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                                 * * * * *