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.