CHAPTER 262. MUNICIPAL HOSPITAL AUTHORITIES
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.
(c) The authority is composed only of the territory in each
municipality in the authority.
(d) The authority is a body politic and corporate.
(e) The authority does not have taxing power.
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.
(c) Except as otherwise provided by this section, an ordinance
dissolving an authority takes effect on the 31st day after the
date the governing body adopts the ordinance.
(d) If before the ordinance takes effect the municipality
receives a petition requesting a referendum on the dissolution
that is signed by a number of registered voters of the
municipality equal to at least 10 percent of the number of voters
who voted in the most recent municipal election, the ordinance
does not take effect and the governing body shall order the
election.
(e) Section 41.001(a), Election Code, requiring an election to
be held on a uniform election date, does not apply to an election
under this section. The ballot shall be printed to provide for
voting for or against the proposition: "Dissolution of the (name
of the authority)."
(f) If a majority of the votes in the election are cast in favor
of the proposition, the ordinance takes effect on a date stated
in the order declaring the results of the election. If a majority
of the votes in the election are cast against the proposition,
the ordinance does not take effect and the governing body may not
adopt an ordinance dissolving the authority before the first
anniversary of the date of the election. That ordinance is also
subject to the petition and election requirements of this
section.
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.
(c) The trust indenture may provide that in the event of a
default, as defined in the trust indenture, the trustee may
appoint all directors. On that appointment, the terms of the
directors in office terminate.
(d) If the authority purchases an existing hospital or a
hospital under construction from a nonprofit corporation, the
directors shall be determined as provided in the contract of
purchase.
(e) If the authority is financed under Chapter 223, the
governing body or governing bodies by ordinance may require the
board to submit nominees for appointment to the board. If a
nominee is rejected by the governing body or governing bodies,
the board shall submit another nominee. The governing body or
governing bodies shall select the directors from the nominees
submitted by the board and any other nominee submitted by a
member of a governing body. The governing body or governing
bodies may also limit the number of successive terms that a
director may serve.
(f) An officer or employee of a municipality in the authority is
not eligible for appointment as a director.
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.
(c) The board may lease a hospital, or part of a hospital, owned
by the authority for operation by the lessee as a hospital under
terms that are satisfactory to the board and the lessee. The
lease must:
(1) be authorized by resolution of the board;
(2) be executed on behalf of the authority by the president and
secretary of the board; and
(3) have the seal of the authority impressed on the lease.
(d) The bond resolution or trust indenture may prescribe
procedures and policies for the operation of a hospital. If a
hospital is used, operated, or acquired by a nonprofit
corporation or is leased, the authority may delegate to the
nonprofit corporation or lessee the duty to establish the
procedures and policies.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 262.0225. AUTHORITY TO BORROW MONEY. (a) This section
applies only to an authority created by a municipality with a
population of less than 25,000.
(b) The board may, on behalf of the authority, borrow money from
a federally insured lending institution for any of the
authority's purposes.
(c) The board may borrow money in the amount it considers
advisable subject to a rate of interest and other terms and
conditions it considers advisable.
(d) A loan for which bonds are pledged shall mature not later
than the first anniversary of the date on which the loan is made.
Added by Acts 1995, 74th Leg., ch. 740, Sec. 1, eff. Aug. 28,
1995. Amended by Acts 2003, 78th Leg., ch. 702, Sec. 1, eff. June
20, 2003.
Sec. 262.023. EMPLOYEES. (a) The board may employ a manager or
executive director of a hospital and other employees, experts,
and agents.
(b) The board may delegate to the manager or executive director
the authority to manage the hospital and to employ and discharge
employees.
(c) The board may employ legal counsel.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 262.024. MANAGEMENT AGREEMENT. (a) The board may enter
into an agreement with any person for the management or operation
of a hospital, or part of a hospital, owned by the authority
under terms that are satisfactory to the board and the
contracting party.
(b) The agreement must:
(1) be authorized by resolution of the board;
(2) be executed on behalf of the authority by the president and
secretary of the board; and
(3) have the seal of the authority impressed on the agreement.
(c) The board may delegate to the manager the authority to
manage the hospital and to employ and discharge employees.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 262.025. COMMITTEES. (a) The board, by a resolution
adopted by a majority of the directors in office, may designate
one or more committees if authorized to do so by the authority's
bylaws.
(b) At least two directors must serve on each committee. Each
committee may have additional nonvoting members who are not
directors if authorized by the resolution or the bylaws.
(c) A committee may exercise the board's power to manage the
authority to the extent and in the manner provided by the
resolution or the bylaws. However, the board may not delegate to
a committee the authority to:
(1) issue bonds;
(2) make or amend a lease of a hospital or a management
agreement relating to a hospital; or
(3) employ or discharge a manager or executive director.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 262.026. RATES FOR HOSPITAL SERVICES. (a) Except as
provided by Subsection (b), through charging sufficient rates for
services provided by a hospital and through its other revenue
sources the board shall produce revenue sufficient to:
(1) pay the expenses of owning, operating, and maintaining the
hospital;
(2) pay the interest on the bonds as it becomes due;
(3) create a sinking fund to pay the bonds as they become due;
and
(4) create and maintain a bond reserve fund and other funds as
provided in the bond resolution or trust indenture.
