1-1 By: King of Parker (Senate Sponsor - Haywood) H.B. No. 3132 1-2 (In the Senate - Received from the House April 23, 2001; 1-3 April 24, 2001, read first time and referred to Committee on 1-4 Intergovernmental Relations; May 4, 2001, reported favorably by the 1-5 following vote: Yeas 6, Nays 0; May 4, 2001, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to the dissolution of the Gainesville Hospital District 1-9 and the Muenster Hospital District and the creation of the Cooke 1-10 County Hospital District. 1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-12 ARTICLE 1. CHANGES RELATING TO GAINESVILLE HOSPITAL DISTRICT 1-13 SECTION 1.01. Chapter 211, Acts of the 64th Legislature, 1-14 Regular Session, 1975, is amended by adding Section 1A to read as 1-15 follows: 1-16 Sec. 1A. On the dissolution of the Gainesville Hospital 1-17 District and the approval of the creation of the Cooke County 1-18 Hospital District, a reference in this Act or in any other law to 1-19 the Gainesville Hospital District means the Cooke County Hospital 1-20 District. 1-21 SECTION 1.02. Chapter 211, Acts of the 64th Legislature, 1-22 Regular Session, 1975, is amended by adding Section 18A to read as 1-23 follows: 1-24 Sec. 18A. DISSOLUTION OF DISTRICT IN EVENT OF DISSOLUTION OF 1-25 MUENSTER HOSPITAL DISTRICT AND CREATION OF COOKE COUNTY HOSPITAL 1-26 DISTRICT. (a) Notwithstanding the provisions of any other section 1-27 of this Act, the Gainesville Hospital District may be dissolved as 1-28 provided by this section. 1-29 (b) The board of directors may order an election on the 1-30 question of the dissolution of the Gainesville Hospital District, 1-31 creation of the Cooke County Hospital District, transfer of the 1-32 Gainesville Hospital District's assets and obligations to the Cooke 1-33 County Hospital District, and assumption by the Cooke County 1-34 Hospital District of the Gainesville Hospital District's 1-35 outstanding debts. 1-36 (c) The board shall order an election if: 1-37 (1) the board has reasonable grounds to conclude that 1-38 the board of the Muenster Hospital District will order an election 1-39 under Section 20c, Chapter 477, Acts of the 59th Legislature, 1-40 Regular Session, 1965; or 1-41 (2) the board receives a petition requesting an 1-42 election on the question of the dissolution of the Gainesville 1-43 Hospital District, creation of the Cooke County Hospital District, 1-44 and transfer of assets that is signed by at least 15 percent of the 1-45 registered voters in the Gainesville Hospital District. 1-46 (d) If the board of directors orders an election under this 1-47 section, it shall promptly notify the board of directors of the 1-48 Muenster Hospital District of the election order. 1-49 (e) The election shall be held not less than 45 or more than 1-50 60 days after the date on which an election is ordered and shall be 1-51 held on the same date that the separate election in the Muenster 1-52 Hospital District is held. The board of directors shall cooperate 1-53 with the board of directors of the Muenster Hospital District in 1-54 setting the date of the elections. Section 41.001(a), Election 1-55 Code, does not apply to an election ordered under this section. 1-56 (f) The ballot for the election shall be printed to permit 1-57 voting for or against the proposition: "The dissolution of the 1-58 Gainesville Hospital District and creation of the Cooke County 1-59 Hospital District, providing for the levy of a tax not to exceed 75 1-60 cents on each $100 valuation on all taxable property in the Cooke 1-61 County Hospital District, and providing for the transfer to and 1-62 assumption by the Cooke County Hospital District of all outstanding 1-63 bonds and indebtedness issued or refunded for hospital purposes by 1-64 the Gainesville Hospital District and the transfer of the existing 2-1 Gainesville Hospital District's assets to the Cooke County Hospital 2-2 District." 2-3 (g) Except as provided by Subsections (e) and (f) of this 2-4 section, the election shall be held in accordance with the 2-5 applicable provisions of the Election Code. 2-6 (h) The Gainesville Hospital District is dissolved if: 2-7 (1) a majority of the voters in the Gainesville 2-8 Hospital District voting in the election held under this section 2-9 favor the proposition; and 2-10 (2) a majority of the voters in the Muenster Hospital 2-11 District voting in an election held on the same date under Section 2-12 20c, Chapter 477, Acts of the 59th Legislature, Regular Session, 2-13 1965, favor the dissolution of the Muenster Hospital District, the 2-14 creation of the Cooke County Hospital District, the transfer of the 2-15 assets of the Muenster Hospital District to the Cooke County 2-16 Hospital District, and the assumption of the assets and obligations 2-17 of the Muenster Hospital District by the Cooke County Hospital 2-18 District. 2-19 (i) The Gainesville Hospital District is not dissolved and 2-20 the board of directors shall continue to administer the Gainesville 2-21 Hospital District if a majority of the voters in either the 2-22 Gainesville Hospital District or the Muenster Hospital District do 2-23 not favor the proposition on which they voted. 2-24 (j) If the Gainesville Hospital District is dissolved under 2-25 this section, the board of directors shall orderly transfer the 2-26 assets and obligations of the Gainesville Hospital District to the 2-27 Cooke County Hospital District not later than the 180th day after 2-28 the date of the election. 