Texas Health and Safety Code

As effective September 1, 2019

Subtitle C

Chapter 261

Subchapter A

Sec. 261.001: Regulation of Hospitals By Type a General-Law Municipality

The governing body of a Type A general-law municipality may:

(1) construct or establish one or more hospitals and control and regulate those hospitals; and

(2) prohibit or permit and regulate the establishment of private hospitals.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Subchapter B

Sec. 261.011: Authority of Governing Body

(a) The governing body of a municipality by ordinance may order the sale, lease, or closure of all or part of a hospital owned and operated by the municipality, including real property. The ordinance must include a finding by the governing body that the sale, lease, or closure is in the best interest of the residents of the municipality.

(b) A sale or closure may not take effect before the expiration of the period in which a petition may be filed under Section 261.012.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 261.012: Sale Or Closure Petition; Election

(a) The governing body shall order and conduct an election on the sale or closure of a hospital if, before the 31st day after the date the governing body orders the sale or closure, the governing body receives a petition signed by at least 10 percent of the qualified voters of the municipality requesting the election.

(b) If a petition is filed under Subsection (a), the sale or closure is contingent on voter approval. If a majority of the qualified voters voting on the question approve the sale or closure, the hospital may be sold or closed. The number of qualified voters of the municipality is determined according to the most recent official list of qualified voters.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 261.013: Form and Terms of Lease in Municipality of 25,000 Or Less

(a) The governing body of a municipality with a population of 25,000 or less may lease all or part of a hospital owned by the municipality for operation by the lessee as a public hospital under terms that are satisfactory to the governing body and the lessee. The term of the lease may not exceed 50 years.

(b) The lease must:

(1) be authorized by ordinance or resolution adopted by the governing body;

(2) be executed on behalf of the municipality by the mayor and the municipal secretary or clerk; and

(3) have the seal of the municipality impressed on the lease.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Subchapter C

Sec. 261.051: Definition

In this subchapter, "municipal hospital management contractor" means a nonprofit corporation, partnership, or sole proprietorship that manages or operates a hospital or provides services under a contract with a municipality or municipal hospital authority.

Comments

Added by Acts 2003, 78th Leg., ch. 204, Sec. 11.02, eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 289, Sec. 2, eff. Sept. 1, 2003. Amended by Acts 2003, 78th Leg., 3rd C.S., ch. 3, Sec. 26.01, eff. Jan. 11, 2004.

Sec. 261.052: Liability of a Municipal Hospital Management Contractor

A municipal hospital management contractor in its management or operation of a hospital under a contract with a municipality or a municipal hospital authority is considered a governmental unit for purposes of Chapters 101, 102, and 108, Civil Practice and Remedies Code, and any employee of the contractor is, while performing services under the contract for the benefit of the hospital, an employee of the municipality for the purposes of Chapters 101, 102, and 108, Civil Practice and Remedies Code.

Comments

Added by Acts 2003, 78th Leg., ch. 204, Sec. 11.02, eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 289, Sec. 2, eff. Sept. 1, 2003. Amended by Acts 2003, 78th Leg., 3rd C.S., ch. 3, Sec. 26.01, eff. Jan. 11, 2004.

Chapter 262

Subchapter A

Sec. 262.001: Short Title

This chapter may be cited as the Hospital Authority Act.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.002: Definitions

In this chapter:

(1) "Authority" means a hospital authority created under this chapter.

(2) "Board" means the board of directors of an authority.

(3) "Bond" includes a note.

(4) "Bond resolution" means the resolution authorizing the issuance of revenue bonds.

(5) "Governing body" means the governing body of a municipality.

(6) "Hospital" means a hospital project as defined by Section 223.002.

(7) "Trust indenture" means the mortgage, deed of trust, or other instrument pledging revenues of, or creating a mortgage lien on, properties to secure revenue bonds issued by an authority.

(8) "Trustee" means the trustee under a trust indenture.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.003: Creation

(a) A governing body may adopt an ordinance creating a hospital authority and designating the name of the authority if the governing body finds that creation of the authority is in the best interest of the municipality and its residents.

(b) The governing bodies of two or more municipalities may each adopt an ordinance creating a hospital authority that includes those municipalities and designating the name of the authority if the governing bodies find that creation of the authority is in the best interest of the municipalities.

(c) The authority is composed only of the territory in each municipality in the authority.

(d) The authority is a body politic and corporate.

(e) The authority does not have taxing power.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.004: Tax Exemption

The authority's property is exempt from taxation because it is held for public purposes only and devoted exclusively to the use and benefit of the public.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.005: Dissolution

(a) A governing body by ordinance may dissolve an authority created by the governing body if the governing body and the authority provide for the sale or transfer of the authority's assets and liabilities to the municipality or to another person.

(b) The dissolution of an authority and the sale or transfer of the authority's assets and liabilities may not:

(1) violate a trust indenture or bond resolution relating to the outstanding bonds of the authority; or

(2) diminish or impair the rights of the holders of outstanding bonds, warrants, or other obligations of the authority.

(c) Except as otherwise provided by this section, an ordinance dissolving an authority takes effect on the 31st day after the date the governing body adopts the ordinance.

(d) If before the ordinance takes effect the municipality receives a petition requesting a referendum on the dissolution that is signed by a number of registered voters of the municipality equal to at least 10 percent of the number of voters who voted in the most recent municipal election, the ordinance does not take effect and the governing body shall order the election.

(e) Section 41.001(a), Election Code, requiring an election to be held on a uniform election date, does not apply to an election under this section. The ballot shall be printed to provide for voting for or against the proposition: "Dissolution of the (name of the authority)."

(f) If a majority of the votes in the election are cast in favor of the proposition, the ordinance takes effect on a date stated in the order declaring the results of the election. If a majority of the votes in the election are cast against the proposition, the ordinance does not take effect and the governing body may not adopt an ordinance dissolving the authority before the first anniversary of the date of the election. That ordinance is also subject to the petition and election requirements of this section.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Subchapter B

Sec. 262.011: Board of Directors

(a) The authority is governed by a board of directors with at least seven and not more than 11 members.

(b) The number of directors shall be determined at the time the authority is created. The number may be changed by amendment of the ordinance or ordinances creating the authority unless prohibited by the resolution authorizing the issuance of bonds or by the trust indenture securing the bonds. However, a reduction in the number of directors may not shorten the term of an incumbent director.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.012: Appointment of Board; Terms of Office

(a) The governing body or governing bodies shall appoint the directors of the authority for terms not to exceed two years except as otherwise provided by this section. If the authority includes more than one municipality, each governing body shall appoint an equal number of directors unless the governing bodies agree otherwise.

(b) The resolution authorizing the issuance of revenue bonds or the trust indenture securing the bonds may prescribe the method of selecting a majority of the directors and the term of office of those directors, and the terms of directors appointed before the issuance of the bonds are subject to the resolution or trust indenture. The governing body or governing bodies shall appoint the remaining directors.

(c) The trust indenture may provide that in the event of a default, as defined in the trust indenture, the trustee may appoint all directors. On that appointment, the terms of the directors in office terminate.

(d) If the authority purchases an existing hospital or a hospital under construction from a nonprofit corporation, the directors shall be determined as provided in the contract of purchase.

(e) If the authority is financed under Chapter 223, the governing body or governing bodies by ordinance may require the board to submit nominees for appointment to the board. If a nominee is rejected by the governing body or governing bodies, the board shall submit another nominee. The governing body or governing bodies shall select the directors from the nominees submitted by the board and any other nominee submitted by a member of a governing body. The governing body or governing bodies may also limit the number of successive terms that a director may serve.

(f) An officer or employee of a municipality in the authority is not eligible for appointment as a director.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.013: Officers

(a) The board shall elect:

(1) a president and a vice-president, who must be directors;

(2) a secretary and a treasurer, who are not required to be directors; and

(3) any other officers authorized by the authority's bylaws.

(b) The offices of secretary and treasurer may be combined.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.014: Authority of Board

(a) Action may be taken by a majority of the directors present if a quorum is present.

(b) The president has the same right to vote as other directors.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.015: Compensation

A director may not receive compensation for services but is entitled to reimbursement for expenses incurred in performing services.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Subchapter C

Sec. 262.021: General Powers

(a) The authority has the power of perpetual succession.

(b) The authority may:

(1) have a seal;

(2) sue and be sued; and

(3) make, amend, and repeal its bylaws.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.022: Acquisition, Operation, and Lease of Hospitals

(a) The authority may construct, purchase, enlarge, furnish, or equip one or more hospitals. A hospital may be located outside the municipality or municipalities.

(b) The authority may operate and maintain one or more hospitals. The authority shall operate a hospital without the intervention of private profit for the use and benefit of the public unless the authority leases the hospital.

(c) The board may lease a hospital, or part of a hospital, owned by the authority for operation by the lessee as a hospital under terms that are satisfactory to the board and the lessee. The lease must:

(1) be authorized by resolution of the board;

(2) be executed on behalf of the authority by the president and secretary of the board; and

(3) have the seal of the authority impressed on the lease.

(d) The bond resolution or trust indenture may prescribe procedures and policies for the operation of a hospital. If a hospital is used, operated, or acquired by a nonprofit corporation or is leased, the authority may delegate to the nonprofit corporation or lessee the duty to establish the procedures and policies.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.0225: Authority to Borrow Money

(a) This section applies only to an authority created by a municipality with a population of less than 25,000.

(b) The board may, on behalf of the authority, borrow money from a federally insured lending institution for any of the authority's purposes.

(c) The board may borrow money in the amount it considers advisable subject to a rate of interest and other terms and conditions it considers advisable.

(d) A loan for which bonds are pledged shall mature not later than the first anniversary of the date on which the loan is made.

Comments

Added by Acts 1995, 74th Leg., ch. 740, Sec. 1, eff. Aug. 28, 1995. Amended by Acts 2003, 78th Leg., ch. 702, Sec. 1, eff. June 20, 2003.

Sec. 262.023: Employees

(a) The board may employ a manager or executive director of a hospital and other employees, experts, and agents.

(b) The board may delegate to the manager or executive director the authority to manage the hospital and to employ and discharge employees.

(c) The board may employ legal counsel.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.024: Management Agreement

(a) The board may enter into an agreement with any person for the management or operation of a hospital, or part of a hospital, owned by the authority under terms that are satisfactory to the board and the contracting party.

(b) The agreement must:

(1) be authorized by resolution of the board;

(2) be executed on behalf of the authority by the president and secretary of the board; and

(3) have the seal of the authority impressed on the agreement.

(c) The board may delegate to the manager the authority to manage the hospital and to employ and discharge employees.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.025: Committees

(a) The board, by a resolution adopted by a majority of the directors in office, may designate one or more committees if authorized to do so by the authority's bylaws.

(b) At least two directors must serve on each committee. Each committee may have additional nonvoting members who are not directors if authorized by the resolution or the bylaws.

(c) A committee may exercise the board's power to manage the authority to the extent and in the manner provided by the resolution or the bylaws. However, the board may not delegate to a committee the authority to:

(1) issue bonds;

(2) make or amend a lease of a hospital or a management agreement relating to a hospital; or

(3) employ or discharge a manager or executive director.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.026: Rates for Hospital Services

(a) Except as provided by Subsection (b), through charging sufficient rates for services provided by a hospital and through its other revenue sources the board shall produce revenue sufficient to:

(1) pay the expenses of owning, operating, and maintaining the hospital;

(2) pay the interest on the bonds as it becomes due;

(3) create a sinking fund to pay the bonds as they become due; and

(4) create and maintain a bond reserve fund and other funds as provided in the bond resolution or trust indenture.

(b) If the hospital is used, operated, or acquired by a nonprofit corporation under Chapter 223 or is leased, the board shall require the nonprofit corporation or the lessee to charge rates for services provided by the hospital that are sufficient with the nonprofit corporation's or lessee's other sources of revenue to:

(1) pay the expenses of operating and maintaining the hospital; and

(2) make payments or pay rentals to the authority that are sufficient with the authority's other pledged sources of estimated revenue to:

(A) pay the interest on the bonds as it becomes due;

(B) create a sinking fund to pay the bonds as they become due; and

(C) create and maintain a bond reserve fund and other funds as provided in the bond resolution or trust indenture.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.027: Depository

The authority may:

(1) select a depository in the same manner that a municipality may select a depository under Chapter 105, Local Government Code; or

(2) award its depository contract to the depository or depositories selected as the depository or depositories of the municipality or municipalities in the authority and on the same terms as the terms of the municipal depository agreement or agreements.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.028: Eminent Domain

(a) To carry out a power granted by this chapter, the authority may acquire the fee simple title to land, other property, and easements by condemnation under Chapter 21, Property Code.

