By Haywood S.B. No. 406
75R1321 SAW-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the operation of the Gainesville Hospital District.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Chapter 211, Acts of the 64th Legislature,
1-5 Regular Session, 1975, is amended by amending Sections 2, 4, 5, 6,
1-6 8, 9, and 10, and by adding Section 4A to read as follows:
1-7 Sec. 2. The hospital district herein authorized to be
1-8 created shall provide for the establishment, administration,
1-9 maintenance, operation, and financing of a hospital or hospital
1-10 system within its boundaries, may provide any services or
1-11 facilities necessary for medical and hospital care for its needy
1-12 inhabitants, and is hereby authorized and empowered to provide any
1-13 services or facilities necessary for hospital or medical care,
1-14 including rural health clinics, outpatient clinics, nursing homes,
1-15 home health care agencies, extended care facilities, assisted
1-16 living or personal care facilities, retirement housing, and medical
1-17 office buildings [purchase, construct, acquire, repair, or renovate
1-18 buildings and improvements and equip same for hospital purposes.
1-19 It is hereby found and determined that neither Cooke County, Texas,
1-20 nor any city or town within the boundaries of the hospital district
1-21 herein authorized to be created has any outstanding indebtedness
1-22 incurred for hospital purposes and that the Gainesville Hospital
1-23 Authority (heretofore created and established under the provisions
1-24 of Chapter 472, Acts of the 55th Legislature, Regular Session,
2-1 1957, as amended (Article 4437e, Vernon's Texas Civil Statutes)),
2-2 is the only type of political subdivision of the State of Texas
2-3 currently owning, operating, and maintaining hospital facilities
2-4 within the boundaries of the proposed Gainesville Hospital
2-5 District].
2-6 Sec. 4. (a) The board of directors consists of nine
2-7 directors who serve staggered three-year terms [Upon the effective
2-8 date of this Act, the following named nine persons shall be and
2-9 constitute the temporary or provisional directors of the said
2-10 district:]
2-11 [1--Lambert Bezner] [6--Dr. Harry M. Roark]
2-12 [2--Dr. James R. Cole] [7--J. Robert Evans]
2-13 [3--L. V. Henry] [8--W. W. Weems]
2-14 [4--E. J. (Junior) Hudspeth] [9--E. E. Wright]
2-15 [5--Joe B. Hundt]
2-16 [and each of said directors shall subscribe to the constitutional
2-17 oath of office within 60 days of the effective date of this Act.
2-18 Should any of the named directors refuse to act or for any reason
2-19 fail to qualify as herein required, the County Judge of Cooke
2-20 County shall fill such vacancy. The terms of office of the first,
2-21 third, fifth, seventh, and ninth named directors shall expire on
2-22 the first Saturday in April of the year following the election for
2-23 the creation of the district, and the terms of the second, fourth,
2-24 sixth, and eighth named directors shall expire on the first
2-25 Saturday in April of the second year following the election for the
2-26 creation of the district]. A regular election for directors shall
2-27 be held on the first Saturday in May [April] of each year. The
3-1 regular election for directors shall be ordered by the board, and
3-2 such order shall state the time, place, and purpose of the
3-3 election, and the board shall appoint the presiding judge who shall
3-4 appoint an assistant judge and such clerks as may be required, and
3-5 such election shall be ordered at least 45 [30] days prior to the
3-6 date on which it is to be held. Any person desiring his name to be
3-7 printed on the ballot as a candidate for director shall file an
3-8 application [a petition, signed by not less than 15 qualified
3-9 voters asking that such name be printed on the ballot,] with the
3-10 secretary of the board of directors of the district[. Such
3-11 petition shall be filed with such secretary] at least 31 [25] days
3-12 prior to the date of election. Notice of such election shall be
3-13 published one time in a newspaper of general circulation in the
3-14 area of the district at least 20 days before the election. All
3-15 vacancies in office may [(other than for the failure of an original
3-16 director herein appointed to qualify) shall] be filled by a
3-17 majority vote of the remaining directors, and such appointees shall
3-18 hold office for the unexpired terms for which they were appointed.
