By King of Parker                                     H.B. No. 3132
         77R6372 YDB-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the dissolution of the Gainesville Hospital District
 1-3     and the Muenster Hospital District and the creation of the Cooke
 1-4     County Hospital District.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6        ARTICLE 1. CHANGES RELATING TO GAINESVILLE HOSPITAL DISTRICT
 1-7           SECTION 1.01. Chapter 211, Acts of the 64th Legislature,
 1-8     Regular Session, 1975, is amended by adding Section 1A to read as
 1-9     follows:
1-10           Sec. 1A. On the dissolution of the Gainesville Hospital
1-11     District and the approval of the creation of the Cooke County
1-12     Hospital District, a reference in this Act or in any other law to
1-13     the Gainesville Hospital District means the Cooke County Hospital
1-14     District.
1-15           SECTION 1.02. Chapter 211, Acts of the 64th Legislature,
1-16     Regular Session, 1975, is amended by adding Section 18A to read as
1-17     follows:
1-18           Sec. 18A.  DISSOLUTION OF DISTRICT IN EVENT OF DISSOLUTION OF
1-19     MUENSTER HOSPITAL DISTRICT AND CREATION OF COOKE COUNTY HOSPITAL
1-20     DISTRICT.  (a)  Notwithstanding the provisions of any other section
1-21     of this Act, the Gainesville Hospital District may be dissolved as
1-22     provided by this section.
1-23           (b)  The board of directors may order an election on the
1-24     question of the dissolution of the Gainesville Hospital District,
 2-1     creation of the Cooke County Hospital District, transfer of the
 2-2     Gainesville Hospital District's assets and obligations to the Cooke
 2-3     County Hospital District, and assumption by the Cooke County
 2-4     Hospital District of the Gainesville Hospital District's
 2-5     outstanding debts.
 2-6           (c)  The board shall order an election if:
 2-7                 (1)  the board has reasonable grounds to conclude that
 2-8     the board of the Muenster Hospital District will order an election
 2-9     under Section 20c, Chapter 477, Acts of the 59th Legislature,
2-10     Regular Session, 1965; or
2-11                 (2)  the board receives a petition requesting an
2-12     election on the question of dissolution and transfer of assets that
2-13     is signed by at least 50 registered voters in the Gainesville
2-14     Hospital District.
2-15           (d)  If the board of directors orders an election under this
2-16     section, it shall promptly notify the board of directors of the
2-17     Muenster Hospital District of the election order.
2-18           (e)  The election shall be held not less than 45 or more than
2-19     60 days after the date on which an election is ordered and shall be
2-20     held on the same date that the separate election in the Muenster
2-21     Hospital District is held.  The board of directors shall cooperate
2-22     with the board of directors of the Muenster Hospital District in
2-23     setting the date of the elections.  Section 41.001(a), Election
2-24     Code, does not apply to an election ordered under this section.
2-25           (f)  The ballot for the election shall be printed to permit
2-26     voting for or against the proposition:  "The dissolution of the
2-27     Gainesville Hospital District and creation of the Cooke County
 3-1     Hospital District, providing for the levy of a tax not to exceed 75
 3-2     cents on each $100 valuation on all taxable property in the Cooke
 3-3     County Hospital District, and providing for the transfer to and
 3-4     assumption by the Cooke County Hospital District of all outstanding
 3-5     bonds and indebtedness issued or refunded for hospital purposes by
 3-6     the Gainesville Hospital District and the transfer of the existing
 3-7     Gainesville Hospital District's assets to the Cooke County Hospital
 3-8     District."
 3-9           (g)  Except as provided by Subsections (e) and (f) of this
3-10     section, the election shall be held in accordance with the
3-11     applicable provisions of the Election Code.
3-12           (h)  The Gainesville Hospital District is dissolved if:
3-13                 (1)  a majority of the voters in the Gainesville
3-14     Hospital District voting in the election held under this section
3-15     favor the proposition; and
3-16                 (2)  a majority of the voters in the Muenster Hospital
3-17     District voting in an election held on the same date under Section
3-18     20c, Chapter 477, Acts of the 59th Legislature, Regular Session,
3-19     1965, favor the dissolution of the Muenster Hospital District, the
3-20     creation of the Cooke County Hospital District, the transfer of the
3-21     assets of the Muenster Hospital District to the Cooke County
3-22     Hospital District, and the assumption of the assets and obligations
3-23     of the Muenster Hospital District by the Cooke County Hospital
3-24     District.
3-25           (i)  The Gainesville Hospital District is not dissolved and
3-26     the board of directors shall continue to administer the Gainesville
3-27     Hospital District if a majority of the voters in either the
 4-1     Gainesville Hospital District or the Muenster Hospital District do
 4-2     not favor the proposition on which they voted.
 4-3           (j)  If the Gainesville Hospital District is dissolved under
 4-4     this section, the board of directors shall orderly transfer the
 4-5     assets and obligations of the Gainesville Hospital District to the
 4-6     Cooke County Hospital District not later than the 180th day after
 4-7     the date of the election.