2-29 (k) The board of directors may not hold an election on the 2-30 question of dissolution under this section and the creation of the 2-31 Cooke County Hospital District before the first anniversary of the 2-32 most recent election held under this section concerning the 2-33 dissolution and the creation of the Cooke County Hospital District. 2-34 ARTICLE 2. CHANGES RELATING TO MUENSTER HOSPITAL DISTRICT 2-35 SECTION 2.01. Chapter 477, Acts of the 59th Legislature, 2-36 Regular Session, 1965, is amended by adding Section 1A to read as 2-37 follows: 2-38 Sec. 1A. On the dissolution of the Muenster Hospital District 2-39 and the approval of the creation of the Cooke County Hospital 2-40 District, a reference in this Act or in any other law to the 2-41 Muenster Hospital District means the Cooke County Hospital 2-42 District. 2-43 SECTION 2.02. Section 20b(e), Chapter 477, Acts of the 59th 2-44 Legislature, Regular Session, 1965, is amended to read as follows: 2-45 (e) If a majority of the votes in the election favor 2-46 dissolution, the Board shall find that the District is dissolved. 2-47 If a majority of the votes in the election do not favor 2-48 dissolution, the Board shall continue to administer the District, 2-49 and another election on the question of dissolution under this 2-50 section may not be held before the first anniversary of the most 2-51 recent election held under this section to dissolve the District. 2-52 SECTION 2.03. Chapter 477, Acts of the 59th Legislature, 2-53 Regular Session, 1965, is amended by adding Section 20c to read as 2-54 follows: 2-55 Sec. 20c. DISSOLUTION OF DISTRICT IN EVENT OF DISSOLUTION OF 2-56 GAINESVILLE HOSPITAL DISTRICT AND CREATION OF COOKE COUNTY HOSPITAL 2-57 DISTRICT. (a) Notwithstanding any other provision of this Act, the 2-58 Muenster Hospital District may be dissolved as provided by this 2-59 section. 2-60 (b) The Board of Directors may order an election on the 2-61 question of the dissolution of the Muenster Hospital District, 2-62 creation of the Cooke County Hospital District, transfer of the 2-63 Muenster Hospital District's assets and obligations to the Cooke 2-64 County Hospital District, and assumption by the Cooke County 2-65 Hospital District of the Muenster Hospital District's outstanding 2-66 debts. 2-67 (c) The Board shall order an election if: 2-68 (1) the Board has reasonable grounds to conclude that 2-69 the Board of Directors of the Gainesville Hospital District will 3-1 order an election under Section 18A, Chapter 211, Acts of the 64th 3-2 Legislature, Regular Session, 1975; or 3-3 (2) the Board receives a petition requesting an 3-4 election on the question of the dissolution of the Muenster 3-5 Hospital District, creation of the Cooke County Hospital District, 3-6 and transfer of assets that is signed by at least 15 percent of the 3-7 registered voters in the Muenster Hospital District. 3-8 (d) If the Board of Directors orders an election under this 3-9 section, it shall promptly notify the Board of Directors of the 3-10 Gainesville Hospital District of the election order. 3-11 (e) The election shall be held not less than 45 or more than 3-12 60 days after the date on which an election is ordered and shall be 3-13 held on the same date that the separate election in the Gainesville 3-14 Hospital District is held. The Board of Directors shall cooperate 3-15 with the Board of Directors of the Gainesville Hospital District in 3-16 setting the date of the elections. Section 41.001(a), Election 3-17 Code, does not apply to an election ordered under this section. 3-18 (f) The ballot for the election shall be printed to permit 3-19 voting for or against the proposition: "The dissolution of the 3-20 Muenster Hospital District and creation of the Cooke County 3-21 Hospital District, providing for the levy of a tax not to exceed 75 3-22 cents on each $100 valuation on all taxable property in the Cooke 3-23 County Hospital District, and providing for the transfer to and 3-24 assumption by the Cooke County Hospital District of all outstanding 3-25 bonds and indebtedness issued or refunded for hospital purposes by 3-26 the Muenster Hospital District and the transfer of the existing 3-27 Muenster Hospital District's assets to the Cooke County Hospital 3-28 District." 3-29 (g) Except as provided by Subsections (e) and (f) of this 3-30 section, the election shall be held in accordance with the 3-31 applicable provisions of the Election Code. 3-32 (h) The Muenster Hospital District is dissolved if: 3-33 (1) a majority of the voters in the Muenster Hospital 3-34 District voting in the election held under this section favor the 3-35 proposition; and 3-36 (2) a majority of the voters in the Gainesville 3-37 Hospital District voting in an election held on the same date under 3-38 Section 18A, Chapter 211, Acts of the 64th Legislature, Regular 3-39 Session, 1975, favor the dissolution of the Gainesville Hospital 3-40 District, the creation of the Cooke County Hospital District, the 3-41 transfer of the assets of the Gainesville Hospital District to 3-42 Cooke County Hospital District, and the assumption of the assets 3-43 and obligations of the Gainesville Hospital District by the Cooke 3-44 County Hospital District. 3-45 (i) The Muenster Hospital District is not dissolved and the 3-46 Board of Directors shall continue to administer the Muenster 3-47 Hospital District if a majority of the voters in either district do 3-48 not favor the proposition on which they voted. 3-49 (j) If the Muenster Hospital District is dissolved under 3-50 this section, the Board of Directors shall orderly transfer the 3-51 assets and obligations of the Muenster Hospital District to the 3-52 Cooke County Hospital District not later than the 180th day after 3-53 the date of the election. 