CHAPTER 284. SPECIAL PROVISIONS RELATING TO HOSPITAL DISTRICT BONDS
HEALTH AND SAFETY CODE
TITLE 4. HEALTH FACILITIES
SUBTITLE D. HOSPITAL DISTRICTS
CHAPTER 284. SPECIAL PROVISIONS RELATING TO HOSPITAL DISTRICT
BONDS
SUBCHAPTER A. ISSUANCE OF REVENUE BONDS IN COUNTIES WITH
POPULATION OF AT LEAST 200,000
Sec. 284.001. AUTHORITY TO ISSUE; FORM OF BONDS. (a) The
commissioners court of a county with a population of at least
200,000 in which a hospital district has been created in
accordance with Article IX of the Texas Constitution may issue
revenue bonds to provide funds to:
(1) acquire, construct, repair, renovate, improve, enlarge, and
equip a hospital facility; and
(2) acquire any real or personal property on behalf of the
district for those purposes.
(b) The commissioners court may not issue revenue bonds under
this subchapter on behalf of a hospital district to purchase a
nursing home for long-term care.
(c) The bonds and bond interest coupons are negotiable
instruments.
(d) The bonds may be issued in the form, denomination, and
manner and under the terms and conditions determined and provided
by the commissioners court in the order authorizing the issuance
of the bonds.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 284.002. TERMS. (a) The bonds must mature serially or
otherwise not more than 40 years after the date they are issued.
(b) The bonds may be:
(1) made redeemable before maturity; and
(2) issued registrable as to principal or as to principal and
interest.
(c) The bonds shall be executed in the manner and bear interest
at the rate provided by the commissioners court in the order
authorizing the bonds.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 284.003. APPROVAL AND REGISTRATION OF BONDS. (a) The
commissioners court shall submit the bonds and the proceedings
authorizing their issuance to the attorney general for
examination. If the attorney general finds that the bonds are
authorized in accordance with law, the attorney general shall
approve the bonds and the comptroller shall register the bonds.
(b) After approval and registration, the bonds are incontestable
and are binding obligations according to their terms.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 284.004. SECURITY. (a) The commissioners court may make
bonds issued under this subchapter payable from and secured by a
lien on or pledge of all or part of the hospital district revenue
from operation or ownership of hospital facilities, except ad
valorem taxes.
(b) The commissioners court may also secure the bonds by:
(1) a pledge of all or part of a grant, a donation, or other
income received from a public or private source, whether in
accordance with an agreement or otherwise; and
(2) a mortgage or deed of trust on real property on which a
district hospital facility is or will be located and any real or
personal property incident or appurtenant to that facility.
(c) The commissioners court may authorize the execution and
delivery of a trust indenture, mortgage, deed of trust, or other
form of encumbrance to evidence a security agreement under
Subsection (b)(2).
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 284.005. SALE OF BONDS; USE OF PROCEEDS. (a) The bonds
may be sold in the manner, at the price, and under the terms
determined and provided by the commissioners court in the order
authorizing the issuance of the bonds.
(b) If permitted by the bond order, a required part of the
proceeds from the bond sale may be used for:
(1) the payment of interest on the bonds during the construction
of hospital facilities financed with bond proceeds;
(2) the payment of operation and maintenance expenses of those
facilities to the extent and for the period specified by the bond
order; and
(3) the creation of reserves for the payment of bond principal
and interest.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 284.006. INVESTMENT OF BOND PROCEEDS. Proceeds from the
sale of bonds may be invested until needed to the extent and in
the manner provided by the bond order.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 284.007. LEGAL INVESTMENTS. The bonds are legal and
authorized investments for:
(1) a bank;
(2) a trust company;
(3) a savings and loan association;
(4) an insurance company;
(5) a small business investment corporation;
(6) a fiduciary;
(7) a trustee;
(8) a guardian; or
(9) an interest or sinking fund or other public funds of the
state or a municipality, county, school district, or other
political subdivision of the state.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 284.008. SECURITY FOR DEPOSITS. The bonds are eligible to
secure deposits of public funds of the state or of a
municipality, county, school district, or other political
subdivision of the state. The bonds are lawful and sufficient
security for deposits to the extent of their market value if
accompanied by all appurtenant unmatured coupons, if any.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 284.009. AUTHORITY TO ISSUE SUBSEQUENT BONDS. In the
authorization of bonds under Section 284.001, the commissioners
court may provide for the subsequent issuance of additional
parity, subordinate lien, or other bonds, under the terms or
conditions stated in the order authorizing the issuance of the
original bonds.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 284.010. REFUNDING BONDS AND REFINANCING. (a) Revenue
bonds issued by the commissioners court under this subchapter or
under any other statute of this state and payable from hospital
facility revenue may be refunded or otherwise refinanced by the
commissioners court.
(b) The provisions of this subchapter pertinent and appropriate
to the issuance of revenue bonds generally apply to the refunding
bonds.
