1-1 By: Haywood S.B. No. 1626
1-2 (In the Senate - Filed March 12, 1999; March 15, 1999, read
1-3 first time and referred to Committee on Intergovernmental
1-4 Relations; March 31, 1999, reported favorably by the following
1-5 vote: Yeas 5, Nays 0; March 31, 1999, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the Chillicothe Hospital District.
1-9 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-10 SECTION 1. Subsections (f) and (g), Section 3, Chapter 74,
1-11 Acts of the 66th Legislature, Regular Session, 1979, are amended to
1-12 read as follows:
1-13 (f) The commissioners court shall determine the seven
1-14 candidates for director receiving the highest number of votes at
1-15 the creation election and declare those persons elected to the
1-16 board. The commissioners court also shall declare the terms of
1-17 each director. Successors to the board shall be elected by vote of
1-18 the qualified electors of the entire district for two-year terms.
1-19 The board shall publish notice of each election of directors in a
1-20 newspaper or newspapers that individually or collectively provides
1-21 general circulation in the district one time at least 30 days
1-22 before the date of the election. Any person desiring to have his
1-23 or her name printed on the ballot as a candidate for director shall
1-24 file an application with the secretary of the board of directors at
1-25 least 45 [25] days before the election [a petition signed by at
1-26 least 15 qualified electors]. The board shall canvass the returns
1-27 and declare the results. A vacancy in office shall be filled for
1-28 the unexpired term by appointment by the remainder of the board of
1-29 directors.
1-30 (g) Each member of the board shall qualify by executing the
1-31 constitutional oath of office and may be required to execute [by
1-32 executing] good and sufficient bond, to be approved by the
1-33 commissioners court, for $5,000 payable to the district,
1-34 conditioned upon the faithful performance of that director's duties
1-35 as director. The oath and bond shall be kept in the permanent
1-36 records of the district. The district may provide for directors'
1-37 bonds with district funds.
1-38 SECTION 2. Sections 4 and 5, Chapter 74, Acts of the 66th
1-39 Legislature, Regular Session, 1979, are amended to read as follows:
1-40 Sec. 4. POWERS AND DUTIES. (a) The board shall manage,
1-41 control, and administer the hospital system and all funds and
1-42 resources of the district, but in no event shall any operating,
1-43 depreciation, or building reserves be invested in any funds or
1-44 securities other than those specified in Article 836 or 837,
1-45 Revised [Civil] Statutes [of Texas, 1925, as amended]. The
1-46 district, through its board, may sue and be sued and may promulgate
1-47 rules governing the operation of the hospital, hospital system, its
1-48 staff, and its employees. The board may appoint qualified persons
1-49 as administrator of the hospital district, attorney for the
1-50 district, and assistant to the administrator. The administrator,
1-51 the attorney, and the assistant administrator, if any, shall serve
1-52 at the will of the board and shall receive the compensation
1-53 determined by the board. The administrator may [shall], on
1-54 assuming his or her duties, execute a bond payable to the hospital
1-55 district in an amount to be set by the board, in no event less than
1-56 $5,000, conditioned that he or she shall perform the duties
1-57 required of him or her, and containing such other conditions as the
1-58 board may require. The board may pay for the bond with district
1-59 funds. The administrator shall supervise all the work and
1-60 activities of the district and shall have general direction of the
1-61 affairs of the district, subject to the limitations as may be
1-62 prescribed by the board. The board may appoint to the staff
1-63 doctors it may deem necessary for the efficient operation of the
1-64 district and may provide for temporary appointments to the staff if
2-1 warranted by circumstances.
2-2 (b) The board may purchase or lease property, facilities,
2-3 and equipment for the district to use in the hospital system and
2-4 may mortgage or pledge the property, facilities, or equipment as
2-5 security for the payment of the purchase price.
2-6 (c) The board may delegate to the administrator the
2-7 authority to employ technicians, nurses, and employees of the
2-8 district.