3-54 (k) The Board of Directors may not hold an election on the 3-55 question of dissolution under this section and the creation of the 3-56 Cooke County Hospital District before the first anniversary of the 3-57 most recent election held under this section concerning the 3-58 dissolution and the creation of the Cooke County Hospital District. 3-59 ARTICLE 3. CREATION OF COOKE COUNTY HOSPITAL DISTRICT 3-60 SECTION 3.01. (a) In accordance with Section 9, Article IX, 3-61 Texas Constitution, this article authorizes the creation, 3-62 establishment, administration, maintenance, operation, and 3-63 financing of a hospital district in this state with boundaries 3-64 coextensive with the boundaries of Cooke County as they existed on 3-65 November 15, 1999. 3-66 (b) The district is to be known as "Cooke County Hospital 3-67 District," and it has the rights, powers, and duties provided in 3-68 this article. 3-69 SECTION 3.02. (a) The Cooke County Hospital District may not 4-1 be created unless the creation, the assumption of debt, and the 4-2 levy of taxes are approved by a majority of the voters at an 4-3 election held in the Gainesville Hospital District and by a 4-4 majority of the voters at a separate election held in the Muenster 4-5 Hospital District. 4-6 (b) The election in the Gainesville Hospital District and 4-7 the election in the Muenster Hospital District shall be held on the 4-8 same day and must be held before the fifth anniversary of the 4-9 effective date of this Act. 4-10 SECTION 3.03. (a) If the Cooke County Hospital District is 4-11 created in accordance with Section 18A, Chapter 211, Acts of the 4-12 64th Legislature, Regular Session, 1975, and Section 20c, Chapter 4-13 477, Acts of the 59th Legislature, Regular Session, 1965, the 4-14 following nine persons shall serve as temporary directors of the 4-15 Cooke County Hospital District: 4-16 (1) David Hutcherson; 4-17 (2) Karla Metzler; 4-18 (3) Harrison Wellman; 4-19 (4) Dave Sanders; 4-20 (5) Jerry Parr; 4-21 (6) Don Flusche; 4-22 (7) Gerald Hess; 4-23 (8) Charles Bayer; and 4-24 (9) Werner Becker, Jr. 4-25 (b) A vacancy on the temporary board of directors shall be 4-26 filled by the Commissioners Court of Cooke County. 4-27 (c) The temporary board shall serve as the directors of the 4-28 Cooke County Hospital District until elected directors take office. 4-29 SECTION 3.04. (a) If the Cooke County Hospital District is 4-30 created, directors shall be elected at an election to be held on 4-31 the first Saturday in May following the date the Cooke County 4-32 Hospital District is created. 4-33 (b) The temporary directors may postpone the election date 4-34 for one year or until a subsequent uniform election date if the 4-35 temporary directors determine that there is not sufficient time to 4-36 comply with the requirements of law. 4-37 (c) Two directors shall be elected from each of 4-38 Commissioners Precincts Numbers 1, 2, 3, and 4 of Cooke County, 4-39 and one director shall be elected from the district at large. 4-40 (d) At the initial election of directors following creation 4-41 of the Cooke County Hospital District, the two candidates receiving 4-42 the highest number of votes from each commissioners precinct are 4-43 the directors for that precinct, and the candidate receiving the 4-44 highest number of votes from the district at large is the director 4-45 for the district at large. 4-46 (e) The directors elected at the initial election of 4-47 directors following creation of the Cooke County Hospital District 4-48 shall draw lots to determine which three directors shall serve 4-49 one-year terms, which three directors shall serve two-year terms, 4-50 and which three directors shall serve three-year terms. 4-51 SECTION 3.05. (a) After the initial election of directors 4-52 following creation, an election shall be held each year on the 4-53 first Saturday in May, and the appropriate number of successor 4-54 directors shall be elected for three-year terms. 4-55 (b) Notice of each election shall be published in a 4-56 newspaper of general circulation in the district in accordance with 4-57 Section 4.003, Election Code. Any person desiring to have the 4-58 person's name printed on the ballot as a candidate for director 4-59 shall file an application with the secretary of the board of 4-60 directors. The application shall be filed with the secretary at 4-61 least 60 days before the date of the election. The application 4-62 must specify the commissioners precinct the candidate wishes to 4-63 represent or that the candidate wishes to represent the district at 4-64 large. 4-65 (c) Vacancies in office shall be filled for the unexpired 4-66 term by the remainder of the board of directors. 4-67 SECTION 3.06. A person may not be appointed or elected as a 4-68 member of the temporary or permanent board of directors unless the 4-69 person is a resident of the district, a qualified voter, and, if 5-1 elected from a commissioners precinct, a resident of the precinct. 5-2 The following persons are not eligible to serve as a director: 5-3 (1) an administrator; 5-4 (2) any other employee of the district; or 5-5 (3) an individual who was employed by the district 5-6 within 24 months before the date of election or appointment. 