(b) The authority is considered to be a municipal corporation for the purposes of Section 21.021(c), Property Code.

(c) The board shall determine the amount and character of the interest in land, other property, and easements to be acquired under this section.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.029: Gifts and Endowments

The board may accept gifts and endowments to hold and administer as required by the respective donors.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.030: Medical Records

(a) The preservation, microfilming, destruction, or other disposition of the records of the authority is subject to Subtitle C, Title 6, Local Government Code.

(b) The period that medical records are retained shall be in accordance with rules relating to the retention of medical records adopted by the Texas Department of Health and with other applicable federal and state laws and rules.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 14, Sec. 116, eff. Sept. 1, 1991.

Sec. 262.031: Sale of Property; General Provisions

(a) The board may sell, through sealed bids or at a public auction, real property acquired by gift or purchase that the board determines is not needed for hospital purposes if the sale does not violate:

(1) a trust indenture or bond resolution relating to outstanding bonds of the authority;

(2) prior restrictions placed on the use of the property; or

(3) an agreement between the authority and a nonprofit corporation under Chapter 223.

(b) If the board conducts the sale by sealed bids, the board shall provide notice of the sale under Section 272.001, Local Government Code.

(c) If the board conducts the sale by public auction, the board shall publish a notice of the sale once a week for three consecutive weeks in a newspaper of general circulation in each municipality in the authority. The notice must include a description of the property and the date, time, and place of the auction. The first notice must be published not later than the 21st day before the date of the auction.

(d) This section does not affect the authority's powers under Chapter 223.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.032: Sale of Property to Political Subdivision

(a) The authority may sell property to a political subdivision for the fair market value of the property.

(b) The board must publish a notice of its intention to sell, a description of the property, and the scheduled date of sale in one or more newspapers of general circulation in the authority once a week for two consecutive weeks. The first notice must be published not later than the 15th day before the scheduled sale date.

(c) A petition requesting an election on the question of the sale, signed by at least 10 percent of the qualified voters residing in the authority, may be presented to the secretary or president of the board before the scheduled sale date.

(d) The board shall order the election on receiving the petition. If no petition is filed, the board may sell the property without an election or may order an election on its own motion. The order must contain the same information contained in the notice of the election under Subsection (f).

(e) Section 41.001(a), Election Code, requiring elections to be held on uniform election dates, does not apply to the election.

(f) In addition to the contents of the notice required by the Election Code, the notice must state the names of the presiding judge, alternate judge, and clerks for each polling place. The board shall publish notice of the election in one or more newspapers of general circulation in the authority once a week for two consecutive weeks. The first notice must be published not later than the 31st day before election day.

(g) The ballot shall be printed to provide for voting for or against the proposition: "The sale of ______ by the ____________ Hospital Authority."

(h) If a majority of qualified voters who vote in the election favor the sale, the board may sell the property.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.033: Sale Or Closing of Hospital

(a) The board may sell a hospital, or part of a hospital, owned by the authority or close a hospital, or part of a hospital, owned or operated by the authority. The sale or closure must:

(1) be authorized by resolution of the board;

(2) be executed on behalf of the authority by the president and secretary of the board; and

(3) be made by a document having the seal of the authority impressed on it.

(b) A sale or closing may not take effect before the expiration of the period in which a petition may be filed under Subsection (c).

(c) The board shall order and conduct an election on the sale or closing of a hospital if, before the 31st day after the date the governing body authorizes the sale or closing, the board receives a petition requesting the election signed by at least 10 percent of the qualified voters of the authority. The number of qualified voters is determined according to the most recent official list of registered voters.

(d) If a petition is filed under Subsection (c), the hospital may be sold or closed only if a majority of the qualified voters voting on the question approve the sale or closing.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.0331: Expenditure of Funds for Public Health Initiatives After Sale Or Closing of Hospital

(a) If, after the sale or closing of a hospital under Section 262.033, the authority does not own or operate a hospital, the board may use the authority's available assets to promote public health and general welfare initiatives that the board determines will benefit the residents served by the authority, including:

(1) owning, operating, or funding an indigent health care clinic, medical research facility, medical training facility, or other health care facility;

(2) providing direct or indirect financial assistance to a nonprofit organization that:

(A) owns or operates a hospital, indigent health care clinic, medical research facility, medical training facility, or other health care facility; or

(B) supports an initiative promoting health education, wellness, or disease prevention; and

(3) undertaking any other activity that the board determines is necessary or appropriate to improve public health, promote wellness, prevent disease, or enhance the general welfare of the residents served by the authority.

(b) The board may not make an expenditure under Subsection (a) unless:

(1) the board makes appropriate provisions for the satisfaction of any outstanding bonds, debt obligations, or other liabilities of the authority;

(2) the predominant purpose of the expenditure is to promote the public health and general welfare of the residents served by the authority; and

(3) the board establishes sufficient controls to ensure that the expenditure promotes the public health and general welfare of the residents served by the authority.

Comments

Added by Acts 2013, 83rd Leg., R.S., Ch. 154 (S.B. 233), Sec. 1, eff. September 1, 2013.

Sec. 262.034: Facilities and Services for Elderly and Disabled

(a) The authority may construct, acquire, own, operate, enlarge, improve, furnish, or equip one or more of the following types of facilities or services for the care of the elderly or disabled:

(1) a nursing home or similar long-term care facility;

(2) elderly housing;

(3) assisted living;

(4) home health;

(5) personal care;

(6) special care;

(7) continuing care; and

(8) durable medical equipment.

(b) The authority may lease or enter into an operations or management agreement relating to all or part of a facility or service for the care of the elderly or disabled that is owned by the authority. The authority may sell, transfer, otherwise convey, or close all or part of the facility and may discontinue a service.

(c) The authority may issue revenue bonds and other notes in accordance with this chapter to acquire, construct, or improve a facility for the care of the elderly or disabled or to implement the delivery of a service for the care of the elderly or disabled.

(d) For the purposes of this section, a facility or service described by Subsection (a) is considered to be a hospital project under Chapter 223 (Hospital Project Financing Act).

(e) This section applies only to an authority that owns or operates a hospital licensed under Chapter 241 and that is located in:

(1) a county with a population of 225,000 or less;

(2) those portions of extended municipalities that the federal census bureau has determined to be rural;

(3) an area that is not delineated as an urbanized area by the federal census bureau; or

(4) a municipality with a population of less than 12,000 and a county with a population of 2.5 million or more at the time the authority begins operating a facility or providing a service described by Subsection (a).

(f) This section does not authorize the authority to issue revenue bonds or other notes in accordance with this chapter to construct, acquire, own, enlarge, improve, furnish, or equip a facility or service listed in Subsection (a) if a private provider of the facility or service is available and accessible in the service area of the authority.

(g) An authority described by Subsection (e)(4) may not own or operate more than 50 licensed nursing home beds under this section and is not subject to Subsection (f).

Comments

Added by Acts 1991, 72nd Leg., ch. 14, Sec. 117, eff. Sept. 1, 1991. Amended by Acts 1995, 74th Leg., ch. 965, Sec. 4, eff. June 16, 1995; Acts 1999, 76th Leg., ch. 793, Sec. 1, eff. Aug. 30, 1999; Acts 1999, 76th Leg., ch. 1030, Sec. 1, eff. Sept. 1, 1999.

Sec. 262.035: Powers and Duties of Certain Hospital Authorities; Lease

(a) This section applies only to an authority created in a county with a population of at least 350,000 in which a hospital district is not located.

(b) A municipality may lease to an authority subject to this section all or part of a hospital and any other health facilities owned by the municipality. The lease may provide that the municipality may retain during the term of the lease specified rights relating to the operation of the authority and the facilities leased from the municipality. The lease may provide that:

(1) the municipality may retain the power to appoint all directors of the authority, notwithstanding Section 262.012;

(2) the authority is required to perform specified health care services on behalf of the municipality;

(3) the municipality may agree to fund specified health care services;

(4) the authority is prohibited from eliminating or curtailing specified health care services offered at the facilities leased from the municipality without prior consultation with or the approval of the municipality;

(5) the authority is prohibited from subletting the facilities leased from the municipality or assigning its rights under the lease for a total term of more than five years, or entering into a management contract for the operation of the facilities leased from the municipality as a whole, or pledging the authority's revenues derived from the operation of the facilities leased from the municipality, without prior consultation with or the approval of the municipality;

(6) the board may be subject to any ethics or conflict of interest ordinance applicable to other sovereign city boards and commissions adopted by the municipality and any goals for hiring and contracting with minorities or women adopted by and for the municipality;

(7) the authority will comply with Chapter 252, Local Government Code, relating to purchasing and contracts;

(8) the municipality may issue general obligation bonds for the use and benefit of the authority;

(9) an authority and its employees may participate in the municipality's employee retirement plan, employee health plans, and other employee benefit plans; and

(10) the lease may contain other terms and conditions that the municipality and authority agree on and which are not prohibited by law or by the constitution.

(c) If the municipality retains in the lease the right to appoint all members of the board, the municipality may remove the entire board or any member of the board at any time with cause. The municipality may remove the board or a member of the board under this subsection only after reasonable written notice to the board or board members and on the affirmative vote of a majority of the members of the governing body of the municipality.

(d) For purposes of Chapters 101 and 102, Civil Practice and Remedies Code, a municipal hospital authority subject to this section is a unit of local government and not a municipality.

(e) An authority subject to this section is subject to Chapter 551, Government Code, and Chapter 552, Government Code.

Comments

Added by Acts 1993, 73rd Leg., ch. 558, Sec. 1, eff. June 11, 1993. Amended by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(82), (88), eff. Sept. 1, 1995.

Sec. 262.036: Retirement Benefits

If any authority is created by the governing body of a municipality which has established a municipal retirement system pursuant to Chapter 451, Acts of the 72nd Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas Civil Statutes), then the board of such authority shall have the authority to provide and shall provide retirement benefits for employees of the authority by participating in and making all contributions required or authorized by the municipal retirement system established by the municipality pursuant to Chapter 451, Acts of the 72nd Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas Civil Statutes).

Comments

Added by Acts 1993, 73rd Leg., ch. 614, Sec. 1, eff. July 1, 1993. Renumbered from Health & Safety Code Sec. 262.035 by Acts 1995, 74th Leg., ch. 76, Sec. 17.01(23), eff. Sept. 1, 1995.

Sec. 262.037: Establishment of Nonprofit Corporation

(a) The authority may form and sponsor a nonprofit corporation under the Texas Nonprofit Corporation Law, as described by Section 1.008, Business Organizations Code, to own and operate all or part of one or more ancillary health care facilities consistent with the purposes of an authority under this chapter.

(b) The board shall appoint the board of directors of a nonprofit corporation formed under this section.

(c) The authority may contribute money to or solicit money for the nonprofit corporation. If the authority contributes money to or solicits money for the corporation, the authority shall establish procedures and controls sufficient to ensure that the money is used by the corporation for public purposes.

(d) A nonprofit corporation formed under this section has the same powers as a development corporation under Section 221.030.

(e) A nonprofit corporation formed under this section shall comply with Chapter 2258, Government Code, in the same manner and to the same extent that the authority is required to comply with that chapter.

Comments

Added by Acts 2007, 80th Leg., R.S., Ch. 470 (H.B. 2168), Sec. 1, eff. June 16, 2007.

Sec. 262.038: Hospital Authority Contracts, Collaborations, and Joint Ventures

The authority may, directly or through any nonprofit corporation formed by the authority, contract, collaborate, or enter into a joint venture with any public or private entity as necessary to carry out the functions of or provide services to the authority.

Comments

Added by Acts 2007, 80th Leg., R.S., Ch. 470 (H.B. 2168), Sec. 1, eff. June 16, 2007.

Sec. 262.039: Investment of Authority Funds

(a) This section applies only to an authority that:

(1) is located in:

(A) a county of 2.4 million or more; or

(B) a municipality of less than 15,000;

(2) has assets that exceed the amount of any outstanding bonds issued under Subchapter D; and

(3) does not operate a hospital.

(b) Notwithstanding any other law, an authority may invest authority funds:

(1) as provided by Chapter 2256, Government Code; and

(2) in any investment a trustee is authorized to make under Subtitle B, Title 9, Property Code.

