By:  Haywood                                          S.B. No. 1626
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to the Chillicothe Hospital District.
 1-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-3           SECTION 1.  Subsections (f) and (g), Section 3, Chapter 74,
 1-4     Acts of the 66th Legislature, Regular Session, 1979, are amended to
 1-5     read as follows:
 1-6           (f)  The commissioners court shall determine the seven
 1-7     candidates for director receiving the highest number of votes at
 1-8     the creation election and declare those persons elected to the
 1-9     board.  The commissioners court also shall declare the terms of
1-10     each director.  Successors to the board shall be elected by vote of
1-11     the qualified electors of the entire district for two-year terms.
1-12     The board shall publish notice of each election of directors in a
1-13     newspaper or newspapers that individually or collectively provides
1-14     general circulation in the district one time at least 30 days
1-15     before the date of the election.  Any person desiring to have his
1-16     or her name printed on the ballot as a candidate for director shall
1-17     file an application with the secretary of the board of directors at
1-18     least 45 [25] days before the election [a petition signed by at
1-19     least 15 qualified electors].  The board shall canvass the returns
1-20     and declare the results.  A vacancy in office shall be filled for
1-21     the unexpired term by appointment by the remainder of the board of
1-22     directors.
1-23           (g)  Each member of the board shall qualify by executing the
1-24     constitutional oath of office and may be required to execute [by
 2-1     executing] good and sufficient bond, to be approved by the
 2-2     commissioners court, for $5,000 payable to the district,
 2-3     conditioned upon the faithful performance of that director's duties
 2-4     as director.  The oath and bond shall be kept in the permanent
 2-5     records of the district.  The district may provide for directors'
 2-6     bonds with district funds.
 2-7           SECTION 2.  Sections 4 and 5, Chapter 74, Acts of the 66th
 2-8     Legislature, Regular Session, 1979, are amended to read as follows:
 2-9           Sec. 4.  POWERS AND DUTIES.  (a)  The board shall manage,
2-10     control, and administer the hospital system and all funds and
2-11     resources of the district, but in no event shall any operating,
2-12     depreciation, or building reserves be invested in any funds or
2-13     securities other than those specified in Article 836 or 837,
2-14     Revised [Civil] Statutes [of Texas, 1925, as amended].  The
2-15     district, through its board, may sue and be sued and may promulgate
2-16     rules governing the operation of the hospital, hospital system, its
2-17     staff, and its employees.  The board may appoint qualified persons
2-18     as administrator of the hospital district, attorney for the
2-19     district, and assistant to the administrator.  The administrator,
2-20     the attorney, and the assistant administrator, if any, shall serve
2-21     at the will of the board and shall receive the compensation
2-22     determined by the board.  The administrator may [shall], on
2-23     assuming his or her duties, execute a bond payable to the hospital
2-24     district in an amount to be set by the board, in no event less than
2-25     $5,000, conditioned that he or she shall perform the duties
2-26     required of him or her, and containing such other conditions as the
 3-1     board may require.  The board may pay for the bond with district
 3-2     funds.  The administrator shall supervise all the work and
 3-3     activities of the district and shall have general direction of the
 3-4     affairs of the district, subject to the limitations as may be
 3-5     prescribed by the board.  The board may appoint to the staff
 3-6     doctors it may deem necessary for the efficient operation of the
 3-7     district and may provide for temporary appointments to the staff if
 3-8     warranted by circumstances.
 3-9           (b)  The board may purchase or lease property, facilities,
3-10     and equipment for the district to use in the hospital system and
3-11     may mortgage or pledge the property, facilities, or equipment as
3-12     security for the payment of the purchase price.
3-13           (c)  The board may delegate to the administrator the
3-14     authority to employ technicians, nurses, and employees of the
3-15     district.
3-16           (d)  The board may contract with other political subdivisions
3-17     or governmental agencies whereby the district will provide
3-18     investigatory or other services as to facilities for the medical
3-19     care, hospital, or welfare needs of the inhabitants of the district
3-20     and may contract with any county or incorporated municipality
3-21     located outside its boundaries for reimbursement for the care and
3-22     treatment of the sick, diseased, or injured persons of that county
3-23     or municipality.  The district may also contract with the state or
3-24     agencies of the federal government for the reimbursement for the
3-25     treatment of sick, diseased, or injured persons.
