CHAPTER 1059. MCCULLOCH COUNTY HOSPITAL DISTRICT

SPECIAL DISTRICT LOCAL LAWS CODE

TITLE 3. HEALTH

SUBTITLE A. HOSPITAL DISTRICTS

CHAPTER 1059. MCCULLOCH COUNTY HOSPITAL DISTRICT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 1059.001. DEFINITIONS.In this chapter:

(1) "Board" means the board of directors of the district.

(2) "Director" means a member of the board.

(3) "District" means the McCulloch County Hospital District.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.002. AUTHORITY FOR OPERATION. The district operates

and is financed as provided by Section 9, Article IX, Texas

Constitution, and by this chapter.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.003. ESSENTIAL PUBLIC FUNCTION. The district is a

public entity performing an essential public function.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.004. DISTRICT TERRITORY. The boundaries of the

district are coextensive with the boundaries of McCulloch County,

Texas.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.005. DISTRICT SUPPORT AND MAINTENANCE NOT STATE

OBLIGATION. The state may not become obligated for the support

or maintenance of the district.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.006. RESTRICTION ON STATE FINANCIAL ASSISTANCE. The

legislature may not make a direct appropriation for the

construction, maintenance, or improvement of a district facility.

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

920, Sec. 1.02, eff. April 1, 2009.

SUBCHAPTER B. DISTRICT ADMINISTRATION

Sec. 1059.051. BOARD ELECTION; TERMS. (a) The district is

governed by a board of seven directors.

(b) One director is elected from each commissioners precinct and

three directors are elected from the district at large.

(c) Directors serve staggered three-year terms.

(d) An election shall be held on the uniform election date in

May of each year to elect the appropriate number of directors.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.052. NOTICE OF ELECTION. Not earlier than 30 days or

later than 10 days before the date of an election of directors,

notice of the election shall be published one time in a newspaper

with general circulation in the district.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.053. QUALIFICATIONS FOR OFFICE. (a) To be eligible

to be a candidate for or to serve as a director, a person must

be:

(1) a district resident;

(2) a qualified voter; and

(3) able to obtain a bond as prescribed by Section 1059.054.

(b) In addition to Subsection (a), a person who is elected from

a commissioners precinct or who is appointed to fill a vacancy

for a commissioners precinct must be a resident of that

commissioners precinct.

(c) A district employee or member of the district's medical

staff may not serve as a director.

(d) A person formerly employed by the district may not serve as

a director before the second anniversary of the date of the

termination of that person's employment by the district.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.054. BOND; RECORD OF BOND. (a) Before assuming the

duties of office, each director must execute a bond for $5,000

that is:

(1) payable to the district; and

(2) conditioned on the faithful performance of the director's

duties.

(b) Each director's bond shall be kept in the district's

permanent records.

(c) The director shall obtain the bond from an insurer

authorized to engage in business in this state.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.055. BOARD VACANCY. If a vacancy occurs in the office

of director, the remaining directors shall appoint a director for

the unexpired term.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.056. OFFICERS. (a) The board shall elect a president

and a vice president from among its members.

(b) The board shall appoint a secretary, who need not be a

director.

(c) Each officer of the board serves for a term of one year.

(d) The board shall fill a vacancy in a board office for the

unexpired term.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.057. COMPENSATION; EXPENSES. A director or officer

serves without compensation but may be reimbursed for actual

expenses incurred in the performance of official duties. The

expenses must be:

(1) reported in the district's records; and

(2) approved by the board.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.058. VOTING REQUIREMENT. A concurrence of a majority

of the directors voting is necessary in any matter relating to

district business.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.059. DISTRICT ADMINISTRATOR. (a) The board may

appoint a qualified person as district administrator.

(b) The district administrator serves at the will of the board

and is entitled to the compensation determined by the board.

(c) Before assuming the duties of district administrator, the

administrator shall execute a bond in the amount determined by

the board of not less than $5,000 that is:

(1) payable to the district; and

(2) conditioned on the faithful performance of the

administrator's duties under this chapter.

(d) The bond shall be kept in the district's permanent records.

(e) The district administrator shall obtain the bond from an

insurer authorized to engage in business in this state.

(f) The board may pay for the bond with district money.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.060. GENERAL DUTIES OF DISTRICT ADMINISTRATOR.

