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