3-19 (b) A [No] director is not [shall be] entitled to
3-20 compensation but is [shall be] entitled to reimbursement for
3-21 [receive his] actual expenses incurred in attending to the
3-22 district's business, provided that the [such] expenses are reported
3-23 in the district's minute book or other district records and
3-24 approved by the remainder of the board. To be qualified to hold
3-25 office as a director of the district, a person must be a resident
3-26 of the district and a qualified voter [own property therein subject
3-27 to hospital-district taxation]. An employee of the district may
4-1 not serve as a director. The board of directors shall elect from
4-2 its number a president, vice-president, secretary, and [such]
4-3 other officers as in the judgment of the board are necessary; and
4-4 each officer shall serve in that capacity for a period of one year.
4-5 The president shall be the chief executive officer of the district
4-6 and shall have the same right to vote as any other director. The
4-7 vice-president shall perform all duties and exercise all powers
4-8 conferred by this Act upon the president when the president is
4-9 absent or fails or declines to act.
4-10 (c) [The directors named herein and their successors in
4-11 office shall hold office as provisional or temporary directors
4-12 until such time as the creation of the district has been approved
4-13 at an election as herein provided. At such time as the creation of
4-14 the district is so approved and the returns of the election
4-15 officially canvassed, the persons acting as provisional or
4-16 temporary directors shall become permanent directors whose terms
4-17 shall expire as hereinabove provided.] Each [permanent] director
4-18 [and his successor in office] shall qualify by executing the
4-19 constitutional oath of office. A majority of the board shall
4-20 constitute a quorum for the transaction of business. A director
4-21 who misses four consecutive board meetings may be removed by the
4-22 board for cause.
4-23 (d) The board of directors may purchase directors and
4-24 officers liability insurance with district funds and may enact
4-25 bylaws to indemnify each board member from liability for an action
4-26 or an omission of the member in performing a duty within the scope
4-27 of the member's official capacity and authority as provided by this
5-1 Act or state or federal law.
5-2 Sec. 4A. (a) In a general or special election of directors,
5-3 a write-in vote may not be counted unless the name written in
5-4 appears on the list of write-in candidates.
5-5 (b) To be entitled to a place on the list of write-in
5-6 candidates, a candidate must make a declaration of write-in
5-7 candidacy.
5-8 (c) A declaration of write-in candidacy must be filed with
5-9 the secretary of the board of directors not later than 5 p.m. of
5-10 the 45th day before election day. However, if a candidate whose
5-11 name is to appear on the ballot dies or is declared ineligible
5-12 after the 48th day before election day, a declaration of write-in
5-13 candidacy for the office sought by the deceased or ineligible
5-14 candidate may be filed not later than 5 p.m. of the 42nd day before
5-15 election day.
5-16 (d) Subchapter B, Chapter 146, Election Code, applies to
5-17 write-in voting in an election of directors except to the extent of
5-18 a conflict with this section.
5-19 Sec. 5. (a) The board of directors shall manage, control,
5-20 and administer the hospitals and the hospital system and the
5-21 business, funds, and resources of the district [hospital
5-22 facilities] to provide medical and hospital care for needy
5-23 residents of the district. The district through its board of
5-24 directors shall have the power and authority to sue and be sued and
5-25 to promulgate rules and regulations governing the operation of the
5-26 district. The board of directors shall appoint a qualified person
5-27 to be known as the administrator [or manager] of the hospital
6-1 district and may in its discretion appoint an assistant to the
6-2 administrator [or manager]. The [Such] administrator [or manager,]
6-3 and assistant administrator [or assistant manager], if any, shall
6-4 serve at the will of the board and shall receive such compensation
6-5 as may be fixed by the board. The board may require that the
6-6 administrator [or manager shall], upon assuming the administrator's
6-7 [his] duties, execute a bond payable to the hospital district in an
6-8 amount to be set by the board of directors, in no event less than
6-9 $5,000, conditioned on the faithful performance of the
6-10 administrator's [that he shall perform the] duties [required of
6-11 him,] and containing [such] other conditions as the board may
6-12 require. The board may purchase the bond with district funds.