Subject to the limitations prescribed by the board, the district

administrator shall:

(1) supervise the work and activities of the district; and

(2) direct the general affairs of the district.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.061. EMPLOYEES; APPOINTMENT AND REMOVAL OF STAFF. (a)

The board may:

(1) appoint to or remove from the staff any doctors the board

considers necessary for the efficient operation of the district

and may make temporary appointments as necessary; and

(2) adopt policies relating to the method of appointing and

removing staff members.

(b) The district may employ technicians, nurses, fiscal agents,

accountants, architects, attorneys, and other necessary

employees.

(c) The board may delegate to the district administrator the

authority to employ persons for the district.

(d) The district may not employ a person who is related to a

director within the second degree by consanguinity or affinity,

as determined under Subchapter B, Chapter 573, Government Code,

during that director's term of office. A district employee who is

related to a person elected as a director within the second

degree by consanguinity or affinity shall resign from employment

when that director takes office.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.062. RECRUITMENT OF MEDICAL STAFF AND PROFESSIONAL

PERSONNEL. The board may use innovative methods to recruit

physicians, nurses, technicians, and other professional

personnel, including:

(1) scholarship programs;

(2) agreements for future services;

(3) shared personnel;

(4) bonuses; and

(5) any other method the district considers necessary.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.063. RETIREMENT BENEFITS. The board may provide

retirement benefits for district employees by:

(1) establishing or administering a retirement program; or

(2) participating in:

(A) the Texas County and District Retirement System; or

(B) another statewide retirement system in which the district is

eligible to participate.

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

920, Sec. 1.02, eff. April 1, 2009.

SUBCHAPTER C. POWERS AND DUTIES

Sec. 1059.101. DISTRICT RESPONSIBILITY. The district has full

responsibility for:

(1) operating hospital facilities; and

(2) providing medical and hospital care for the district's needy

inhabitants.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.102. RESTRICTION ON POLITICAL SUBDIVISION TAXATION AND

DEBT. McCulloch County, the City of Brady, and the McCulloch

County Hospital Authority may not impose a tax or issue bonds or

other obligations for hospital purposes or to provide medical

care for district residents.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.103. MANAGEMENT, CONTROL, AND ADMINISTRATION. The

board shall manage, control, and administer the hospital system

and the district's money and resources.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.104. RULES. The board may adopt rules governing:

(1) the operation of the hospital and hospital system; and

(2) the duties, functions, and responsibilities of district

staff and employees.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.105. PURCHASING AND ACCOUNTING PROCEDURES. The board

may prescribe:

(1) the method of making purchases and expenditures by and for

the district; and

(2) accounting and control procedures for the district.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.106. MOBILE EMERGENCY MEDICAL OR AIR AMBULANCE

SERVICE. The district may operate or provide for the operation

of a mobile emergency medical or air ambulance service.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.107. DISTRICT PROPERTY, FACILITIES, EQUIPMENT, AND

SERVICES. (a) The board shall determine:

(1) the type, number, and location of buildings required to

maintain an adequate hospital system; and

(2) the type of equipment necessary for hospital care.

(b) The district has complete discretion as to the type and

extent of services the district will offer. The district may

provide any services or facilities the board finds necessary for

hospital or medical care, including:

(1) facilities for domiciliary care, including geriatric

domiciliary care;

(2) outpatient clinics;

(3) dispensaries;

(4) convalescent home facilities;

(5) necessary nurses;

(6) domiciliaries and training centers;

(7) blood banks;

(8) community mental health centers;

(9) alcohol or chemical dependency centers;

(10) minor emergency centers;

(11) research centers; or

(12) laboratories.

(c) The board may:

(1) acquire property, including facilities and equipment, for

the district for use in the hospital system; and

(2) mortgage or pledge the property as security for the payment

of the purchase price.

(d) The board may lease hospital facilities for the district.

(e) The board may sell or otherwise dispose of property,

including facilities or equipment, for the district at public or

private sale at the price and terms the board considers most

advantageous.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.108. EMINENT DOMAIN. (a) The district may exercise

the power of eminent domain to acquire a fee simple or other

interest in property located in district territory if the

property interest is necessary to exercise a right or authority

conferred by this chapter.

