may also issue bonds to refund any previously issued
7-23     bonds for the same purposes.  The bonds must be payable from and
7-24     secured by a pledge of all or any part of the district's revenues
7-25     from the operation of the district's facilities.  The bonds may
7-26     also be secured by a mortgage or deed of trust lien on all or any
7-27     part of its property.  The district shall issue the bonds in
 8-1     accordance with the procedures and requirements for the issuance of
 8-2     revenue bonds by county hospital authorities specified by Sections
 8-3     264.042, 264.043, 264.046, 264.047, 264.048, and 264.049, Health
 8-4     and Safety Code.
 8-5           (c)  Because the district is a public entity performing an
 8-6     essential public function, bonds issued by the district,
 8-7     transactions relating to the bonds, and profits made in the sale of
 8-8     the bonds are free from taxation by the state or any city, county,
 8-9     special district, or other political subdivision of the state.
8-10           Sec. 6B.  The board of directors of the Ochiltree County
8-11     Hospital District may borrow money for district purposes on the
8-12     credit of the district or secured by revenues of the district.
8-13           Sec. 8.  (a)  The board of directors of such district shall
8-14     have the power to prescribe the method and manner of making
8-15     purchases and expenditures by and for such hospital district, and
8-16     also shall prescribe all accounting and control procedures; the
8-17     method of purchasing necessary supplies, materials and equipment;
8-18     and shall have the power to adopt a seal for such district; and may
8-19     employ a general manager, attorney, bookkeeper and architect.
8-20           (b)  The board of directors of the Ochiltree County Hospital
8-21     District may appoint a qualified person as administrator of the
8-22     district.  The administrator serves at the will of the board of
8-23     directors and receives compensation as determined by the board of
8-24     directors.  The administrator shall supervise the work and
8-25     activities of the district and direct the general affairs of the
8-26     district subject to the limitations prescribed by the board of
8-27     directors.
 9-1           (c)  The board of directors of the Ochiltree County Hospital
 9-2     District may employ technicians, nurses, fiscal agents,
 9-3     accountants, and other necessary employees.  The board of directors
 9-4     may delegate to the administrator the authority to employ these
 9-5     persons for the district.
 9-6           (d)  The board of directors of the Ochiltree County Hospital
 9-7     District may appoint doctors to the medical staff or remove doctors
 9-8     from the medical staff as necessary for the efficient operation of
 9-9     the district.  This authority includes the authority to make
9-10     temporary appointments.  The board of directors may adopt policies
9-11     relating to the appointment and removal of medical staff members.
9-12           (e)  All books, records, accounts, notices and minutes and
9-13     all other matters of the district and the operation of its
9-14     facilities shall, except as herein provided, be maintained at the
9-15     office of the district and there be open to public inspection at
9-16     all reasonable hours.
9-17           (f)  The board of directors is specifically empowered to
9-18     adopt rules and regulations governing the operation of such
9-19     district and its facilities which rules and regulations shall
9-20     supplement but shall not contravene any of the provisions of this
9-21     Act.  Such rules and regulations may, upon approval of the board of
9-22     directors, be published in booklet or pamphlet form at the expense
9-23     of the district and may be made available to any taxpayer upon
9-24     request.
9-25           Sec. 8B.  (a)  This section applies only to the Ochiltree
9-26     County Hospital District.
9-27           (b)  The board of directors shall determine the type, number,
 10-1    and location of facilities required to establish and maintain an
 10-2    adequate hospital system and the type of equipment necessary for
 10-3    hospital care.  The hospital system may include facilities and
 10-4    equipment to provide for domiciliary care and treatment of sick,
 10-5    injured, or geriatric patients, outpatient clinics, rural health
 10-6    clinics, convalescent home facilities, assisted living or personal
 10-7    care facilities, physician's offices, home health care services,
 10-8    durable medical equipment, long-term care, skilled nursing care,
 10-9    intermediate nursing care, hospice care, community mental health
10-10    centers, alcohol or chemical dependency centers, or any other
10-11    facility or equipment the board considers necessary for hospital
10-12    purposes.  The district may also operate or assist in the operation
10-13    of a mobile emergency medical service as part of the hospital
10-14    system.
10-15          (c)  The board of directors may acquire by lease, purchase,
10-16    or lease to purchase or may construct, repair, or renovate
10-17    property, facilities, or equipment for use in the district hospital
10-18    system and may mortgage or pledge the property, facilities, or
10-19    equipment acquired as security for the payment of the purchase
10-20    price.
10-21          (d)  The board of directors may lease hospital facilities on
10-22    behalf of the district.
10-23          (e)  The district may operate any facilities covered by this
10-24    section or may enter into a contract with any person to manage or
10-25    operate any of those facilities.
10-26          (f)  The board of directors may lease or sell all or part of
10-27    the district's property, facilities, or equipment to any public or
 11-1    private entity or otherwise dispose of property, facilities, or
 11-2    equipment of the district.
 11-3          (g)  The district, subject to the approval of the board of
 11-4    directors, may provide primary care, emergency services,
 11-5    preventative medical services, and other health related services
 11-6    outside the district, provided that the services serve the purpose
 11-7    of the district as established by this Act.
 11-8          (h)  The board of directors may contract with a political
 11-9    subdivision or governmental agency to provide investigatory or
11-10    other services related to facilities for the medical care,
11-11    hospital, or welfare needs of the inhabitants of the district and
11-12    may contract with a hospital, hospital authority, hospital
11-13    district, emergency services district, county, municipality, or
11-14    other political subdivision of this state that is located outside
11-15    its boundaries to be reimbursed for the care and treatment of the
11-16    sick, diseased, or injured persons of that entity.  The board of
11-17    directors may also contract with the state or agencies of the
11-18    federal government to be reimbursed for the treatment of sick,
11-19    diseased, or injured persons.
