1-1 By: Dunnam (Senate Sponsor - Sibley) H.B. No. 3691 1-2 (In the Senate - Received from the House May 9, 2001; 1-3 May 10, 2001, read first time and referred to Committee on 1-4 Intergovernmental Relations; May 11, 2001, reported favorably by 1-5 the following vote: Yeas 4, Nays 0; May 11, 2001, sent to 1-6 printer.) 1-7 A BILL TO BE ENTITLED 1-8 AN ACT 1-9 relating to the creation, administration, powers, duties, 1-10 operation, and financing of a hospital district to be known as the 1-11 West Medical District; authorizing a tax; and granting the 1-12 authority to issue and refund bonds. 1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-14 ARTICLE 1. GENERAL PROVISIONS 1-15 SECTION 1.01. DEFINITIONS. In this Act: 1-16 (1) "District" means the West Medical District. 1-17 (2) "Board" means the board of directors of the 1-18 district. 1-19 (3) "Director" means a member of the board. 1-20 SECTION 1.02. DISTRICT AUTHORIZATION. A hospital district 1-21 to be known as the West Medical District may be created and 1-22 established and, if created, must be maintained, operated, and 1-23 financed in the manner provided by Section 9, Article IX, Texas 1-24 Constitution, and by this Act. 1-25 SECTION 1.03. BOUNDARIES. The boundaries of the district 1-26 are coextensive with the boundaries of the West Independent School 1-27 District in McLennan County. 1-28 SECTION 1.04. ELECTION CODE PROVISIONS. Section 41.001(a), 1-29 Election Code, does not apply to an election ordered under this 1-30 Act. 1-31 ARTICLE 2. TEMPORARY DIRECTORS 1-32 SECTION 2.01. TEMPORARY DIRECTORS. On the effective date of 1-33 this Act, the following persons become temporary directors of the 1-34 district: 1-35 (1) John Crowder; 1-36 (2) Roby Urbanovsky; 1-37 (3) Larry Sparks; 1-38 (4) Jeanette Karlik; 1-39 (5) Robby Payne; 1-40 (6) Tommy Muska; and 1-41 (7) Kirk Wines. 1-42 SECTION 2.02. VACANCY IN OFFICE. The directors remaining 1-43 after a vacancy in the office of a temporary director shall fill 1-44 the vacancy by appointment by majority vote. 1-45 ARTICLE 3. CREATION OF DISTRICT 1-46 SECTION 3.01. CREATION ELECTION. The district may be 1-47 created and a tax may be authorized only if the creation and the 1-48 tax are approved by a majority of the qualified voters of the 1-49 territory of the proposed district voting at an election called and 1-50 held for that purpose. 1-51 SECTION 3.02. ORDERING ELECTION. (a) A majority of the 1-52 temporary directors of the district may order a creation election 1-53 to be held as prescribed by Subsection (c) of this section. 1-54 (b) On presentation of a petition for a creation election 1-55 signed by at least 50 of the registered voters of the territory of 1-56 the proposed district, according to the most recent official list 1-57 of registered voters, the temporary directors shall order an 1-58 election to be held as prescribed by Subsection (c) of this 1-59 section. The election shall be called not later than the 60th day 1-60 after the date the petition is presented to the district. 1-61 (c) The election order must call for an election to be held 1-62 in the territory within the West Independent School District 1-63 boundaries in McLennan County. 1-64 SECTION 3.03. ELECTION ORDER. The order calling the 2-1 election must state: 2-2 (1) the nature of the election, including the 2-3 proposition that is to appear on the ballot; 2-4 (2) the date of the election; 2-5 (3) the hours during which the polls will be open; and 2-6 (4) the location of the polling places. 2-7 SECTION 3.04. NOTICE. The temporary directors shall give 2-8 notice of the election by publishing a substantial copy of the 2-9 election order in a newspaper of general circulation in the 2-10 proposed district once a week for two consecutive weeks. The first 2-11 publication must appear at least 35 days before the date set for 2-12 the election. 2-13 SECTION 3.05. ELECTION DATE. The election shall be held not 2-14 less than 45 days or more than 60 days after the date on which the 2-15 election is ordered. 2-16 SECTION 3.06. BALLOT PROPOSITION. The ballot for the 2-17 election shall be printed to permit voting for or against the 2-18 proposition: "The creation of a hospital district to be known as 2-19 the West Medical District and the levy of annual taxes for hospital 2-20 purposes at a rate not to exceed 75 cents on each $100 valuation of 2-21 all taxable property in the district." 2-22 SECTION 3.07. CANVASSING RETURNS. (a) The temporary 2-23 directors shall meet and canvass the returns of the election. 2-24 (b) If a majority of the votes cast at the election favor 2-25 creation of the district, the temporary directors shall declare the 2-26 district created and shall enter the results in their minutes. 2-27 (c) If the creation of the district is defeated, the 2-28 temporary directors may call and hold another creation election, 2-29 but another creation election may not be called and held before the 2-30 first anniversary of the date of the most recent creation election. 2-31 SECTION 3.08. EXPIRATION OF ACT. If the creation of the 2-32 district is not approved at an election held before the fifth 2-33 anniversary of the effective date of this Act, this Act expires. 