(b) The district must exercise the power of eminent domain in

the manner provided by Chapter 21, Property Code, except the

district is not required to deposit in the trial court money or a

bond as provided by Section 21.021(a), Property Code.

(c) In a condemnation proceeding brought by the district, the

district is not required to:

(1) pay in advance or provide a bond or other security for costs

in the trial court;

(2) provide a bond for the issuance of a temporary restraining

order or a temporary injunction; or

(3) provide a bond for costs or a supersedeas bond on an appeal

or writ of error.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.109. COST OF RELOCATING OR ALTERING PROPERTY. In

exercising the power of eminent domain, if the board requires

relocating, raising, lowering, rerouting, changing the grade of,

or altering the construction of any railroad, highway, pipeline,

or electric transmission and electric distribution, telegraph, or

telephone line, conduit, pole, or facility, the district must

bear the actual cost of relocating, raising, lowering, rerouting,

changing the grade, or altering the construction to provide

comparable replacement without enhancement of facilities, after

deducting the net salvage value derived from the old facility.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.110. GIFTS AND ENDOWMENTS. The board may accept for

the district a gift or endowment to be held in trust for any

purpose and under any direction, limitation, or other provision

prescribed in writing by the donor that is consistent with the

proper management of the district.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.111. CONSTRUCTION CONTRACTS. (a) The board may enter

into construction contracts for the district.

(b) The board may enter into a construction contract that

involves the expenditure of more than the amount provided by

Section 271.024, Local Government Code, only after competitive

bidding as provided by Subchapter B, Chapter 271, Local

Government Code.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.112. OPERATING AND MANAGEMENT CONTRACTS. The board

may enter into an operating or management contract relating to a

hospital facility for the district.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.113. CONTRACTS WITH GOVERNMENTAL ENTITIES FOR

SERVICES. The board may contract with a political subdivision of

this state or with a state or federal agency for the district to:

(1) furnish a mobile emergency medical or air ambulance service;

or

(2) provide for the investigatory or welfare needs of district

inhabitants.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.114. PAYMENT FOR TREATMENT; PROCEDURES. (a) When a

patient who resides in the district is admitted to a district

facility, the district administrator may have an inquiry made

into the financial circumstances of:

(1) the patient; or

(2) a relative of the patient who is legally responsible for the

patient's support.

(b) As required by Section 9, Article IX, Texas Constitution,

the district without charge shall provide to a patient who

resides in the district the care and treatment that the patient

or a relative of the patient who is legally responsible for the

patient's support cannot pay.

(c) On determining that the patient or a relative legally

responsible for the patient's support can pay for all or part of

the care and treatment provided by the district, the district

administrator shall report that determination to the board, and

the board shall issue an order directing the patient or the

relative to pay the district a specified amount each week. The

amount must be based on the individual's ability to pay.

(d) The district administrator may collect money owed to the

district from the patient's estate or from that of a relative who

was legally responsible for the patient's support in the manner

provided by law for collection of expenses of the last illness of

a deceased person.

(e) If there is a dispute relating to an individual's ability to

pay or if the district administrator has any doubt concerning an

individual's ability to pay, the board shall:

(1) call witnesses;

(2) issue subpoenas and subpoenas duces tecum;

(3) administer oaths;

(4) hear and resolve the question; and

(5) issue a final order.

(f) A final order of the board may be appealed to a district

court in McCulloch County. The substantial evidence rule applies

to the appeal.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.115. POLICIES OR RULES ON INDIGENT HEALTH CARE. (a)

The district may adopt, amend, or repeal policies or rules

relating to indigent health care that include:

(1) eligibility of patients for indigent health care;

(2) application forms for patients or relatives of patients

requesting indigent health care that may require personal and

financial information to be furnished;

(3) procedures for obtaining and completing applications for

indigent health care and for filing the completed applications

with the district;

(4) procedures for reviewing applications to determine

eligibility for indigent health care; and

(5) other procedures provided by this section and Section

1059.116.

(b) The application procedure to determine eligibility for

indigent health care must be adopted not later than the beginning

of each operating year and must comply with Chapter 61, Health

and Safety Code.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.116. REIMBURSEMENT FOR SERVICES. (a) The board shall

require a county, municipality, or public hospital located

outside the district to reimburse the district for the district's

care and treatment of a sick or injured person of that county,

municipality, or public hospital as provided by Chapter 61,

Health and Safety Code.