(b) If the hospital is used, operated, or acquired by a
nonprofit corporation under Chapter 223 or is leased, the board
shall require the nonprofit corporation or the lessee to charge
rates for services provided by the hospital that are sufficient
with the nonprofit corporation's or lessee's other sources of
revenue to:
(1) pay the expenses of operating and maintaining the hospital;
and
(2) make payments or pay rentals to the authority that are
sufficient with the authority's other pledged sources of
estimated revenue to:
(A) pay the interest on the bonds as it becomes due;
(B) create a sinking fund to pay the bonds as they become due;
and
(C) create and maintain a bond reserve fund and other funds as
provided in the bond resolution or trust indenture.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 262.027. DEPOSITORY. The authority may:
(1) select a depository in the same manner that a municipality
may select a depository under Chapter 105, Local Government Code;
or
(2) award its depository contract to the depository or
depositories selected as the depository or depositories of the
municipality or municipalities in the authority and on the same
terms as the terms of the municipal depository agreement or
agreements.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 262.028. EMINENT DOMAIN. (a) To carry out a power granted
by this chapter, the authority may acquire the fee simple title
to land, other property, and easements by condemnation under
Chapter 21, Property Code.
(b) The authority is considered to be a municipal corporation
for the purposes of Section 21.021(c), Property Code.
(c) The board shall determine the amount and character of the
interest in land, other property, and easements to be acquired
under this section.
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.
(c) If the board conducts the sale by public auction, the board
shall publish a notice of the sale once a week for three
consecutive weeks in a newspaper of general circulation in each
municipality in the authority. The notice must include a
description of the property and the date, time, and place of the
auction. The first notice must be published not later than the
21st day before the date of the auction.
(d) This section does not affect the authority's powers under
Chapter 223.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 262.032. SALE OF PROPERTY TO POLITICAL SUBDIVISION. (a)
The authority may sell property to a political subdivision for
the fair market value of the property.
(b) The board must publish a notice of its intention to sell, a
description of the property, and the scheduled date of sale in
one or more newspapers of general circulation in the authority
once a week for two consecutive weeks. The first notice must be
published not later than the 15th day before the scheduled sale
date.
(c) A petition requesting an election on the question of the
sale, signed by at least 10 percent of the qualified voters
residing in the authority, may be presented to the secretary or
president of the board before the scheduled sale date.
(d) The board shall order the election on receiving the
petition. If no petition is filed, the board may sell the
property without an election or may order an election on its own
motion. The order must contain the same information contained in
the notice of the election under Subsection (f).
(e) Section 41.001(a), Election Code, requiring elections to be
held on uniform election dates, does not apply to the election.
(f) In addition to the contents of the notice required by the
Election Code, the notice must state the names of the presiding
judge, alternate judge, and clerks for each polling place. The
board shall publish notice of the election in one or more
newspapers of general circulation in the authority once a week
for two consecutive weeks. The first notice must be published not
later than the 31st day before election day.
(g) The ballot shall be printed to provide for voting for or
against the proposition: "The sale of ______ by the ____________
Hospital Authority."
(h) If a majority of qualified voters who vote in the election
favor the sale, the board may sell the property.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 262.033. SALE OR CLOSING OF HOSPITAL. (a) The board may
sell a hospital, or part of a hospital, owned by the authority or
close a hospital, or part of a hospital, owned or operated by the
authority. The sale or closure must:
(1) be authorized by resolution of the board;
(2) be executed on behalf of the authority by the president and
secretary of the board; and
(3) be made by a document having the seal of the authority
impressed on it.
(b) A sale or closing may not take effect before the expiration
of the period in which a petition may be filed under Subsection
(c).
(c) The board shall order and conduct an election on the sale or
closing of a hospital if, before the 31st day after the date the
governing body authorizes the sale or closing, the board receives
a petition requesting the election signed by at least 10 percent
of the qualified voters of the authority. The number of qualified
voters is determined according to the most recent official list
of registered voters.
(d) If a petition is filed under Subsection (c), the hospital
may be sold or closed only if a majority of the qualified voters
voting on the question approve the sale or closing.
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.
(c) The authority may issue revenue bonds and other notes in
accordance with this chapter to acquire, construct, or improve a
facility for the care of the elderly or disabled or to implement
the delivery of a service for the care of the elderly or
disabled.
(d) For the purposes of this section, a facility or service
described by Subsection (a) is considered to be a hospital
project under Chapter 223 (Hospital Project Financing Act).