2-9 (d) The board may contract with other political subdivisions
2-10 or governmental agencies whereby the district will provide
2-11 investigatory or other services as to facilities for the medical
2-12 care, hospital, or welfare needs of the inhabitants of the district
2-13 and may contract with any county or incorporated municipality
2-14 located outside its boundaries for reimbursement for the care and
2-15 treatment of the sick, diseased, or injured persons of that county
2-16 or municipality. The district may also contract with the state or
2-17 agencies of the federal government for the reimbursement for the
2-18 treatment of sick, diseased, or injured persons.
2-19 (e) The board may enter into an interlocal agreement with
2-20 another political subdivision for the purpose of operating the
2-21 hospital district.
2-22 (f) The board may also enter into a contract or contracts to
2-23 provide administrative and other personnel for the operation of the
2-24 hospital facilities, but in no event may a contract be for a period
2-25 in excess of 25 years from the date the contract is entered into.
2-26 The board may transfer district hospital facilities by lease to
2-27 individuals, corporations, or other legal entities and may sell or
2-28 otherwise dispose of the district's property, facilities, and
2-29 equipment.
2-30 (g) The board may provide retirement benefits for the
2-31 employees of the district by establishing or administering a
2-32 retirement program or electing to participate in the Texas County
2-33 and District Retirement System or any other statewide retirement
2-34 system in which the district is eligible to participate.
2-35 (h) The board may spend district funds to recruit
2-36 physicians, nurses, and other trained medical personnel. The board
2-37 may contract with one or more full-time medical students or other
2-38 students in a health occupation, each of whom must be enrolled in
2-39 good standing in an accredited medical school, college, or
2-40 university, to pay the student's tuition or other expenses in
2-41 consideration of the student's contractual agreement to serve as an
2-42 employee or independent contractor for the district under terms
2-43 provided in the contract.
2-44 (i) The board may institute a suit to enforce the payment of
2-45 taxes and to forclose liens to secure the payment of taxes due the
2-46 district.
2-47 Sec. 5. BUDGET. The district shall be operated on the basis
2-48 of a fiscal year established by the board, provided the fiscal year
2-49 may not be changed during the time revenue bonds of the district
2-50 are outstanding or more than once in any 24-month period. The
2-51 board shall have an annual audit made of the financial condition of
2-52 the district, which together with other records of the district
2-53 shall be open to inspection at the principal office of the
2-54 district. The administrator shall prepare an annual budget for
2-55 approval by the board. The budget shall also contain a complete
2-56 financial statement of the district showing all outstanding
2-57 obligations of the district, the cash on hand to the credit of each
2-58 fund of the district, the funds received from all sources during
2-59 the previous year, the funds available from all sources during the
2-60 ensuing year, the balances expected at the end of the year in which
2-61 the budget is being prepared, estimated revenues and balances
2-62 available to cover the proposed budget, and the estimated tax rate
2-63 that will be required. A public hearing on the annual budget shall
2-64 be held by the board after notice of a hearing has been published
2-65 in accordance with Chapter 551, Government Code [a newspaper with
2-66 general circulation in the district one time at least 10 days
2-67 before the date set for the hearing]. Any person residing in the
2-68 district is entitled to be present and participate in the hearing.
2-69 At the conclusion of the hearing, the budget, as proposed by the
3-1 administrator, shall be acted on by the board. The board shall
3-2 have authority to make changes in the budget that in its judgment
3-3 the law warrants and the interest of the taxpayers demands. No
3-4 expenditure may be made for any expense not included in the annual
3-5 budget or an amendment to it. The annual budget may be amended
3-6 from time to time as the circumstances may require, but the annual
3-7 budget and all amendments to it shall be approved by the board. As
3-8 soon as practicable after the close of each fiscal year, the
3-9 administrator shall prepare for the board a full sworn statement of
3-10 all money belonging to the district and a full account of the
3-11 disbursements of same.