(b) The board shall require the sheriff of McCulloch County to

reimburse the district for the district's care and treatment of a

person who is confined in a jail facility of McCulloch County and

is not a district resident.

(c) The board may contract with the state or federal government

for that government to reimburse the district for treatment of a

sick or injured person.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.117. AUTHORITY TO SUE AND BE SUED. (a) The board may

sue and be sued on behalf of the district.

(b) The district may assert any defense or counterclaim the

McCulloch County Hospital Authority could have asserted related

to any debt that was:

(1) incurred by the authority for hospital purposes; and

(2) assumed by the district on the district's creation.

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

920, Sec. 1.02, eff. April 1, 2009.

SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS

Sec. 1059.151. BUDGET. (a) The district administrator shall

prepare a proposed annual budget for the district.

(b) The proposed budget must contain a complete financial

statement, including a statement of:

(1) the outstanding obligations of the district;

(2) the amount of cash on hand in each district fund;

(3) the amount of money received by the district from all

sources during the previous year;

(4) the amount of money available to the district from all

sources during the ensuing year;

(5) the amount of the balances expected at the end of the year

in which the budget is being prepared;

(6) the estimated amount of revenue and balances available to

cover the proposed budget; and

(7) the estimated tax rate required.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.152. NOTICE; HEARING; ADOPTION OF BUDGET. (a) The

board shall hold a public hearing on the proposed annual budget.

(b) The board shall publish notice of the hearing in a newspaper

of general circulation in the district not later than the 10th

day before the date of the hearing.

(c) Any district resident is entitled to be present and

participate at the hearing.

(d) At the conclusion of the hearing, the board shall adopt a

budget by acting on the budget proposed by the district

administrator. The board may make any changes in the proposed

budget that the board judges to be in the interests of the

taxpayers.

(e) The budget is effective only after adoption by the board.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.153. AMENDMENTS TO BUDGET. After adoption, the annual

budget may be amended on the board's approval.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.154. RESTRICTION ON EXPENDITURES. Money may be spent

only for an expense included in the budget or an amendment to the

budget.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.155. FISCAL YEAR. (a) The district operates on a

fiscal year established by the board.

(b) The fiscal year may not be changed:

(1) when revenue bonds of the district are outstanding; or

(2) more than once in a 24-month period.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.156. ANNUAL AUDIT. The board annually shall have an

audit made of the district's financial condition.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.157. INSPECTION OF ANNUAL AUDIT AND DISTRICT RECORDS.

The annual audit and other district records are open to

inspection during regular business hours at the district's

principal office.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.158. FINANCIAL REPORT. As soon as practicable after

the close of the fiscal year, the district administrator shall

prepare for the board:

(1) a sworn statement of the amount of district money; and

(2) an account of the disbursements of that money.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.159. DEPOSITORY. (a) The board shall select at least

one bank to serve as a depository for district money.

(b) District money, other than money invested as provided by

Section 1059.160(b) and money transmitted to a bank for payment

of bonds or obligations issued or assumed by the district, shall

be deposited as received with the depository bank and must remain

on deposit. This subsection does not limit the power of the

board to place a portion of district money on time deposit or to

purchase certificates of deposit.

(c) The district may not deposit money with a bank in an amount

that exceeds the maximum amount secured by the Federal Deposit

Insurance Corporation unless the bank first executes a bond or

other security in an amount sufficient to secure from loss the

district money that exceeds the amount secured by the Federal

Deposit Insurance Corporation.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.160. SPENDING AND INVESTMENT RESTRICTIONS. (a)

Except as provided by Sections 1059.111, 1059.201, 1059.204, and

1059.205, the district may not incur a debt payable from district

revenue other than the revenue on hand or to be on hand in the

current and immediately following district fiscal years.

(b) The board may invest operating, depreciation, or building

reserves only in funds or securities specified by Chapter 2256,

Government Code.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.161. AUTHORITY TO BORROW MONEY. (a) The district may

borrow money for district operating expenses in an amount not to

exceed the amount of tax revenue the district expects to receive

during the 12-month period following the date the money is

borrowed.

(b) The district may pledge all or any part of that tax revenue

to repay the amount borrowed.

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

920, Sec. 1.02, eff. April 1, 2009.