3-26           (e)  The board may enter into an interlocal agreement with
 4-1     another political subdivision for the purpose of operating the
 4-2     hospital district.
 4-3           (f)  The board may also enter into a contract or contracts to
 4-4     provide administrative and other personnel for the operation of the
 4-5     hospital facilities, but in no event may a contract be for a period
 4-6     in excess of 25 years from the date the contract is entered into.
 4-7     The board may transfer district hospital facilities by lease to
 4-8     individuals, corporations, or other legal entities and may sell or
 4-9     otherwise dispose of the district's property, facilities, and
4-10     equipment.
4-11           (g)  The board may provide retirement benefits for the
4-12     employees of the district by establishing or administering a
4-13     retirement program or electing to participate in the Texas County
4-14     and District Retirement System or any other statewide retirement
4-15     system in which the district is eligible to participate.
4-16           (h)  The board may spend district funds to recruit
4-17     physicians, nurses, and other trained medical personnel.  The board
4-18     may contract with one or more full-time medical students or other
4-19     students in a health occupation, each of whom must be enrolled in
4-20     good standing in an accredited medical school, college, or
4-21     university, to pay the student's tuition or other expenses in
4-22     consideration of the student's contractual agreement to serve as an
4-23     employee or independent contractor for the district under terms
4-24     provided in the contract.
4-25           (i)  The board may institute a suit to enforce the payment of
4-26     taxes and to forclose liens to secure the payment of taxes due the
 5-1     district.
 5-2           Sec. 5.  BUDGET.  The district shall be operated on the basis
 5-3     of a fiscal year established by the board, provided the fiscal year
 5-4     may not be changed during the time revenue bonds of the district
 5-5     are outstanding or more than once in any 24-month period.  The
 5-6     board shall have an annual audit made of the financial condition of
 5-7     the district, which together with other records of the district
 5-8     shall be open to inspection at the principal office of the
 5-9     district.  The administrator shall prepare an annual budget for
5-10     approval by the board.  The budget shall also contain a complete
5-11     financial statement of the district showing all outstanding
5-12     obligations of the district, the cash on hand to the credit of each
5-13     fund of the district, the funds received from all sources during
5-14     the previous year, the funds available from all sources during the
5-15     ensuing year, the balances expected at the end of the year in which
5-16     the budget is being prepared, estimated revenues and balances
5-17     available to cover the proposed budget, and the estimated tax rate
5-18     that will be required.  A public hearing on the annual budget shall
5-19     be held by the board after notice of a hearing has been published
5-20     in accordance with Chapter 551, Government Code [a newspaper with
5-21     general circulation in the district one time at least 10 days
5-22     before the date set for the hearing].  Any person residing in the
5-23     district is entitled to be present and participate in the hearing.
5-24     At the conclusion of the hearing, the budget, as proposed by the
5-25     administrator, shall be acted on by the board.  The board shall
5-26     have authority to make changes in the budget that in its judgment
 6-1     the law warrants and the interest of the taxpayers demands.  No
 6-2     expenditure may be made for any expense not included in the annual
 6-3     budget or an amendment to it.  The annual budget may be amended
 6-4     from time to time as the circumstances may require, but the annual
 6-5     budget and all amendments to it shall be approved by the board.  As
 6-6     soon as practicable after the close of each fiscal year, the
 6-7     administrator shall prepare for the board a full sworn statement of
 6-8     all money belonging to the district and a full account of the
 6-9     disbursements of same.
6-10           SECTION 3.  Subsection (a), Section 6, Chapter 74, Acts of
6-11     the 66th Legislature, Regular Session, 1979, is amended to read as
6-12     follows:
6-13           (a)  The board may issue and sell its bonds in the name and
6-14     on the faith and credit of the hospital district for any purpose
6-15     related to the purchase, construction, acquisition, repair, and
6-16     renovation of buildings and improvements and equipping the same for
6-17     hospital purposes.  At the time of the issuance of any bonds
6-18     payable from taxation [by the district], a tax shall be levied by
6-19     the board sufficient to create an interest and sinking fund to pay
6-20     the interest on and principal of the bonds as they mature,
6-21     providing that the tax together with any other taxes levied for the
6-22     district shall not exceed the limit approved by the voters at the
6-23     election authorizing the levy of taxes [75 cents on each $100
6-24     valuation of all taxable property located in the district subject
6-25     to hospital district taxation in any one year].  No bonds may be
6-26     issued by the hospital district except refunding bonds until
 7-1     authorized by a majority of the qualified electors of the district.