5-7 SECTION 3.07. (a) The district authorized by this article 5-8 to be created shall take over and there shall be transferred to the 5-9 district title to all land, buildings, improvements, and equipment 5-10 pertaining to the hospitals or hospital system that may be located 5-11 within or outside the district and owned by Cooke County or a 5-12 municipality in the district, and after that date the district 5-13 shall provide for the establishment of a hospital system by the 5-14 purchase, construction, acquisition, repair, and renovation of 5-15 buildings and equipment, equipping the buildings, and the 5-16 administration of the district for hospital purposes. 5-17 (b) The district shall assume the outstanding indebtedness 5-18 incurred by the Gainesville Hospital District or the Muenster 5-19 Hospital District to provide medical care for residents of the 5-20 district before the creation of the district. 5-21 SECTION 3.08. (a) The board of directors, both temporary 5-22 and permanent, shall organize by electing one of the members as 5-23 president and one as vice president. A secretary, who need not be 5-24 a director, shall also be elected. Officers shall be elected for a 5-25 term of one year and vacancies shall be filled for the unexpired 5-26 term by the board. 5-27 (b) When a quorum is present, a majority of the members of 5-28 the board of directors voting must concur in a matter pertaining to 5-29 the business of the district. A quorum of the board shall be 5-30 required to transact the business of the district. A majority of 5-31 the members of the board constitutes a quorum. 5-32 (c) All members of the board of directors and officers shall 5-33 serve without compensation, but may be reimbursed for actual 5-34 expenses incurred in the performance of the member's official 5-35 duties as approved by the board and reported in the minute book of 5-36 the district or other records of the district. 5-37 SECTION 3.09. (a) The board of directors shall manage, 5-38 control, and administer the hospital system and the business of and 5-39 all funds and resources of the district, and the operating, 5-40 depreciation, or building reserves shall be invested in accordance 5-41 with Chapter 2256, Government Code. 5-42 (b) The district, through its board of directors, may sue 5-43 and be sued and adopt rules governing the operation of the 5-44 hospital, hospital system, and the district's staff and employees. 5-45 (c) The board of directors shall appoint one or more 5-46 qualified persons as the administrators of the hospital district 5-47 and may appoint one or more assistants to the administrators. The 5-48 administrators and assistant administrators, if any, serve at the 5-49 will of the board and receive compensation as may be fixed by the 5-50 board. Each administrator shall, on assuming the administrator's 5-51 duties, execute a bond payable to the hospital district in an 5-52 amount set by the board, but not less than $5,000, conditioned on 5-53 the faithful performance of the duties required of the 5-54 administrator and containing other conditions as the board may 5-55 require. The board may pay for the bond with district funds. The 5-56 administrators shall supervise all the work and activities of the 5-57 district, subject to the limitations prescribed by the board. 5-58 (d) The board of directors shall have the authority to 5-59 appoint to the staff any doctors the board considers necessary for 5-60 the efficient operation of the district if warranted by 5-61 circumstances. The board shall have the authority to employ and 5-62 may delegate to the administrators the authority to employ persons 5-63 for the district, including technicians, nurses, fiscal agents, 5-64 accountants, architects, persons providing professional or staff 5-65 assistance, and other necessary employees. 5-66 (e) The board of directors may contract with any other 5-67 political subdivision or governmental agency for the district to 5-68 provide investigatory or other services as to the medical, 5-69 hospital, or welfare needs of the residents of the district. The 6-1 district may contract with any county or municipality located 6-2 outside the district's boundaries for the care and treatment of the 6-3 sick, diseased, or injured persons of the county or municipality, 6-4 and may contract with the state or agencies of the federal 6-5 government for the state or federal government to reimburse the 6-6 district for the treatment of the sick, diseased, or injured 6-7 persons. The board may delegate to the administrators the 6-8 authority to contract with a person for the district. 6-9 SECTION 3.10. (a) The district shall operate on the basis 6-10 of fiscal years established from time to time by the board of 6-11 directors, provided that a fiscal year may not be changed during 6-12 the time revenue bonds of the district are outstanding or more than 6-13 once in any 24-month period. 6-14 (b) The board of directors shall cause an annual audit to be 6-15 made of the financial affairs of the district, which shall be open 6-16 to inspection at the principal office of the district. 6-17 (c) The administrators shall prepare an annual budget for 6-18 approval by the board of directors. The budget shall contain a 6-19 complete financial statement of the district showing: 6-20 (1) all outstanding obligations of the district; 6-21 (2) the cash on hand to the credit of each fund of the 6-22 district; 6-23 (3) the amount of money received by the district from 6-24 all sources during the previous year; 6-25 (4) the funds available from all sources during the 6-26 ensuing year, with balances expected at year end of the year in 6-27 which the budget is being prepared; and 6-28 (5) estimated revenues and balances available to cover 6-29 the proposed budget and the estimated tax rate that will be 6-30 required. 