(c) In issuing refunding bonds or in refinancing revenue bonds,
the commissioners court in the same authorizing proceedings may:
(1) refund or refinance bonds issued under this subchapter and
bonds issued under another statute of this state and combine the
refunding bonds with other new bonds to be issued under those
laws into one or more issues or series of bonds; and
(2) provide for the subsequent issuance of additional parity,
subordinate lien, or other bonds.
(d) Refunding bonds shall be issued and delivered under the
terms and conditions stated in the authorizing proceedings.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 284.011. TAXES TO PAY OPERATING AND MAINTENANCE EXPENSES.
(a) Ad valorem taxes of the hospital district shall be used to
pay hospital facility operation and maintenance expenses to the
extent that hospital facility revenue and income are not
available at any time to pay all those expenses.
(b) The proceeds of an annual ad valorem tax may be pledged to
pay hospital facility operation and maintenance expenses in the
order authorizing the issuance of bonds under this subchapter.
(c) During each year that any of the bonds are outstanding, the
commissioners court shall compute and determine the rate and
amount of ad valorem tax that is sufficient to raise and produce
the funds required to pay required hospital facility operation
and maintenance expenses if the annual ad valorem tax is pledged
as security for the payment of those expenses. In determining the
tax rate, the commissioners court may allow for tax delinquencies
and the cost of tax collection.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 284.012. AUTHORITY OF DISTRICT GOVERNING BODY IN ABSENCE OF
AD VALOREM TAX. If a hospital district created under Article IX
of the Texas Constitution does not have ad valorem taxes levied
on behalf of the district by the commissioners court of the
county in which the hospital district is located, the district
board of directors or other governing body has all of the powers
and duties otherwise provided to a commissioners court under this
subchapter.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 284.013. ANNUAL BUDGET. (a) The commissioners court,
board of hospital managers, or hospital district board of
directors shall provide in each annual hospital district budget
for the payment of all operation and maintenance expenses of the
hospital district.
(b) In preparing the budget, the commissioners court or board
may consider the estimated revenue and income from hospital
facilities that will be available for paying operation and
maintenance expenses after providing for all principal, interest,
and reserve requirements in connection with the bonds.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 284.014. AUTHORITY TO CHARGE FOR HOSPITAL SERVICES. (a)
The commissioners court, board of hospital managers, or hospital
district board of directors may fix and collect charges for the
occupancy or use of hospital facilities and hospital services in
the amount and manner determined by the commissioners court or
board.
(b) The charges shall be fixed and collected in an amount:
(1) sufficient, with other pledged resources, to provide for all
payments of principal, interest, and any other amounts required
in connection with the bonds; and
(2) required by the bond order to provide for payment of all or
part of the operation, maintenance, and other expenses of the
hospital facilities.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 284.015. USE OF OTHER LAW. A commissioners court may use
other law not in conflict with this chapter to the extent
convenient or necessary to carry out any power expressly or
impliedly granted by this chapter.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
SUBCHAPTER B. ISSUING AND REFUNDING REVENUE BONDS BY HOSPITAL
DISTRICTS CREATED UNDER ARTICLE IX, SECTION 9, OF THE TEXAS
CONSTITUTION
Sec. 284.031. AUTHORITY TO ISSUE. (a) A hospital district
created in accordance with Article IX, Section 9, of the Texas
Constitution may issue revenue bonds to:
(1) acquire, construct, repair, renovate, or equip buildings and
improvements for hospital purposes; and
(2) acquire sites for hospital purposes.
(b) The hospital district may refund revenue bonds previously
issued for the purposes specified by Subsection (a).
(c) The bonds must be payable from and secured by a pledge of
all or part of district revenues from operation of a hospital.
The bonds may also be secured by a mortgage or deed of trust lien
on all or part of the district's property.
(d) The bonds must be issued in accordance with Sections
264.042-264.047(a), 264.048, and 264.049, and with the effect
specified by Section 264.050.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
SUBCHAPTER C. BOND ELECTIONS IN HOSPITAL DISTRICTS
Sec. 284.041. BOND ELECTIONS FOR REVENUE BONDS. (a) The
commissioners court of a county authorized by law to issue
revenue bonds on behalf of a hospital district in the county may,
on its own motion, order an advisory election to determine
whether a majority of the qualified voters of the hospital
district voting at the election favor the issuance of revenue
bonds. The order must contain the same information contained in
the notice of the election.
(b) In addition to the contents of the notice required by the
Election Code, the notice must state any other matters that the
commissioners court considers necessary or advisable.
(c) Subject to any additional notice requirements under Section
4.003, Election Code, the commissioners court shall publish
notice of the election one time, at least 10 days before the date
set for the election, in a newspaper of general circulation in
the hospital district.
(d) The election is advisory only and does not affect the
authority of the commissioners court to issue revenue bonds on
behalf of the hospital district under an applicable law that does
not require an election.
(e) The expenses of holding the election shall be paid from
hospital district funds.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.