 4-8           (k)  The board of directors may not hold an election on the
 4-9     question of dissolution and the creation of the Cooke County
4-10     Hospital District under this section before the first anniversary
4-11     of the most recent election concerning the dissolution and the
4-12     creation of the Cooke County Hospital District.
4-13         ARTICLE 2.  CHANGES RELATING TO MUENSTER HOSPITAL DISTRICT
4-14           SECTION 2.01. Chapter 477, Acts of the 59th Legislature,
4-15     Regular Session, 1965, is amended by adding Section 1A to read as
4-16     follows:
4-17           Sec. 1A. On the dissolution of the Muenster Hospital District
4-18     and the approval of the creation of the Cooke County Hospital
4-19     District, a reference in this Act or in any other law to the
4-20     Muenster Hospital District means the Cooke County Hospital
4-21     District.
4-22           SECTION 2.02.  Section 206(e), Chapter 477, Acts of the 59th
4-23     Legislature, Regular Session, 1965, is amended to read as follows:
4-24           (e)  If a majority of the votes in the election favor
4-25     dissolution, the Board shall find that the District is dissolved.
4-26     If a majority of the votes in the election do not favor
4-27     dissolution, the Board shall continue to administer the District,
 5-1     and another election on the question of dissolution under this
 5-2     section may not be held before the first anniversary of the most
 5-3     recent election held under this section to dissolve the District.
 5-4           SECTION 2.03. Chapter 477, Acts of the 59th Legislature,
 5-5     Regular Session, 1965, is amended by adding Section 20c to read as
 5-6     follows:
 5-7           Sec. 20c.  DISSOLUTION OF DISTRICT IN EVENT OF DISSOLUTION OF
 5-8     GAINESVILLE HOSPITAL DISTRICT AND CREATION OF COOKE COUNTY HOSPITAL
 5-9     DISTRICT. (a)  Notwithstanding any other provision of this Act, the
5-10     Muenster Hospital District may be dissolved as provided by this
5-11     section.
5-12           (b)  The Board of Directors may order an election on the
5-13     question of the dissolution of the Muenster Hospital District,
5-14     creation of the Cooke County Hospital District, transfer of the
5-15     Muenster Hospital District's assets and obligations to the Cooke
5-16     County Hospital District, and assumption by the Cooke County
5-17     Hospital District of the Muenster Hospital District's outstanding
5-18     debts.
5-19           (c)  The Board shall order an election if:
5-20                 (1)  the Board has reasonable grounds to conclude that
5-21     the Board of Directors of the Gainesville Hospital District will
5-22     order an election under Section 18A, Chapter 211, Acts of the 64th
5-23     Legislature, Regular Session, 1975; or
5-24                 (2)  the Board receives a petition requesting an
5-25     election on the question of dissolution and transfer of assets that
5-26     is signed by at least 50 registered voters in the Muenster Hospital
5-27     District.
 6-1           (d)  If the Board of Directors orders an election under this
 6-2     section, it shall promptly notify the Board of Directors of the
 6-3     Gainesville Hospital District of the election order.
 6-4           (e)  The election shall be held not less than 45 or more than
 6-5     60 days after the date on which an election is ordered and shall be
 6-6     held on the same date that the separate election in the Gainesville
 6-7     Hospital District is held.  The Board of Directors shall cooperate
 6-8     with the Board of Directors of the Gainesville Hospital District in
 6-9     setting the date of the elections.  Section 41.001(a), Election
6-10     Code, does not apply to an election ordered under this section.
6-11           (f)  The ballot for the election shall be printed to permit
6-12     voting for or against the proposition:  "The dissolution of the
6-13     Muenster Hospital District and creation of the Cooke County
6-14     Hospital District, providing for the levy of a tax not to exceed 75
6-15     cents on each $100 valuation on all taxable property in the Cooke
6-16     County Hospital District, and providing for the transfer to and
6-17     assumption by the Cooke County Hospital District of all outstanding
6-18     bonds and indebtedness issued or refunded for hospital purposes by
6-19     the Muenster Hospital District and the transfer of the existing
6-20     Muenster Hospital District's assets to the Cooke County Hospital
6-21     District."
6-22           (g)  Except as provided by Subsections (e) and (f) of this
6-23     section, the election shall be held in accordance with the
6-24     applicable provisions of the Election Code.
6-25           (h)  The Muenster Hospital District is dissolved if:
6-26                 (1)  a majority of the voters in the Muenster Hospital
6-27     District voting in the election held under this section favor the
 7-1     proposition; and
 7-2                 (2)  a majority of the voters in the Gainesville
 7-3     Hospital District voting in an election held on the same date under
 7-4     Section 18A, Chapter 211, Acts of the 64th Legislature, Regular
 7-5     Session, 1975, favor the dissolution of the Gainesville Hospital
 7-6     District, the creation of the Cooke County Hospital District, the
 7-7     transfer of the assets of the Gainesville Hospital District to
 7-8     Cooke County Hospital District, and the assumption of the assets
 7-9     and obligations of the Gainesville Hospital District by the Cooke
7-10     County Hospital District.