 7-2     The board, in ordering a bond election, shall specify the date of
 7-3     the election, the amount of bonds to be authorized, the maximum
 7-4     maturity of the bonds, the place or places where the election will
 7-5     be held, and the presiding judge and alternate judge for each
 7-6     voting place and shall provide for clerks as in county elections.
 7-7     Section 41.001, [9b, Texas] Election Code, [as amended (Article
 7-8     2.01b, Vernon's Texas Election Code),] does not apply to a bond
 7-9     election.  Notice of any bond election shall be given as provided
7-10     in Article 704, Revised [Civil] Statutes [of Texas, 1925, as
7-11     amended], and the election shall be conducted in accordance with
7-12     the Texas Election Code, [as amended,] except as modified by the
7-13     provisions of this Act.  The board shall canvass the returns and
7-14     declare the results.
7-15           SECTION 4.  Section 8, Chapter 74, Acts of the 66th
7-16     Legislature, Regular Session, 1979, is amended to read as follows:
7-17           Sec. 8.  REVENUE BONDS.  In addition to the power to issue
7-18     bonds payable from taxes levied by the district as contemplated by
7-19     Section 6 of this Act, the board may issue revenue bonds and refund
7-20     any previously issued revenue bonds for purchasing, constructing,
7-21     acquiring, repairing, equipping, or renovating buildings and
7-22     improvements for hospital purposes, and for acquiring sites for
7-23     hospital purposes.  The bonds shall be payable from and secured by
7-24     a pledge of all or any part of the revenues of the district to be
7-25     derived from the operation of its hospital or hospitals, and the
7-26     bonds may be additionally secured by a mortgage or deed of trust
 8-1     lien on any part or all of its property.  The bonds shall be issued
 8-2     in the manner and in accordance with the procedures and
 8-3     requirements specified for the issuance of revenue bonds by county
 8-4     hospital authorities in Sections 264.042, 264.043, 264.046,
 8-5     264.047, 264.048, and 264.049, Health and Safety Code [Sections 8,
 8-6     10, 11, 12, and 13 of Chapter 122, Acts of the 58th Legislature,
 8-7     1963, as amended (Article 4494r, Vernon's Texas Civil Statutes)].
 8-8           SECTION 5.  Subsection (b), Section 9, Chapter 74, Acts of
 8-9     the 66th Legislature, Regular Session, 1979, is amended to read as
8-10     follows:
8-11           (b)  The board may prescribe the method and manner of making
8-12     purchases and expenditures by and for the hospital district and may
8-13     prescribe all accounting and control procedures.  Contracts for
8-14     construction involving the expenditure of more than $10,000 may be
8-15     made only after advertising in the manner provided by Section
8-16     252.041, Local Government Code [Chapter 163, General Laws, Acts of
8-17     the 42nd Legislature, Regular Session, 1931, as amended (Article
8-18     2368a, Vernon's Texas Civil Statutes)].  The provisions of Chapter
8-19     2253, Government Code [Article 5160, Revised Civil Statutes of
8-20     Texas, 1925, as amended], relating to performance and payment bonds
8-21     shall apply to construction contracts let by the district.  The
8-22     district may acquire equipment for use in its hospital system and
8-23     mortgage or pledge the property acquired as security for the
8-24     payment of the purchase price.  Except as permitted in the
8-25     preceding sentence and Sections 6 and 7 of this Act, the district
8-26     may incur no obligation payable from revenues of the district, tax
 9-1     or otherwise, except those on hand or to be on hand within the then
 9-2     current and following fiscal years of the district.