6-31 (d) A public hearing on the annual budget shall be held by 6-32 the board of directors after notice of the hearing has been 6-33 published one time in a newspaper of general circulation in the 6-34 district at least 10 days before the date set for the hearing. Any 6-35 person residing in the district shall have the right to be present 6-36 and participate in the hearing. 6-37 (e) The budget, as proposed by the administrator, shall be 6-38 acted on by the board of directors. The board shall have authority 6-39 to make changes in the budget as the board determines the law 6-40 warrants and the interests of the taxpayers demand. 6-41 (f) The annual budget may be amended from time to time with 6-42 the approval of the board of directors. 6-43 SECTION 3.11. (a) The board of directors shall have the 6-44 power and authority to issue and sell bonds in the name and on the 6-45 faith and credit of the hospital district for: 6-46 (1) the purchase, construction, acquisition, repair, 6-47 and renovation of buildings or improvements; 6-48 (2) equipping the buildings and improvements for 6-49 hospital and health care services related purposes; or 6-50 (3) acquiring and operating a skilled nursing unit, 6-51 convalescent facility, nursing home, assisted living facility, or 6-52 other related health care facility. 6-53 (b) At the time bonds are issued by the district, a tax 6-54 shall be levied by the board of directors sufficient to create an 6-55 interest and sinking fund to pay the interest on and principal of 6-56 the bonds as the bonds mature, provided that the tax together with 6-57 any other taxes levied for the district may not exceed the limit 6-58 approved by the voters at the election authorizing the levy of 6-59 taxes. 6-60 (c) Bonds may not be issued by the district except for 6-61 revenue or refunding bonds until authorized by a majority of the 6-62 electors of the district. 6-63 (d) The order for a bond election shall specify: 6-64 (1) the nature and date of the election; 6-65 (2) the location of the polling places; 6-66 (3) the hours during which the polls will be open; 6-67 and 6-68 (4) the amount of bonds to be authorized and the 6-69 maximum maturity of the bonds. 7-1 (e) Notice of a bond election shall be given as provided by 7-2 Section 1251.003, Government Code, and shall be conducted in 7-3 accordance with the Election Code, except as modified by the 7-4 provisions of this article. 7-5 SECTION 3.12. (a) Refunding bonds of the district may be 7-6 issued for the purpose of refunding and paying off any outstanding 7-7 indebtedness the district has issued or assumed. 7-8 (b) Refunding bonds may be sold and the proceeds from the 7-9 bonds may be applied to the payment of outstanding indebtedness or 7-10 may be exchanged in whole or in part for not less than a similar 7-11 principal amount of the outstanding indebtedness. 7-12 (c) If the refunding bonds are to be sold and the proceeds 7-13 from the bonds are to be applied to the payment of any outstanding 7-14 indebtedness, the refunding bonds shall be issued and payments made 7-15 in the manner specified by Chapter 1207, Government Code. 7-16 SECTION 3.13. Bonds issued by the district must: 7-17 (1) mature not later than the 40th anniversary of the 7-18 date of issuance; 7-19 (2) be executed in the manner provided by Chapter 618, 7-20 Government Code; 7-21 (3) bear a rate of interest that does not exceed the 7-22 amount prescribed by Chapter 1204, Government Code; and 7-23 (4) be subject to the requirements of Chapter 1202, 7-24 Government Code. 7-25 SECTION 3.14. (a) In addition to being granted the power to 7-26 issue bonds payable from taxes levied by the district under Section 7-27 3.12 of this article, the board of directors may issue and refund 7-28 any previously issued revenue bond to: 7-29 (1) purchase, construct, acquire, repair, equip, or 7-30 renovate a building or improvement for hospital and related 7-31 purposes; 7-32 (2) acquire a site for hospital purposes; or 7-33 (3) acquire and operate a facility described by 7-34 Section 3.11(a)(3) of this article to assist the district in 7-35 carrying out the district's hospital purposes. 7-36 (b) Bonds authorized under this section shall be payable 7-37 from and secured by a pledge of all or any part of the revenues of 7-38 the district to be derived from the operation of the district's 7-39 hospital system, and may be additionally secured by a mortgage or 7-40 deed of trust lien on any part or all of the district's properties. 7-41 (c) Bonds shall be issued in the manner and in accordance 7-42 with the procedures and requirements specified for the issuance of 7-43 revenue bonds by a county hospital authority under Chapter 264, 7-44 Health and Safety Code. 7-45 SECTION 3.15. (a) The board of directors has complete 7-46 discretion as to the type of buildings, both in number and 7-47 location, required to establish and maintain an adequate hospital 7-48 system and the type of equipment necessary for hospital care. The 7-49 hospital system may include: 7-50 (1) domiciliary care and treatment of the sick, 7-51 wounded, and injured; 7-52 (2) outpatient clinics; 7-53 (3) pharmacies; 7-54 (4) geriatric domiciliary care and treatment; 7-55 (5) convalescent home facilities; 7-56 (6) necessary nurses, domiciliaries, and training 7-57 centers; 7-58 (7) research centers and laboratories; and 7-59 (8) any other facilities determined by the board to be 7-60 necessary for hospital and related health care. 7-61 (b) Notwithstanding Subsection (a) of this section, the 7-62 district shall provide full-time health care services and 7-63 facilities in the city of Muenster, including, at a minimum, 7-64 physician offices and services, outpatient medical care, 7-65 comprehensive laboratory services, and comprehensive radiology 7-66 services, including ultrasound, mammography, and computerized 7-67 tomography, at Muenster Memorial Hospital or its successor facility 7-68 and nursing home care at St. Richard's Villa. If the district does 7-69 not construct a new acute care hospital facility, the district 8-1 shall continue to operate an acute care hospital facility located 8-2 in the city of Muenster until the district constructs a new 8-3 hospital facility to serve the residents of the city of Muenster. 