6-13 (b) The administrator [or manager] shall supervise all the
6-14 work and activities of the hospital district and shall have general
6-15 direction of the affairs of the district, subject to such
6-16 limitations as may be prescribed by the board. The board of
6-17 directors[, with the administrator,] shall have the authority to
6-18 appoint to the medical staff the doctors the board considers
6-19 necessary for the efficient operation of the district. The board
6-20 may [admit such doctors or] employ technicians, nurses, and other
6-21 employees of every kind and character as may be deemed necessary
6-22 for the efficient operation of the hospital district or may provide
6-23 that the administrator [or manager shall] have the authority to
6-24 appoint [admit] or employ such persons.
6-25 (c) The [Such] board shall be authorized to contract with
6-26 any private or public entity or payor [county or incorporated
6-27 municipality] located inside or outside the district for the care
7-1 and treatment of [the] sick, diseased, or injured persons for whom
7-2 the private or public entity or payor has an obligation to provide
7-3 care, [of any such county or municipality] and shall have the
7-4 authority to contract with the State of Texas and agencies of the
7-5 federal government for treatment of sick, diseased, or injured
7-6 persons for whom the State of Texas or the federal government is
7-7 responsible.
7-8 (d) The board may purchase or lease property, facilities,
7-9 and equipment for the district to use in the hospital system and
7-10 may mortgage or pledge the property, facilities, or equipment as
7-11 security for the payment of the purchase price [of directors is
7-12 also authorized to enter into such contracts or agreements with the
7-13 State of Texas or the federal government as may be required to
7-14 establish or continue a retirement program for the benefit of the
7-15 district's employees].
7-16 (e) The board may [also] enter into a contract or contracts
7-17 with nonprofit corporations whereby such corporations agree to
7-18 provide administrative and other personnel for the operation of the
7-19 hospital facilities, but in no event may such contract be for a
7-20 period in excess of 25 years from the date the same is entered
7-21 [executed]. The board may also lease district hospital facilities
7-22 to nonprofit corporations or governmental entities and may sell or
7-23 otherwise dispose of the district's property, facilities, and
7-24 equipment.
7-25 (f) The board may provide retirement benefits for the
7-26 employees of the district by establishing or administering a
7-27 retirement program or electing to participate in the Texas County
8-1 and District Retirement System or any other statewide retirement
8-2 system in which the district is eligible to participate.
8-3 (g) The board may spend district funds to recruit doctors,
8-4 nurses, and other trained medical personnel. The board may
8-5 contract with one or more full-time medical students or other
8-6 students in a health occupation, each of whom is enrolled in and in
8-7 good standing at an accredited medical school, college, or
8-8 university, to pay the student's tuition or other expenses in
8-9 consideration for the student's agreement to serve as an employee
8-10 or independent contractor for the district under terms prescribed
8-11 by the contract.
8-12 (h) The board may bring suit to enforce the payment of taxes
8-13 and to foreclose liens to secure the payment of taxes due to the
8-14 district.
8-15 (i) The board of directors of such district shall have the
8-16 power to prescribe the method and manner of making purchases and
8-17 expenditures by and for such hospital district and may [also shall
8-18 be authorized to] prescribe all accounting and control procedures
8-19 and [to] make such rules and regulations as may be required to
8-20 carry out the provisions of this Act. The board is given exclusive
8-21 authority to determine the type, character, and use of the
8-22 facilities forming a part of the hospital system.
8-23 Sec. 6. (a) The district shall be operated on a fiscal year
8-24 as established by the board, but in no event may the fiscal year be
8-25 changed more than one time in any 36-month period. The district
8-26 shall cause an annual audit to be made of the financial condition
8-27 of said district, which shall at all times be open to inspection at
9-1 the principal office of the district. In addition, the
9-2 administrator [or manager] shall prepare an annual budget for
9-3 approval by the board of directors of said district. As soon as
9-4 practical after the close of each fiscal year, the administrator
9-5 [or manager] shall prepare for the board a full sworn statement of
9-6 all money belonging to the district and a full account of the
9-7 disbursements of same.