SUBCHAPTER E. BONDS

Sec. 1059.201. GENERAL OBLIGATION BONDS. The board may issue

and sell general obligation bonds authorized by an election in

the name and on the faith and credit of the district to:

(1) purchase, construct, acquire, repair, or renovate buildings

or improvements;

(2) equip buildings or improvements for hospital purposes; or

(3) acquire and operate a mobile emergency medical or air

ambulance service.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.202. TAX TO PAY GENERAL OBLIGATION BONDS. (a) At the

time general obligation bonds are issued by the district under

Section 1059.201, the board shall impose an ad valorem tax at a

rate sufficient to create an interest and sinking fund to pay the

principal of and interest on the bonds as the bonds mature.

(b) The tax required by this section together with any other ad

valorem tax the district imposes may not in any year exceed the

limit approved by the voters at the election authorizing the

imposition of the tax.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.203. GENERAL OBLIGATION BOND ELECTION. (a) The

district may issue general obligation bonds only if the bonds are

authorized by a majority of the district voters voting at an

election held for that purpose.

(b) The board may order a bond election.

(c) The order calling the election must specify:

(1) the nature and date of the election;

(2) the hours during which the polls will be open;

(3) the location of polling places;

(4) the amount of the bonds to be authorized; and

(5) the maximum maturity of the bonds.

(d) Notice of a bond election shall be given as provided by

Section 1251.003, Government Code.

(e) The board shall declare the results of the bond election.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.204. REVENUE BONDS. (a) The board may issue revenue

bonds to:

(1) purchase, construct, acquire, repair, equip, or renovate

buildings or improvements for hospital purposes, including the

purposes described by Section 1059.107;

(2) acquire sites to be used for hospital purposes; or

(3) acquire and operate a mobile emergency medical or air

ambulance service to assist the district in carrying out its

hospital purposes.

(b) The bonds must be payable from and secured by a pledge of

all or part of the revenue derived from the operation of the

district's hospital system.

(c) The bonds may be additionally secured by a mortgage or deed

of trust lien on all or part of district property.

(d) The bonds must be issued in the manner provided by Sections

264.042, 264.043, and 264.046-264.049, Health and Safety Code,

for issuance of revenue bonds by a county hospital authority.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.205. REFUNDING BONDS. (a) The board may issue

refunding bonds to refund outstanding indebtedness issued or

assumed by the district.

(b) A refunding bond may be:

(1) sold, with the proceeds of the refunding bond applied to the

payment of the outstanding indebtedness; or

(2) exchanged wholly or partly for not less than a similar

principal amount of outstanding indebtedness.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.206. MATURITY OF BONDS. District bonds must mature

not later than 50 years after the date of issuance.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.207. EXECUTION OF BONDS. (a) The board president

shall execute the district's bonds in the district's name.

(b) The board secretary shall countersign the bonds in the

manner provided by Chapter 618, Government Code.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.208. BONDS EXEMPT FROM TAXATION. The following are

exempt from taxation by this state or a political subdivision of

this state:

(1) bonds issued by the district;

(2) any transaction relating to the bonds; and

(3) profits made in the sale of the bonds.

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

920, Sec. 1.02, eff. April 1, 2009.

SUBCHAPTER F. AD VALOREM TAX

Sec. 1059.251. IMPOSITION OF AD VALOREM TAX. (a) The board may

impose a tax on all property in the district subject to district

taxation.

(b) The tax may be used to pay:

(1) indebtedness issued or assumed by the district; and

(2) the maintenance and operating expenses of the district.

(c) The district may not impose a tax to pay the principal of or

interest on revenue bonds issued under this chapter.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.252. TAX RATE. (a) The board may impose the tax at a

rate not to exceed the limit approved by the voters at the

election authorizing the imposition of the tax.

(b) The tax rate for all purposes may not exceed 75 cents on

each $100 valuation of all taxable property in the district.

(c) In setting the tax rate, the board shall consider the income

of the district from sources other than taxation.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.253. TAX ASSESSOR-COLLECTOR. The board may provide

for the appointment of a tax assessor-collector for the district

or may contract for the assessment and collection of taxes as

provided by the Tax Code.

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

920, Sec. 1.02, eff. April 1, 2009.