2-34 ARTICLE 4. DISTRICT ADMINISTRATION 2-35 SECTION 4.01. BOARD OF DIRECTORS. (a) The district is 2-36 governed by a board of seven directors. 2-37 (b) From the time the creation of the district is approved 2-38 until the elected directors take office, the temporary directors 2-39 serve as directors of the district. 2-40 SECTION 4.02. INITIAL DIRECTORS ELECTION. (a) Directors 2-41 shall be elected at an election to be held on the first Saturday in 2-42 May following the creation of the district. 2-43 (b) At the initial election of directors following creation 2-44 of the district, members of the board of directors shall be elected 2-45 at large on a single ballot, with the seven candidates receiving 2-46 the highest number of votes being elected as directors. The 2-47 directors elected at the initial election shall draw lots to 2-48 determine which two directors shall serve one-year terms, which two 2-49 directors shall serve two-year terms, and which three directors 2-50 shall serve three-year terms. 2-51 SECTION 4.03. METHOD OF ELECTION; STAGGERED TERMS; TERM OF 2-52 OFFICE; ELECTION DATE. (a) After the initial election of 2-53 directors following creation of the district, an election shall be 2-54 held on the first Saturday in May each year to elect the 2-55 appropriate number of successor directors. 2-56 (b) The directors shall be elected at large. 2-57 (c) Except as provided by Section 4.02(b) of this Act, each 2-58 director is elected for a three-year term. 2-59 SECTION 4.04. NOTICE OF ELECTION. Notice of each election 2-60 of directors shall be published in a newspaper of general 2-61 circulation in the district in accordance with Chapter 4, Election 2-62 Code. 2-63 SECTION 4.05. APPLICATION. A person who wishes to have the 2-64 person's name printed on the ballot as a candidate for director 2-65 must file an application with the secretary of the board of 2-66 directors in accordance with Chapter 144, Election Code. 2-67 SECTION 4.06. QUALIFICATIONS FOR OFFICE. (a) To be 2-68 eligible to be a candidate for or to serve as a director, a person 2-69 must be: 3-1 (1) a resident of the district; and 3-2 (2) a qualified voter. 3-3 (b) An employee of the district may not serve as a director. 3-4 SECTION 4.07. BOND. (a) Before assuming the duties of the 3-5 office, each director must execute a bond for $5,000 payable to the 3-6 district, conditioned on the faithful performance of the person's 3-7 duties as director. 3-8 (b) The bond shall be kept in the permanent records of the 3-9 district. 3-10 (c) The board may pay for the director's bond with district 3-11 funds. 3-12 SECTION 4.08. BOARD VACANCY. A vacancy in the office of 3-13 director shall be filled for the unexpired term by appointment by 3-14 the remaining directors. 3-15 SECTION 4.09. OFFICERS; OFFICERS' TERMS; VACANCY. (a) The 3-16 board shall elect from among its members a president and a vice 3-17 president. 3-18 (b) The board shall appoint a secretary, who need not be a 3-19 director. 3-20 (c) Each officer of the board serves for a term of one year. 3-21 (d) The board shall fill a vacancy in a board office for the 3-22 unexpired term. 3-23 SECTION 4.10. COMPENSATION. (a) Directors and officers 3-24 serve without compensation but may be reimbursed for actual 3-25 expenses incurred in the performance of official duties. 3-26 (b) Expenses reimbursed under this section must be: 3-27 (1) reported in the district's minute book or other 3-28 district records; and 3-29 (2) approved by the board. 3-30 SECTION 4.11. QUORUM; VOTING REQUIREMENT. (a) A majority 3-31 of the membership of the board constitutes a quorum for the 3-32 transaction of business. 3-33 (b) When a quorum is present, a majority of the members of 3-34 the board voting must concur in a matter relating to the business 3-35 of the district. 3-36 SECTION 4.12. ADMINISTRATOR AND ASSISTANT ADMINISTRATOR. 3-37 (a) The board may appoint a qualified person as administrator of 3-38 the district and may in its discretion appoint an assistant to the 3-39 administrator. 3-40 (b) The administrator and assistant administrator, if any, 3-41 serve at the will of the board. 3-42 (c) The administrator and assistant administrator, if any, 3-43 are entitled to compensation as determined by the board. 3-44 (d) The administrator shall supervise all the work and 3-45 activities of the district and shall have general direction of the 3-46 affairs of the district, subject to any limitations the board may 3-47 prescribe. 3-48 (e) Before assuming the duties of administrator, the 3-49 administrator shall execute a bond payable to the hospital district 3-50 in an amount not less than $5,000 as determined by the board, 3-51 conditioned on the administrator's performing the administrator's 3-52 duties required under this Act. The board may pay for the bond 3-53 with district funds. 3-54 (f) The board may delegate to the administrator the 3-55 authority to employ or contract with persons for the district. 3-56 SECTION 4.13. APPOINTMENTS TO STAFF. The board may: 3-57 (1) appoint to the staff any doctors the board 3-58 considers necessary for the efficient operation of the district; 3-59 and 3-60 (2) make temporary appointments the board considers 3-61 necessary. 