9-8 (b) The board of directors shall each year cause a budget to
9-9 be prepared showing the proposed expenditures and disbursements and
9-10 the estimated receipts and collections for the following fiscal
9-11 year and shall hold a public hearing on the proposed budget after
9-12 publication of a notice of hearing in a newspaper of general
9-13 circulation in the county at least once not less than 10 days prior
9-14 to the date set for the hearing. Any person who is a taxpayer of
9-15 the district shall have the right to appear at the time and place
9-16 designated in the notice and be heard with reference to any item
9-17 shown in the proposed budget. The proposed budget shall also show
9-18 the amount of taxes required to be levied and collected during such
9-19 fiscal year, and, upon final approval of the budget, the board of
9-20 directors shall levy such tax as may be required and certify the
9-21 tax rate for such year to the tax assessor and collector of the
9-22 district, and it shall be the duty of said tax assessor and
9-23 collector of the district to assess and collect such tax.
9-24 Sec. 8. (a) If the board of directors declares that funds
9-25 are not available to meet the lawfully authorized obligations of
9-26 the district and that an emergency exists, the board may borrow
9-27 money at a rate not to exceed the maximum annual percentage rate
10-1 allowed by law at the time of the loan for district obligations.
10-2 (b) To secure a loan, the board may pledge:
10-3 (1) the revenues of the district that are not pledged
10-4 to the bonded indebtedness of the district;
10-5 (2) district taxes to be levied by the district during
10-6 the 12-month period following the date of the pledge that are not
10-7 pledged to pay the principal of or interest on district bonds; or
10-8 (3) district bonds that have been authorized but not
10-9 sold.
10-10 (c) A loan for which taxes or bonds are pledged shall mature
10-11 not later than the first anniversary of the date on which the loan
10-12 is made. A loan for which revenues are pledged shall mature not
10-13 later than the fifth anniversary of the date on which the loan is
10-14 made.
10-15 (d) The board may not spend money obtained from a loan under
10-16 this section for any purpose other than the purpose for which the
10-17 board declared an emergency. If taxes or bonds are pledged to pay
10-18 the loan, the board may not spend the loan proceeds for a purpose
10-19 other than the purpose for which the taxes were levied or the
10-20 bonds were authorized. [In the event the hospital district is
10-21 established and created, all right, title, and interest in and to
10-22 any buildings, improvements, furnishings, and equipment owned and
10-23 operated by a hospital authority established pursuant to Article
10-24 4437e, Vernon's Texas Civil Statutes, and located wholly within the
10-25 boundaries of such hospital authority, including the unspent
10-26 portions of any funds therefore set up or appropriated by budget or
10-27 otherwise for the support and maintenance of hospital facilities
11-1 and for the security and payment of outstanding debt, can be
11-2 transferred to and become the funds of the district. In addition
11-3 all obligations under contract by such hospital authority for
11-4 hospital purposes, including any outstanding bonded indebtedness of
11-5 the hospital authority, can be assumed and discharged by the
11-6 hospital district without prejudice to the rights of third parties;
11-7 and such hospital authority by virtue of such assumption shall be
11-8 by the hospital district relieved of any further liability for the
11-9 payment thereof or for providing interest and sinking-fund
11-10 requirements thereon; provided that nothing herein contained shall
11-11 limit or affect any of the rights of any of the holders of such
11-12 bonds of the hospital authority in the event of default in the
11-13 payment of the principal of or interest on any of such bonds in
11-14 accordance with their respective terms. As soon as the hospital
11-15 district is created and authorized at the election hereinabove
11-16 provided, the governing body of such hospital authority can
11-17 complete the transfer of properties herein authorized by executing
11-18 and delivering to the hospital district, to wit, to its said board
11-19 of directors, an instrument in writing conveying to said hospital
11-20 district the hospital property located within the district's
11-21 boundaries, including lands, buildings, furnishings, and equipment;
11-22 and can transfer to said hospital district the funds hereinabove
11-23 provided to become vested in the hospital district, upon being
11-24 furnished the certificate of the president of the board of
11-25 directors of the district to the fact that a depository for the
11-26 district's funds has been selected and has qualified, which funds
11-27 shall, in the hands of the hospital district and of its board of
12-1 directors, be used for all or any of the same purposes as, and for
12-2 no other purpose than, the purposes for which said hospital
12-3 authority transferring such funds could lawfully have used the same
12-4 had they remained the property and funds of such hospital
12-5 authority.]
