CHAPTER 262. MUNICIPAL HOSPITAL AUTHORITIES

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HEALTH AND SAFETY CODE

TITLE 4. HEALTH FACILITIES

SUBTITLE C. LOCAL HOSPITALS

CHAPTER 262. MUNICIPAL HOSPITAL AUTHORITIES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 262.001. SHORT TITLE. This chapter may be cited as the

Hospital Authority Act.

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.

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.

municipality in the authority.

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

(e) The authority does not have taxing power.

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.

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.

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.

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

SUBCHAPTER B. BOARD OF DIRECTORS

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.

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.

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.

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.

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.

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.

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

SUBCHAPTER C. POWERS AND DUTIES

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.

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.

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.

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.

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.

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.

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.

manage the hospital and to employ and discharge employees.

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.

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.

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

provided in the bond resolution or trust indenture.

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;

(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.

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.

interest in land, other property, and easements to be acquired

under this section.

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.

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.

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.

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.

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.

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.

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).

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.

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

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.

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).

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.

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.

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).

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.

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.

Added by Acts 2007, 80th Leg., R.S., Ch.

470, 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.

Added by Acts 2007, 80th Leg., R.S., Ch.

470, Sec. 1, eff. June 16, 2007.

SUBCHAPTER D. BONDS

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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."

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.

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

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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