7-11           (i)  The Muenster Hospital District is not dissolved and the
7-12     Board of Directors shall continue to administer the Muenster
7-13     Hospital District if a majority of the voters in either district do
7-14     not favor the proposition on which they voted.
7-15           (j)  If the Muenster Hospital District is dissolved under
7-16     this section, the Board of Directors shall transfer the assets and
7-17     obligations of the Muenster Hospital District to the Cooke County
7-18     Hospital District.
7-19           ARTICLE 3.  CREATION OF COOKE COUNTY HOSPITAL DISTRICT
7-20           SECTION 3.01. (a)  In accordance with Section 9, Article IX,
7-21     Texas Constitution, this article authorizes the creation,
7-22     establishment, administration, maintenance, operation, and
7-23     financing of a hospital district in this state with boundaries
7-24     coextensive with the boundaries of Cooke County as they existed on
7-25     November 15, 1999.
7-26           (b)  The district is to be known as "Cooke County Hospital
7-27     District," and it has the rights, powers, and duties provided in
 8-1     this article.
 8-2           SECTION 3.02. (a)  The Cooke County Hospital District may not
 8-3     be created unless the creation, the assumption of debt, and the
 8-4     levy of taxes are approved by a majority of the voters at an
 8-5     election held in the Gainesville Hospital District and by a
 8-6     majority of the voters at a separate election held in the Muenster
 8-7     Hospital District.
 8-8           (b)  The election in the Gainesville Hospital District and
 8-9     the election in the Muenster Hospital District shall be held on the
8-10     same day and must be held before the fifth anniversary of the
8-11     effective date of this Act.
8-12           SECTION 3.03. (a)  If the Cooke County Hospital District is
8-13     created in accordance with Section 18A, Chapter 211, Acts of the
8-14     64th Legislature, Regular Session, 1975, and Section 20c, Chapter
8-15     477, Acts of the 59th Legislature, Regular Session, 1965, the
8-16     following nine persons shall serve as temporary directors of the
8-17     Cooke County Hospital District:
8-18                 (1)  David Hutcherson;
8-19                 (2)  Karla Metzler;
8-20                 (3)  Harrison Wellman;
8-21                 (4)  Dave Sanders;
8-22                 (5)  Jerry Parr;
8-23                 (6)  Don Flusche;
8-24                 (7)  Gerald Hess;
8-25                 (8)  Charles Bayer; and
8-26                 (9)  Werner Becker, Jr.
8-27           (b)  A vacancy on the temporary board of directors shall be
 9-1     filled by the Commissioners Court of Cooke County.
 9-2           (c)  The temporary board shall serve as the directors of the
 9-3     Cooke County Hospital District until elected directors take office.
 9-4           SECTION 3.04.  (a)  If the Cooke County Hospital District is
 9-5     created, directors shall be elected at an election to be held on
 9-6     the first Saturday in May following the date the Cooke County
 9-7     Hospital District is created.
 9-8           (b)  The temporary directors may postpone the election date
 9-9     for one year or until a subsequent uniform election date if the
9-10     temporary directors determine that there is not sufficient time to
9-11     comply with the requirements of law.
9-12           (c)  Two directors shall be elected from each of
9-13     Commissioners Precincts Numbers  1, 2, 3, and 4 of Cooke County as
9-14     those boundaries existed on November 15, 1999, and one director
9-15     shall be elected from the district at large.
9-16           (d)  At the initial election of directors following creation
9-17     of the Cooke County Hospital District, the two candidates receiving
9-18     the highest number of votes from each commissioners precinct are
9-19     the directors for that precinct, and the candidate receiving the
9-20     highest number of votes from the district at large is the director
9-21     for the district at large.
9-22           (e)  The directors elected at the initial election of
9-23     directors following creation of the Cooke County Hospital District
9-24     shall draw lots to determine which three directors shall serve
9-25     one-year terms, which three directors shall serve two-year terms,
9-26     and which three directors shall serve three-year terms.
9-27           SECTION 3.05.  (a)  After the initial election of directors
 10-1    following creation, an election shall be held each year on the
 10-2    first Saturday in May, and the appropriate number of successor
 10-3    directors shall be elected for three-year terms.
 10-4          (b)  Notice of each election shall be published in a
 10-5    newspaper of general circulation in the district in accordance with
 10-6    Section 4.003, Election Code.  Any person desiring to have the
 10-7    person's name printed on the ballot as a candidate for director
 10-8    shall file an application with the secretary of the board of
 10-9    directors.  The application shall be filed with the secretary at
10-10    least 60 days before the date of the election.  The application
10-11    must specify the commissioners precinct the candidate wishes to
10-12    represent or that the candidate wishes to represent the district at
10-13    large.
10-14          (c)  Vacancies in office shall be filled for the unexpired
10-15    term by the remainder of the board of directors.
10-16          SECTION 3.06.  A person may not be appointed or elected as a
10-17    member of the temporary or permanent board of directors unless the
10-18    person is a resident of the district, a qualified voter, and, if
10-19    elected from a commissioners precinct, a resident of the precinct.