12-6 [(b) In the alternative to Subsection (a) of this section,
12-7 the hospital district is hereby authorized and empowered to
12-8 purchase from any such hospital authority, as described in
12-9 Subsection (a), and each such hospital authority is hereby
12-10 authorized to sell to said hospital district any and all of its
12-11 hospital facilities, including all lands, buildings, equipment, and
12-12 properties, at a price equal to the cost of paying and retiring all
12-13 of the hospital authority's outstanding revenue bonds by utilizing
12-14 one or more of the following methods, to wit: (1) by selling
12-15 district bonds for cash in an amount sufficient to pay the
12-16 authority's bonds and any premiums required to the bondholders to
12-17 prepay the same prior to maturity or option date, and the payment
12-18 thereof by the authority; or (2) by obtaining the consent of the
12-19 holders of the authority's outstanding bonds to a purchase of the
12-20 authority's hospital facilities and continuing the pledge of the
12-21 revenues securing the authority's revenue bonds; or (3) by
12-22 exchanging district bonds for such outstanding revenue bonds or
12-23 refunding them with district bonds; or (4) by selling district
12-24 bonds for cash in an amount necessary, without account for
12-25 investment, to pay and retire such revenue bonds (both principal
12-26 and interest) as they become due or mature, but not longer than the
12-27 earliest option date, and making firm banking arrangements for
13-1 such outstanding revenue bonds of the authority by depositing the
13-2 proceeds from the sale of the district's bonds into an interest and
13-3 sinking fund from which such revenue bonds are payable; or (5) any
13-4 combination of the foregoing.]
13-5 Sec. 9. The board of directors of the hospital district
13-6 shall have the power and authority to issue and sell bonds for the
13-7 purchase, construction, acquisition, repair, or renovation of
13-8 buildings and improvements and equipping the same for hospital
13-9 purposes[; including but not limited to the purchasing and
13-10 acquiring, and from time to time improving, repairing, renovating,
13-11 and equipping all buildings, improvements, furnishings, and
13-12 equipment of any hospital authority established prior to the
13-13 election for the creation of the hospital district and pursuant to
13-14 the provisions of Article 4437e, Vernon's Texas Civil Statutes, and
13-15 located wholly within the boundaries of the hospital district].
13-16 Such bonds may be payable from (1) a tax levied to create an
13-17 interest and sinking fund sufficient to pay the interest on and
13-18 principal of the bonds, as the same become due and mature, provided
13-19 such tax together with any other taxes levied by the district shall
13-20 not exceed 75 cents on each $100 valuation of taxable property in
13-21 any one year, or (2) all or any part of the revenues of the
13-22 district to be derived from the operation of its hospital or
13-23 hospitals, and such revenue bonds may be additionally secured by a
13-24 mortgage or deed-of-trust lien on any part or all of its
13-25 properties. No bonds payable from taxes [(except refunding bonds
13-26 and bonds issued to purchase and acquire all buildings,
13-27 improvements, furnishings, and equipment of a hospital authority,
14-1 as provided in Section 8(b) of this Act)] shall be issued by the
14-2 hospital district until authorized by a majority vote of the
14-3 resident qualified electors[, who own taxable property within the
14-4 district and who have duly rendered the same for taxation,] voting
14-5 at an election called and held for such purpose. Such election for
14-6 the authorization to issue tax bonds may be called by the board of
14-7 directors on its own motion, and the order calling the election
14-8 shall specify the date of the election, the place or places where
14-9 the election shall be held, the presiding officers thereof, the
14-10 purpose for which the bonds are to be issued, the amount thereof,
14-11 and the maximum maturity date of such bonds (not to exceed 40 years
14-12 from the date of issuance). Notice of such bond election shall be
14-13 given as required by Article 704, Revised Statutes [by publishing a
14-14 substantial copy of the order calling the election in a newspaper
14-15 of general circulation in the district once a week for two
14-16 consecutive weeks, the date of the first publication to be at least
14-17 14 days prior to the date set for the election].