(e) This section applies only to an authority that owns or
operates a hospital licensed under Chapter 241 and that is
located in:
(1) a county with a population of 225,000 or less;
(2) those portions of extended municipalities that the federal
census bureau has determined to be rural;
(3) an area that is not delineated as an urbanized area by the
federal census bureau; or
(4) a municipality with a population of less than 12,000 and a
county with a population of 2.5 million or more at the time the
authority begins operating a facility or providing a service
described by Subsection (a).
(f) This section does not authorize the authority to issue
revenue bonds or other notes in accordance with this chapter to
construct, acquire, own, enlarge, improve, furnish, or equip a
facility or service listed in Subsection (a) if a private
provider of the facility or service is available and accessible
in the service area of the authority.
(g) An authority described by Subsection (e)(4) may not own or
operate more than 50 licensed nursing home beds under this
section and is not subject to Subsection (f).
Added by Acts 1991, 72nd Leg., ch. 14, Sec. 117, eff. Sept. 1,
1991. Amended by Acts 1995, 74th Leg., ch. 965, Sec. 4, eff. June
16, 1995; Acts 1999, 76th Leg., ch. 793, Sec. 1, eff. Aug. 30,
1999; Acts 1999, 76th Leg., ch. 1030, Sec. 1, eff. Sept. 1, 1999.
Sec. 262.035. POWERS AND DUTIES OF CERTAIN HOSPITAL AUTHORITIES;
LEASE. (a) This section applies only to an authority created in
a county with a population of at least 350,000 in which a
hospital district is not located.
(b) A municipality may lease to an authority subject to this
section all or part of a hospital and any other health facilities
owned by the municipality. The lease may provide that the
municipality may retain during the term of the lease specified
rights relating to the operation of the authority and the
facilities leased from the municipality. The lease may provide
that:
(1) the municipality may retain the power to appoint all
directors of the authority, notwithstanding Section 262.012;
(2) the authority is required to perform specified health care
services on behalf of the municipality;
(3) the municipality may agree to fund specified health care
services;
(4) the authority is prohibited from eliminating or curtailing
specified health care services offered at the facilities leased
from the municipality without prior consultation with or the
approval of the municipality;
(5) the authority is prohibited from subletting the facilities
leased from the municipality or assigning its rights under the
lease for a total term of more than five years, or entering into
a management contract for the operation of the facilities leased
from the municipality as a whole, or pledging the authority's
revenues derived from the operation of the facilities leased from
the municipality, without prior consultation with or the approval
of the municipality;
(6) the board may be subject to any ethics or conflict of
interest ordinance applicable to other sovereign city boards and
commissions adopted by the municipality and any goals for hiring
and contracting with minorities or women adopted by and for the
municipality;
(7) the authority will comply with Chapter 252, Local Government
Code, relating to purchasing and contracts;
(8) the municipality may issue general obligation bonds for the
use and benefit of the authority;
(9) an authority and its employees may participate in the
municipality's employee retirement plan, employee health plans,
and other employee benefit plans; and
(10) the lease may contain other terms and conditions that the
municipality and authority agree on and which are not prohibited
by law or by the constitution.
(c) If the municipality retains in the lease the right to
appoint all members of the board, the municipality may remove the
entire board or any member of the board at any time with cause.
The municipality may remove the board or a member of the board
under this subsection only after reasonable written notice to the
board or board members and on the affirmative vote of a majority
of the members of the governing body of the municipality.
(d) For purposes of Chapters 101 and 102, Civil Practice and
Remedies Code, a municipal hospital authority subject to this
section is a unit of local government and not a municipality.
(e) An authority subject to this section is subject to Chapter
551, Government Code, and Chapter 552, Government Code.
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.
(c) The authority may contribute money to or solicit money for
the nonprofit corporation. If the authority contributes money to
or solicits money for the corporation, the authority shall
establish procedures and controls sufficient to ensure that the
money is used by the corporation for public purposes.
(d) A nonprofit corporation formed under this section has the
same powers as a development corporation under Section 221.030.
(e) A nonprofit corporation formed under this section shall
comply with Chapter 2258, Government Code, in the same manner and
to the same extent that the authority is required to comply with
that chapter.
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.
(c) If a majority of voters who vote at the election approve the
issuance of the bonds, the board may issue the bonds. If a
petition is not filed, the board may issue the bonds without an
election. However, the board may order the election on its own
motion if a petition is not filed.
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.
(c) The law relating to the security for and the investment of
municipal funds controls, to the extent applicable, the
investment of the authority's funds. The bond resolution or trust
indenture may further restrict those investments. Additionally,
the authority may invest its bond proceeds, until that money is
needed, as authorized by the bond resolution or trust indenture.
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.
(c) Following approval and registration, the bonds are
incontestable.
(d) The bonds are negotiable and must contain the following
provision: "The holder hereof shall never have the right to
demand payment thereof out of money raised or to be raised by
taxation."
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.