Comments

Added by Acts 2013, 83rd Leg., R.S., Ch. 154 (S.B. 233), Sec. 1, eff. September 1, 2013.

Amended by:

Acts 2015, 84th Leg., R.S., Ch. 581 (H.B. 3333), Sec. 1, eff. September 1, 2015.

Subchapter D

Sec. 262.041: Revenue Bonds

(a) The authority may issue revenue bonds to provide funds for any of the authority's purposes.

(b) Revenue bonds must be payable from, and secured by a pledge of, revenues from the operation of one or more hospitals and any other revenues from owning hospital property. Additionally, revenue bonds may be secured by a mortgage or deed of trust on real property owned by the authority or by a chattel mortgage on the authority's personal property.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.042: Form and Procedure

(a) Revenue bonds must be authorized by a resolution adopted by a majority vote of a quorum of the board. The bonds must:

(1) be signed by the president or vice-president of the board;

(2) be countersigned by the secretary of the board; and

(3) have the seal of the authority impressed or printed on the bonds.

(b) Printed facsimile signatures may be substituted for the actual signatures of the president, vice-president, or secretary.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.043: Terms

(a) Revenue bonds must mature serially or otherwise not more than 40 years after they are issued.

(b) Revenue bonds may:

(1) be sold at a price and under terms that the board considers the most advantageous reasonably obtainable, except that the net effective interest rate computed according to Chapter 1204, Government Code, may not exceed 10 percent a year;

(2) be made callable before maturity at times and prices prescribed in the resolution authorizing the bonds; and

(3) be made registrable as to principal or as to principal and interest.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.252, eff. Sept. 1, 2001.

Sec. 262.044: Notice

(a) Before the board adopts a resolution authorizing the issuance of bonds other than refunding bonds, the board shall publish a notice of its intention to adopt the resolution and of the maximum amount and maximum maturity of the bonds.

(b) The notice must be published once a week for two consecutive weeks in one or more newspapers of general circulation in the authority. The first notice must be not later than the 15th day before the date set for adoption of the resolution.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.045: Referendum

(a) A petition requesting an election on the proposition for the issuance of the revenue bonds may be presented to the president or secretary of the board before the date set for the adoption of the bond resolution. The petition must be signed by at least 10 percent of the qualified voters residing in the authority who own taxable property in the authority.

(b) The election shall be ordered and held as provided by Chapter 1251, Government Code. The board, president, and secretary shall perform the functions assigned under that chapter respectively to the municipality's governing body, mayor, and municipal secretary.

(c) If a majority of voters who vote at the election approve the issuance of the bonds, the board may issue the bonds. If a petition is not filed, the board may issue the bonds without an election. However, the board may order the election on its own motion if a petition is not filed.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.253, eff. Sept. 1, 2001.

Sec. 262.046: Junior Lien Bonds; Parity Bonds

(a) Bonds constituting a junior lien on the revenues or properties may be issued unless prohibited by the bond resolution or the trust indenture.

(b) Parity bonds may be issued under conditions specified by the bond resolution or trust indenture.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.047: Bond Proceeds; Investment of Funds

(a) The board may set aside from the proceeds from the sale of bonds:

(1) an amount for payment of not more than two years' interest on the bonds;

(2) the amount required for operating expenses during the first year of operation as estimated by the board; and

(3) an amount to fund any bond reserve fund or other reserve funds provided for in the bond resolution or trust indenture.

(b) The bond proceeds may be deposited in banks and paid out under terms as provided in the bond resolution or trust indenture.

(c) The law relating to the security for and the investment of municipal funds controls, to the extent applicable, the investment of the authority's funds. The bond resolution or trust indenture may further restrict those investments. Additionally, the authority may invest its bond proceeds, until that money is needed, as authorized by the bond resolution or trust indenture.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.048: Refunding Bonds

(a) The authority may issue bonds to refund outstanding bonds in the same manner that other bonds are issued under this chapter.

(b) Bonds issued under this chapter may be exchanged by the comptroller or sold. The proceeds shall be applied as provided by Subchapters B and C, Chapter 1207, Government Code, or other applicable law.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.254, eff. Sept. 1, 2001.

Sec. 262.049: Approval and Registration of Bonds

(a) The authority shall submit to the attorney general bonds issued under this chapter and the record relating to the issuance of those bonds.

(b) If the attorney general finds that the bonds were issued in accordance with this chapter, are valid and binding obligations of the authority, and are secured as recited in the bonds:

(1) the attorney general shall approve the bonds; and

(2) the comptroller shall register the bonds and certify the registration on the bonds.

(c) Following approval and registration, the bonds are incontestable.

(d) The bonds are negotiable and must contain the following provision: "The holder hereof shall never have the right to demand payment thereof out of money raised or to be raised by taxation."

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 262.050: Legal Investments; Security for Deposits

(a) Bonds issued under this chapter are legal and authorized investments for:

(1) a bank;

(2) a savings bank;

(3) a trust company;

(4) a savings and loan association;

(5) an insurance company; or

(6) the interest and sinking fund or other public fund of an authority.

(b) The bonds are eligible and lawful security, to the extent of the value of the bonds, for the deposits of public funds of the state or an authority if accompanied by all appurtenant unmatured interest coupons.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Chapter 263

Subchapter A

Sec. 263.0001: Definition

In this chapter, "executive commissioner" means the executive commissioner of the Health and Human Services Commission.

Comments

Added by Acts 2015, 84th Leg., R.S., Ch. 1 (S.B. 219), Sec. 3.0820, eff. April 2, 2015.

Sec. 263.001: Two Or More Counties May Join

(a) Two or more adjacent counties may act together to carry out the purposes of this chapter and construct one or more hospitals for their joint use as provided by this chapter for a single county if:

(1) each of the counties has fewer than 15,000 inhabitants; and

(2) the executive commissioner approves.

(b) The counties acting together have the same powers and liabilities under this chapter as a single county.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Amended by:

Acts 2015, 84th Leg., R.S., Ch. 1 (S.B. 219), Sec. 3.0821, eff. April 2, 2015.

Sec. 263.002: Additional Hospital

A county may maintain more than one county hospital if considered advisable by the commissioners court of the county and approved by the executive commissioner.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Amended by:

Acts 2015, 84th Leg., R.S., Ch. 1 (S.B. 219), Sec. 3.0822, eff. April 2, 2015.

Subchapter B

Sec. 263.021: Establishing Or Enlarging Hospital on Petition; Submission of Bond Proposition

(a) The commissioners court of a county may establish a county hospital or any medical or other health facility or enlarge an existing hospital or facility for the care and treatment of persons who are sick or injured in accordance with this subchapter.

(b) Ten percent or more of the qualified property taxpaying voters of a county may petition the commissioners court of the county to establish or enlarge a county hospital or any medical or other health facility.

(c) A petition may not be presented to the commissioners court during the 12-month period succeeding the date on which a petition under this section was last presented to the court unless the county does not own a hospital.

(d) On proper petition, the commissioners court shall, within the period designated in the petition, submit to the qualified voters of the county at a special or regular election the proposition of issuing bonds in the amount designated in the petition to establish or enlarge the hospital or facility.

(e) The commissioners court may not submit to the voters a bond proposition to establish or enlarge a county hospital or facility more than twice during any 12-month period.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.022: Powers and Duties of Commissioners Court After Passage of Bond Proposition

(a) If a bond proposition under Section 263.021 is approved by a majority of the qualified voters voting at the election, the commissioners court of the county shall establish or enlarge a hospital or medical or other health facility as provided in the proposition and maintain the hospital or facility.

(b) In establishing, enlarging, or maintaining a hospital or facility, the commissioners court may:

(1) purchase or lease real or personal property or acquire real property and easements to real property by condemnation;

(2) purchase or construct any necessary buildings;

(3) make necessary improvements, repairs, and alterations to an existing building;

(4) impose property taxes in the county for all necessary expenditures related to the hospital or facility, including maintenance expenses;

(5) issue county bonds to provide funds to establish, enlarge, and equip the hospital or facility or make any necessary permanent improvements in connection with the hospital or facility; and

(6) accept and hold a grant or devise of land or a gift or bequest of money or personal property in trust for the county and apply the principal or income, or both, for the benefit of the hospital or facility and in accordance with the terms of the gift.

(c) Subject to this chapter, the commissioners court may purchase or lease real or personal property, or both, in an adjacent county if the court considers the purchase or lease necessary for hospital purposes. The commissioners court may not acquire real property in an adjacent county by condemnation.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.023: Construction of Hospital to Avoid Inadequate Care in Certain Counties

(a) The commissioners court of a county shall provide for the construction of a county hospital if:

(1) the county has a municipality with more than 10,000 inhabitants as ascertained by the court in the manner determined by a resolution of the court; and

(2) the county does not have a county hospital or the county hospital is inadequate.

(b) The commissioners court shall provide for the construction of the hospital within six months after the date the number of inhabitants of the municipality exceeds 10,000 except that the executive commissioner may, for good cause, extend this period.

(c) The hospital must have a room or ward for the care of confinement cases and a room or ward for the temporary care of persons suffering from mental or nervous disease.

(d) The hospital must have separate buildings for persons suffering from tuberculosis and other communicable diseases.

(e) Sufficient accommodations shall be added to the hospital as needed to take care of persons in the county who are sick or injured.

(f) If adequate funds for the issuance of county warrants and scrip for the construction of the hospital are not available from the county, the commissioners court shall submit, either at a special election called for the purpose or at a regular election, the proposition of the issuance of county bonds for the construction of the hospital. If the proposition is not approved by a majority vote at the election, the court shall, on petition of 10 percent or more of the qualified voters of the county, resubmit the proposition.

(g) A petition may not be presented to the commissioners court if a petition has been presented to the court in the preceding 12 months.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Amended by:

Acts 2015, 84th Leg., R.S., Ch. 1 (S.B. 219), Sec. 3.0823, eff. April 2, 2015.

Sec. 263.024: Hospital Revenue Bonds

(a) A county may issue revenue bonds for:

(1) acquiring, constructing, repairing, equipping, or renovating buildings and improvements for county hospital purposes; or

(2) acquiring land for county hospital purposes.

(b) The county may issue bonds to refund previously issued revenue bonds.

(c) The revenue bonds shall be payable from and secured by a pledge of all or a part of the revenues of the county derived from the operation of the hospital. The bonds may be additionally secured by a mortgage or deed of trust lien on all or part of the county's hospital property.

(d) The revenue bonds must be issued in accordance with Sections 264.042-264.047(a), 264.048, and 264.049, and with the effect specified by Section 264.050.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.025: Hospital Operating Funds Used for Improvements in Counties of 24,500 to 25,500

The commissioners court of a county with a population of 24,500 to 25,500 may use excess money in the county hospital operating fund for making permanent improvements to the county hospital and for the payment of county bonds issued for the construction and improvement of a county hospital facility.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 597, Sec. 71, eff. Sept. 1, 1991; Acts 2001, 77th Leg., ch. 669, Sec. 35, eff. Sept. 1, 2001.

Sec. 263.026: Health Unit Or Center in County with Population Greater Than 100,000

(a) The commissioners court of a county with a population of more than 100,000 that has a county hospital may acquire sites and construct or otherwise acquire buildings to use for county public health units or public health centers as part of the county hospital system. The commissioners court may locate a health unit or center anywhere in the county.

(b) Payments for the sites or buildings shall be made from the county permanent improvement fund. To pay for a site or building for a health unit or center, the commissioners court may:

(1) issue negotiable bonds and impose taxes to pay the principal of and interest on the bonds in accordance with Subtitles A and C, Title 9, Government Code;

(2) issue time warrants and impose taxes to pay the principal of and interest on the time warrants in accordance with Subchapter C, Chapter 262, Local Government Code; or

(3) by order issue certificates of indebtedness and impose taxes to pay the principal of and interest on the certificates in accordance with this section.

(c) The certificates of indebtedness must:

(1) mature not later than 35 years after the date of the certificates; and

(2) be signed by the county judge and attested by the county clerk, either by their actual or facsimile signatures as provided by the order of issuance.

(d) The interest on certificates of indebtedness may be evidenced by interest coupons at the discretion of the commissioners court. The interest coupons must be executed by the facsimile signatures of the county judge and county clerk.

(e) The certificates of indebtedness and the record relating to their issuance shall be submitted to the attorney general for examination. If the certificates are issued in accordance with the Texas Constitution and this section, the attorney general shall approve the certificates and the comptroller shall register the certificates. If the certificates are registered, they are incontestable after they are delivered to the purchasers.

