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.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter B, Chapter 265, Health and Safety
1-6 Code, is amended by adding Sections 265.017 through 265.020 to read
1-7 as follows:
1-8 Sec. 265.017. ISSUANCE OF REVENUE BONDS. (a) The board of
1-9 managers may issue and sell revenue bonds in the name of the
1-10 hospital to finance:
1-11 (1) the acquisition of real property, the acquisition,
1-12 construction, improvement, repair, or rehabilitation of hospital
1-13 facilities, or the acquisition of equipment or supplies necessary
1-14 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" and "obligation" have the meanings
1-23 assigned by Section 1371.001, Government Code.
1-24 (c) Bonds issued under this subchapter must be approved by:
1-25 (1) a resolution adopted by the board of managers; and
2-1 (2) a resolution or order adopted by the commissioners
2-2 court of the county and the governing body of the municipality that
2-3 appointed the board.
2-4 (d) At the time of issuance of the bonds, the board of
2-5 managers may:
2-6 (1) determine the title of the bonds, provided the
2-7 title includes the following: "Board of Managers Joint (insert
2-8 county name)-(insert municipality name) Hospital Revenue Bonds";
2-9 (2) prescribe procedures for the operation and
2-10 maintenance of the hospital in the proceedings authorizing issuance
2-11 of the revenue bonds; and
2-12 (3) provide for the issuance of additional parity
2-13 bonds or subordinate lien bonds under terms prescribed by the board
2-14 of managers in the proceedings authorizing issuance of the revenue
2-15 bonds.
2-16 Sec. 265.0171. REPAYMENT OF BONDS. The board of managers
2-17 may provide for the payment of principal of, premium on, if any,
2-18 and interest on the bonds by pledging all or any part of the
2-19 hospital's revenue derived from the operation of the hospital or
2-20 from other sources.
2-21 Sec. 265.0172. ADDITIONAL SECURITY FOR BONDS. The bonds may
2-22 be additionally secured by a deed of trust or mortgage lien on part
2-23 or all of the physical properties of the hospital and rights
2-24 appurtenant to those properties.
2-25 Sec. 265.0173. MATURITY. A bond issued under this
2-26 subchapter must mature not later than 40 years after its date.
3-1 Sec. 265.0174. BONDS NOT PAYABLE FROM TAXES. A bond issued
3-2 under this subchapter must contain the following provision: "The
3-3 holder of this obligation is not entitled to demand payment of this
3-4 obligation out of any money raised by taxation by (name of county)
3-5 or by (name of municipality) or from any other income of the county
3-6 or municipality. The board of managers of the hospital has no
3-7 taxing power."
3-8 Sec. 265.0175. SALE OF BONDS. The board of managers may
3-9 sell bonds issued under this subchapter at public or private sale
3-10 in the manner and on the terms approved by the board.
3-11 Sec. 265.0176. REFUNDING BONDS. (a) The board of managers
3-12 may refund bonds issued under this subchapter by issuing refunding
3-13 bonds under terms approved by the board.
3-14 (b) All appropriate provisions of this subchapter apply to
3-15 the refunding bonds. The refunding bonds shall be issued in the
3-16 manner provided by this subchapter for issuing other bonds.
3-17 (c) The refunding bonds may be sold and delivered in amounts
3-18 sufficient to pay the principal of and interest and any redemption
3-19 premium on the bonds to be refunded, at maturity or on any
3-20 redemption date.
3-21 (d) The refunding bonds may be issued to be exchanged for
3-22 the bonds being refunded by them. In that case, the comptroller
3-23 shall register the refunding bonds and deliver them to the holder
3-24 of the bonds being refunded as approved by the board. The exchange
3-25 may be made in one delivery or in installment deliveries.
3-26 Sec. 265.018. HOSPITAL PROPERTY. The board of managers may
4-1 acquire, hold, or dispose of property or an interest in property.
4-2 As agreed by the county and municipality, the county or
4-3 municipality may hold title to hospital property, or title may be
4-4 held in the name of the hospital.
4-5 Sec. 265.0181. TRANSFER OF PROPERTY. On dissolution of the
4-6 board of managers, title to property held by the board or in the
4-7 name of the hospital shall be transferred to the county and
4-8 municipality as agreed to by the county and municipality.
4-9 Sec. 265.019. USE OF EARNINGS OR ASSETS FOR PRIVATE PURPOSES
4-10 PROHIBITED. Except as reasonable compensation for services
4-11 rendered or reasonable allowance for authorized expenditures
4-12 incurred on behalf of the board of managers or the hospital, the
4-13 net earnings of the board or the hospital may not be used for the
4-14 benefit of a private officer, board member, individual, or
4-15 substantial contributor to the board of managers or the hospital.
4-16 The assets of the board or the hospital may not be distributed to,
4-17 be divided among, be used for, accrue to, or benefit a private
4-18 officer, board member, individual, or substantial contributor to
4-19 the board or the hospital.
4-20 Sec. 265.020. APPLICABILITY. Sections 265.017-265.019 apply
4-21 only to a hospital located in a county with a population of 75,000
4-22 or more.
4-23 SECTION 2. This Act takes effect immediately if it receives
4-24 a vote of two-thirds of all the members elected to each house, as
4-25 provided by Section 39, Article III, Texas Constitution. If this
4-26 Act does not receive the vote necessary for immediate effect, this
5-1 Act takes effect September 1, 2001.
_______________________________ _______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 739 passed the Senate on
March 22, 2001, by the following vote: Yeas 30, Nays 0, one
present, not voting; and that the Senate concurred in House
amendment on May 3, 2001, by the following vote: Yeas 30, Nays 0,
one present, not voting.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 739 passed the House, with
amendment, on April 27, 2001, by the following vote: Yeas 143,
Nays 0, two present, not voting.
_______________________________
Chief Clerk of the House
Approved:
_______________________________
Date
_______________________________
Governor