3-12 SECTION 3. Subsection (a), Section 6, Chapter 74, Acts of
3-13 the 66th Legislature, Regular Session, 1979, is amended to read as
3-14 follows:
3-15 (a) The board may issue and sell its bonds in the name and
3-16 on the faith and credit of the hospital district for any purpose
3-17 related to the purchase, construction, acquisition, repair, and
3-18 renovation of buildings and improvements and equipping the same for
3-19 hospital purposes. At the time of the issuance of any bonds
3-20 payable from taxation [by the district], a tax shall be levied by
3-21 the board sufficient to create an interest and sinking fund to pay
3-22 the interest on and principal of the bonds as they mature,
3-23 providing that the tax together with any other taxes levied for the
3-24 district shall not exceed the limit approved by the voters at the
3-25 election authorizing the levy of taxes [75 cents on each $100
3-26 valuation of all taxable property located in the district subject
3-27 to hospital district taxation in any one year]. No bonds may be
3-28 issued by the hospital district except refunding bonds until
3-29 authorized by a majority of the qualified electors of the district.
3-30 The board, in ordering a bond election, shall specify the date of
3-31 the election, the amount of bonds to be authorized, the maximum
3-32 maturity of the bonds, the place or places where the election will
3-33 be held, and the presiding judge and alternate judge for each
3-34 voting place and shall provide for clerks as in county elections.
3-35 Section 41.001, [9b, Texas] Election Code, [as amended (Article
3-36 2.01b, Vernon's Texas Election Code),] does not apply to a bond
3-37 election. Notice of any bond election shall be given as provided
3-38 in Article 704, Revised [Civil] Statutes [of Texas, 1925, as
3-39 amended], and the election shall be conducted in accordance with
3-40 the Texas Election Code, [as amended,] except as modified by the
3-41 provisions of this Act. The board shall canvass the returns and
3-42 declare the results.
3-43 SECTION 4. Section 8, Chapter 74, Acts of the 66th
3-44 Legislature, Regular Session, 1979, is amended to read as follows:
3-45 Sec. 8. REVENUE BONDS. In addition to the power to issue
3-46 bonds payable from taxes levied by the district as contemplated by
3-47 Section 6 of this Act, the board may issue revenue bonds and refund
3-48 any previously issued revenue bonds for purchasing, constructing,
3-49 acquiring, repairing, equipping, or renovating buildings and
3-50 improvements for hospital purposes, and for acquiring sites for
3-51 hospital purposes. The bonds shall be payable from and secured by
3-52 a pledge of all or any part of the revenues of the district to be
3-53 derived from the operation of its hospital or hospitals, and the
3-54 bonds may be additionally secured by a mortgage or deed of trust
3-55 lien on any part or all of its property. The bonds shall be issued
3-56 in the manner and in accordance with the procedures and
3-57 requirements specified for the issuance of revenue bonds by county
3-58 hospital authorities in Sections 264.042, 264.043, 264.046,
3-59 264.047, 264.048, and 264.049, Health and Safety Code [Sections 8,
3-60 10, 11, 12, and 13 of Chapter 122, Acts of the 58th Legislature,
3-61 1963, as amended (Article 4494r, Vernon's Texas Civil Statutes)].
3-62 SECTION 5. Subsection (b), Section 9, Chapter 74, Acts of
3-63 the 66th Legislature, Regular Session, 1979, is amended to read as
3-64 follows:
3-65 (b) The board may prescribe the method and manner of making
3-66 purchases and expenditures by and for the hospital district and may
3-67 prescribe all accounting and control procedures. Contracts for
3-68 construction involving the expenditure of more than $10,000 may be
3-69 made only after advertising in the manner provided by Section
4-1 252.041, Local Government Code [Chapter 163, General Laws, Acts of
4-2 the 42nd Legislature, Regular Session, 1931, as amended (Article
4-3 2368a, Vernon's Texas Civil Statutes)]. The provisions of Chapter
4-4 2253, Government Code [Article 5160, Revised Civil Statutes of
4-5 Texas, 1925, as amended], relating to performance and payment bonds
4-6 shall apply to construction contracts let by the district. The
4-7 district may acquire equipment for use in its hospital system and
4-8 mortgage or pledge the property acquired as security for the
4-9 payment of the purchase price. Except as permitted in the
4-10 preceding sentence and Sections 6 and 7 of this Act, the district
4-11 may incur no obligation payable from revenues of the district, tax
4-12 or otherwise, except those on hand or to be on hand within the then
4-13 current and following fiscal years of the district.