(f) The commissioners court shall sell the certificates of indebtedness for not less than their par value plus accrued interest. The commissioners court shall impose a continuing annual ad valorem tax sufficient to pay the principal of and interest on the certificates as each becomes due and payable.

(g) Certificates of indebtedness issued under this section are negotiable instruments.

(h) The commissioners court may issue refunding bonds to refund bonds and certificates issued under this section, subject to state law applicable to refunding bonds issued by counties. The commissioners court may issue the refunding bonds without notice or a referendum.

(i) The commissioners court may issue refunding bonds to refund time warrants issued under this section.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1999, 76th Leg., ch. 1064, Sec. 32, eff. Sept. 1, 1999.

Sec. 263.027: Approval of Construction Or Repair

If requested by the commissioners court of a county, the executive commissioner must approve plans for the construction, alteration, or repair of a hospital or facility under this chapter before the construction, alteration, or repair may begin.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Amended by:

Acts 2015, 84th Leg., R.S., Ch. 1 (S.B. 219), Sec. 3.0824, eff. April 2, 2015.

Sec. 263.028: Contract for Care

(a) The commissioners court of a county that does not have a municipality with a population of more than 10,000 may contract with a hospital in the county, an incorporated society or municipality in the county that maintains a hospital, or an adjacent county for the care of residents of the county who are sick or injured.

(b) The term of the contract may not exceed one year.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.029: Sale Or Lease of Hospital

(a) A county may sell or lease all or part of a county hospital or medical or other health facility operated by the county, including real property, if the commissioners court of the county, by order entered in the minutes of the court, finds that the sale or lease is in the best interest of the county.

(b) The commissioners court shall set a time and place for a hearing on the proposed sale or lease. The date of the hearing may not be earlier than the 16th day or later than the 30th day from the date of the order.

(c) The county clerk, immediately after the time and place of the hearing are set, shall give notice informing all qualified voters of the county and other persons interested in the issue of selling or leasing the hospital of the time and place of the hearing and their right to appear at the hearing and to speak for or against the proposed action. The county clerk shall publish notice once a week for two consecutive weeks in a newspaper published in the county. The first notice must be published not later than the 15th day before the date set for the hearing. If no newspaper is published in the county, the county clerk shall post the notice at the courthouse door for 14 days before the date set for the hearing.

(d) Ten percent or more of the qualified voters in the county may petition the commissioners court in writing before the time set for the hearing for a referendum on whether the hospital shall be sold or leased or shall continue under county operation. The commissioners court may not sell or lease the hospital unless the proposition to sell or lease the hospital is approved by a majority of the votes cast at the election. The election shall be held under and governed by the election provisions of Section 263.021.

(e) If no petition is filed with the county clerk, the commissioners court may conduct the hearing. Any person interested may appear in person or by attorney. The commissioners court may adjourn the hearing from day to day and from time to time as it considers necessary. On completion of the hearing, the commissioners court may enter an order determining whether or not to sell or lease the hospital. If the court finds that due notice was given, no petition was filed, and the proposed sale or lease is in the best interest of the county, the commissioners court may enter in its minutes an order that the hospital be sold or leased.

(f) The commissioners court may submit the issue of the sale or lease to the voters and withhold its final determination pending the election even if no petition is filed.

(g) The court may sell the hospital or may lease the hospital to be operated as a hospital by the lessee under terms satisfactory to the commissioners court and the lessee. The commissioners court shall enter in its minutes an order of the sale or lease that contains a complete copy of the sales or lease contract.

(h) If 50 qualified property taxpaying voters in a county with a population of 5,000 to 10,390 file a written petition with the commissioners court requesting a referendum on the issue of leasing all or part of the county hospital and if the proposition to lease all or part of the hospital is not approved by a majority of the votes cast at the election, the commissioners court may not lease all or part of the hospital for a period greater than five years.

(i) The commissioners court may deposit all or part of the proceeds from the sale of a county hospital to the credit of a fund to be known as the county health care fund and shall deposit any of the remainder to the credit of the county general fund. The county health care fund may be used only to finance items related to providing health care to county residents, including indigent residents. The commissioners court may deposit to the credit of the county health care fund all or part of the interest from that fund and shall deposit any remainder to the credit of the county general fund.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.030: Closing of Hospital

(a) The commissioners court of a county by order on terms it considers reasonable may close a hospital or medical facility constructed, purchased, or acquired under this chapter.

(b) The order is final 30 days after the date of adoption unless at least 10 percent of the qualified voters in the county petition the commissioners court requesting an election to determine whether the hospital or facility should be closed.

(c) On proper petition, the commissioners court shall set a time for an election and shall submit to the qualified voters of the county ballots providing for voting for or against the proposition: "The closing of (name of hospital or facility to be closed)."

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.031: Closing Part of Hospital

A county may close a part of a county hospital.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Subchapter C

Sec. 263.041: Appointment of Board of Managers

(a) The commissioners court of a county shall appoint at least six but not more than 12 residents of the county as the board of managers of a county hospital or medical or other health facility after the court acquires the site for the hospital and awards the contracts for the buildings and improvements necessary for the hospital.

(b) A manager is appointed for a term of two years except that the commissioners court may set the terms of the initial managers at less than two years so that as close as possible to one-half of the managers' terms expire each year.

(c) An appointment to fill a vacancy is for the unexpired term.

(d) A vacancy is created if a manager misses three consecutive board meetings unless the board takes formal action to excuse the absences.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.042: Operation of Board of Managers

(a) The board of managers shall elect from among its members a president, at least one vice-president, a secretary, and a treasurer.

(b) The county judge of the county in which the hospital is located may vote to break a tie vote by the board of managers.

(c) The board of managers shall meet at the hospital at least once a month and may meet at other times as provided by its bylaws.

(d) The board of managers shall hold an annual meeting before the beginning of the third week preceding the date of the meeting of the commissioners court at which the court considers appropriations for the following year.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.043: Compensation and Expenses of Board of Managers

(a) The commissioners court may provide hospitalization insurance as compensation for the services of the board of managers.

(b) The commissioners court shall pay and audit, in the same manner as other expenses of the hospital, the managers' actual and necessary traveling and other expenses within this state.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.044: Tort Claims Payments

A member of the board of managers is a county officer for purposes of Chapter 102, Civil Practice and Remedies Code.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.045: Removal of Manager

After citation, the commissioners court may, at any time, remove a member of the board of managers from office for cause.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.046: General Powers and Duties of Board of Managers

(a) The board of managers shall generally manage and control the hospital, including:

(1) its buildings and grounds;

(2) its officers and employees;

(3) its patients; and

(4) all matters relating to its government, discipline, contracts, and fiscal concerns.

(b) The board of managers may adopt rules it considers necessary to carry out the purposes of the hospital.

(c) The board of managers shall maintain an effective inspection of the hospital and keep itself informed of the hospital's affairs and management.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.047: Salaries

(a) The board of managers shall determine the salaries of the officers and employees of the hospital, including the superintendent.

(b) The salaries may not exceed the appropriation made for the salaries by the commissioners court.

(c) The salaries are full compensation for all services rendered.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.048: Visiting Physicians

(a) The board of managers shall appoint a staff of visiting physicians who visit and treat hospital patients at the request of the board or the superintendent.

(b) The physicians serve without pay from the county.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.049: Discharge of Patients

(a) The board of managers shall make the final disposition of a case concerning the discharge of a patient from the hospital.

(b) The decision of the board of managers regarding discharge of a patient may not be appealed.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.050: Dispensaries and Clinics

(a) The board of managers may establish and operate:

(1) an outpatient department or a free dispensary and clinic at the hospital or in the municipality located nearest the hospital; and

(2) a branch dispensary or clinic in a municipality that is located in the county and that has 5,000 or more inhabitants.

(b) The board of managers shall appoint a physician to serve at the dispensary or clinic, determine the time that the physician is required to spend at the dispensary or clinic, and fix the salary, if any, of the physician.

(c) The board of managers shall appoint a trained visiting nurse to serve in connection with the dispensary or clinic and the hospital. The board shall fix the salary of the nurse within the limits of the appropriation made for the salary by the commissioners court.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.051: School for Children Having Tuberculosis

(a) The board of managers may establish a special and separate school for the education, care, and treatment of children having tuberculosis.

(b) The school may be located at the hospital, in the municipality nearest the hospital, or in the largest municipality in the county.

(c) The school shall be conducted as a branch of the hospital and the children at the school are patients of the hospital and subject to this chapter.

(d) The board of managers shall employ a specially qualified teacher to instruct and care for the children of the school.

(e) The board of managers shall assign the superintendent of the hospital, a member of the staff of visiting physicians, or a physician serving a county dispensary or shall employ a physician to attend the children of the school and to supervise their care and treatment.

(f) The board of managers shall assign a nurse from the hospital or a visiting nurse or shall employ a nurse to assist in the care and treatment of the children of the school.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.052: Contract for Care By Board

The board of managers may contract for the care of a person who is sick or injured and who applies to the hospital for admission. The board may contract for this care with:

(1) a hospital in the county; or

(2) an incorporated society or municipality in the county that maintains a hospital.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.053: Records

(a) The board of managers shall keep a proper record of its proceedings in a book provided for that purpose. The record must be open for inspection at all times to the board, the commissioners court, and any resident of the county.

(b) The board of managers shall certify all bills and accounts, including salaries and wages, and transmit them to the commissioners court, which shall provide for their payment in the same manner that other charges against the county are paid.

(c) The board of managers shall report to the commissioners court annually, and at other times as directed by the court, on the details of the operation during the year of the hospital dispensaries and school for children suffering from tuberculosis. The report must contain:

(1) the number of patients admitted and the methods and result of their treatment, together with suitable recommendations and other material required by the court; and

(2) full and detailed estimates of the appropriations required during the following year for all purposes, including maintenance, building construction, repairs, renewals, extensions, and improvements.

(d) The board of managers shall incorporate into its report to the commissioners court the accounts and records prepared by the superintendent of the hospital under Section 263.077.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Subchapter D

Sec. 263.071: Appointment of Superintendent

(a) The board of managers shall appoint a superintendent of the hospital who holds office at the pleasure of the board.

(b) The superintendent may not be a member of the board of managers and must be a qualified practitioner of medicine or be specially trained for the work of a superintendent.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.072: Role of Superintendent

(a) The superintendent is the chief executive officer of the hospital.

(b) The superintendent is subject to the bylaws and rules of the hospital and to the board of managers.

(c) The board of managers shall determine the amount of time that a superintendent must spend at the hospital in the performance of the superintendent's duties.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.073: Bond

The superintendent, before beginning to discharge the duties of office, shall give a bond in a sum determined by the board of managers to secure the faithful performance of the superintendent's duties.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.074: General Powers and Duties of Superintendent

(a) The superintendent has general supervision and control of:

(1) the records and accounts of the hospital;

(2) the hospital buildings; and

(3) the internal affairs of the hospital, including discipline.

(b) The superintendent shall enforce the bylaws and rules adopted by the board of managers for the government, discipline, and management of the hospital and its employees and patients.

(c) The superintendent may adopt additional rules and orders the superintendent considers necessary that are not inconsistent with law or the rules and directions of the board of managers.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.075: Equipping the Hospital

(a) The superintendent shall, with the consent of the board of managers, equip the hospital with furniture, appliances, fixtures, and other facilities necessary for the care and treatment of patients and the use of officers and employees.

(b) The superintendent shall purchase all supplies necessary for the hospital.

(c) Expenditures under this section may not exceed the amount provided for them by the commissioners court.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.076: Officers and Employees

(a) With the consent of the board of managers, the superintendent shall appoint resident officers and employees considered proper and necessary by the superintendent for the efficient performance of the hospital's business.

(b) The superintendent shall determine the duties of the officers and employees of the hospital.

(c) The superintendent may discharge an officer or employee at the discretion of the superintendent for cause stated in writing after an opportunity for a hearing.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.077: Accounts and Records

(a) The superintendent shall require daily accounts and records of the hospital's business and operations.

(b) The superintendent shall require that:

(1) a record is kept of the condition of a patient on and after admission; and

(2) proper records and accounts are kept of the admission of a patient, including the patient's name, age, sex, color, marital condition, residence, occupation, and place of past employment.