10-20    The following persons are not eligible to serve as a director:
10-21                (1)  an administrator;
10-22                (2)  any other employee of the district; or
10-23                (3)  an individual who was employed by the district
10-24    within 24 months before the date of election or appointment.
10-25          SECTION 3.07.  (a)  The district authorized by this article
10-26    to be created shall take over and there shall be transferred to the
10-27    district title to all land, buildings, improvements, and equipment
 11-1    pertaining to the hospitals or hospital system that may be located
 11-2    within or outside the district and owned by Cooke County or a
 11-3    municipality in the district, and after that date the district
 11-4    shall provide for the establishment of a hospital system by the
 11-5    purchase, construction, acquisition, repair, and renovation of
 11-6    buildings and equipment, equipping the buildings, and the
 11-7    administration of the district for hospital purposes.
 11-8          (b)  The district shall assume the outstanding indebtedness
 11-9    incurred by the Gainesville Hospital District or the Muenster
11-10    Hospital District to provide medical care for residents of the
11-11    district before the creation of the district.
11-12          SECTION 3.08.  (a)  The board of directors, both temporary
11-13    and permanent, shall organize by electing one of the members as
11-14    president and one as vice president.  A secretary, who need not be
11-15    a director, shall also be elected.  Officers shall be elected for a
11-16    term of one year and vacancies shall be filled for the unexpired
11-17    term by the board.
11-18          (b)  When a quorum is present, a majority of the members of
11-19    the board of directors voting must concur in a matter pertaining to
11-20    the business of the district.  A quorum of the board shall be
11-21    required to transact the business of the district.  A majority of
11-22    the members of the board constitutes a quorum.
11-23          (c)  All members of the board of directors and officers shall
11-24    serve without compensation, but may be reimbursed for actual
11-25    expenses incurred in the performance of the member's official
11-26    duties as approved by the board and reported in the minute book of
11-27    the district or other records of the district.
 12-1          SECTION 3.09.  (a)  The board of directors shall manage,
 12-2    control, and administer the hospital system and the business of and
 12-3    all funds and resources of the district, and the operating,
 12-4    depreciation, or building reserves shall be invested in accordance
 12-5    with Chapter 2256, Government Code.
 12-6          (b)  The district, through its board of directors, may sue
 12-7    and be sued and adopt rules governing the operation of the
 12-8    hospital, hospital system, and the district's staff and employees. 
 12-9          (c)  The board of directors shall appoint one or more
12-10    qualified persons as the administrators of the hospital district
12-11    and may appoint one or more assistants to the administrators.  The
12-12    administrators and assistant administrators, if any, serve at the
12-13    will of the board and receive compensation as may be fixed by the
12-14    board.  Each administrator shall, on assuming the administrator's
12-15    duties, execute a bond payable to the hospital district in an
12-16    amount set by the board, but not less than $5,000, conditioned on
12-17    the faithful performance of the duties required of the
12-18    administrator and containing other conditions as the board may
12-19    require.  The board may pay for the bond with district funds.  The
12-20    administrators shall supervise all the work and activities of the
12-21    district, subject to the limitations prescribed by the board.
12-22          (d)  The board of directors shall have the authority to
12-23    appoint to the staff any doctors the board considers necessary for
12-24    the efficient operation of the district if warranted by
12-25    circumstances.  The board shall have the authority to employ and
12-26    may delegate to the administrators the authority to employ persons
12-27    for the district, including technicians, nurses, fiscal agents,
 13-1    accountants, architects, persons providing professional or staff
 13-2    assistance, and other necessary employees.
 13-3          (e)  The board of directors may contract with any other
 13-4    political subdivision or governmental agency for the district to
 13-5    provide investigatory or other services as to the medical,
 13-6    hospital, or welfare needs of the residents of the district.  The
 13-7    district may contract with any county or municipality located
 13-8    outside the district's boundaries for the care and treatment of the
 13-9    sick, diseased, or injured persons of the county or municipality,
13-10    and may contract with the state or agencies of the federal
13-11    government for the state or federal government to reimburse the
13-12    district for the treatment of the sick, diseased, or injured
13-13    persons.  The board may delegate to the administrators the
13-14    authority to contract with a person for the district.
13-15          SECTION 3.10.  (a)  The district shall operate on the basis
13-16    of fiscal years established from time to time by the board of
13-17    directors, provided that a fiscal year may not be changed during
13-18    the time revenue bonds of the district are outstanding or more than
13-19    once in any 24-month period.
13-20          (b)  The board of directors shall cause an annual audit to be
13-21    made of the financial affairs of the district, which shall be open
13-22    to inspection at the principal office of the district.
13-23          (c)  The administrators shall prepare an annual budget for
13-24    approval by the board of directors.  The budget shall contain a
13-25    complete financial statement of the district showing:
13-26                (1)  all outstanding obligations of the district;
13-27                (2)  the cash on hand to the credit of each fund of the
 14-1    district;
 14-2                (3)  the amount of money received by the district from
 14-3    all sources during the previous year;
 14-4                (4)  the funds available from all sources during the
 14-5    ensuing year, with balances expected at year end of the year in
 14-6    which the budget is being prepared; and
 14-7                (5)  estimated revenues and balances available to cover
 14-8    the proposed budget and the estimated tax rate that will be
 14-9    required.
