By: Wentworth S.B. No. 739 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the powers and duties of the board of managers of 1-3 certain joint municipal and county hospitals, including the power 1-4 to issue revenue bonds. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Subchapter B, Chapter 265, Health and Safety 1-7 Code, is amended by adding Sections 265.017 through 265.019 to read 1-8 as follows: 1-9 Sec. 265.017. ISSUANCE OF REVENUE BONDS. (a) The board of 1-10 managers may issue and sell revenue bonds in the name of the 1-11 hospital to finance: 1-12 (1) the acquisition of real property, the construction 1-13 of hospital facilities, or the acquisition of equipment or supplies 1-14 necessary for the hospital to provide hospital services; or 1-15 (2) the installation of equipment necessary for the 1-16 hospital to provide hospital services. 1-17 (b) The board of managers has the powers of an issuer under 1-18 Chapter 1371, Government Code, and may enter into a credit 1-19 agreement under that chapter. A bond issued under this subchapter 1-20 is an obligation under Chapter 1371, Government Code, but is not 1-21 required to be rated as required by that chapter. In this 1-22 subsection, "credit agreement," "obligation," and "issuer" have the 1-23 meanings assigned by Section 1371.001, Government Code. 1-24 Sec. 265.0171. REPAYMENT OF BONDS. The board of managers 1-25 may provide for the payment of principal of and interest on the 2-1 bonds by pledging all or any part of the hospital's revenue derived 2-2 from the operation of the hospital or from other sources. 2-3 Sec. 265.0172. ADDITIONAL SECURITY FOR BONDS. The bonds may 2-4 be additionally secured by a deed of trust or mortgage lien on part 2-5 or all of the physical properties of the hospital and rights 2-6 appurtenant to those properties. 2-7 Sec. 265.0173. MATURITY. A bond issued under this 2-8 subchapter must mature not later than 40 years after its date. 2-9 Sec. 265.0174. BONDS NOT PAYABLE FROM TAXES. A bond issued 2-10 under this subchapter must contain the following provision: "The 2-11 holder of this obligation is not entitled to demand payment of this 2-12 obligation out of any money raised by taxation by (name of county) 2-13 or by (name of municipality) or from any other income of the county 2-14 or municipality. The board of managers of the hospital has no 2-15 taxing power." 2-16 Sec. 265.0175. SALE OF BONDS. The board of managers may 2-17 sell bonds issued under this subchapter at public or private sale 2-18 in the manner and on the terms approved by the board. 2-19 Sec. 265.0176. REFUNDING BONDS. (a) The board of managers 2-20 may refund bonds issued under this subchapter by issuing refunding 2-21 bonds under terms approved by the board. 2-22 (b) All appropriate provisions of this subchapter apply to 2-23 the refunding bonds. The refunding bonds shall be issued in the 2-24 manner provided by this subchapter for issuing other bonds. 2-25 (c) The refunding bonds may be sold and delivered in amounts 2-26 sufficient to pay the principal of and interest and any redemption 3-1 premium on the bonds to be refunded, at maturity or on any 3-2 redemption date. 3-3 (d) The refunding bonds may be issued to be exchanged for 3-4 the bonds being refunded by them. In that case, the comptroller 3-5 shall register the refunding bonds and deliver them to the holder 3-6 of the bonds being refunded as approved by the board. The exchange 3-7 may be made in one delivery or in installment deliveries. 3-8 Sec. 265.018. HOSPITAL PROPERTY. The board of managers may 3-9 acquire, hold, or dispose of property or an interest in property. 3-10 As agreed by the county and municipality, the county or 3-11 municipality may hold title to hospital property. 3-12 Sec. 265.0181. TRANSFER OF PROPERTY. On dissolution of the 3-13 board of managers, title to property held by the board shall be 3-14 transferred to the county and municipality as approved by the 3-15 board. 3-16 Sec. 265.019. USE OF EARNINGS OR ASSETS FOR PRIVATE PURPOSES 3-17 PROHIBITED. Except as reasonable compensation for services 3-18 rendered or reasonable allowance for authorized expenditures 3-19 incurred on behalf of the board of managers or the hospital, the 3-20 net earnings of the board or the hospital may not be used for the 3-21 benefit of a private officer, board member, individual, or 3-22 substantial contributor to the board of managers or the hospital. 3-23 The assets of the board or the hospital may not be distributed to, 3-24 divided among, be used for, accrue to, or benefit a private 3-25 officer, board member, individual, or substantial contributor to 3-26 the board or the hospital. 4-1 SECTION 2. This Act takes effect immediately if it receives 4-2 a vote of two-thirds of all the members elected to each house, as 4-3 provided by Section 39, Article III, Texas Constitution. If this 4-4 Act does not receive the vote necessary for immediate effect, this 4-5 Act takes effect September 1, 2001.