(c) The superintendent shall present the accounts and records to the board of managers in an annual report.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.078: Forms for Admission

(a) The county hospital shall provide forms for application for admission to the hospital and the superintendent shall forward the forms free to a licensed physician in the county in which the hospital is located at the request of the physician.

(b) An application for admission to a county hospital must be made, if practicable, on a form provided under this section.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.079: Admission of Persons from County

(a) A resident of a county in which a county hospital is located who desires treatment in the hospital may apply in person to the superintendent or to a licensed physician for examination. If the physician finds that the resident is sick or injured, the physician may apply to the superintendent for admission of the resident.

(b) After the superintendent receives an application for admission to the hospital, the superintendent shall notify the applicant to appear in person at the hospital if:

(1) it appears from the application that the applicant is sick or injured; and

(2) there is a vacancy in the hospital.

(c) The superintendent, acting under the general direction of the board of managers, shall admit an applicant for admission to the hospital in order of application or according to the urgency of need of treatment if:

(1) after a personal examination of the applicant, the superintendent is satisfied that the applicant is sick or injured; and

(2) the applicant resides in the county at the time of the application for admission to the hospital.

(d) An application for admission must state whether, in the judgment of the physician, the applicant is able to pay, in whole or in part, for the applicant's care and treatment while in the hospital.

(e) An application must be filed and recorded in a book kept for that purpose in the order it is received.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.080: Admission of Persons from Adjacent County

The superintendent shall admit to the hospital a person sent by the commissioners court of an adjacent county if:

(1) the adjacent county has contracted with the board of managers for the care and treatment of persons who are sick or injured;

(2) the person resides in the adjacent county at the time of the application for admission to the hospital; and

(3) there is sufficient provision for the care of persons who are sick or injured and who reside in the county in which the hospital is located.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.081: Condition and Treatment of Patient

The superintendent shall require that a patient's physical condition is carefully examined and the treatment the patient needs is provided.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.082: Payment By Patient

(a) A patient may not be permitted to pay an amount for the patient's maintenance in the hospital greater than the average per capita cost of maintenance in the hospital, including a reasonable allowance for the interest on the cost of the hospital.

(b) An officer or employee of a county hospital may not accept from a patient a fee, payment, or gratuity for any service.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.083: Support

(a) The superintendent shall inquire into a patient's circumstances and the circumstances of the patient's relatives legally responsible for the patient's support if the patient is admitted to the hospital from the county in which the hospital is located. If the superintendent finds that the patient or the patient's relatives are liable to pay for the patient's care and treatment in whole or in part, the superintendent shall issue an order directing the patient or the patient's relatives to pay to the treasurer of the hospital a specified amount each week in proportion to the financial ability of the patient or the patient's relatives to pay.

(b) A patient or the patient's relatives may not be required to pay an amount greater than the actual per capita cost of maintenance.

(c) A superintendent may collect an amount owed under this section from the estate of a patient, or the relatives legally responsible for the patient's support, in the manner provided by law for the collection of expenses of the last illness of a decedent.

(d) A county court of the county in which a patient's hospital is located shall hear and determine the ability of the patient or the patient's relatives to pay under this section if there is a dispute over that ability or if there is doubt in the mind of the superintendent of the hospital over that ability. The court shall hear witnesses and issue any order that may be proper. The order may not be appealed.

(e) Discrimination in the accommodations, care, or treatment of a patient may not be made because the patient or the patient's relatives contribute to the cost, in whole or in part, of the patient's maintenance.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.084: Discharge of Patients

(a) The superintendent shall temporarily or permanently discharge a patient from the hospital if the patient:

(1) is not sick or injured or recovers from the sickness or injury;

(2) wilfully or habitually violates hospital rules; or

(3) is not suitable for treatment for any other reason.

(b) The superintendent shall make a full report of a discharge of a patient from the hospital at the next meeting of the board of managers after the discharge.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 263.085: Collection of Money

(a) The superintendent shall collect money due the hospital.

(b) The superintendent shall keep an accurate account of money collected at the hospital, report at the monthly meeting of the board of managers the amount of money collected, and transmit the money to the county treasurer of the county in which the hospital is located within 10 days after the date of the meeting of the board.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Subchapter E

Sec. 263.101: Inspections

(a) A resident officer of a county hospital shall admit a member of the board of managers into every part of the hospital and its premises.

(b) On the demand of a member of the board of managers, a resident officer of the hospital shall:

(1) give the board access to all books, papers, accounts, and other records pertaining to the hospital; and

(2) furnish the board with copies, abstracts, and reports.

(c) A hospital established or maintained under this chapter is subject to inspection by an authorized representative of:

(1) the Department of State Health Services;

(2) the commissioners court; or

(3) a state board of charities, if such a board is created.

(d) A resident officer of a county hospital shall admit a representative listed in Subsection (c) into every part of the hospital and its buildings.

(e) On the demand of a representative listed in Subsection (c), a resident officer of the hospital shall give the representative access to all books, papers, accounts, reports, and other records pertaining to the hospital.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Amended by:

Acts 2015, 84th Leg., R.S., Ch. 1 (S.B. 219), Sec. 3.0825, eff. April 2, 2015.

Sec. 263.102: Rules and Publications

(a) The board of managers shall print, or purchase from the Department of State Health Services at the actual cost of printing:

(1) rules adopted by the executive commissioner for the care of persons having a communicable disease and for the prevention and spread of communicable disease; and

(2) bulletins and other publications prepared by the department providing information about the cause, nature, treatment, and prevention of disease.

(b) The board of managers shall send or deliver copies of those rules, bulletins, and publications to:

(1) all practicing physicians in the county in which the hospital is located;

(2) all public schools;

(3) private schools that request copies; and

(4) organizations, churches, societies, unions, and individuals who present a written request for copies.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Amended by:

Acts 2015, 84th Leg., R.S., Ch. 1 (S.B. 219), Sec. 3.0826, eff. April 2, 2015.

Acts 2015, 84th Leg., R.S., Ch. 1 (S.B. 219), Sec. 3.0827, eff. April 2, 2015.

Chapter 264

Subchapter A

Sec. 264.001: Short Title

This chapter may be cited as the County Hospital Authority Act.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.002: Definitions

In this chapter:

(1) "Authority" means a county hospital authority created under this chapter.

(2) "Board" means the board of directors of an authority.

(3) "Bond" includes a note.

(4) "Bond resolution" means the resolution authorizing the issuance of revenue bonds.

(5) "Hospital" means a hospital project as defined under Section 223.002.

(6) "Trust indenture" means the mortgage, deed of trust, or other instrument pledging revenues of or creating a mortgage lien on properties to secure revenue bonds issued by an authority.

(7) "Trustee" means the trustee under a trust indenture.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.003: Creation

(a) The commissioners court of a county by order may create a county hospital authority and designate the name of the authority if the commissioners court finds that creation of the authority is in the best interest of the county and its residents.

(b) The authority is composed only of the territory in the county.

(c) The authority is a body politic and corporate and a political subdivision of the state.

(d) The authority does not have taxing power.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.004: Dissolution

(a) The commissioners court of a county by order may dissolve an authority created by the commissioners court if the commissioners court and the authority provide for the sale or transfer of the authority's assets and liabilities to the county.

(b) The dissolution of an authority and the sale or transfer of the authority's assets and liabilities may not:

(1) violate a trust indenture or bond resolution relating to the outstanding bonds of the authority; or

(2) diminish or impair the rights of the holders of outstanding bonds, warrants, or other obligations of the authority.

(c) An order dissolving an authority takes effect on the 31st day after the date the commissioners court adopts the order.

(d) All records of the authority remaining when the authority is dissolved shall be transferred to the county clerk of the county in which the authority is located.

Comments

Added by Acts 2017, 85th Leg., R.S., Ch. 120 (H.B. 594), Sec. 1, eff. May 26, 2017.

Subchapter B

Sec. 264.011: Board of Directors

(a) The authority is governed by a board of directors with at least seven and not more than 11 members.

(b) The number of directors shall be determined at the time the authority is created. The number may be changed by amendment of the order creating the authority unless prohibited by the resolution authorizing the issuance of bonds or by the trust indenture securing the bonds. However, a reduction in the number of directors may not shorten the term of an incumbent director.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.012: Appointment of Board; Terms of Office

(a) The commissioners court shall appoint the directors of the authority for terms not to exceed three years except as otherwise provided by this section.

(b) The resolution authorizing the issuance of revenue bonds or the trust indenture securing the bonds may prescribe the method of selecting a majority of the directors and the term of office of those directors, and the terms of directors appointed before the issuance of the bonds are subject to the resolution or trust indenture. The commissioners court shall appoint the remaining directors.

(c) The trust indenture may provide that in the event of a default, as defined in the trust indenture, the trustee may appoint all directors. On that appointment, the terms of the directors in office terminate.

(d) If the authority purchases an existing hospital or a hospital under construction from a nonprofit corporation, the directors shall be determined as provided in the contract of purchase.

(e) An officer or employee of the county is not eligible for appointment as a director.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.013: Officers

(a) The board shall elect:

(1) a president and a vice-president, who must be directors;

(2) a secretary and a treasurer, who are not required to be directors; and

(3) any other officers authorized by the authority's bylaws.

(b) The offices of secretary and treasurer may be combined.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.014: Authority of Board

(a) Action may be taken by a majority of the directors present if a quorum is present.

(b) The president has the same right to vote as other directors.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.015: Compensation

A director may not receive compensation for services but is entitled to reimbursement for expenses incurred in performing services.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Subchapter C

Sec. 264.021: General Powers

(a) The authority has the power of perpetual succession.

(b) The authority may:

(1) have a seal;

(2) sue and be sued; and

(3) make, amend, and repeal its bylaws.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.022: Acquisition, Operation, and Lease of Hospitals

(a) The authority may construct, purchase, enlarge, furnish, or equip one or more hospitals located in the county.

(b) The authority may operate and maintain one or more hospitals. The authority shall operate a hospital without the intervention of private profit for the use and benefit of the public unless the authority leases the hospital.

(c) The board may lease a hospital or part of a hospital owned by the authority for operation by the lessee as a hospital under terms that are satisfactory to the board and the lessee. The lease must:

(1) be authorized by resolution of the board;

(2) be executed on behalf of the authority by the president and secretary of the board; and

(3) have the seal of the authority impressed on the lease.

(d) The bond resolution or trust indenture may prescribe procedures and policies for the operation of a hospital. If a hospital is used, operated, or acquired by a nonprofit corporation or is leased, the authority may delegate to the nonprofit corporation or lessee the duty to establish the procedures and policies.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.023: Employees

(a) The board may employ a manager or executive director of a hospital and other employees, experts, and agents.

(b) The board may delegate to the manager or executive director the power to manage the hospital and to employ and discharge employees.

(c) The board may employ legal counsel.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.024: Management Agreement

(a) The board may enter into an agreement with any person for the management or operation of a hospital or part of a hospital owned by the authority under terms that are satisfactory to the board and the contracting party.

(b) The agreement must:

(1) be authorized by resolution of the board;

(2) be executed on behalf of the authority by the president and secretary of the board; and

(3) have the seal of the authority impressed on the agreement.

(c) The board may delegate to the manager the power to manage the hospital and to employ and discharge employees.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.025: Committees

(a) The board, by a resolution adopted by a majority of the directors in office, may designate one or more committees if authorized to do so by the authority's bylaws.

(b) At least two directors must serve on each committee. Each committee may have additional nonvoting members who are not directors if authorized by the resolution or the bylaws.

(c) A committee may exercise the board's power to manage the authority to the extent and in the manner provided by the resolution or the bylaws. However, the board may not delegate to a committee the power to:

(1) issue bonds;

(2) make or amend a lease of a hospital or a management agreement relating to a hospital; or

(3) employ or discharge a manager or executive director.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.026: Rates for Hospital Services

(a) Except as provided by Subsection (b), through charging sufficient rates for services provided by a hospital and through its other revenue sources, the board shall produce revenue sufficient to:

(1) pay the expenses of owning, operating, and maintaining the hospital;

(2) pay the interest on the bonds as it becomes due;

(3) create a sinking fund to pay the bonds as they become due; and

(4) create and maintain a bond reserve fund and other funds as provided in the bond resolution or trust indenture.