14-10          (d)  A public hearing on the annual budget shall be held by
14-11    the board of directors after notice of the hearing has been
14-12    published one time in a newspaper of general circulation in the
14-13    district at least 10 days before the date set for the hearing.  Any
14-14    person residing in the district shall have the right to be present
14-15    and participate in the hearing.
14-16          (e)  The budget, as proposed by the administrator, shall be
14-17    acted on by the board of directors.  The board shall have authority
14-18    to make changes in the budget as the board determines the law
14-19    warrants and the interests of the taxpayers demand.
14-20          (f)  The annual budget may be amended from time to time with
14-21    the approval of the board of directors.
14-22          SECTION 3.11.  (a)  The board of directors shall have the
14-23    power and authority to issue and sell bonds in the name and on the
14-24    faith and credit of the hospital district for:
14-25                (1)  the purchase, construction, acquisition, repair,
14-26    and renovation of buildings or improvements;
14-27                (2)  equipping the buildings and improvements for
 15-1    hospital and health care services related purposes;  or
 15-2                (3)  acquiring and operating a skilled nursing unit,
 15-3    convalescent facility, nursing home, assisted living facility, or
 15-4    other related health care facility.
 15-5          (b)  At the time bonds are issued by the district, a tax
 15-6    shall be levied by the board of directors sufficient to create an
 15-7    interest and sinking fund to pay the interest on and principal of
 15-8    the bonds as the bonds mature, provided that the tax together with
 15-9    any other taxes levied for the district may not exceed the limit
15-10    approved by the voters at the election authorizing the levy of
15-11    taxes.
15-12          (c)  Bonds may not be issued by the district except for
15-13    revenue or refunding bonds until authorized by a majority of the
15-14    electors of the district.
15-15          (d)  The order for a bond election shall specify:
15-16                (1)  the nature and date of the election;
15-17                (2)  the location of the polling places;
15-18                (3)  the hours during which the polls will be open;
15-19    and
15-20                (4)  the amount of bonds to be authorized and the
15-21    maximum maturity of the bonds.
15-22          (e)  Notice of a bond election shall be given as provided by
15-23    Section 1251.003, Government Code, and shall be conducted in
15-24    accordance with the Election Code, except as modified by the
15-25    provisions of this article.
15-26          SECTION 3.12.  (a)  Refunding bonds of the district may be
15-27    issued for the purpose of refunding and paying off any outstanding
 16-1    indebtedness the district has issued or assumed.
 16-2          (b)  Refunding bonds may be sold and the proceeds from the
 16-3    bonds may be applied to the payment of outstanding indebtedness or
 16-4    may be exchanged in whole or in part for not less than a similar
 16-5    principal amount of the outstanding indebtedness.
 16-6          (c)  If the refunding bonds are to be sold and the proceeds
 16-7    from the bonds are to be applied to the payment of any outstanding
 16-8    indebtedness, the refunding bonds shall be issued and payments made
 16-9    in the manner specified by Chapter 1207, Government Code.
16-10          SECTION 3.13.  Bonds issued by the district must:
16-11                (1)  mature not later than the 40th anniversary of the
16-12    date of issuance;
16-13                (2)  be executed in the manner provided by Chapter 618,
16-14    Government Code;
16-15                (3)  bear a rate of interest that does not exceed the
16-16    amount prescribed by Chapter 1204, Government Code; and
16-17                (4)  be subject to the requirements of Chapter 1202,
16-18    Government Code.
16-19          SECTION 3.14.  (a)  In addition to being granted the power to
16-20    issue bonds payable from taxes levied by the district under Section
16-21    3.12 of this article, the board of directors may issue and refund
16-22    any previously issued revenue bond to:
16-23                (1)  purchase, construct, acquire, repair, equip, or
16-24    renovate a building or improvement for hospital and related
16-25    purposes;
16-26                (2)  acquire a site for hospital purposes;  or
16-27                (3)  acquire and operate a facility described by
 17-1    Section 3.11(a)(3) of this article to assist the district in
 17-2    carrying out the district's hospital purposes.
 17-3          (b)  Bonds authorized under this section shall be payable
 17-4    from and secured by a pledge of all or any part of the revenues of
 17-5    the district to be derived from the operation of the district's
 17-6    hospital system, and may be additionally secured by a mortgage or
 17-7    deed of trust lien on any part or all of the district's properties.
 17-8          (c)  Bonds shall be issued in the manner and in accordance
 17-9    with the procedures and requirements specified for the issuance of
17-10    revenue bonds by a county hospital authority under Chapter 264,
17-11    Health and Safety Code.