11-20          (i)  The district may contract with, affiliate with, or enter
11-21    into another arrangement with a managed care system, a preferred
11-22    provider organization, a health maintenance organization, another
11-23    provider of alternative health care or delivery system, or a
11-24    private hospital to jointly administer or deliver health care
11-25    services.  The district may spend district funds to establish and
11-26    maintain partnerships, corporations, or other entities involved in
11-27    the delivery of health care services.
 12-1          (j)  The district may sponsor and create a nonstock
 12-2    corporation under the Texas Non-Profit Corporation Act (Article
 12-3    1396-1.01 et seq., Vernon's Texas Civil Statutes) and may
 12-4    contribute funds to or solicit funds for the corporation.  The
 12-5    corporation may use funds, other than funds paid by the corporation
 12-6    to the district, only to provide health care or other services the
 12-7    district may provide under this Act.  The board of directors of the
 12-8    hospital district shall establish adequate controls to ensure that
 12-9    the corporation uses its funds as required by this subsection.  The
12-10    corporation may invest corporation funds in any manner in which the
12-11    district may invest funds, including investing funds as authorized
12-12    by Chapter 2256, Government Code.
12-13          (k)  The board of directors may spend district funds, enter
12-14    into agreements, and take other necessary action to recruit
12-15    physicians and other persons to serve as medical staff members or
12-16    employees of the district, including:
12-17                (1)  advertising and marketing;
12-18                (2)  paying travel, recruitment, and relocation
12-19    expenses;
12-20                (3)  providing a loan or scholarship to a physician or
12-21    a person currently enrolled in health care education courses at an
12-22    institution of higher education who contractually agrees to become
12-23    a district employee or medical staff member; and
12-24                (4)  providing office space without the payment of rent
12-25    for the space or otherwise subsidizing office space or other
12-26    facilities for a health care professional, including a physician.
12-27          (l)  The board of directors may spend district funds, enter
 13-1    into agreements, and take other necessary action to conduct,
 13-2    participate in, or otherwise assist in providing health care
 13-3    educational programs for current or prospective medical staff
 13-4    members or employees of the district.
 13-5          (m)  The board of directors may provide retirement benefits
 13-6    for employees of the district by establishing or administering a
 13-7    retirement program or by participating in the Texas County and
 13-8    District Retirement System or in another statewide retirement
 13-9    system in which the district is eligible to participate.
13-10          Sec. 9.   The fiscal year of the Ochiltree County Hospital
13-11    District [hospital districts] authorized to be established by the
13-12    provisions hereof shall commence on October 1 of each year and end
13-13    on the 30th day of September of the following year.  The Castro
13-14    County Hospital District shall operate on the fiscal year
13-15    established by the board of directors of that district.  The
13-16    district directors shall cause an annual independent audit to be
13-17    made of the books and records of the district, such audit to be
13-18    made covering such fiscal year, and the same shall be filed with
13-19    the Comptroller of Public Accounts of the State of Texas and at the
13-20    office of the district not later than December 31st of each year.
13-21          The board of directors shall each year cause a budget to be
13-22    prepared showing the proposed expenditures and disbursements and
13-23    the estimated receipts and collections for the following fiscal
13-24    year and shall hold a public hearing on the proposed budget after
13-25    publication of a notice of hearing in a newspaper of general
13-26    circulation in the county at least once not less than ten (10) days
13-27    prior to the date set for the hearing.  Any person who is a
 14-1    taxpayer of the district shall have the right to appear at the time
 14-2    and place designated  in the notice and be heard with reference to
 14-3    any item shown in the proposed budget.  The proposed budget shall
 14-4    also show the amount of taxes required to be levied and collected
 14-5    during such fiscal year and upon final approval of the budget, the
 14-6    board of directors shall levy such tax as may be required and
 14-7    certify the tax rate for such year to the county tax assessor and
 14-8    collector as provided in Section 5 hereof, and it shall be the duty
 14-9    of the said tax assessor and collector to assess and collect such
14-10    tax.
14-11          Sec. 14A.  The board of directors of the Ochiltree County
14-12    Hospital District shall seek reimbursement, in the manner provided
14-13    by Chapter 61, Health and Safety Code, from a county, municipality,
14-14    or public hospital located outside the boundaries of the district
14-15    for the district's care for or treatment of a sick, diseased, or
14-16    injured person for whom that county, municipality, or public
14-17    hospital has an obligation to provide care.  The board of directors
14-18    shall seek reimbursement under Article 104.002, Code of Criminal
14-19    Procedure, for the district's care for or treatment of a person who
14-20    is not a resident of the district and who is confined in a county
14-21    jail facility.
14-22          SECTION 2.  The importance of this legislation and the
14-23    crowded condition of the calendars in both houses create an
14-24    emergency and an imperative public necessity that the
14-25    constitutional rule requiring bills to be read on three several
14-26    days in each house be suspended, and this rule is hereby suspended,
14-27    and that this Act take effect and be in force from and after its
 15-1    passage, and it is so enacted.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I certify that H.B. No. 1878 was passed by the House on April
         11, 1997, by a non-record vote.
                                             _______________________________
                                                 Chief Clerk of the House
               I certify that H.B. No. 1878 was passed by the Senate on May
         12, 1997, by the following vote:  Yeas 31, Nays 0.
                                             _______________________________
                                                 Secretary of the Senate
         APPROVED:  _____________________
                            Date
                    _____________________
                          Governor