3-62 SECTION 4.14. TECHNICIANS, NURSES, AND OTHER DISTRICT 3-63 EMPLOYEES. The district may employ or contract with technicians, 3-64 nurses, fiscal agents, accountants, architects, attorneys, and 3-65 other necessary employees. 3-66 ARTICLE 5. POWERS AND DUTIES 3-67 SECTION 5.01. RESPONSIBILITY OF GOVERNMENTAL ENTITY. (a) 3-68 On creation of the district, the West Hospital Authority may, in 3-69 the authority's sole discretion, convey or transfer to the 4-1 district: 4-2 (1) title to any land, buildings, improvements, or 4-3 equipment related to the hospital system that is owned by the West 4-4 Hospital Authority; 4-5 (2) operating funds and reserves for operating 4-6 expenses and funds that have been budgeted by the West Hospital 4-7 Authority to provide medical care for residents of the district for 4-8 the remainder of the fiscal year in which the district is 4-9 established; and 4-10 (3) accounts receivable of the West Hospital Authority 4-11 for medical care provided for residents of the district. 4-12 (b) The West Hospital Authority shall convey or transfer to 4-13 the district funds established for payment of indebtedness assumed 4-14 by the district. 4-15 (c) Except as provided by Subsection (b) of this section, 4-16 nothing in this Act requires the West Hospital Authority to convey 4-17 or transfer any funds or interest in property to the district. 4-18 (d) On creation of the district, McLennan County may 4-19 transfer to the district: 4-20 (1) any taxes levied by McLennan County for hospital 4-21 purposes for residents of the district for the year in which the 4-22 district is created; or 4-23 (2) any accounts receivable of McLennan County for 4-24 medical care provided for residents of the district. 4-25 SECTION 5.02. LIMITATION ON GOVERNMENTAL ENTITY. On or 4-26 after creation of the district, another governmental entity, 4-27 including a county or municipality, in which the district is 4-28 located may not levy taxes or issue bonds or other obligations for 4-29 hospital purposes or for providing medical care for the residents 4-30 of the district. 4-31 SECTION 5.03. DISTRICT RESPONSIBILITIES. (a) On creation 4-32 of the district, the district: 4-33 (1) assumes full responsibility for operating hospital 4-34 facilities and for furnishing medical and hospital care for the 4-35 district's needy inhabitants; 4-36 (2) assumes any outstanding indebtedness incurred by a 4-37 county, municipality, or other governmental entity in which all or 4-38 part of the district is located in providing hospital care for 4-39 residents of the territory of the district before the district's 4-40 creation; and 4-41 (3) may operate or provide for the operation of a 4-42 mobile emergency medical service. 4-43 (b) If part of a county, municipality, or other governmental 4-44 entity is included in the district and part is not included in the 4-45 district, the amount of indebtedness the district assumes under 4-46 Subsection (a)(2) of this section is the portion of the total 4-47 outstanding indebtedness of the county, municipality, or other 4-48 entity for hospital care for all residents of the county, 4-49 municipality, or other entity that the value of taxable property in 4-50 the district bears to the total value of taxable property in the 4-51 county, municipality, or other entity according to the last 4-52 preceding approved assessment rolls of the county, municipality, or 4-53 other entity before the district is confirmed. 4-54 SECTION 5.04. MANAGEMENT, CONTROL, AND ADMINISTRATION. The 4-55 board shall manage, control, and administer the hospital system and 4-56 the funds and resources of the district. 4-57 SECTION 5.05. DISTRICT RULES. The board may adopt rules 4-58 governing the operations of the hospital and hospital system and 4-59 the duties, functions, and responsibilities of district staff and 4-60 employees. 4-61 SECTION 5.06. METHODS AND PROCEDURES. The board may 4-62 prescribe: 4-63 (1) the method of making purchases and expenditures by 4-64 and for the district; and 4-65 (2) accounting and control procedures for the 4-66 district. 4-67 SECTION 5.07. HOSPITAL PROPERTY, FACILITIES, EQUIPMENT, AND 4-68 SERVICES. (a) The board shall determine the type, number, and 4-69 location of buildings required to establish and maintain an 5-1 adequate hospital system and the type of equipment necessary for 5-2 hospital care. 5-3 (b) The board has complete discretion as to the type and 5-4 extent of services the district will offer. The district may 5-5 provide any services or facilities the board finds necessary for 5-6 hospital or medical care, including: 5-7 (1) emergency medical services; 5-8 (2) primary care clinics; 5-9 (3) outpatient clinics; 5-10 (4) home health agencies; 5-11 (5) pharmacies; 5-12 (6) nursing facilities; 5-13 (7) assisted living facilities; 5-14 (8) blood banks; 5-15 (9) community mental health centers; 5-16 (10) alcohol or chemical dependency centers; 5-17 (11) minor emergency centers; 5-18 (12) research centers; or 5-19 (13) laboratories. 