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