14-18 Revenue bonds of the district may be issued without an
14-19 election in the manner and in accordance with the procedures and
14-20 requirements specified for the issuance of revenue bonds by county
14-21 hospital authorities in Sections 264.042, 264.043, 264.046,
14-22 264.047, 264.048, and 264.049, Health and Safety Code [8, 10, 11,
14-23 12, and 13 of Article 4494r, Vernon's Texas Civil Statutes].
14-24 The bonds of the district may be made optional for redemption
14-25 prior to maturity date at the discretion of the board of directors,
14-26 may be in any denomination fixed and determined in the order
14-27 authorizing the issuance of such securities, and may be issued and
15-1 sold at any price or prices and bear interest at the legal [any]
15-2 rate or rates as shall be determined within the discretion of the
15-3 board of directors of the district. Such bonds shall be executed
15-4 in the name of the hospital district and on its behalf by the
15-5 president of the board of directors and countersigned by the
15-6 secretary of the board of directors and shall be subject to the
15-7 same requirements in the matter of approval thereof by the
15-8 Attorney General of the State of Texas and the registration thereof
15-9 by the Comptroller of Public Accounts of the State of Texas as are
15-10 by law provided for such approval and registration of bonds of
15-11 counties of this state. Upon the approval of such bonds by the
15-12 Attorney General of Texas and registration by the comptroller, the
15-13 same shall be incontestable for any cause.
15-14 Sec. 10. The board of directors may, without an election,
15-15 issue bonds of the district (payable from taxes or revenues) to
15-16 refund and pay off any validly issued and outstanding bonds
15-17 heretofore or hereafter issued by the district [and any bonds or
15-18 other obligations assumed by it under the provisions of Section 8
15-19 of this Act;] provided that [,] any such refunding bonds [shall]
15-20 bear interest at the same rate or at a lesser rate than the bonds
15-21 being refunded unless it be shown mathematically that a savings
15-22 will result in the total amount of interest to be paid. The
15-23 district shall issue refunding bonds as provided by Chapter 784,
15-24 Acts of the 61st Legislature, Regular Session, 1969 (Article
15-25 717k-3, Vernon's Texas Civil Statutes). If the district assumes
15-26 any revenue bonds of another [a] hospital [authority], it may
15-27 refund them with the same authority and in the same manner as if
16-1 the district had originally issued such bonds and pursuant to any
16-2 general law of the State of Texas authorizing refunding bonds and
16-3 applicable to hospital districts.
16-4 SECTION 2. (a) The district shall hold an election for
16-5 directors on May 2, 1998. At that election nine new directors
16-6 shall be elected. The three directors who receive the three
16-7 highest total number of votes shall serve three-year terms, the
16-8 three directors who receive the fourth-, fifth-, and sixth-highest
16-9 number of total votes shall serve two-year terms, and the remaining
16-10 directors shall serve one-year terms. If two or more persons
16-11 receive the same number of votes and if it is necessary to break
16-12 the tie so that terms may be assigned under this subsection, those
16-13 persons shall draw lots to determine their respective terms.
16-14 (b) The terms of the directors serving on the board
16-15 immediately before the date of the election expire when a majority
16-16 of the directors elected on May 2, 1998, take office.
16-17 SECTION 3. The importance of this legislation and the
16-18 crowded condition of the calendars in both houses create an
16-19 emergency and an imperative public necessity that the
16-20 constitutional rule requiring bills to be read on three several
16-21 days in each house be suspended, and this rule is hereby suspended,
16-22 and that this Act take effect and be in force from and after its
16-23 passage, and it is so enacted.