4-14 SECTION 6. Subsection (a), Section 13, Chapter 74, Acts of
4-15 the 66th Legislature, Regular Session, 1979, is amended to read as
4-16 follows:
4-17 (a) The district shall have the right and power of eminent
4-18 domain for the purpose of acquiring by condemnation any and all
4-19 property of any kind and character in fee simple, or any lesser
4-20 interest in property, within the boundaries of the district
4-21 necessary or convenient to the powers, rights, and privileges
4-22 conferred by this Act, in the manner provided by the general law
4-23 with respect to condemnation by counties. The district shall not
4-24 be required to make deposits in the registry of the trial court of
4-25 the sum required by Section 21.021, Property Code, [Paragraph 2,
4-26 Article 3268, Revised Civil Statutes of Texas, 1925, as amended],
4-27 or to make bond as provided in that law. In condemnation
4-28 proceedings being prosecuted by the district, the district shall
4-29 not be required to pay in advance or give bond or other security
4-30 for costs in the trial court or to give any bond otherwise required
4-31 for the issuance of a temporary restraining order or a temporary
4-32 injunction or to give bond for costs or for supersedeas on any
4-33 appeal or writ of error.
4-34 SECTION 7. Section 14, Chapter 74, Acts of the 66th
4-35 Legislature, Regular Session, 1979, is amended to read as follows:
4-36 Sec. 14. TAX ASSESSMENT AND COLLECTION. (a) The board may
4-37 levy taxes for the entire year in which the district is created as
4-38 a result of the election provided in this Act. All taxes of the
4-39 district shall be assessed and collected on county tax values as
4-40 provided in Subsection (b) of this section unless the board, by
4-41 majority vote, elects to have taxes assessed and collected by its
4-42 own tax assessor-collector under Subsection (b) [(c)] of this
4-43 section. An election may be held annually before December 1 and
4-44 shall govern the manner in which taxes are subsequently assessed
4-45 and collected until changed by a similar resolution. Hospital tax
4-46 shall be levied on all taxable property within the district subject
4-47 to hospital district taxation.
4-48 (b) The board may annually impose property taxes in an
4-49 amount not to exceed the limit approved by the voters at the
4-50 election authorizing the levy of taxes. The tax rate for all
4-51 purposes may not exceed 75 cents on each $100 valuation of all
4-52 taxable property in the district. The taxes may be used to pay for
4-53 indebtedness issued or assumed by the district and for the
4-54 maintenance and operation expenses of the district. The district
4-55 may not impose taxes to pay the principal of or interest on revenue
4-56 bonds. The Tax Code governs the appraisal, assessment, and
4-57 collection of district taxes. The board may provide for the
4-58 appointment of a tax assessor-collector of the district or may
4-59 contract for the assessment and collection of taxes as provided by
4-60 the Tax Code. [Under this subsection, district taxes shall be
4-61 assessed and collected on county tax values in the same manner as
4-62 provided by law with relation to county taxes. The tax
4-63 assessor-collector of Hardeman County shall be charged and required
4-64 to accomplish the assessment and collection of all taxes levied by
4-65 and on behalf of the district. The assessor-collector of taxes
4-66 shall charge and deduct from payments to the hospital district an
4-67 amount as fees for assessing and collecting the taxes at a rate of
4-68 one percent of the taxes assessed and one percent of the taxes
4-69 collected, but in no event shall the amount paid exceed $5,000 in
5-1 any one calendar year. These fees shall be deposited in the
5-2 officers salary fund of the county and reported as fees of office
5-3 of the county tax assessor collector. Interest and penalties on
5-4 taxes paid to the hospital district shall be the same as in the
5-5 case of county taxes. Discounts shall be the same as allowed by
5-6 the county. The residue of tax collections after deductions of
5-7 discounts and fees for assessing and collecting shall be deposited
5-8 in the district's depository. The bonds of the county tax
5-9 assessor-collector shall stand as security for the proper
5-10 performance of his or her duties as assessor-collector of the
5-11 district; or if in the judgment of the board it is necessary,
5-12 additional bond payable to the district may be required. In all
5-13 matters pertaining to the assessment, collection, and enforcement
5-14 of taxes for the district, the county tax assessor-collector may
5-15 act in all respects according to the laws of the State of Texas
5-16 relating to state and county taxes.]