5-20 (c) The board may: 5-21 (1) acquire property, facilities, and equipment for 5-22 the district for use in the hospital system; 5-23 (2) mortgage or pledge the property, facilities, or 5-24 equipment acquired as security for the payment of the purchase 5-25 price; 5-26 (3) transfer by lease to physicians, individuals, 5-27 companies, corporations, or other legal entities or acquire by 5-28 lease district hospital facilities; and 5-29 (4) sell or otherwise dispose of property, facilities, 5-30 or equipment. 5-31 SECTION 5.08. CONSTRUCTION CONTRACTS. (a) The board may 5-32 enter into construction contracts on behalf of the district. 5-33 (b) A contract for construction in excess of the amount 5-34 provided by Section 271.024, Local Government Code, may be made 5-35 only after competitive bidding as provided by Subchapter B, Chapter 5-36 271, Local Government Code. 5-37 (c) Chapter 2253, Government Code, as it relates to 5-38 performance and payment bonds, applies to construction contracts 5-39 let by the district. 5-40 SECTION 5.09. DISTRICT OPERATING AND MANAGEMENT CONTRACTS. 5-41 The board may enter into operating or management contracts relating 5-42 to hospital facilities on behalf of the district. 5-43 SECTION 5.10. INDIGENT CARE. (a) The district shall supply 5-44 care and treatment without charge to a patient who resides in the 5-45 district if the patient or relative who is legally responsible for 5-46 the patient's support cannot pay for the care and treatment. 5-47 (b) The board shall determine the health care services to be 5-48 provided to residents eligible for assistance under this section to 5-49 fulfill the district's obligations under Section 9, Article IX, 5-50 Texas Constitution, and Section 61.055, Health and Safety Code. 5-51 The board may enter into a contract with another entity to fulfill 5-52 its obligations under this Act, Section 9, Article IX, Texas 5-53 Constitution, and Section 61.055, Health and Safety Code. 5-54 (c) Not later than the first day of each operating year, the 5-55 district shall adopt an application procedure to determine 5-56 eligibility for assistance, as provided by Section 61.053, Health 5-57 and Safety Code. 5-58 (d) The administrator of the district may have an inquiry 5-59 made into the financial circumstances of: 5-60 (1) a patient residing in the district and admitted to 5-61 a district facility; and 5-62 (2) a relative of the patient who is legally 5-63 responsible for the patient's support. 5-64 (e) On finding that the patient or a relative of the patient 5-65 legally responsible for the patient's support can pay for all or 5-66 any part of the care and treatment provided by the district, the 5-67 administrator shall report that finding to the board, and the board 5-68 shall issue an order directing the patient or the relative to pay 5-69 the district each week a specified amount that the individual is 6-1 able to pay. 6-2 (f) The administrator may collect money owed to the district 6-3 from the estate of the patient or from that of a relative who was 6-4 legally responsible for the patient's support in the manner 6-5 provided by law for collection of expenses in the last illness of a 6-6 deceased person. 6-7 (g) If there is a dispute relating to an individual's 6-8 ability to pay or if the administrator has any doubt concerning the 6-9 individual's ability to pay, the board shall call witnesses, hear 6-10 and resolve the question, and issue a final order. An appeal from 6-11 a final order of the board must be made to a district court in the 6-12 county in which the district is located, and the substantial 6-13 evidence rule applies. 6-14 SECTION 5.11. REIMBURSEMENT FOR SERVICES. (a) The board 6-15 shall require reimbursement from a county, municipality, or public 6-16 hospital located outside the boundaries of the district for the 6-17 district's care and treatment of a sick, diseased, or injured 6-18 person of that county, municipality, or public hospital as provided 6-19 by Chapter 61, Health and Safety Code. 6-20 (b) The board shall require reimbursement from the sheriff 6-21 or police chief of a county or municipality for the district's care 6-22 and treatment of a person confined in a jail facility of the county 6-23 or municipality who is not a resident of the district. 6-24 (c) The board may contract with state or federal government 6-25 for the state or federal government to reimburse the district for 6-26 treatment of a sick, diseased, or injured person. 6-27 SECTION 5.12. SERVICE CONTRACTS. The board may contract 6-28 with a municipality, county, special district, or other political 6-29 subdivision of the state or with a state or federal agency for the 6-30 district to: 6-31 (1) furnish a mobile emergency medical service; or 6-32 (2) provide for the investigatory or welfare needs of 6-33 inhabitants of the district. 6-34 SECTION 5.13. GIFTS AND ENDOWMENTS. On behalf of the 6-35 district, the board may accept gifts and endowments to be held in 6-36 trust for any purpose and under any direction, limitation, or 6-37 provision prescribed in writing by the donor that is consistent 6-38 with the proper management of the district. 6-39 SECTION 5.14. AUTHORITY TO SUE AND BE SUED. The board may 6-40 sue and be sued on behalf of the district. 