17-12          SECTION 3.15.  (a)  The board of directors has complete
17-13    discretion as to the type of buildings, both in number and
17-14    location, required to establish and maintain an adequate hospital
17-15    system and the type of equipment necessary for hospital care.  The
17-16    hospital system may include:
17-17                (1)  domiciliary care and treatment of the sick,
17-18    wounded, and injured;
17-19                (2)  outpatient clinics;
17-20                (3)  pharmacies;
17-21                (4)  geriatric domiciliary care and treatment;
17-22                (5)  convalescent home facilities;
17-23                (6)  necessary nurses, domiciliaries, and training
17-24    centers;
17-25                (7)  research centers and laboratories; and
17-26                (8)  any other facilities determined by the board to be
17-27    necessary for hospital and related health care.
 18-1          (b)  Notwithstanding Subsection (a) of this section, the
 18-2    district shall provide full-time health care services and
 18-3    facilities in the city of Muenster, including, at a minimum,
 18-4    physician offices and services, outpatient medical care,
 18-5    comprehensive laboratory services, and comprehensive radiology
 18-6    services, including ultrasound, mammography, and computerized
 18-7    tomography, at Muenster Memorial Hospital or its successor facility
 18-8    and nursing home care at St. Richard's Villa.  If the district does
 18-9    not construct a new acute care hospital facility, the district
18-10    shall continue to operate an acute care hospital facility located
18-11    in the city of Muenster until the district constructs a new
18-12    hospital facility to serve the residents of the city of Muenster.
18-13          (c)  The district, through its board of directors, may enter
18-14    into an operating or management contract with regard to all or part
18-15    of the district's facilities or may lease all or part of the
18-16    district's buildings and facilities on terms and conditions
18-17    considered to be in the best interest of the residents of the
18-18    district. A lease under this section may not be for a period that
18-19    exceeds 25 years.
18-20          (d)  The district may sell or otherwise dispose of any
18-21    property, real or personal, or equipment of any nature on terms and
18-22    conditions found by the board of directors to be in the best
18-23    interest of the residents of the district.
18-24          (e)  The board of directors may prescribe the method and
18-25    manner of making purchases and expenditures by and for the district
18-26    and may prescribe all accounting and control procedures.
18-27          (f)  A contract for construction may be made only after
 19-1    competitive bidding as provided by Subchapter B, Chapter 271, Local
 19-2    Government Code.
 19-3          (g)  The provisions of Chapter 2253, Government Code,
 19-4    relating to performance and payment bonds apply to construction
 19-5    contracts let by the district.
 19-6          (h)  The district may acquire property, facilities, and
 19-7    equipment for use in the hospital system and may mortgage or pledge
 19-8    the property, facilities, or equipment acquired by the district as
 19-9    security for the payment of the purchase price.
19-10          (i)  The board of directors shall name one or more banks to
19-11    serve as depository for the funds of the district.  All funds of
19-12    the district, except those invested as provided in Section 3.09(a)
19-13    of this article and those transmitted to a bank for payment for
19-14    bonds or obligations issued or assumed by the district, shall be
19-15    deposited as received with the depository bank and shall remain on
19-16    deposit. Nothing in this subsection may limit the power of the
19-17    board to place a portion of the board's funds on time deposit or to
19-18    purchase certificates of deposit or other investments permitted by
19-19    Chapter 2256, Government Code.
19-20          (j)  Before the district deposits the district's funds in a
19-21    bank in an amount that exceeds the maximum amount secured by the
19-22    Federal Deposit Insurance Corporation, the bank must execute a bond
19-23    or other security in an amount sufficient to secure from loss the
19-24    district funds that exceed the amount secured by the Federal
19-25    Deposit Insurance Corporation.
19-26          SECTION 3.16. (a)  The board of directors may provide
19-27    retirement benefits for employees of the district by establishing
 20-1    or administering a retirement program or electing to participate in
 20-2    the Texas County and District Retirement System or in any other
 20-3    statewide retirement system in which the district is eligible to
 20-4    participate.
 20-5          (b)  The board of directors may institute a suit to enforce
 20-6    the payment of taxes or to foreclose liens to secure the payment of
 20-7    taxes due the district.
 20-8          (c)  The district, subject to the approval of the board of
 20-9    directors, may provide primary care, emergency services, preventive
20-10    medical services, and other health-related services outside the
20-11    boundaries of the district, provided the services serve the purpose
20-12    of the district as established by this article.
20-13          (d)  The board of directors may also contract with the state
20-14    or agencies of the federal government to be reimbursed for the
20-15    treatment of sick, diseased, or injured persons.
20-16          (e)  The district may contract with, affiliate with, or enter
20-17    into another arrangement with a managed care system, a preferred
20-18    provider organization, a health maintenance organization, another
20-19    provider of alternative health care or delivery system, or a
20-20    private hospital to jointly administer or deliver health care
20-21    services. The district may spend district funds to establish and
20-22    maintain partnerships, corporations, or other entities involved in
20-23    the delivery of health care services.
