By:  Wentworth                                                    S.B. No. 1632


A BILL TO BE ENTITLED

AN ACT

relating to the borrowing of money and encumbrance of property by a 
joint county and municipal hospital.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter B, Chapter 265, Health and Safety 
Code, is amended by adding Sections 265.0177 through 265.0179 to 
read as follows:
	Sec. 265.0177.  AUTHORITY TO BORROW MONEY.  (a)  The board 
of managers may borrow money in the name of the hospital for the 
purposes described in Section 265.0179 and may, in connection with 
the loan, execute a loan agreement or promissory note as evidence of 
the obligation to repay the loan.
	(b)  The loan amount, interest rate, maturity, security, and 
other terms and conditions of the loan must be found to be 
reasonable by the board of managers.  The maturity of the loan may 
not exceed 30 years.
	(c)  Before entering into a loan under this section, the 
board of managers shall determine that it will have sufficient 
funds available from revenues generated by the hospital to pay the 
loan when the loan is due.
	(d)  The commissioners court and the governing body of the 
municipality shall approve the terms of the loan by written 
resolution.
	(e)  Chapter 1202, Government Code, does not apply to a 
promissory note or any other instrument evidencing a loan under 
this section.
	Sec. 265.0178.  PLEDGE OF SECURITY.  (a)  A loan under Sec. 
265.0177 may be:
		(1)  payable from and secured by a pledge of all or part 
of the revenues, income, or resources of the hospital; or
		(2)  secured by a deed of trust or other security 
interest in any real or personal property of the hospital.
	(b)  The holder of a loan obligation under Sec. 265.0177 does 
not have the right to demand payment of the principal and interest 
on the loan out of any funds or property of the hospital other than 
the funds or property specifically pledged to secure payment of the 
loan.
	Sec. 265.0179.  PERMISSIBLE USES OF LOAN PROCEEDS.  The 
proceeds from a loan under Sec. 265.0177 may be used to pay costs 
relating to the acquisition, construction, rehabilitation, and 
equipping of hospital facilities, including costs related to the 
acquisition of real property and any other improvements deemed 
necessary and appropriate by the board of managers.
	SECTION 2.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2003.