1-1 By: Wentworth S.B. No. 739 1-2 (In the Senate - Filed February 15, 2001; February 19, 2001, 1-3 read first time and referred to Committee on Intergovernmental 1-4 Relations; March 14, 2001, reported favorably by the following 1-5 vote: Yeas 7, Nays 0; March 14, 2001, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to the powers and duties of the board of managers of 1-9 certain joint municipal and county hospitals, including the power 1-10 to issue revenue bonds. 1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-12 SECTION 1. Subchapter B, Chapter 265, Health and Safety 1-13 Code, is amended by adding Sections 265.017 through 265.019 to read 1-14 as follows: 1-15 Sec. 265.017. ISSUANCE OF REVENUE BONDS. (a) The board of 1-16 managers may issue and sell revenue bonds in the name of the 1-17 hospital to finance: 1-18 (1) the acquisition of real property, the construction 1-19 of hospital facilities, or the acquisition of equipment or supplies 1-20 necessary for the hospital to provide hospital services; or 1-21 (2) the installation of equipment necessary for the 1-22 hospital to provide hospital services. 1-23 (b) The board of managers has the powers of an issuer under 1-24 Chapter 1371, Government Code, and may enter into a credit 1-25 agreement under that chapter. A bond issued under this subchapter 1-26 is an obligation under Chapter 1371, Government Code, but is not 1-27 required to be rated as required by that chapter. In this 1-28 subsection, "credit agreement," "obligation," and "issuer" have the 1-29 meanings assigned by Section 1371.001, Government Code. 1-30 Sec. 265.0171. REPAYMENT OF BONDS. The board of managers 1-31 may provide for the payment of principal of and interest on the 1-32 bonds by pledging all or any part of the hospital's revenue derived 1-33 from the operation of the hospital or from other sources. 1-34 Sec. 265.0172. ADDITIONAL SECURITY FOR BONDS. The bonds may 1-35 be additionally secured by a deed of trust or mortgage lien on part 1-36 or all of the physical properties of the hospital and rights 1-37 appurtenant to those properties. 1-38 Sec. 265.0173. MATURITY. A bond issued under this 1-39 subchapter must mature not later than 40 years after its date. 1-40 Sec. 265.0174. BONDS NOT PAYABLE FROM TAXES. A bond issued 1-41 under this subchapter must contain the following provision: "The 1-42 holder of this obligation is not entitled to demand payment of this 1-43 obligation out of any money raised by taxation by (name of county) 1-44 or by (name of municipality) or from any other income of the county 1-45 or municipality. The board of managers of the hospital has no 1-46 taxing power." 1-47 Sec. 265.0175. SALE OF BONDS. The board of managers may 1-48 sell bonds issued under this subchapter at public or private sale 1-49 in the manner and on the terms approved by the board. 1-50 Sec. 265.0176. REFUNDING BONDS. (a) The board of managers 1-51 may refund bonds issued under this subchapter by issuing refunding 1-52 bonds under terms approved by the board. 1-53 (b) All appropriate provisions of this subchapter apply to 1-54 the refunding bonds. The refunding bonds shall be issued in the 1-55 manner provided by this subchapter for issuing other bonds. 1-56 (c) The refunding bonds may be sold and delivered in amounts 1-57 sufficient to pay the principal of and interest and any redemption 1-58 premium on the bonds to be refunded, at maturity or on any 1-59 redemption date. 1-60 (d) The refunding bonds may be issued to be exchanged for 1-61 the bonds being refunded by them. In that case, the comptroller 1-62 shall register the refunding bonds and deliver them to the holder 1-63 of the bonds being refunded as approved by the board. The exchange 1-64 may be made in one delivery or in installment deliveries. 2-1 Sec. 265.018. HOSPITAL PROPERTY. The board of managers may 2-2 acquire, hold, or dispose of property or an interest in property. 2-3 As agreed by the county and municipality, the county or 2-4 municipality may hold title to hospital property. 2-5 Sec. 265.0181. TRANSFER OF PROPERTY. On dissolution of the 2-6 board of managers, title to property held by the board shall be 2-7 transferred to the county and municipality as approved by the 2-8 board. 2-9 Sec. 265.019. USE OF EARNINGS OR ASSETS FOR PRIVATE PURPOSES 2-10 PROHIBITED. Except as reasonable compensation for services 2-11 rendered or reasonable allowance for authorized expenditures 2-12 incurred on behalf of the board of managers or the hospital, the 2-13 net earnings of the board or the hospital may not be used for the 2-14 benefit of a private officer, board member, individual, or 2-15 substantial contributor to the board of managers or the hospital. 2-16 The assets of the board or the hospital may not be distributed to, 2-17 divided among, be used for, accrue to, or benefit a private 2-18 officer, board member, individual, or substantial contributor to 2-19 the board or the hospital. 2-20 SECTION 2. This Act takes effect immediately if it receives 2-21 a vote of two-thirds of all the members elected to each house, as 2-22 provided by Section 39, Article III, Texas Constitution. If this 2-23 Act does not receive the vote necessary for immediate effect, this 2-24 Act takes effect September 1, 2001. 2-25 * * * * *