6-41 SECTION 5.15. RETIREMENT BENEFITS. The board may provide 6-42 retirement benefits for the employees of the district by 6-43 establishing or administering a retirement program or electing to 6-44 participate in any statewide retirement system in which the 6-45 district is eligible to participate. 6-46 SECTION 5.16. RECRUITMENT OF STAFF AND EMPLOYEES. The board 6-47 may spend district funds, enter into agreements, and take other 6-48 necessary action to recruit physicians, nurses, and other persons 6-49 to serve as medical staff members or employees of the district, 6-50 including: 6-51 (1) advertising and marketing; 6-52 (2) paying travel, recruitment, and relocation 6-53 expenses; 6-54 (3) providing a loan or scholarship to a physician or 6-55 a person currently enrolled in health care education courses at an 6-56 institution of higher education who contractually agrees to become 6-57 a district employee or medical staff member; or 6-58 (4) contracting with one or more full-time medical 6-59 students or other students in a health occupation, each of whom 6-60 shall be enrolled in and in good standing at an accredited medical 6-61 school, college, or university, to pay the student's tuition or 6-62 other expenses in consideration of the student's agreement to serve 6-63 as an employee or independent contractor for the district. 6-64 SECTION 5.17. NONPROFIT CORPORATION. The district may 6-65 sponsor and create a nonprofit corporation under the Texas 6-66 Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's 6-67 Texas Civil Statutes), and may contribute funds to or solicit funds 6-68 for the corporation. The corporation may use district funds only 6-69 to provide health care or other services the district is authorized 7-1 to provide under this Act. The board shall establish adequate 7-2 controls to ensure that the corporation uses its funds as required 7-3 by law. The corporation may invest corporation funds in any manner 7-4 in which the district may invest funds, including investing funds 7-5 as authorized by Chapter 2256, Government Code. 7-6 ARTICLE 6. DISTRICT FINANCES 7-7 SECTION 6.01. FISCAL YEAR. (a) The district operates on 7-8 the fiscal year established by the board. 7-9 (b) The fiscal year may not be changed if revenue bonds of 7-10 the district are outstanding or more than once in a 24-month 7-11 period. 7-12 SECTION 6.02. ANNUAL AUDIT. The board annually shall have 7-13 an audit made of the financial condition of the district. 7-14 SECTION 6.03. DISTRICT AUDIT AND RECORDS. The annual audit 7-15 and other district records are open to inspection during regular 7-16 business hours at the principal office of the district. 7-17 SECTION 6.04. ANNUAL BUDGET. (a) The administrator of the 7-18 district shall prepare a proposed annual budget for the district. 7-19 (b) The proposed budget must contain a complete financial 7-20 statement, including a statement of: 7-21 (1) the outstanding obligations of the district; 7-22 (2) the amount of cash on hand to the credit of each 7-23 fund of the district; 7-24 (3) the amount of money received by the district from 7-25 all sources during the previous year; 7-26 (4) the amount of money available to the district from 7-27 all sources during the ensuing year; 7-28 (5) the amount of the balances expected at the end of 7-29 the year in which the budget is being prepared; 7-30 (6) the estimated amount of revenues and balances 7-31 available to cover the proposed budget; and 7-32 (7) the estimated tax rate that will be required. 7-33 SECTION 6.05. NOTICE; HEARING; ADOPTION OF BUDGET. (a) The 7-34 board shall hold a public hearing on the proposed annual budget. 7-35 (b) The board shall publish notice of the hearing in a 7-36 newspaper of general circulation in the district not later than the 7-37 10th day before the date of the hearing. 7-38 (c) Any resident of the district is entitled to be present 7-39 and participate at the hearing. 7-40 (d) At the conclusion of the hearing, the board shall adopt 7-41 a budget by acting on the budget proposed by the administrator. 7-42 The board may make any changes in the proposed budget that in its 7-43 judgment the interests of the taxpayers demand. 7-44 (e) The budget is effective only after adoption by the 7-45 board. 7-46 SECTION 6.06. AMENDING BUDGET. After adoption, the annual 7-47 budget may be amended on the board's approval. 7-48 SECTION 6.07. LIMITATION ON EXPENDITURES. Money may not be 7-49 spent for an expense not included in the annual budget or an 7-50 amendment to it. 7-51 SECTION 6.08. SWORN STATEMENT. As soon as practicable after 7-52 the close of the fiscal year, the administrator shall prepare for 7-53 the board a sworn statement of the amount of money that belongs to 7-54 the district and an account of the disbursements of that money. 