SUBCHAPTER G. DISSOLUTION

Sec. 1059.301. DISSOLUTION; ELECTION. (a) The district may be

dissolved only on approval of a majority of the district voters

voting in an election held for that purpose.

(b) The board may order an election on the question of

dissolving the district and disposing of the district's assets

and obligations.

(c) The board shall order an election if the board receives a

petition requesting an election that is signed by a number of

district residents equal to at least 15 percent of the registered

voters in the district.

(d) The order calling the election must state:

(1) the nature of the election, including the proposition to

appear on the ballot;

(2) the date of the election;

(3) the hours during which the polls will be open; and

(4) the location of the polling places.

(e) Section 41.001(a), Election Code, does not apply to an

election ordered under this section.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.302. NOTICE OF ELECTION. (a) The board shall give

notice of an election under this subchapter by publishing once a

week for two consecutive weeks the election order in a newspaper

with general circulation in the district.

(b) The first publication of notice must appear not later than

the 35th day before the date set for the election.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.303. BALLOT. The ballot for an election under this

subchapter must be printed to permit voting for or against the

proposition: "The dissolution of the McCulloch County Hospital

District."

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.304. ELECTION RESULTS. (a) If a majority of the

votes in an election under this subchapter favor dissolution, the

board shall find that the district is dissolved.

(b) If a majority of the votes in the election do not favor

dissolution, the board shall continue to administer the district

and another election on the question of dissolution may not be

held before the first anniversary of the date of the most recent

election to dissolve the district.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.305. TRANSFER OR ADMINISTRATION OF ASSETS. (a) If a

majority of the votes in the election held under this subchapter

favor dissolution, the board shall:

(1) transfer the land, buildings, improvements, equipment, and

other assets that belong to the district to McCulloch County or

another governmental entity in McCulloch County; or

(2) administer the property, assets, and debts until all money

has been disposed of and all district debts have been paid or

settled.

(b) If the district makes the transfer under Subsection (a)(1),

the county or entity assumes all debts and obligations of the

district at the time of the transfer, and the district is

dissolved.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.306. SALE OR TRANSFER OF ASSETS AND LIABILITIES. (a)

The district may not be dissolved unless the board provides for

the sale or transfer of the district's assets and liabilities to

another person.

(b) The dissolution of the district and the sale or transfer of

the district's assets or liabilities may not contravene a trust

indenture or bond resolution relating to the district's

outstanding bonds. The dissolution and sale or transfer does not

diminish or impair the rights of a holder of an outstanding bond,

warrant, or other obligation of the district.

(c) The sale or transfer of the district's assets and

liabilities must satisfy the debt and bond obligations of the

district in a manner that protects the interests of district

residents, including the residents' collective property rights in

the district's assets.

(d) The district may not transfer or dispose of the district's

assets except for due compensation unless:

(1) the transfer is made to another governmental entity that

serves the district; and

(2) the transferred assets are to be used for the benefit of

district residents.

(e) A grant from federal funds is an obligation to be repaid in

satisfaction.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.307. IMPOSITION OF TAX AND RETURN OF SURPLUS TAXES.

(a) After the board finds that the district is dissolved, the

board shall:

(1) determine the debt owed by the district; and

(2) impose on the property included in the district's tax rolls

a tax that is in proportion of the debt to the property value.

(b) On the payment of all outstanding debts and obligations of

the district, the board shall order the secretary to return to

each district taxpayer the taxpayer's pro rata share of all

unused tax money.

(c) A taxpayer may request that the taxpayer's share of surplus

tax money be credited to the taxpayer's county taxes. If a

taxpayer requests the credit, the board shall direct the

secretary to transmit the money to the county tax

assessor-collector.

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

920, Sec. 1.02, eff. April 1, 2009.

Sec. 1059.308. REPORT; DISSOLUTION ORDER. (a) After the

district has paid all district debts and has disposed of all

district money and other assets as prescribed by this subchapter,

the board shall file a written report with the Commissioners

Court of McCulloch County summarizing the board's actions in

dissolving the district.

(b) Not later than the 10th day after the date the Commissioners

Court of McCulloch County receives the report and determines that

the requirements of this subchapter have been fulfilled, the

commissioners court shall enter an order dissolving the district

and releasing the board from any further duty or obligation.

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

920, Sec. 1.02, eff. April 1, 2009.