CHAPTER 265. JOINT MUNICIPAL AND COUNTY HOSPITALS

State Codes and Statutes

Statutes > Texas > Health-and-safety-code > Title-4-health-facilities > Chapter-265-joint-municipal-and-county-hospitals

HEALTH AND SAFETY CODE

TITLE 4. HEALTH FACILITIES

SUBTITLE C. LOCAL HOSPITALS

CHAPTER 265. JOINT MUNICIPAL AND COUNTY HOSPITALS

SUBCHAPTER A. GENERAL PROVISIONS

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.

jointly control the management of the hospital.

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.

jointly control the management of the hospital.

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.

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.

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

SUBCHAPTER B. JOINT HOSPITAL WITH BOARD OF MANAGERS

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.

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.

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.

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.

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.

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.

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.

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.

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.

(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.

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.

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.

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.

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."

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.

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.

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

the bonds being refunded as approved by the board. The exchange

may be made in one delivery or in installment deliveries.

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.

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.

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.

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.

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.

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.

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.

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.

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

2001.

SUBCHAPTER C. JOINT HOSPITAL CONTROLLED BY MUNICIPALITY OR COUNTY

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.

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.

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.

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.

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.

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.

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.

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.

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

SUBCHAPTER D. JOINT COUNTY-MUNICIPAL HOSPITAL BOARDS

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.

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.

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.

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.

considers necessary or advisable.

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.

official that the board considers necessary or advisable to carry

out any power, duty, or function of the board.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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."

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.

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.

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.

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.

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.

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.

incontestable and are valid and binding obligations in accordance

with their terms.

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.

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.

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.

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.

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.

interest in land or other property to be acquired under this

section.

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

SUBCHAPTER E. SALE, LEASE, OR CLOSING

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.

of the period in which a petition may be filed under Section

265.072.

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.

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.

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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