20-24          (f)  The district may sponsor and create a nonprofit
20-25    corporation under the Texas Non-Profit Corporation Act (Article
20-26    1396-1.01 et seq., Vernon's Texas Civil Statutes) and may
20-27    contribute funds to or solicit funds for the corporation. The
 21-1    corporation may use funds, other than funds paid by the corporation
 21-2    to the district, only to provide health care or other services the
 21-3    district is authorized to provide under this article.  The board of
 21-4    directors of the hospital district shall establish adequate
 21-5    controls to ensure that the corporation uses its funds as required
 21-6    by this subsection. The corporation may invest corporation funds in
 21-7    any manner in which the district may invest funds, including
 21-8    investing funds as authorized by Chapter 2256, Government Code.
 21-9          (g)  The board of directors may spend district funds, enter
21-10    into agreements, and take other necessary action to recruit
21-11    physicians and other persons to serve as medical staff members or
21-12    employees of the district, including:
21-13                (1)  advertising and marketing;
21-14                (2)  paying travel, recruitment, and relocation
21-15    expenses;
21-16                (3)  providing a loan or scholarship to a physician or
21-17    a person currently enrolled in health care education courses at an
21-18    institution of higher education who contractually agrees to become
21-19    a district employee or medical staff member; or
21-20                (4)  contracting with one or more full-time medical
21-21    students or other students in a health occupation, enrolled in and
21-22    in good standing at an accredited medical school, college, or
21-23    university, to pay the student's tuition or other expenses in
21-24    consideration of the student's agreement to serve as an employee or
21-25    independent contractor for the district.
21-26          (h)  The board of directors may spend district funds, enter
21-27    into agreements, and take other necessary action to conduct,
 22-1    participate in, or otherwise assist in providing health care
 22-2    educational programs for current or prospective medical staff
 22-3    members or employees of the district.
 22-4          SECTION 3.17.  (a)  The board of directors shall annually
 22-5    levy a tax in an amount not to exceed the limit approved by the
 22-6    voters for the purpose of paying:
 22-7                (1)  the indebtedness assumed or issued by the
 22-8    district; or
 22-9                (2)  the maintenance and operating expenses of the
22-10    district.
22-11          (b)  A tax levied under this section may not be levied to pay
22-12    the principal of or interest on revenue bonds issued under Section
22-13    3.14 of this article.
22-14          (c)  In setting a tax rate under this section, the board of
22-15    directors shall consider the income of the district from sources
22-16    other than taxation.  On determining the amount of tax required to
22-17    be levied, the board shall make the levy and certify the levy to
22-18    the tax assessor-collector.
22-19          SECTION 3.18.  (a)  Bonds issued and indebtedness assumed by
22-20    the district are a legal and authorized investment of a bank,
22-21    savings bank, trust company, savings and loan association,
22-22    insurance company, fiduciary, trustee, guardian, or sinking fund of
22-23    a municipality, school district, or other political subdivision of
22-24    the state, and for all public funds of the state or an agency of
22-25    the state, including the state permanent school fund.
22-26          (b)  Bonds issued or indebtedness assumed by the district is
22-27    eligible to secure the deposit of public funds of the state and the
 23-1    public funds of a municipality, school district, or other political
 23-2    subdivision of the state, and is lawful and sufficient security for
 23-3    those deposits to the extent of the value of the bonds or
 23-4    indebtedness when accompanied by all unmatured coupons.
 23-5          SECTION 3.19.  (a)  The district has the right and power of
 23-6    eminent domain for the purpose of acquiring by condemnation any and
 23-7    all property of any kind and character in fee simple, or any lesser
 23-8    interest in the property, within the boundaries of the district if
 23-9    necessary to the exercise of the rights or authority conferred by
23-10    this article in the manner provided by the general law with respect
23-11    to condemnation by counties.
23-12          (b)  The district is not required to deposit in the trial
23-13    court money or bond as provided by Section 21.021, Property Code.
23-14          (c)  In a condemnation proceeding prosecuted by the district,
23-15    the district is not required to:
23-16                (1)  pay in advance or give bond or other security for
23-17    costs in the trial court;
23-18                (2)  give any bond otherwise required for the issuance
23-19    of a temporary restraining order or a temporary injunction;  or
23-20                (3)  give bond for costs or for supersedeas on an
23-21    appeal or writ of error.
23-22          SECTION 3.20.  (a)  The directors may levy taxes for the
23-23    entire year in which the district is established as a result of the
23-24    initial election provided under this article.
23-25          (b)  The Tax Code governs the appraisal, assessment, and
23-26    collection of district taxes.
23-27          (c)  The board of directors may provide for the appointment
 24-1    of a tax assessor-collector for the district or may contract for
 24-2    the assessment and collection of taxes as provided by the Tax Code.
 24-3          SECTION 3.21.  (a)  The district shall provide without charge
 24-4    to a patient residing in the district the medical care and
 24-5    treatment that the patient or a relative of the patient who is
 24-6    legally responsible for the patient's support cannot pay.
 24-7          (b)  Each operating year, the district shall adopt an
 24-8    application procedure to determine eligibility for assistance as
 24-9    provided by Section 61.053, Health and Safety Code.