5-17 [(c) Under this subsection, taxes shall be assessed and
5-18 collected by a tax assessor-collector appointed by the board, which
5-19 shall also fix the term of his or her employment, compensation, and
5-20 requirement for bond to assure the faithful performance of his or
5-21 her duties, but in no event shall the bond be for less than $5,000.
5-22 The directors shall appoint five persons to serve as a board of
5-23 equalization for two-year terms and shall fix their compensation.
5-24 The members of the board of equalization and the tax
5-25 assessor-collector shall be residents of the district, and each
5-26 shall have the same duties, including the obligation to execute the
5-27 oath of office, as required of county officials exercising those
5-28 powers and duties. Except as provided in this law to the contrary,
5-29 all the provisions of Title 122, Revised Civil Statutes of Texas,
5-30 1925, as amended, shall apply to the district.]
5-31 SECTION 8. Chapter 74, Acts of the 66th Legislature, Regular
5-32 Session, 1979, is amended by adding Sections 16a, 16b, and 16c to
5-33 read as follows:
5-34 Sec. 16a. EMERGENCY LOANS. (a) If the board declares that
5-35 funds are not available to meet the lawfully authorized obligations
5-36 of the district and that an emergency exists, the board may borrow
5-37 money at a rate not to exceed the maximum annual percentage rate
5-38 allowed by law for district obligations at the time of the loan.
5-39 (b) To secure an emergency loan, the board may pledge:
5-40 (1) the revenues of the district that are not pledged
5-41 to pay the bonded indebtedness of the district;
5-42 (2) district taxes to be levied by the district during
5-43 the 12-month period following the date of the pledge that are not
5-44 pledged to pay the principal of or interest on district bonds; or
5-45 (3) district bonds that have been authorized but not
5-46 sold.
5-47 (c) An emergency loan for which taxes or bonds are pledged
5-48 shall mature not later than the first anniversary of the date on
5-49 which the loan is made. An emergency loan for which district
5-50 revenues are pledged shall mature not later than the fifth
5-51 anniversary of the date on which the loan is made.
5-52 (d) The board may not spend money obtained from a loan under
5-53 this section for any purpose other than the purpose for which the
5-54 board declared an emergency. If taxes or bonds are pledged to pay
5-55 the loan, the board may not spend the loan proceeds for a purpose
5-56 other than the purpose for which the taxes were levied or the bonds
5-57 were authorized.
5-58 Sec. 16b. OTHER LOANS. (a) The board may borrow money at a
5-59 rate not to exceed the maximum annual percentage rate allowed by
5-60 law for district obligations at the time of the loan.
5-61 (b) To secure a loan, the board may pledge:
5-62 (1) the revenues of the district that are not pledged
5-63 to pay the bonded indebtedness of the district;
5-64 (2) district taxes to be levied by the district during
5-65 the 12-month period following the date of the pledge that are not
5-66 pledged to pay the principal of or interest on district bonds; or
5-67 (3) district bonds that have been authorized but not
5-68 sold.
5-69 (c) A loan for which taxes or bonds are pledged shall mature
6-1 not later than the first anniversary of the date on which the loan
6-2 is made. A loan for which district revenues are pledged shall
6-3 mature not later than the fifth anniversary of the date on which
6-4 the loan is made.
6-5 Sec. 16c. DISSOLUTION. (a) The district may be dissolved
6-6 only if the dissolution is approved by a majority of the qualified
6-7 voters of the district voting in an election called and held for
6-8 that purpose.
6-9 (b) The board may order an election on the question of
6-10 dissolving the district and disposing of the district's assets and
6-11 obligations. The board shall order an election if the board
6-12 receives a petition requesting an election that is signed by a
6-13 number of residents of the district equal to at least 15 percent of
6-14 the registered voters in the district.
6-15 (c) The election shall be held not later than the 60th day
6-16 after the date the election is ordered. Section 41.001(a),
6-17 Election Code, does not apply to an election ordered under this
6-18 section. The order calling the election shall state:
6-19 (1) the nature of the election, including the
6-20 proposition that is to appear on the ballot;
6-21 (2) the date of the election;
6-22 (3) the hours during which the polls will be open; and
6-23 (4) the location of the polling places.