 9-3           SECTION 6.  Subsection (a), Section 13, Chapter 74, Acts of
 9-4     the 66th Legislature, Regular Session, 1979, is amended to read as
 9-5     follows:
 9-6           (a)  The district shall have the right and power of eminent
 9-7     domain for the purpose of acquiring by condemnation any and all
 9-8     property of any kind and character in fee simple, or any lesser
 9-9     interest in property, within the boundaries of the district
9-10     necessary or convenient to the powers, rights, and privileges
9-11     conferred by this Act, in the manner provided by the general law
9-12     with respect to condemnation by counties.  The district shall not
9-13     be required to make deposits in the registry of the trial court of
9-14     the sum required by Section 21.021, Property Code, [Paragraph 2,
9-15     Article 3268, Revised Civil Statutes of Texas, 1925, as amended],
9-16     or to make bond as provided in that law.  In condemnation
9-17     proceedings being prosecuted by the district, the district shall
9-18     not be required to pay in advance or give bond or other security
9-19     for costs in the trial court or to give any bond otherwise required
9-20     for the issuance of a temporary restraining order or a temporary
9-21     injunction or to give bond for costs or for supersedeas on any
9-22     appeal or writ of error.
9-23           SECTION 7.  Section 14, Chapter 74, Acts of the 66th
9-24     Legislature, Regular Session, 1979, is amended to read as follows:
9-25           Sec. 14.  TAX ASSESSMENT AND COLLECTION.  (a)  The board may
9-26     levy taxes for the entire year in which the district is created as
 10-1    a result of the election provided in this Act.  All taxes of the
 10-2    district shall be assessed and collected on county tax values as
 10-3    provided in Subsection (b) of this section unless the board, by
 10-4    majority vote, elects to have taxes assessed and collected by its
 10-5    own tax assessor-collector under Subsection (b) [(c)] of this
 10-6    section.  An election may be held annually before December 1 and
 10-7    shall govern the manner in which taxes are subsequently assessed
 10-8    and collected until changed by a similar resolution.  Hospital tax
 10-9    shall be levied on all taxable property within the district subject
10-10    to hospital district taxation.
10-11          (b)  The board may annually impose property taxes in an
10-12    amount not to exceed the limit approved by the voters at the
10-13    election authorizing the levy of taxes.  The tax rate for all
10-14    purposes may not exceed 75 cents on each $100 valuation of all
10-15    taxable property in the district.  The taxes may be used to pay for
10-16    indebtedness issued or assumed by the district and for the
10-17    maintenance and operation expenses of the district.  The district
10-18    may not impose taxes to pay the principal of or interest on revenue
10-19    bonds.  The Tax Code governs the appraisal, assessment, and
10-20    collection of district taxes.  The board may provide for the
10-21    appointment of a tax assessor-collector of the district or may
10-22    contract for the assessment and collection of taxes as provided by
10-23    the Tax Code.  [Under this subsection, district taxes shall be
10-24    assessed and collected on county tax values in the same manner as
10-25    provided by law with relation to county taxes.  The tax
10-26    assessor-collector of Hardeman County shall be charged and required
 11-1    to accomplish the assessment and collection of all taxes levied by
 11-2    and on behalf of the district.  The assessor-collector of taxes
 11-3    shall charge and deduct from payments to the hospital district an
 11-4    amount as fees for assessing and collecting the taxes at a rate of
 11-5    one percent of the taxes assessed and one percent of the taxes
 11-6    collected, but in no event shall the amount paid exceed $5,000 in
 11-7    any one calendar year.  These fees shall be deposited in the
 11-8    officers salary fund of the county and reported as fees of office
 11-9    of the county tax assessor collector.  Interest and penalties on
11-10    taxes paid to the hospital district shall be the same as in the
11-11    case of county taxes.  Discounts shall be the same as allowed by
11-12    the county.  The residue of tax collections after deductions of
11-13    discounts and fees for assessing and collecting shall be deposited
11-14    in the district's depository.  The bonds of the county tax
11-15    assessor-collector shall stand as security for the proper
11-16    performance of his or her duties as assessor-collector of the
11-17    district; or if in the judgment of the board it is necessary,
11-18    additional bond payable to the district may be required.  In all
11-19    matters pertaining to the assessment, collection, and enforcement
11-20    of taxes for the district, the county tax assessor-collector may
11-21    act in all respects according to the laws of the State of Texas
11-22    relating to state and county taxes.]