(b) If the hospital is used, operated, or acquired by a nonprofit corporation under Chapter 223 or is leased, the board shall require the nonprofit corporation or the lessee to charge rates for services provided by the hospital that are sufficient, with the nonprofit corporation's or lessee's other sources of revenue, to:

(1) pay the expenses of operating and maintaining the hospital; and

(2) make payments or pay rentals to the authority that are sufficient, with the authority's other pledged sources of estimated revenue, to:

(A) pay the interest on the bonds as it becomes due;

(B) create a sinking fund to pay the bonds as they become due; and

(C) create and maintain a bond reserve fund and other funds as provided in the bond resolution or trust indenture.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.027: Depository

The authority may:

(1) select a depository in the same manner that a county may select a depository under Chapter 116, Local Government Code; or

(2) award its depository contract to the depository or depositories of the county on the same terms as the terms of the county depository agreement.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.028: Eminent Domain

(a) To carry out a power granted by this chapter, the authority may acquire the fee simple title to land, other property, and easements by condemnation under Chapter 21, Property Code.

(b) The authority is considered to be a municipal corporation for the purposes of Section 21.021(c), Property Code.

(c) The board shall determine the amount and character of the interest in land, other property, and easements to be acquired under this section.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.029: Gifts and Endowments

The board may accept gifts and endowments to hold and administer as required by the respective donors.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.030: Sale of Property; General Provisions

(a) The board may sell, through sealed bids or at a public auction, real property acquired by gift or purchase that the board determines is not needed for hospital purposes if the sale does not violate:

(1) a trust indenture or bond resolution relating to outstanding bonds of the authority; or

(2) an agreement between the authority and a nonprofit corporation under Chapter 223.

(b) If the board conducts the sale by sealed bids, the board must provide notice of the sale under Section 272.001, Local Government Code.

(c) If the board conducts the sale by public auction, the board must publish a notice of the sale once a week for three consecutive weeks in a newspaper of general circulation in the county. The notice must include a description of the property and the date, time, and place of the auction. The first notice must be published not later than the 21st day before the date of the auction.

(d) This section does not affect the authority's powers under Chapter 223.

(e) This section does not apply to the sale or closing of a hospital as provided in Section 264.031.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1997, 75th Leg., ch. 1011, Sec. 2, eff. Sept. 1, 1997.

Sec. 264.031: Sale Or Closing of Hospital

(a) The board may sell all or part of a hospital owned by the authority or close all or part of a hospital owned or operated by the authority. The sale or closing must:

(1) be authorized by resolution of the board;

(2) be executed on behalf of the authority by the president and secretary of the board; and

(3) be made by a document having the seal of the authority impressed on it.

(b) The sale or closing of a hospital may not take effect before the expiration of the time in which a petition may be filed under Subsection (c).

(c) The board shall order and conduct an election on the sale or closing if, before the 31st day after the date the governing body authorizes the sale or closing, the board receives a petition requesting the election signed by at least 10 percent of the qualified voters of the county. The number of qualified voters is determined by the most recent official list of registered voters.

(d) If a petition is filed under Subsection (c), the hospital may be sold or closed only if a majority of the qualified voters voting on the question approve the sale or closing.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.032: Emergency Borrowing

(a) If the board declares that funds are not available to meet lawfully authorized obligations of the authority and that an emergency exists, the board may borrow money at a rate of interest not to exceed the maximum annual percentage rate allowed by law for authority obligations at the time the loan is made.

(b) To secure a loan, the board may pledge:

(1) revenues of the authority that are not pledged to pay bonded indebtedness of the authority;

(2) authority bonds that have been authorized but not sold; or

(3) revenues of the authority if the pledge is subordinate to any pledge securing outstanding bonds of the authority.

(c) A loan for which bonds are pledged must mature not later than the first anniversary of the date on which the loan is made. A loan for which authority revenues are pledged must mature not later than the fifth anniversary of the date on which the loan is made.

(d) The board may not spend money obtained from a loan under this section for any purpose other than the purpose for which the board declared an emergency and, if bonds are pledged to pay the loan, for any purpose other than the purposes for which the pledged bonds were authorized.

Comments

Added by Acts 1997, 75th Leg., ch. 1011, Sec. 1, eff. Sept. 1, 1997.

Sec. 264.033: Time Warrants

The authority may issue time warrants in the manner in which a commissioners court may issue time warrants under Subchapter C, Chapter 262, Local Government Code.

Comments

Added by Acts 1997, 75th Leg., ch. 1011, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1064, Sec. 33, eff. Sept. 1, 1999.

Sec. 264.034: Facilities and Services for the Disabled Or the Elderly

(a) The authority may construct, acquire, own, operate, enlarge, improve, furnish, equip, or provide the following facilities and services to care for the disabled or the elderly:

(1) a nursing home or similar long-term care facility;

(2) elderly housing;

(3) assisted living services;

(4) home health care;

(5) personal care;

(6) special care;

(7) continuing care; or

(8) durable medical equipment.

(b) The authority may lease or enter into an operations or management agreement to care for the disabled or the elderly under Subsection (a).

(c) The authority may sell, transfer, otherwise convey, or close all or part of a facility described by Subsection (a) and discontinue a service described by Subsection (a).

(d) The authority may issue revenue bonds, notes, and time warrants as provided by this chapter to acquire, construct, or improve a facility described by Subsection (a).

(e) For purposes of Chapter 223, a facility or service described by Subsection (a) is a hospital project.

Comments

Added by Acts 1997, 75th Leg., ch. 1011, Sec. 1, eff. Sept. 1, 1997.

Sec. 264.035: Establishment of Nonprofit Corporation

(a) The authority may form and sponsor a nonprofit corporation under the Texas Nonprofit Corporation Law, as described by Section 1.008, Business Organizations Code, to own and operate all or part of one or more ancillary health care facilities consistent with the purposes of an authority under this chapter.

(b) The board shall appoint the board of directors of a nonprofit corporation formed under this section.

(c) The authority may contribute money to or solicit money for the nonprofit corporation. If the authority contributes money to or solicits money for the corporation, the authority shall establish procedures and controls sufficient to ensure that the money is used by the corporation for public purposes.

(d) A nonprofit corporation formed under this section has the same powers as a development corporation under Section 221.030.

(e) A nonprofit corporation formed under this section shall comply with Chapter 2258, Government Code, in the same manner and to the same extent that the authority is required to comply with that chapter.

Comments

Added by Acts 2007, 80th Leg., R.S., Ch. 470 (H.B. 2168), Sec. 2, eff. June 16, 2007.

Sec. 264.036: Hospital Authority Contracts, Collaborations, and Joint Ventures

The authority may, directly or through any nonprofit corporation formed by the authority, contract, collaborate, or enter into a joint venture with any public or private entity as necessary to carry out the functions of or provide services to the authority.

Comments

Added by Acts 2007, 80th Leg., R.S., Ch. 470 (H.B. 2168), Sec. 2, eff. June 16, 2007.

Subchapter D

Sec. 264.041: Revenue Bonds

(a) The authority may issue revenue bonds to provide funds for any of the authority's purposes.

(b) Revenue bonds must be payable from, and secured by a pledge of, revenues from the operation of one or more hospitals and any other revenues from owning hospital property. Additionally, revenue bonds may be secured by a mortgage or deed of trust on real property owned by the authority or by a chattel mortgage on the authority's personal property.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.042: Form and Procedure

(a) Revenue bonds must be authorized by a resolution adopted by a majority vote of a quorum of the board. The bonds must:

(1) be signed by the president or vice-president of the board;

(2) be countersigned by the secretary of the board; and

(3) have the seal of the authority impressed or printed on the bonds.

(b) Printed facsimile signatures may be substituted for the actual signatures of the president, vice-president, or secretary.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.043: Terms

(a) Revenue bonds must mature serially or otherwise not more than 40 years after they are issued.

(b) Revenue bonds may:

(1) be sold at a price and under terms that the board considers the most advantageous reasonably obtainable, except that the net effective interest rate computed according to Chapter 1204, Government Code, may not exceed 10 percent a year;

(2) be made callable before maturity at times and prices prescribed in the resolution authorizing the bonds; and

(3) be made registrable as to principal or as to principal and interest.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.255, eff. Sept. 1, 2001.

Sec. 264.044: Notice

(a) Before the board adopts a resolution authorizing the issuance of bonds other than refunding bonds, the board must publish a notice of its intention to adopt the resolution and of the maximum amount and maximum maturity of the bonds.

(b) The notice must be published once a week for two consecutive weeks in one or more newspapers of general circulation in the authority. The first notice must be published not later than the 15th day before the date set for adoption of the resolution.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.045: Referendum

(a) A petition requesting an election on the proposition for the issuance of the revenue bonds may be presented to the secretary or president of the board before the date set for the adoption of the bond resolution. The petition must be signed by at least 10 percent of the qualified voters residing in the county who own taxable property in the authority.

(b) The election shall be ordered and held as provided by Chapter 1251, Government Code. The board, president, and secretary shall perform the functions assigned under that chapter respectively to the commissioners court, county judge, and county clerk.

(c) If a majority of voters who vote at the election approve the issuance of the bonds, the board may issue the bonds. If a petition is not filed, the board may issue the bonds without an election. However, the board may order the election on its own motion if a petition is not filed.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.256, eff. Sept. 1, 2001.

Sec. 264.046: Junior Lien Bonds; Parity Bonds

(a) Bonds constituting a junior lien on the revenues or properties may be issued unless prohibited by the bond resolution or the trust indenture.

(b) Parity bonds may be issued under conditions specified by the bond resolution or trust indenture.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.047: Bond Proceeds; Investment of Funds

(a) The board may set aside from the proceeds from the sale of bonds:

(1) an amount for payment of not more than two years' interest on the bonds;

(2) the amount required for operating expenses during the first year of operation as estimated by the board; and

(3) an amount to fund any bond reserve fund or other reserve funds provided for in the bond resolution or trust indenture.

(b) The bond proceeds may be deposited in banks and paid out under terms as provided in the bond resolution or trust indenture.

(c) The law relating to the security for and the investment of county funds controls, to the extent applicable, the investment of the authority's funds. The bond resolution or trust indenture may further restrict those investments. Additionally, the authority may invest its bond proceeds, until that money is needed, as authorized by the bond resolution or trust indenture.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.048: Refunding Bonds

(a) The authority may issue bonds to refund outstanding bonds in the same manner that other bonds are issued under this chapter.

(b) Bonds issued under this section may be exchanged by the comptroller or sold. The proceeds shall be applied as provided by Subchapters B and C, Chapter 1207, Government Code, or other applicable law.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.257, eff. Sept. 1, 2001.

Sec. 264.049: Approval and Registration of Bonds

(a) The authority shall submit to the attorney general the bonds issued under this chapter and the record relating to the issuance of those bonds.

(b) If the attorney general finds that the bonds were issued in accordance with this chapter, are valid and binding obligations of the authority, and are secured as recited in the bonds:

(1) the attorney general shall approve the bonds; and

(2) the comptroller shall register the bonds and certify the registration on the bonds.

(c) Following approval and registration, the bonds are incontestable.

(d) The bonds are negotiable and must contain the following provision: "The holder hereof shall never have the right to demand payment thereof out of money raised or to be raised by taxation."

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 264.050: Legal Investments

Bonds of the authority are legal and authorized investments for:

(1) a bank;

(2) a savings bank;

(3) a trust company;

(4) a savings and loan association;

(5) an insurance company; or

(6) the sinking fund of a political corporation or subdivision of the state, including a municipality, county, or school district.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Chapter 265

Subchapter A

Sec. 265.001: Municipality with Population of at Least 10,000 and Any County

(a) The commissioners court of a county may cooperate with the proper authorities of a municipality with at least 10,000 inhabitants to establish, build, equip, and maintain a hospital in the municipality.

(b) The commissioners court may appropriate funds for the hospital that the commissioners court considers appropriate after a joint conference with the municipal authorities.

(c) The commissioners court and the municipal authorities shall jointly control the management of the hospital.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.002: County and Any Two Or More Municipalities

(a) The commissioners court of a county may cooperate with the proper authorities of two or more municipalities to establish, build, equip, and maintain a hospital in the county.

(b) The commissioners court may appropriate funds for the hospital that the court considers appropriate after a joint conference with the municipal authorities.

(c) The commissioners court and the municipal authorities shall jointly control the management of the hospital.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.003: County with Population of at Least 92,600 and Municipality with Population of at Least 57,250

(a) The commissioners court of a county with a population of at least 92,600 and the governing body of a municipality in that county with a population of at least 57,250 may establish, build, equip, maintain, and operate a hospital for the care and treatment of sick, infirm, or injured inhabitants of the county or municipality.

(b) The commissioners court and the governing body by agreement may divide the hospital costs between the county and the municipality.