7-55 SECTION 6.09. BORROWING MONEY. (a) The district may borrow 7-56 money at a rate not to exceed the minimum annual percentage rate 7-57 allowed by law for district obligations at the time of the loan. 7-58 (b) To secure a loan, the board may pledge: 7-59 (1) the revenues of the district that are not pledged 7-60 to pay the bonded indebtedness of the district; 7-61 (2) district taxes to be levied by the district during 7-62 the 12-month period following the date of the pledge that are not 7-63 pledged to pay the principal of or interest on district bonds; or 7-64 (3) district bonds that have been authorized but not 7-65 sold. 7-66 (c) A loan for which taxes or bonds are pledged shall mature 7-67 not later than the first anniversary of the date on which the loan 7-68 is made. A loan for which district revenues are pledged shall 7-69 mature not later than the fifth anniversary of the date on which 8-1 the loan is made. 8-2 SECTION 6.10. DEPOSITORY. (a) The board shall name at 8-3 least one bank to serve as depository for district funds. 8-4 (b) District funds, other than those transmitted to a bank 8-5 for payment of bonds or obligations issued or assumed by the 8-6 district, shall be deposited as received with the depository bank 8-7 and must remain on deposit. This subsection does not limit the 8-8 power of the board to place a portion of district funds on time 8-9 deposit or to purchase certificates of deposit. 8-10 (c) Before the district deposits funds in a bank in an 8-11 amount that exceeds the maximum amount secured by the Federal 8-12 Deposit Insurance Corporation, the bank must execute a bond or 8-13 other security in an amount sufficient to secure from loss the 8-14 district funds that exceed the amount secured by the Federal 8-15 Deposit Insurance Corporation. 8-16 ARTICLE 7. BONDS 8-17 SECTION 7.01. GENERAL OBLIGATION BONDS. The board may issue 8-18 and sell bonds authorized by an election in the name and on the 8-19 faith and credit of the hospital district to: 8-20 (1) purchase, construct, acquire, repair, or renovate 8-21 buildings or improvements; 8-22 (2) equip buildings or improvements for hospital 8-23 purposes; or 8-24 (3) acquire and operate a mobile emergency medical 8-25 service. 8-26 SECTION 7.02. TAXES TO PAY BONDS. (a) At the time the 8-27 bonds are issued by the district, the board shall levy a tax. 8-28 (b) The tax must be sufficient to create an interest and 8-29 sinking fund to pay the principal of and interest on the bonds as 8-30 the bonds mature. 8-31 (c) In any year, the tax together with any other tax the 8-32 district levies may not exceed the limit approved by the voters at 8-33 the election authorizing the levy of taxes. 8-34 SECTION 7.03. BOND ELECTION. (a) The district may issue 8-35 general obligation bonds only if the bonds are authorized by a 8-36 majority of the qualified voters of the district voting at an 8-37 election called and held for that purpose under this section. 8-38 (b) The board may order a bond election. The order calling 8-39 the election must state: 8-40 (1) the nature and date of the election; 8-41 (2) the hours during which the polls will be open; 8-42 (3) the location of the polling places; 8-43 (4) the amounts of bonds to be authorized; and 8-44 (5) the maximum maturity of the bonds. 8-45 (c) Notice of a bond election shall be given as provided by 8-46 Chapter 1251, Government Code. 8-47 (d) The board shall canvass the returns and declare the 8-48 results of the election. 8-49 SECTION 7.04. REVENUE BONDS. (a) The board may issue bonds 8-50 to: 8-51 (1) purchase, construct, acquire, repair, equip, or 8-52 renovate buildings or improvements for hospital purposes; 8-53 (2) acquire sites to be used for hospital purposes; or 8-54 (3) acquire and operate a mobile emergency medical 8-55 service to assist the district in carrying out the district's 8-56 hospital purpose. 8-57 (b) The bonds must be payable from and secured by a pledge 8-58 of all or part of the revenues derived from the operation of the 8-59 district's hospital system. The bonds may be additionally secured 8-60 by a mortgage or deed of trust lien on all or part of district 8-61 property. 8-62 (c) The bonds must be issued in the manner provided by 8-63 Sections 264.042, 264.043, 264.046, 264.047, 264.048, and 264.049, 8-64 Health and Safety Code, for issuance of revenue bonds by county 8-65 hospital authorities. 8-66 SECTION 7.05. REFUNDING BONDS. (a) Refunding bonds of the 8-67 district may be issued to refund and pay off any outstanding 8-68 indebtedness the district has issued or assumed. 8-69 (b) The bonds must be issued in the manner provided by 9-1 Chapter 1207, Government Code. 9-2 SECTION 7.06. INTEREST AND MATURITY. District bonds must 9-3 mature not later than the 50th anniversary of the date of their 9-4 issuance and must bear interest at a rate not to exceed that 9-5 provided by Chapter 1204, Government Code. 9-6 SECTION 7.07. EXECUTION OF BONDS. The president of the board 9-7 shall execute the bonds in the name of the district, and the 9-8 secretary of the board shall countersign the bonds in the manner 9-9 provided by Chapter 618, Government Code. 9-10 SECTION 7.08. APPROVAL AND REGISTRATION OF BONDS. (a) 9-11 District bonds are subject to the same requirements with regard to 9-12 approval by the attorney general and registration by the 9-13 comptroller as the law provides for approval and registration of 9-14 bonds issued by counties. 9-15 (b) On approval by the attorney general and registration by 9-16 the comptroller, the bonds are incontestable for any cause. 