11-23          [(c)  Under this subsection, taxes shall be assessed and
11-24    collected by a tax assessor-collector appointed by the board, which
11-25    shall also fix the term of his or her employment, compensation, and
11-26    requirement for bond to assure the faithful performance of his or
 12-1    her duties, but in no event shall the bond be for less than $5,000.
 12-2    The directors shall appoint five persons to serve as a board of
 12-3    equalization for two-year terms and shall fix their compensation.
 12-4    The members of the board of equalization and the tax
 12-5    assessor-collector shall be residents of the district, and each
 12-6    shall have the same duties, including the obligation to execute the
 12-7    oath of office, as required of county officials exercising those
 12-8    powers and duties.  Except as provided in this law to the contrary,
 12-9    all the provisions of Title 122, Revised Civil Statutes of Texas,
12-10    1925, as amended, shall apply to the district.]
12-11          SECTION 8.  Chapter 74, Acts of the 66th Legislature, Regular
12-12    Session, 1979, is amended by adding Sections 16a, 16b, and 16c to
12-13    read as follows:
12-14          Sec. 16a.  EMERGENCY LOANS.  (a)  If the board declares that
12-15    funds are not available to meet the lawfully authorized obligations
12-16    of the district and that an emergency exists, the board may borrow
12-17    money at a rate not to exceed the maximum annual percentage rate
12-18    allowed by law for district obligations at the time of the loan.
12-19          (b)  To secure an emergency loan, the board may pledge:
12-20                (1)  the revenues of the district that are not pledged
12-21    to pay the bonded indebtedness of the district;
12-22                (2)  district taxes to be levied by the district during
12-23    the 12-month period following the date of the pledge that are not
12-24    pledged to pay the principal of or interest on district bonds; or
12-25                (3)  district bonds that have been authorized but not
12-26    sold.
 13-1          (c)  An emergency loan for which taxes or bonds are pledged
 13-2    shall mature not later than the first anniversary of the date on
 13-3    which the loan is made.  An emergency loan for which district
 13-4    revenues are pledged shall mature not later than the fifth
 13-5    anniversary of the date on which the loan is made.
 13-6          (d)  The board may not spend money obtained from a loan under
 13-7    this section for any purpose other than the purpose for which the
 13-8    board declared an emergency.  If taxes or bonds are pledged to pay
 13-9    the loan, the board may not spend the loan proceeds for a purpose
13-10    other than the purpose for which the taxes were levied or the bonds
13-11    were authorized.
13-12          Sec. 16b.  OTHER LOANS.  (a)  The board may borrow money at a
13-13    rate not to exceed the maximum annual percentage rate allowed by
13-14    law for district obligations at the time of the loan.
13-15          (b)  To secure a loan, the board may pledge:
13-16                (1)  the revenues of the district that are not pledged
13-17    to pay the bonded indebtedness of the district;
13-18                (2)  district taxes to be levied by the district during
13-19    the 12-month period following the date of the pledge that are not
13-20    pledged to pay the principal of or interest on district bonds; or
13-21                (3)  district bonds that have been authorized but not
13-22    sold.
13-23          (c)  A loan for which taxes or bonds are pledged shall mature
13-24    not later than the first anniversary of the date on which the loan
13-25    is made.  A loan for which district revenues are pledged shall
13-26    mature not later than the fifth anniversary of the date on which
 14-1    the loan is made.
 14-2          Sec. 16c.  DISSOLUTION.  (a)  The district may be dissolved
 14-3    only if the dissolution is approved by a majority of the qualified
 14-4    voters of the district voting in an election called and held for
 14-5    that purpose.
 14-6          (b)  The board may order an election on the question of
 14-7    dissolving the district and disposing of the district's assets and
 14-8    obligations.  The board shall order an election if the board
 14-9    receives a petition requesting an election that is signed by a
14-10    number of residents of the district equal to at least 15 percent of
14-11    the registered voters in the district.
14-12          (c)  The election shall be held not later than the 60th day
14-13    after the date the election is ordered.  Section 41.001(a),
14-14    Election Code, does not apply to an election ordered under this
14-15    section.  The order calling the election shall state:
14-16                (1)  the nature of the election, including the
14-17    proposition that is to appear on the ballot;
14-18                (2)  the date of the election;
14-19                (3)  the hours during which the polls will be open; and
14-20                (4)  the location of the polling places.