8-4 (c) If a resident of the district prevails in an action 8-5 brought against the district for the district's alleged failure to 8-6 comply with Subsection (b) of this section, the resident is 8-7 entitled to recover reasonable attorney's fees from the district. 8-8 (d) The district, through its board of directors, may enter 8-9 into an operating or management contract with regard to all or part 8-10 of the district's facilities or may lease all or part of the 8-11 district's buildings and facilities on terms and conditions 8-12 considered to be in the best interest of the residents of the 8-13 district. A lease under this subsection may not be for a period 8-14 that exceeds 25 years. 8-15 (e) The district may sell or otherwise dispose of any 8-16 property, real or personal, or equipment of any nature on terms and 8-17 conditions found by the board of directors to be in the best 8-18 interest of the residents of the district. 8-19 (f) The board of directors may prescribe the method and 8-20 manner of making purchases and expenditures by and for the district 8-21 and may prescribe all accounting and control procedures. 8-22 (g) A contract for construction may be made only after 8-23 competitive bidding as provided by Subchapter B, Chapter 271, Local 8-24 Government Code. 8-25 (h) The provisions of Chapter 2253, Government Code, 8-26 relating to performance and payment bonds apply to construction 8-27 contracts let by the district. 8-28 (i) The district may acquire property, facilities, and 8-29 equipment for use in the hospital system and may mortgage or pledge 8-30 the property, facilities, or equipment acquired by the district as 8-31 security for the payment of the purchase price. 8-32 (j) The board of directors shall name one or more banks to 8-33 serve as depository for the funds of the district. All funds of 8-34 the district, except those invested as provided in Section 3.09(a) 8-35 of this article and those transmitted to a bank for payment for 8-36 bonds or obligations issued or assumed by the district, shall be 8-37 deposited as received with the depository bank and shall remain on 8-38 deposit. Nothing in this subsection may limit the power of the 8-39 board to place a portion of the board's funds on time deposit or to 8-40 purchase certificates of deposit or other investments permitted by 8-41 Chapter 2256, Government Code. 8-42 (k) Before the district deposits the district's funds in a 8-43 bank in an amount that exceeds the maximum amount secured by the 8-44 Federal Deposit Insurance Corporation, the bank must execute a bond 8-45 or other security in an amount sufficient to secure from loss the 8-46 district funds that exceed the amount secured by the Federal 8-47 Deposit Insurance Corporation. 8-48 SECTION 3.16. (a) The board of directors may provide 8-49 retirement benefits for employees of the district by establishing 8-50 or administering a retirement program or electing to participate in 8-51 the Texas County and District Retirement System or in any other 8-52 statewide retirement system in which the district is eligible to 8-53 participate. 8-54 (b) The board of directors may institute a suit to enforce 8-55 the payment of taxes or to foreclose liens to secure the payment of 8-56 taxes due the district. 8-57 (c) The district, subject to the approval of the board of 8-58 directors, may provide primary care, emergency services, preventive 8-59 medical services, and other health-related services outside the 8-60 boundaries of the district, provided the services serve the purpose 8-61 of the district as established by this article. 8-62 (d) The board of directors may also contract with the state 8-63 or agencies of the federal government to be reimbursed for the 8-64 treatment of sick, diseased, or injured persons. 8-65 (e) The district may contract with, affiliate with, or enter 8-66 into another arrangement with a managed care system, a preferred 8-67 provider organization, a health maintenance organization, another 8-68 provider of alternative health care or delivery system, or a 8-69 private hospital to jointly administer or deliver health care 9-1 services. The district may spend district funds to establish and 9-2 maintain partnerships, corporations, or other entities involved in 9-3 the delivery of health care services. 