9-17 SECTION 7.09. BONDS AS INVESTMENTS. District bonds and 9-18 indebtedness assumed by the district are legal and authorized 9-19 investments for: 9-20 (1) banks; 9-21 (2) savings banks; 9-22 (3) trust companies; 9-23 (4) savings and loan associations; 9-24 (5) insurance companies; 9-25 (6) fiduciaries; 9-26 (7) trustees; 9-27 (8) guardians; and 9-28 (9) sinking funds of municipalities, counties, school 9-29 districts, and other political subdivisions of the state and other 9-30 public funds of the state and its agencies, including the permanent 9-31 school fund. 9-32 SECTION 7.10. BONDS AS SECURITY FOR DEPOSITS. District bonds 9-33 are eligible to secure deposits of public funds of the state and of 9-34 municipalities, counties, school districts, and other political 9-35 subdivisions of the state. The bonds are lawful and sufficient 9-36 security for deposits to the extent of their value if accompanied 9-37 by all unmatured coupons. 9-38 SECTION 7.11. TAX STATUS OF BONDS. Because the district 9-39 created under this Act is a public entity performing an essential 9-40 public function, bonds issued by the district, any transaction 9-41 relating to the bonds, and profits made in the sale of the bonds 9-42 are free from taxation by the state or by any municipality, county, 9-43 special district, or other political subdivision of the state. 9-44 ARTICLE 8. TAXES 9-45 SECTION 8.01. LEVY OF TAXES. (a) The board annually may 9-46 impose property taxes in an amount not to exceed the limit approved 9-47 by the voters at the election authorizing the levy of taxes. 9-48 (b) The tax rate for all purposes may not exceed 75 cents on 9-49 each $100 valuation of all taxable property in the district. 9-50 (c) The taxes may be used to pay: 9-51 (1) the indebtedness issued or assumed by the 9-52 district; and 9-53 (2) the maintenance and operating expenses of the 9-54 district. 9-55 (d) The district may not impose taxes to pay the principal 9-56 of or interest on revenue bonds issued under this Act. 9-57 SECTION 8.02. BOARD AUTHORITY. The board may impose taxes 9-58 for the entire year in which the district is created. 9-59 SECTION 8.03. ADOPTING TAX RATE. In adopting the tax rate, 9-60 the board shall consider the income of the district from sources 9-61 other than taxation. 9-62 SECTION 8.04. TAX ASSESSMENT AND COLLECTION. (a) The Tax 9-63 Code governs the appraisal, assessment, and collection of district 9-64 taxes. 9-65 (b) The board may provide for the appointment of a tax 9-66 assessor-collector for the district or may contract for the 9-67 assessment and collection of taxes as provided by the Tax Code. 9-68 ARTICLE 9. DISSOLUTION OF DISTRICT 9-69 SECTION 9.01. DISSOLUTION ELECTION. The district may be 10-1 dissolved only if the dissolution is approved by a majority of the 10-2 qualified voters of the district voting in an election called and 10-3 held for that purpose. 10-4 SECTION 9.02. ORDERING ELECTION. (a) The board may order an 10-5 election on the question of dissolving the district and disposing 10-6 of the district's assets and obligations. 10-7 (b) The board shall order an election on the question of 10-8 dissolving the district and disposing of the district's assets and 10-9 obligations if the board receives a petition requesting an election 10-10 that is signed by a number of registered voters of the district 10-11 equal to at least 15 percent of the registered voters in the 10-12 district. 10-13 SECTION 9.03. ELECTION ORDER. The order calling the election 10-14 must state: 10-15 (1) the nature of the election, including the 10-16 proposition that is to appear on the ballot; 10-17 (2) the date of the election; 10-18 (3) the hours during which the polls will be open; and 10-19 (4) the location of the polling places. 10-20 SECTION 9.04. NOTICE. The board shall give notice of the 10-21 election by publishing a substantial copy of the election order in 10-22 a newspaper with general circulation in the district once a week 10-23 for two consecutive weeks. The first publication must appear at 10-24 least 35 days before the date set for the election. 10-25 SECTION 9.05. ELECTION DATE. (a) The election shall be held 10-26 not later than the 60th day after the date the election is ordered. 10-27 (b) Section 41.001, Election Code, does not apply to an 10-28 election ordered under this section. 10-29 SECTION 9.06. BALLOT PROPOSITION. The ballot for an election 10-30 at which the dissolution of the district is proposed shall be 10-31 printed to permit voting for or against the proposition: "The 10-32 dissolution of the West Medical District." 10-33 SECTION 9.07. CANVASSING RETURNS. (a) The board shall 10-34 canvass the returns of the election. 10-35 (b) If a majority of the votes in the election favor 10-36 dissolution, the board shall find that the district is dissolved. 10-37 (c) If a majority of the votes in the election do not favor 10-38 dissolution, the board shall continue to administer the district, 10-39 and another election on the question of dissolution may not be held 10-40 before the first anniversary of the date of the most recent 10-41 election to dissolve the district. 