(c) If the amounts in the county or municipal general funds are insufficient to pay the hospital costs, the commissioners court or the governing body at a special or general election may submit to the qualified voters of the county or municipality, respectively, a proposition for the county and municipality to establish, build, equip, maintain, and operate a hospital and for:

(1) the levy of a tax for that purpose not to exceed 10 cents on each $100 of the taxable value of real and personal property that is taxable by the county or municipality; or

(2) the issuance of bonds by the county or municipality in an amount not to exceed the amount specified in the proposition for all or part of the cost of establishing, building, or equipping the hospital and for the levy of a tax to create a sinking fund for the payment of interest on the bonds not to exceed 10 cents on each $100 of the taxable value of real and personal property that is taxable by the county or municipality.

(d) The commissioners court or governing body may assess and levy a tax, or may issue bonds in the manner provided for issuance of other bonds by the county or municipality and assess and levy a tax, as stated in the proposition if the proposition is approved by a majority of votes cast in the election.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Subchapter B

Sec. 265.011: Establishment of Hospital By Commissioners Court and Municipal Governing Body

The commissioners court of a county and the governing body of a municipality in that county may jointly appoint a board of managers to establish, build, equip, maintain, and operate one or more hospitals for the care and treatment of the sick, infirm, or injured.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.012: Financing

(a) If the municipality or county has issued and sold bonds to establish, build, equip, maintain, and operate a joint municipal and county hospital, the municipality or county may finance the hospital out of general revenue and may levy and collect a tax to finance the hospital not to exceed 10 cents on each $100 of the taxable value of property taxable by the municipality or county.

(b) The commissioners court and the municipal governing body may contribute to the funds necessary for the hospital in a proportion to which they agree.

(c) The board of managers may spend, in a manner determined by the board, funds provided by the county or municipality through the issuance of bonds or other obligations or by appropriation from other funds, for purposes related to the hospital as if the action were taken by the commissioners court or the governing body.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.013: Board of Managers

(a) The board of managers is composed of seven members.

(b) The commissioners court and the municipal governing body shall each appoint three members to the board, and the commissioners court and the governing body shall jointly appoint one member to the board. Members are appointed for six-year terms. However, in making the initial appointments to the board, each appointing entity shall designate one of its appointees for a term expiring two years after the date of appointment, one for a term expiring four years after the date of appointment, and one for a term expiring six years after the date of appointment. The term of the initial joint appointee expires six years after the date of appointment.

(c) The entity that made an original appointment shall appoint a successor member on the expiration of a member's term or to fill, for the unexpired part of a term, a vacancy caused by death or resignation.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.014: Chairman

The board of managers shall select a chairman from among its members who shall:

(1) preside over the board's meetings; and

(2) sign any contract, agreement, or other instrument made by the board on behalf of the county and municipality.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.015: Contracts

The board of managers may execute any contract relating to establishing, building, equipping, maintaining, or operating the hospital as if the action were taken by the commissioners court or the municipal governing body.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.016: Financial Statement; Budget

(a) The board of managers shall annually prepare and present to the commissioners court and the municipal governing body a statement of the hospital's financial status with a proposed budget for the following year.

(b) On the basis of the financial statement and budget, the commissioners court and the governing body shall appropriate an amount those entities consider proper and necessary for the use of the board of managers in the operation of the hospital.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.017: Issuance of Revenue Bonds

(a) The board of managers may issue and sell revenue bonds in the name of the hospital to finance:

(1) the acquisition of real property, the acquisition, construction, improvement, repair, or rehabilitation of hospital facilities, or the acquisition of equipment or supplies necessary for the hospital to provide hospital services; or

(2) the installation of equipment necessary for the hospital to provide hospital services.

(b) The board of managers has the powers of an issuer under Chapter 1371, Government Code, and may enter into a credit agreement under that chapter. A bond issued under this subchapter is an obligation under Chapter 1371, Government Code, but is not required to be rated as required by that chapter. In this subsection, "credit agreement" and "obligation" have the meanings assigned by Section 1371.001, Government Code.

(c) Bonds issued under this subchapter must be approved by:

(1) a resolution adopted by the board of managers; and

(2) a resolution or order adopted by the commissioners court of the county and the governing body of the municipality that appointed the board.

(d) At the time of issuance of the bonds, the board of managers may:

(1) determine the title of the bonds, provided the title includes the following: "Board of Managers Joint (insert county name)-(insert municipality name) Hospital Revenue Bonds";

(2) prescribe procedures for the operation and maintenance of the hospital in the proceedings authorizing issuance of the revenue bonds; and

(3) provide for the issuance of additional parity bonds or subordinate lien bonds under terms prescribed by the board of managers in the proceedings authorizing issuance of the revenue bonds.

Comments

Added by Acts 2001, 77th Leg., ch. 151, Sec. 1, eff. May 16, 2001.

Sec. 265.0171: Repayment of Bonds

The board of managers may provide for the payment of principal of, premium on, if any, and interest on the bonds by pledging all or any part of the hospital's revenue derived from the operation of the hospital or from other sources.

Comments

Added by Acts 2001, 77th Leg., ch. 151, Sec. 1, eff. May 16, 2001.

Sec. 265.0172: Additional Security for Bonds

The bonds may be additionally secured by a deed of trust or mortgage lien on part or all of the physical properties of the hospital and rights appurtenant to those properties.

Comments

Added by Acts 2001, 77th Leg., ch. 151, Sec. 1, eff. May 16, 2001.

Sec. 265.0173: Maturity

A bond issued under this subchapter must mature not later than 40 years after its date.

Comments

Added by Acts 2001, 77th Leg., ch. 151, Sec. 1, eff. May 16, 2001.

Sec. 265.0174: Bonds Not Payable from Taxes

A bond issued under this subchapter must contain the following provision: "The holder of this obligation is not entitled to demand payment of this obligation out of any money raised by taxation by (name of county) or by (name of municipality) or from any other income of the county or municipality. The board of managers of the hospital has no taxing power."

Comments

Added by Acts 2001, 77th Leg., ch. 151, Sec. 1, eff. May 16, 2001.

Sec. 265.0175: Sale of Bonds

The board of managers may sell bonds issued under this subchapter at public or private sale in the manner and on the terms approved by the board.

Comments

Added by Acts 2001, 77th Leg., ch. 151, Sec. 1, eff. May 16, 2001.

Sec. 265.0176: Refunding Bonds

(a) The board of managers may refund bonds issued under this subchapter by issuing refunding bonds under terms approved by the board.

(b) All appropriate provisions of this subchapter apply to the refunding bonds. The refunding bonds shall be issued in the manner provided by this subchapter for issuing other bonds.

(c) The refunding bonds may be sold and delivered in amounts sufficient to pay the principal of and interest and any redemption premium on the bonds to be refunded, at maturity or on any redemption date.

(d) The refunding bonds may be issued to be exchanged for the bonds being refunded by them. In that case, the comptroller shall register the refunding bonds and deliver them to the holder of the bonds being refunded as approved by the board. The exchange may be made in one delivery or in installment deliveries.

Comments

Added by Acts 2001, 77th Leg., ch. 151, Sec. 1, eff. May 16, 2001.

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.

Comments

Added by Acts 2003, 78th Leg., ch. 719, Sec. 1, eff. June 20, 2003.

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.

Comments

Added by Acts 2003, 78th Leg., ch. 719, Sec. 1, eff. June 20, 2003.

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.

Comments

Added by Acts 2003, 78th Leg., ch. 719, Sec. 1, eff. June 20, 2003.

Sec. 265.018: Hospital Property

The board of managers may acquire, hold, or dispose of property or an interest in property. As agreed by the county and municipality, the county or municipality may hold title to hospital property, or title may be held in the name of the hospital.

Comments

Added by Acts 2001, 77th Leg., ch. 151, Sec. 1, eff. May 16, 2001.

Sec. 265.0181: Transfer of Property

On dissolution of the board of managers, title to property held by the board or in the name of the hospital shall be transferred to the county and municipality as agreed to by the county and municipality.

Comments

Added by Acts 2001, 77th Leg., ch. 151, Sec. 1, eff. May 16, 2001.

Sec. 265.019: Use of Earnings Or Assets for Private Purposes Prohibited

Except as reasonable compensation for services rendered or reasonable allowance for authorized expenditures incurred on behalf of the board of managers or the hospital, the net earnings of the board or the hospital may not be used for the benefit of a private officer, board member, individual, or substantial contributor to the board of managers or the hospital. The assets of the board or the hospital may not be distributed to, be divided among, be used for, accrue to, or benefit a private officer, board member, individual, or substantial contributor to the board or the hospital.

Comments

Added by Acts 2001, 77th Leg., ch. 151, Sec. 1, eff. May 16, 2001.

Sec. 265.020: Applicability

Sections 265.017-265.019 apply only to a hospital located in a county with a population of 75,000 or more.

Comments

Added by Acts 2001, 77th Leg., ch. 151, Sec. 1, eff. May 16, 2001.

Subchapter C

Sec. 265.021: Ownership and Control Designated

(a) A county with a population of at least 200,000 and one or more municipalities in the county that jointly own and operate a hospital in the county may by agreement designate one of those governmental entities to assume the entire ownership and control of the hospital on terms to which those governmental entities agree.

(b) On the agreement of the commissioners court and the governing body of each municipality that jointly owns and operates the hospital, a countywide election on the issue of the future ownership and operation of the hospital may be ordered. The majority vote on the propositions submitted shall govern the future ownership and operation of the hospital. The commissioners court shall pay the costs of the election from county funds.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.022: Board of Managers of Hospital Controlled By County

(a) If the county is designated to own and control the hospital, the commissioners court shall appoint a board of managers with at least three and not more than nine members.

(b) The board of managers has control of the management of the hospital.

(c) The board of managers shall give a report of their management, including all acts and rules of the board, to the commissioners court once each quarter or more often at the request of the commissioners court.

(d) The board of managers shall give a quarterly financial statement to the commissioners court that shows all money spent and received by the board and the purposes of the expenditures.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.023: Board of Managers of Hospital Controlled By Municipality

If the municipality is designated to own and control the hospital, the governing body of the municipality may appoint the board of managers under its charter or as it considers appropriate.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.024: Terms

Members of the board of managers shall be appointed for staggered six-year terms, with one-third of the terms expiring every two years.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.025: Tax

(a) The commissioners court may authorize and levy a tax not to exceed 50 cents on each $100 of the taxable value of property taxable by the county for construction of buildings or building additions, for other improvements or equipment, or for operation and maintenance of the hospital if the tax is approved by a majority vote at a county election. Additional taxes may be authorized at subsequent elections if the total tax does not exceed the limit imposed by this subsection.

(b) The voters may approve a part of the tax to be used for the interest and sinking fund for outstanding bonds of the municipality or county issued for construction or maintenance of the hospital, whether issued before or after the ownership and control of the hospital are designated under this chapter.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.026: Tuberculosis Control

(a) The commissioners court and each municipal governing body that designates the ownership and control of a joint hospital under this subchapter may conduct a joint program of tuberculosis control in their jurisdictions to protect the public health through alleviation, suppression, and prevention of the spread of tuberculosis.

(b) The program may include cooperation with public or private agencies that have the same objective, whether federal, state, or local.

(c) The commissioners court may levy a tax not to exceed 10 cents on each $100 of the taxable value of property taxable by the county, in addition to the tax under Section 265.025, if approved by a majority vote at a county election. The revenue from that tax shall be kept separate from other funds and shall be used only for the purposes of this section.

(d) The governing body of a municipality participating in the program may levy a tax not to exceed five cents on each $100 of the taxable value of property taxable by the municipality if approved by a majority vote at a municipal election in accordance with the municipal charter in a home-rule municipality or with other law in a general-law municipality. The revenue from the tax shall be kept separate from other funds and shall be used only for the purposes of this section. The municipal charter of a home-rule municipality may be amended to create the fund for the tax proceeds or other income.

(e) The county and each municipality participating in the program and levying the taxes may create a joint tuberculosis control board to administer this section. The board must have at least five members. The district judges of the county by majority action, the county health board, the municipal health board of the participating municipality with the largest population, the county judge, and the mayor of each participating municipality shall each appoint a member to the board. Board members serve without compensation.

