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.
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