10-42 SECTION 9.08. DISSOLUTION PROCEDURES. (a) If a majority of 10-43 the votes in the election favor dissolution, the board shall: 10-44 (1) transfer the land, buildings, improvements, 10-45 equipment, and other assets that belong to the district to a county 10-46 or another governmental entity in the county in which the district 10-47 is located; 10-48 (2) sell the assets and liabilities to another person 10-49 or entity; or 10-50 (3) administer the property, assets, and debts until 10-51 all funds have been disposed of and all district debts have been 10-52 paid or settled. 10-53 (b) If the district transfers the land, buildings, 10-54 improvements, equipment, and other assets to a county or other 10-55 governmental entity, the county or entity assumes all debts and 10-56 obligations of the district at the time of the transfer, at which 10-57 time the district is dissolved. If the district does not transfer 10-58 the land, buildings, improvements, equipment, and other assets to a 10-59 county or other governmental entity, or sell those assets and the 10-60 liabilities to another person, the board shall administer the 10-61 property, assets, and debts of the district until all funds have 10-62 been disposed of and all district debts have been paid or settled, 10-63 at which time the district is dissolved. 10-64 (c) After the board finds that the district is dissolved, 10-65 the board shall: 10-66 (1) determine the debt owed by the district; and 10-67 (2) impose on the property included in the district's 10-68 tax rolls a tax that is in proportion of the debt to the property 10-69 value. 11-1 (d) When all outstanding debts and obligations of the 11-2 district are paid, the board shall order the secretary to return 11-3 the pro rata share of all unused tax money to each district 11-4 taxpayer. 11-5 (e) A taxpayer may request that the taxpayer's share of 11-6 surplus tax money be credited to the taxpayer's county taxes. If a 11-7 taxpayer requests the credit, the board shall direct the secretary 11-8 to transmit the funds to the county tax assessor-collector. 11-9 (f) After the district has paid all of the district's debts 11-10 and has disposed of all of the district's assets and funds as 11-11 prescribed by this section, the board shall file a written report 11-12 with the Commissioners Court of McLennan County setting forth a 11-13 summary of the board's actions in dissolving the district. 11-14 (g) Not later than the 10th day after the date it receives 11-15 the report and determines that the requirements of this section 11-16 have been fulfilled, the Commissioners Court of McLennan County 11-17 shall enter an order dissolving the district and releasing the 11-18 board from any further duty or obligation. 11-19 SECTION 9.09. SALE OR TRANSFER OF ASSETS. (a) The district 11-20 may provide for the sale or transfer of the district's assets and 11-21 liabilities to another entity or person and the district's 11-22 subsequent dissolution. The dissolution of the district and the 11-23 sale or transfer of the district's assets and liabilities to 11-24 another person or entity may not contravene a trust indenture or 11-25 bond resolution relating to the outstanding bonds of the district. 11-26 The dissolution and sale or transfer does not diminish or impair 11-27 the rights of a holder of an outstanding bond, warrant, or other 11-28 obligation of the district. 11-29 (b) The sale or transfer of the district's assets and 11-30 liabilities must satisfy the debt and bond obligations of the 11-31 district in a manner that protects the interests of the residents 11-32 of the district, including the residents' collective property 11-33 rights in the district's assets. Any grant from federal funds is 11-34 considered an obligation to be repaid in satisfaction. The 11-35 district may not transfer or dispose of the district's assets 11-36 except for due compensation unless the transfer is made to another 11-37 governmental agency that serves the district and the transferred 11-38 assets are to be used for the benefit of residents of the district. 11-39 ARTICLE 10. MISCELLANEOUS 11-40 SECTION 10.01. LIMITATION ON STATE ASSISTANCE. The state may 11-41 not become obligated for the support or maintenance of a hospital 11-42 district created under this Act, nor may the legislature make a 11-43 direct appropriation for the construction, maintenance, or 11-44 improvement of a facility of the district. 11-45 SECTION 10.02. REQUIRED PUBLICATION. Proof of publication of 11-46 the notice required in the enactment of this Act under the 11-47 provisions of Section 9, Article IX, Texas Constitution, has been 11-48 made in the manner and form provided by law pertaining to the 11-49 enactment of local and special laws, and the notice is found and 11-50 declared proper and sufficient to satisfy the requirement. 11-51 SECTION 10.03. EFFECTIVE DATE. This Act takes effect 11-52 immediately if it receives a vote of two-thirds of all the members 11-53 elected to each house, as provided by Section 39, Article III, 11-54 Texas Constitution. If this Act does not receive the vote 11-55 necessary for immediate effect, this Act takes effect September 1, 11-56 2001. 11-57 * * * * *