9-4 (f) The district may sponsor and create a nonprofit 9-5 corporation under the Texas Non-Profit Corporation Act (Article 9-6 1396-1.01 et seq., Vernon's Texas Civil Statutes) and may 9-7 contribute funds to or solicit funds for the corporation. The 9-8 corporation may use funds, other than funds paid by the corporation 9-9 to the district, only to provide health care or other services the 9-10 district is authorized to provide under this article. The board of 9-11 directors of the hospital district shall establish adequate 9-12 controls to ensure that the corporation uses its funds as required 9-13 by this subsection. The corporation may invest corporation funds in 9-14 any manner in which the district may invest funds, including 9-15 investing funds as authorized by Chapter 2256, Government Code. 9-16 (g) The board of directors may spend district funds, enter 9-17 into agreements, and take other necessary action to recruit 9-18 physicians and other persons to serve as medical staff members or 9-19 employees of the district, including: 9-20 (1) advertising and marketing; 9-21 (2) paying travel, recruitment, and relocation 9-22 expenses; 9-23 (3) providing a loan or scholarship to a physician or 9-24 a person currently enrolled in health care education courses at an 9-25 institution of higher education who contractually agrees to become 9-26 a district employee or medical staff member; or 9-27 (4) contracting with one or more full-time medical 9-28 students or other students in a health occupation, enrolled in and 9-29 in good standing at an accredited medical school, college, or 9-30 university, to pay the student's tuition or other expenses in 9-31 consideration of the student's agreement to serve as an employee or 9-32 independent contractor for the district. 9-33 (h) The board of directors may spend district funds, enter 9-34 into agreements, and take other necessary action to conduct, 9-35 participate in, or otherwise assist in providing health care 9-36 educational programs for current or prospective medical staff 9-37 members or employees of the district. 9-38 SECTION 3.17. (a) The board of directors shall annually 9-39 levy a tax in an amount not to exceed the limit approved by the 9-40 voters for the purpose of paying: 9-41 (1) the indebtedness assumed or issued by the 9-42 district; or 9-43 (2) the maintenance and operating expenses of the 9-44 district. 9-45 (b) A tax levied under this section may not be levied to pay 9-46 the principal of or interest on revenue bonds issued under Section 9-47 3.14 of this article. 9-48 (c) In setting a tax rate under this section, the board of 9-49 directors shall consider the income of the district from sources 9-50 other than taxation. On determining the amount of tax required to 9-51 be levied, the board shall make the levy and certify the levy to 9-52 the tax assessor-collector. 9-53 SECTION 3.18. (a) Bonds issued and indebtedness assumed by 9-54 the district are a legal and authorized investment of a bank, 9-55 savings bank, trust company, savings and loan association, 9-56 insurance company, fiduciary, trustee, guardian, or sinking fund of 9-57 a municipality, school district, or other political subdivision of 9-58 the state, and for all public funds of the state or an agency of 9-59 the state, including the state permanent school fund. 9-60 (b) Bonds issued or indebtedness assumed by the district is 9-61 eligible to secure the deposit of public funds of the state and the 9-62 public funds of a municipality, school district, or other political 9-63 subdivision of the state, and is lawful and sufficient security for 9-64 those deposits to the extent of the value of the bonds or 9-65 indebtedness when accompanied by all unmatured coupons. 9-66 SECTION 3.19. (a) The district has the right and power of 9-67 eminent domain for the purpose of acquiring by condemnation any and 9-68 all property of any kind and character in fee simple, or any lesser 9-69 interest in the property, within the boundaries of the district if 10-1 necessary to the exercise of the rights or authority conferred by 10-2 this article in the manner provided by the general law with respect 10-3 to condemnation by counties. 10-4 (b) The district is not required to deposit in the trial 10-5 court money or bond as provided by Section 21.021, Property Code. 10-6 (c) In a condemnation proceeding prosecuted by the district, 10-7 the district is not required to: 10-8 (1) pay in advance or give bond or other security for 10-9 costs in the trial court; 10-10 (2) give any bond otherwise required for the issuance 10-11 of a temporary restraining order or a temporary injunction; or 10-12 (3) give bond for costs or for supersedeas on an 10-13 appeal or writ of error. 10-14 SECTION 3.20. (a) The board of directors may levy taxes for 10-15 the entire year in which the district is established as a result of 10-16 the initial election provided under this article. 10-17 (b) The Tax Code governs the appraisal, assessment, and 10-18 collection of district taxes. 10-19 (c) The board of directors may provide for the appointment 10-20 of a tax assessor-collector for the district or may contract for 10-21 the assessment and collection of taxes as provided by the Tax Code. 10-22 SECTION 3.21. (a) The district shall provide without charge 10-23 to a patient residing in the district the medical care and 10-24 treatment that the patient or a relative of the patient who is 10-25 legally responsible for the patient's support cannot pay. 10-26 (b) Each operating year, the district shall adopt an 10-27 application procedure to determine eligibility for assistance as 10-28 provided by Section 61.053, Health and Safety Code. 10-29 (c) An administrator may cause an inquiry to be made 10-30 regarding the financial circumstances of a patient under Subsection 10-31 (a) of this section residing in the district and admitted to a 10-32 district facility and of the relatives of the patient legally 10-33 responsible for the patient's support. If the patient or relative 10-34 is found to be able to pay for all or part of the care and 10-35 treatment, the administrator shall issue an order directing the 10-36 patient or the relative to pay to the district for the care and 10-37 support of the patient a specified sum each week in an amount that 10-38 the individual is able to pay. The administrator may collect sums 10-39 under this subsection from the estate of the patient or a relative 10-40 who is legally responsible for the patient's support in the manner 10-41 provided by law for collection of expenses in the last illness of a 10-42 deceased person. 