6-24 (d) The board shall give notice of the election by
6-25 publishing a substantial copy of the election order in a newspaper
6-26 with general circulation in the district once a week for two
6-27 consecutive weeks. The first publication must appear not less than
6-28 35 days before the date set for the election. The ballot for the
6-29 election shall be printed to permit voting for or against the
6-30 proposition: "The dissolution of the Chillicothe Hospital
6-31 District."
6-32 (e) If a majority of the votes in the election favor
6-33 dissolution, the board shall find that the district is dissolved.
6-34 If a majority of the votes in the election do not favor
6-35 dissolution, the board shall continue to administer the district,
6-36 and another election on the question of dissolution may not be held
6-37 before the first anniversary of the most recent election to
6-38 dissolve the district.
6-39 (f) If a majority of the votes in the election favor
6-40 dissolution, the board shall:
6-41 (1) transfer the land, buildings, improvements,
6-42 equipment, and other assets that belong to the district to a county
6-43 or another governmental entity in the county in which the district
6-44 is located; or
6-45 (2) administer the property, assets, and debts until
6-46 all funds have been disposed of and all district debts have been
6-47 paid or settled.
6-48 (g) If the district transfers the land, buildings,
6-49 improvements, equipment, and other assets to a county or other
6-50 governmental entity, the county or entity assumes all debts and
6-51 obligations of the district at the time of the transfer, and the
6-52 district is dissolved.
6-53 (h) After the board finds that the district is dissolved,
6-54 the board shall:
6-55 (1) determine the debt owed by the district; and
6-56 (2) impose on the property included in the district's
6-57 tax rolls a tax that is in proportion of the debt to the property
6-58 value.
6-59 (i) When all outstanding debts and obligations of the
6-60 district are paid, the board shall order the secretary to return
6-61 the pro rata share of all unused tax money to each district
6-62 taxpayer.
6-63 (j) A taxpayer may request that the taxpayer's share of
6-64 surplus tax money be credited to the taxpayer's county taxes. If
6-65 the taxpayer requests the credit, the board shall direct the
6-66 secretary to transmit the funds to the county tax
6-67 assessor-collector.
6-68 (k) After the district has paid all its debts and has
6-69 disposed of all its assets and funds as prescribed by this section,
7-1 the board shall file a written report with the Commissioners Court
7-2 of Hardeman County setting forth a summary of the board's actions
7-3 in dissolving the district.
7-4 (l) Not later than the 10th day after the date it receives
7-5 the report and determines that the requirements of this section
7-6 have been fulfilled, the Commissioners Court of Hardeman County
7-7 shall enter an order dissolving the district and releasing the
7-8 board from any further duty or obligation.
7-9 (m) Notwithstanding any other provision of this Act, the
7-10 district may not be dissolved unless the board provides for the
7-11 sale or transfer of the district's assets and liabilities to
7-12 another person or entity. The dissolution of the district and the
7-13 sale or transfer of the district's assets or liabilities may not
7-14 contravene a trust indenture or bond resolution relating to the
7-15 outstanding bonds of the district. The dissolution and sale or
7-16 transfer does not diminish or impair the rights of a holder of an
7-17 outstanding bond, warrant, or other obligation of the district.
7-18 (n) The sale or transfer of the district's assets and
7-19 liabilities must satisfy the debt and bond obligations of the
7-20 district in a manner that protects the interests of the residents
7-21 of the district, including the residents' collective property
7-22 rights in the district's assets. A grant from federal funds is an
7-23 obligation to be repaid in satisfaction. The district may not
7-24 transfer or dispose of the district's assets except for due
7-25 compensation unless the transfer is made to another governmental
7-26 entity that serves the district and the transferred assets are to
7-27 be used for the benefit of the residents of the district.
7-28 SECTION 9. This Act takes effect September 1, 1999.
7-29 SECTION 10. The importance of this legislation and the
7-30 crowded condition of the calendars in both houses create an
7-31 emergency and an imperative public necessity that the
7-32 constitutional rule requiring bills to be read on three several
7-33 days in each house be suspended, and this rule is hereby suspended.
7-34 * * * * *