14-21          (d)  The board shall give notice of the election by
14-22    publishing a substantial copy of the election order in a newspaper
14-23    with general circulation in the district once a week for two
14-24    consecutive weeks.  The first publication must appear not less than
14-25    35 days before the date set for the election.  The ballot for the
14-26    election shall be printed to permit voting for or against the
 15-1    proposition:  "The dissolution of the Chillicothe Hospital
 15-2    District."
 15-3          (e)  If a majority of the votes in the election favor
 15-4    dissolution, the board shall find that the district is dissolved.
 15-5    If a majority of the votes in the election do not favor
 15-6    dissolution, the board shall continue to administer the district,
 15-7    and another election on the question of dissolution may not be held
 15-8    before the first anniversary of the most recent election to
 15-9    dissolve the district.
15-10          (f)  If a majority of the votes in the election favor
15-11    dissolution, the board shall:
15-12                (1)  transfer the land, buildings, improvements,
15-13    equipment, and other assets that belong to the district to a county
15-14    or another governmental entity in the county in which the district
15-15    is located; or
15-16                (2)  administer the property, assets, and debts until
15-17    all funds have been disposed of and all district debts have been
15-18    paid or settled.
15-19          (g)  If the district transfers the land, buildings,
15-20    improvements, equipment, and other assets to a county or other
15-21    governmental entity, the county or entity assumes all debts and
15-22    obligations of the district at the time of the transfer, and the
15-23    district is dissolved.
15-24          (h)  After the board finds that the district is dissolved,
15-25    the board shall:
15-26                (1)  determine the debt owed by the district; and
 16-1                (2)  impose on the property included in the district's
 16-2    tax rolls a tax that is in proportion of the debt to the property
 16-3    value.
 16-4          (i)  When all outstanding debts and obligations of the
 16-5    district are paid, the board shall order the secretary to return
 16-6    the pro rata share of all unused tax money to each district
 16-7    taxpayer.
 16-8          (j)  A taxpayer may request that the taxpayer's share of
 16-9    surplus tax money be credited to the taxpayer's county taxes.  If
16-10    the taxpayer requests the credit, the board shall direct the
16-11    secretary to transmit the funds to the county tax
16-12    assessor-collector.
16-13          (k)  After the district has paid all its debts and has
16-14    disposed of all its assets and funds as prescribed by this section,
16-15    the board shall file a written report with the Commissioners Court
16-16    of Hardeman County setting forth a summary of the board's actions
16-17    in dissolving the district.
16-18          (l)  Not later than the 10th day after the date it receives
16-19    the report and determines that the requirements of this section
16-20    have been fulfilled, the Commissioners Court of Hardeman County
16-21    shall enter an order dissolving the district and releasing the
16-22    board from any further duty or obligation.
16-23          (m)  Notwithstanding any other provision of this Act, the
16-24    district may not be dissolved unless the board provides for the
16-25    sale or transfer of the district's assets and liabilities to
16-26    another person or entity.  The dissolution of the district and the
 17-1    sale or transfer of the district's assets or liabilities may not
 17-2    contravene a trust indenture or bond resolution relating to the
 17-3    outstanding bonds of the district.  The dissolution and sale or
 17-4    transfer does not diminish or impair the rights of a holder of an
 17-5    outstanding bond, warrant, or other obligation of the district.
 17-6          (n)  The sale or transfer of the district's assets and
 17-7    liabilities must satisfy the debt and bond obligations of the
 17-8    district in a manner that protects the interests of the residents
 17-9    of the district, including the residents' collective property
17-10    rights in the district's assets.  A grant from federal funds is an
17-11    obligation to be repaid in satisfaction.  The district may not
17-12    transfer or dispose of the district's assets except for due
17-13    compensation unless the transfer is made to another governmental
17-14    entity that serves the district and the transferred assets are to
17-15    be used for the benefit of the residents of the district.
17-16          SECTION 9.  This Act takes effect September 1, 1999.
17-17          SECTION 10.  The importance of this legislation and the
17-18    crowded condition of the calendars in both houses create an
17-19    emergency and an imperative public necessity that the
17-20    constitutional rule requiring bills to be read on three several
17-21    days in each house be suspended, and this rule is hereby suspended.