10-43 (d) In the case of a dispute regarding the ability to pay, 10-44 the board of directors shall call witnesses, conduct a hearing, and 10-45 issue a final order. An appeal from a final order of the board 10-46 under this subsection shall be made to the district court in Cooke 10-47 County. The substantial evidence rule applies to an appeal under 10-48 this subsection. 10-49 SECTION 3.22. The board of directors, on behalf of the 10-50 district, may accept donations, gifts, and endowments to be held in 10-51 trust and administered by the board for purposes and under 10-52 directions, limitations, and provisions prescribed in writing by 10-53 the donor that are not inconsistent with the proper management of 10-54 the district. 10-55 SECTION 3.23. (a) If the board of directors declares that 10-56 funds are not available to meet the lawfully authorized obligations 10-57 of the district and that an emergency exists, the board may borrow 10-58 money at a rate not to exceed the maximum annual percentage rate 10-59 allowed by law for district obligations at the time of the loan. 10-60 (b) To secure a loan, the board may pledge: 10-61 (1) revenues of the district that are not pledged to 10-62 pay the bonded indebtedness of the district; 10-63 (2) district taxes to be levied by the district during 10-64 the 12-month period following the date of the pledge that are not 10-65 pledged to pay the principal of or interest on district bonds; or 10-66 (3) district bonds that have been authorized but not 10-67 sold. 10-68 (c) A loan for which taxes or bonds are pledged shall mature 10-69 not later than the first anniversary of the date on which the loan 11-1 is made. A loan for which district revenues are pledged shall 11-2 mature not later than the fifth anniversary of the date on which 11-3 the loan is made. 11-4 (d) The board of directors may not spend money obtained from 11-5 a loan under this section for any purpose other than the purpose 11-6 for which the board declared an emergency. If taxes or bonds are 11-7 pledged to pay the loan, the board may not spend the revenue other 11-8 than for the purpose for which the taxes were levied or the bonds 11-9 were authorized. 11-10 SECTION 3.24. (a) After the district is created, a county, 11-11 municipality, or political subdivision in or partly in the district 11-12 may not levy taxes or issue bonds or other obligations for hospital 11-13 purposes or for providing medical care for the residents of the 11-14 district. 11-15 (b) The district shall assume full responsibility for the 11-16 operation of all hospital facilities and for the furnishing of 11-17 medical and hospital care for the district's needy residents. 11-18 (c) When the district is created and established, the county 11-19 and all municipalities located in or partly in the district shall 11-20 convey and transfer to the district title to all land, buildings, 11-21 improvements, and equipment that pertain to a hospital or hospital 11-22 system located in the district owned by the county, municipality, 11-23 or other governmental entity. 11-24 (d) Operating funds and reserves for operating expenses that 11-25 have been budgeted by the county, municipality, or other 11-26 governmental entity in which the district is located to provide 11-27 medical care for residents of the district for the remainder of the 11-28 fiscal year in which the district is established, taxes levied for 11-29 hospital purposes for the current year, and all funds established 11-30 for payment of indebtedness assumed by the district shall be 11-31 transferred to the district. 11-32 SECTION 3.25. The support and maintenance of the district 11-33 may not become a charge against or an obligation of the state. A 11-34 direct appropriation by the legislature may not be made for the 11-35 construction, maintenance, or improvement of any of the facilities 11-36 of the district. 11-37 SECTION 3.26. In administering this article, the district is 11-38 performing an essential public function, and any bonds issued by 11-39 the board and the transfer and the issuance from the bonds, 11-40 including any profits made in the sale of the bonds, are exempt 11-41 from taxation by the state or any municipality or political 11-42 subdivision of the state. 11-43 SECTION 3.27. Proof of publication of the notice required in 11-44 the enactment of this Act under the provisions of Section 9, 11-45 Article IX, Texas Constitution, has been made in the manner and 11-46 form provided by law pertaining to the enactment of local and 11-47 special laws, and the notice is found and declared proper and 11-48 sufficient to satisfy the requirement. 11-49 ARTICLE 4. EFFECTIVE DATE 11-50 SECTION 4.01. This Act takes effect immediately if it 11-51 receives a vote of two-thirds of all the members elected to each 11-52 house, as provided by Section 39, Article III, Texas Constitution. 11-53 If this Act does not receive the vote necessary for immediate 11-54 effect, this Act takes effect September 1, 2001. 11-55 * * * * *