(f) The members are appointed for three-year terms. However, the term of the first appointment by the county health board or by a mayor expires one year after the date of appointment, the term of the first appointment by the municipal health board or the county judge expires two years after the date of appointment, and the term of the first appointment by the district judges expires three years after the date of appointment. The entity that made an original appointment shall appoint a successor member on the expiration of a member's term or to fill, for the unexpired part of a term, a vacancy caused by death or resignation.

(g) The board may administer this section to alleviate, suppress, and prevent the spread of tuberculosis in the county as a public health function.

(h) The county and each municipality participating under this section may combine the proceeds from taxes levied under this section to be spent under the board's direction only to:

(1) provide necessary economic aid to indigent persons with tuberculosis and dependent members of their immediate family, on certification by the county or municipal health authority that those persons are indigent and have resided in the county for at least six months before receiving aid or assistance from a public or private charity or service for the person's support or the support of the person's family, in order to treat and prevent the disease and protect the public health; or

(2) pay administrative expenses, including the expenses of case investigation and necessary equipment and services.

(i) The board quarterly shall report the condition of the fund, the expenditures from the fund, and the services performed to the commissioners court and the governing body of each municipality participating under this section. The commissioners court or the governing body of a municipality participating under this section may examine and audit the books and other records of the board.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Subchapter D

Sec. 265.031: Creation of Board

(a) The commissioners court of a county and the governing body of a municipality located in whole or in part in that county may adopt resolutions creating a joint county-municipal hospital board, without taxing power, designated the "____________ County-Municipality of ____________, Texas, Hospital Board."

(b) A board created under this section is a public agency and body politic.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.032: Appointment of Board

(a) The board consists of seven directors. A director may serve successive terms.

(b) The commissioners court shall appoint four directors in its resolution creating the board, and the municipal governing body shall appoint three directors in its resolution creating the board.

(c) Directors are appointed for staggered terms of two years. However, in making the initial appointments to the board the commissioners court shall designate two of its appointees to serve two-year terms and two to serve one-year terms, and the governing body shall designate two of its appointees to serve two-year terms and one to serve a one-year term.

(d) The entity that makes an original appointment shall appoint a successor director on the expiration of a director's term or to fill, for the unexpired part of a term, a vacancy caused by death or resignation.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.033: Officers

(a) The board shall elect a director as chairman. The chairman shall preside at board meetings and perform other duties and functions prescribed by the board. The chairman may vote in the same manner as any other director.

(b) The board shall elect a secretary, who is not required to be a director. The secretary is the official custodian of the minutes, books, records, and seal of the board and shall perform other duties and functions prescribed by the board.

(c) The board may elect any other officer that the board considers necessary or advisable.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.034: Authority of Board

(a) The board shall act through resolutions adopted by the board. The affirmative vote of four directors is required to adopt a resolution.

(b) The board is a joint agent of the county and the municipality for hospital purposes and shall act solely for the joint benefit of the county and the municipality. However, the board shall act independently in the exercise of powers, duties, and functions under this subchapter.

(c) The board may appoint or employ any agent, employee, or official that the board considers necessary or advisable to carry out any power, duty, or function of the board.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.035: Suits

The board may sue and be sued in its own name, capacity, and behalf.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.036: Compensation

A director may not receive compensation but is entitled to reimbursement for actual expenses incurred in the performance of the duties of director to the extent authorized by the board.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.037: Hospital Facilities; Other Property

(a) The board may purchase, construct, receive, lease, or otherwise acquire hospital facilities and may improve, enlarge, furnish, equip, operate, and maintain those facilities.

(b) The county or the municipality may lease or convey title to, or any other interest in, all or part of the county's or municipality's hospital facilities, including real and personal property, to the board on terms agreed to by the county or municipality and the board.

(c) The board may own, receive, encumber, sell, lease, or convey any interest in real or personal property, including gifts and grants. However, the board may not encumber, sell, lease, or convey real or personal property unless the commissioners court and the governing body of the municipality by resolution approve the transaction.

(d) A board existing in a county with a population of more than 100,000 and a municipality with a population of more than 75,000, as an exercise of its powers as a public agency and body politic, may purchase, construct, receive, lease, or otherwise acquire hospital facilities, including the sublease of one or more hospital facilities, regardless of whether the action might be considered anticompetitive under the antitrust laws of the United States or this state.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1997, 75th Leg., ch. 909, Sec. 1, eff. Sept. 1, 1997.

Sec. 265.038: Contracts for Hospital Services

The county or the municipality may contract with the board for the care and treatment of indigent or needy patients or for any other hospital services. The county or the municipality may make payments to the board under the contract and may levy ad valorem taxes or pledge funds or resources for the payments.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.039: Funds

(a) The board may apply for, receive, and spend federal or state funds available for hospital purposes.

(b) The county or the municipality by resolution may authorize the board to apply for, receive, and spend federal or state funds available for county or municipal hospital purposes.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.040: Authority to Issue Revenue Bonds

(a) The board may issue revenue bonds to perform any power, duty, or function under this subchapter. The issuance must be approved by resolution by the commissioners court and the municipal governing body.

(b) The board may prescribe procedures for the operation and maintenance of the hospital in the proceedings authorizing the issuance of the bonds.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.041: Terms of Bonds

(a) The revenue bonds may mature serially or otherwise not more than 40 years after they are issued. The bonds may bear interest at a rate not to exceed the maximum rate provided by Chapter 1204, Government Code, and may be made redeemable prior to maturity.

(b) The bonds and any appurtenant interest coupons are negotiable instruments.

(c) The bonds may be made registrable as to principal or as to principal and interest.

(d) The directors may determine, in the proceedings authorizing the issuance of the bonds:

(1) the form, denominations, and manner in which the bonds are issued;

(2) the terms and details under which the bonds are issued; and

(3) the manner in which the bonds are executed.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.258, eff. Sept. 1, 2001.

Sec. 265.042: Pledge of Security

(a) The revenue bonds may be payable from, and secured by a pledge of, all or part of the revenues, income, or resources of the board or the board's hospital facilities. Additionally, the bonds may be secured by a mortgage or deed of trust on real or personal property, and the board may authorize the execution and delivery of trust indentures or other encumbrances to evidence the security.

(b) The bonds must contain substantially the following statement: "The owner hereof shall never have the right to demand payment of this obligation from taxes levied by the hospital board."

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.043: Sale and Use of Proceeds

(a) The revenue bonds may be sold at public or private sale at a price and under terms determined by the directors. The bonds may bear interest at a rate not to exceed the maximum rate provided by Chapter 1204, Government Code.

(b) Proceeds from the sale of the bonds may be used, if the use is authorized in the proceedings authorizing issuance of the bonds, to:

(1) pay interest on the bonds during the construction of hospital facilities acquired through issuance of the bonds;

(2) pay operation and maintenance expense of the hospital facilities to the extent and for the time specified in the proceedings;

(3) create reserves for the payment of principal of and interest on the bonds; or

(4) invest, until needed, to the extent and in the manner provided in the bond resolution or a trust indenture executed in connection with the bonds.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.259, eff. Sept. 1, 2001.

Sec. 265.044: Parity and Subordinate Lien Bonds

The directors may provide in the authorization of the revenue bonds for the subsequent issuance of additional parity bonds or subordinate lien bonds under terms set by the board in the proceedings authorizing the issuance of the revenue bonds.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.045: Notice; Petition for Election

(a) Before the directors authorize the issuance of bonds other than refunding bonds, the directors shall prepare and publish a notice of:

(1) its intention to adopt a resolution authorizing the issuance of bonds;

(2) the date it intends to adopt the resolution; and

(3) the maximum amount and maximum maturity of the bonds.

(b) The notice must be published once a week for two consecutive weeks in a newspaper of general circulation in the county and the municipality. The first notice must be published not later than the 15th day before the date set for adopting the bond resolution.

(c) A petition requesting an election on the proposition for the issuance of the bonds may be presented to the hospital board secretary before the date set for adoption of the bond resolution. The petition must be signed by at least 10 percent of the qualified voters residing in the county and in any part of the municipality that is not in the county.

(d) The directors shall order an election requested under Subsection (c) in the county and any part of the municipality that is not in the county. The election shall be held substantially as provided by Chapter 1251, Government Code. The board may issue the bonds if the issuance is approved at the election.

(e) The bond resolution may be adopted on the date set for the adoption, or not later than the 30th day after that date, if no petition is filed, and the bonds may be issued and delivered without an election or the creation of an encumbrance.

(f) The directors may order an election on the issuance of the bonds on their own motion if they consider it advisable.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.260, eff. Sept. 1, 2001.

Sec. 265.046: Refunding Bonds

Any bonds issued under this subchapter may be refunded by the issuance of refunding bonds in the manner provided by this subchapter for the issuance of other bonds, except the refunding bonds may be issued to be exchanged for the bonds being refunded. If the refunding bonds are issued to be exchanged, the comptroller shall register the refunding bonds and deliver them to each holder of the bonds being refunded as provided by the proceedings authorizing the refunding bonds. The exchange may be made in one delivery or several installment deliveries.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.047: Examination, Approval, and Registration of Bonds

(a) The board shall submit to the attorney general for examination the bonds issued under this subchapter and the proceedings authorizing their issuance.

(b) The attorney general shall approve the bonds if the attorney general finds that the bonds have been authorized in accordance with this subchapter, and the comptroller shall register the bonds.

(c) Following approval and registration, the bonds are incontestable and are valid and binding obligations in accordance with their terms.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.048: Legal Investments; Security for Deposits

(a) Bonds issued under this subchapter are legal and authorized investments for:

(1) a bank;

(2) a savings bank;

(3) a trust company;

(4) a savings and loan association;

(5) an insurance company;

(6) a fiduciary;

(7) a trustee;

(8) a guardian; and

(9) an interest and sinking fund or other public fund of the state or of an agency, subdivision, or instrumentality of the state, including a municipality, county, school district, special district, public agency, and body politic.

(b) The bonds are eligible and lawful security for the deposits of public funds of the state or of an agency, subdivision, or instrumentality of the state, including a municipality, county, school district, special district, public agency, and body politic. The bonds may secure those deposits in an amount up to the value of the bonds, if accompanied by all appurtenant unmatured interest coupons.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.049: Charges for Services and Facilities

The board shall operate its hospital facilities for the use and benefit of the public, but shall establish and collect charges for services and facilities that are sufficient combined with other revenue and income to:

(1) pay all expenses related to ownership, operation, and maintenance of its hospital facilities;

(2) pay principal of and interest on its bonds; and

(3) create and maintain reserves and any other funds provided for in the proceedings authorizing the issuance of bonds.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.050: Depository

The board may:

(1) select a depository in the same manner that a municipality or county may select a depository under Chapter 105 or Chapter 116, Local Government Code; or

(2) execute a depository contract with a depository selected by the municipality or the county on the same terms as the municipality or county.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.051: Investment of Funds

(a) The law relating to security for and investment of municipal or county funds applies to hospital board funds. A bond resolution or trust indenture executed for hospital board bonds may further restrict the security for and investment of hospital board funds.

(b) The hospital board may invest, until needed, all or part of its bond proceeds in direct obligations of the United States to the extent authorized in the bond resolution or trust indenture.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.052: Eminent Domain

(a) The hospital board may acquire the fee simple title to or any other interest in land and other property by condemnation under Chapter 21, Property Code, to carry out any power, duty, or function under this subchapter.

(b) The board has the same rights as a county or municipality under Section 21.021, Property Code.

(c) The board shall determine the amount and character of the interest in land or other property to be acquired under this section.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Subchapter E

Sec. 265.071: Official Action

(a) The commissioners court by order and the governing body of a municipality by ordinance may order the sale, lease, or closing of all or part of a joint municipal and county hospital, including real property, owned and operated by the county and municipality.

(b) The order and ordinance must include a finding that the sale, lease, or closing is in the best interest of the residents of the county or municipality, respectively.

(c) A sale or closing may not take effect before the expiration of the period in which a petition may be filed under Section 265.072.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 265.072: Petition and Election

(a) A petition requesting an election on the sale or closing of the hospital may be presented to the commissioners court and the municipal governing body before the 31st day after the date the commissioners court and the governing body order the sale or closing.

(b) The petition must be signed by at least 10 percent of the qualified voters of the county and any part of the municipality that is not in the county.

(c) On receipt of the petition, the commissioners court and the governing body shall order and conduct the election. The commissioners court and the governing body may sell or close the hospital only if a majority of the qualified voters voting at the election approve the sale or closing.

(d) The number of qualified voters of the county and any part of the municipality that is not in the county is determined according to the most recent official list of registered voters.

Comments

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.