24-10          (c)  An administrator may cause an inquiry to be made
24-11    regarding the financial circumstances of a patient under Subsection
24-12    (a) of this section residing in the district and admitted to a
24-13    district facility and of the relatives of the patient legally
24-14    responsible for the patient's support.  If the patient or relative
24-15    is found to be able to pay for all or part of the care and
24-16    treatment, the administrator shall issue an order directing the
24-17    patient or the relative to pay to the district for the care and
24-18    support of the patient a specified sum each week in an amount that
24-19    the individual is able to pay.  The administrator may collect sums
24-20    under this subsection from the estate of the patient or a relative
24-21    who is legally responsible for the patient's support in the manner
24-22    provided by law for collection of expenses in the last illness of a
24-23    deceased person.
24-24          (d)  In the case of a dispute regarding the ability to pay,
24-25    the board of directors shall call witnesses, conduct a hearing, and
24-26    issue a final order.  An appeal from a final order of the board
24-27    under this subsection shall be made to the district court in Cooke
 25-1    County.  The substantial evidence rule applies to an appeal under
 25-2    this subsection.
 25-3          SECTION 3.22.  The board of directors, on behalf of the
 25-4    district, may accept donations, gifts, and endowments to be held in
 25-5    trust and administered by the board for purposes and under
 25-6    directions, limitations, and provisions prescribed in writing by
 25-7    the donor that are not inconsistent with the proper management of
 25-8    the district.
 25-9          SECTION 3.23.  (a)  If the board of directors declares that
25-10    funds are not available to meet the lawfully authorized obligations
25-11    of the district and that an emergency exists, the board may borrow
25-12    money at a rate not to exceed the maximum annual percentage rate
25-13    allowed by law for district obligations at the time of the loan.
25-14          (b)  To secure a loan, the board may pledge:
25-15                (1)  revenues of the district that are not pledged to
25-16    pay the bonded indebtedness of the district;
25-17                (2)  district taxes to be levied by the district during
25-18    the 12-month period following the date of the pledge that are not
25-19    pledged to pay the principal of or interest on district bonds; or
25-20                (3)  district bonds that have been authorized but not
25-21    sold.
25-22          (c)  A loan for which taxes or bonds are pledged shall mature
25-23    not later than the first anniversary of the date on which the loan
25-24    is made.  A loan for which district revenues are pledged shall
25-25    mature not later than the fifth anniversary of the date on which
25-26    the loan is made.
25-27          (d)  The board of directors may not spend money obtained from
 26-1    a loan under this section for any purpose other than the purpose
 26-2    for which the board declared an emergency.  If taxes or bonds are
 26-3    pledged to pay the loan, the board may not spend the revenue other
 26-4    than for the purpose for which the taxes were levied or the bonds
 26-5    were authorized.
 26-6          SECTION 3.24.  (a)  After the district is created, a county,
 26-7    municipality, or political subdivision in or partly in the district
 26-8    may not levy taxes or issue bonds or other obligations for hospital
 26-9    purposes or for providing medical care for the residents of the
26-10    district.
26-11          (b)  The district shall assume full responsibility for the
26-12    operation of all hospital facilities and for the furnishing of
26-13    medical and hospital care for the district's needy residents.
26-14          (c)  When the district is created and established, the county
26-15    and all municipalities located in or partly in the district shall
26-16    convey and transfer to the district title to all land, buildings,
26-17    improvements, and equipment that pertain to a hospital or hospital
26-18    system located in the district owned by the county, municipality,
26-19    or other governmental entity.
26-20          (d)  Operating funds and reserves for operating expenses that
26-21    have been budgeted by the county, municipality, or other
26-22    governmental entity in which the district is located to provide
26-23    medical care for residents of the district for the remainder of the
26-24    fiscal year in which the district is established, taxes levied for
26-25    hospital purposes for the current year, and all funds established
26-26    for payment of indebtedness assumed by the district shall be
26-27    transferred to the district.
 27-1          SECTION 3.25.  The support and maintenance of the district
 27-2    may not become a charge against or an obligation of the state.  A
 27-3    direct appropriation by the legislature may not be made for the
 27-4    construction, maintenance, or improvement of any of the facilities
 27-5    of the district.
 27-6          SECTION 3.26.  In administering this article, the district is
 27-7    performing an essential public function, and any bonds issued by
 27-8    the board and the transfer and the issuance from the bonds,
 27-9    including any profits made in the sale of the bonds, are exempt
27-10    from taxation by the state or any municipality or political
27-11    subdivision of the state.
27-12          SECTION 3.27. Proof of publication of the notice required in
27-13    the enactment of this Act under the provisions of Section 9,
27-14    Article IX, Texas Constitution, has been made in the manner and
27-15    form provided by law pertaining to the enactment of local and
27-16    special laws, and the notice is found and declared proper and
27-17    sufficient to satisfy the requirement.
27-18                        ARTICLE 4.  EFFECTIVE DATE
27-19          SECTION 4.01. This Act takes effect immediately if it
27-20    receives a vote of two-thirds of all the members elected to each
27-21    house, as provided by Section 39, Article III, Texas Constitution.
27-22    If this Act does not receive the vote necessary for immediate
27-23    effect, this Act takes effect September 1, 2001.