By:  Wentworth                                                    S.B. No. 1632
	(In the Senate - Filed March 14, 2003; March 20, 2003, read 
first time and referred to Committee on Intergovernmental 
Relations; April 29, 2003, reported adversely, with favorable 
Committee Substitute by the following vote:  Yeas 5, Nays 0; 
April 29, 2003, sent to printer.)


COMMITTEE SUBSTITUTE FOR S.B. No. 1632                                   By:  Wentworth


A BILL TO BE ENTITLED

AN ACT


relating to the authority of a joint county and municipal hospital 
to borrow money.
	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, 265.0178, and 
265.0179 to read as follows:
	Sec. 265.0177.  AUTHORITY TO BORROW MONEY.  (a)  After 
approval by resolution of the commissioners court of the county and 
the governing body of the municipality that appointed the board, 
the board of managers may, on behalf of the hospital, borrow money 
from a federally insured lending institution for a purpose 
described by Section 265.0179.  The board may execute a loan 
agreement or promissory note as evidence of the obligation to repay 
the loan.
	(b)  The board of managers may borrow money in an amount it 
considers advisable, subject to a rate of interest, security, and 
other terms it considers advisable.  The loan shall mature not later 
than the 30th anniversary of the date on which the loan is made.
	(c)  Before entering into a loan under this section, the 
board of managers must determine that there will be sufficient 
money available from revenues generated by the hospital to pay the 
loan when the loan becomes due.
	(d)  The commissioners court of the county and the governing 
body of the municipality that appointed the board of managers must 
approve the terms of a loan agreement 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 
Section 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 that are not 
pledged to pay a bonded indebtedness of the hospital; or
		(2)  secured by a deed of trust or other security 
interest in any property of the hospital that is not pledged to pay 
a bonded indebtedness of the hospital.
	(b)  The holder of a loan obligation under Section 265.0177 
is not entitled to demand payment of the principal and interest on 
the loan from any money or property of the hospital other than the 
money or property specifically pledged to secure payment of the 
loan.
	Sec. 265.0179.  PERMISSIBLE USES OF LOAN PROCEEDS.  The 
proceeds from a loan under Section 265.0177 may be used to pay costs 
related to the acquisition, construction, rehabilitation, and 
equipping of a hospital facility, including costs related to the 
acquisition of real property and any other improvement considered 
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.



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