HBA-NLM H.B. 2542 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2542 By: Hupp County Affairs 3/28/1999 Introduced BACKGROUND AND PURPOSE The Act creating the McCulloch County Hospital District was passed by the 71st Legislature and has not been amended since it was originally passed. The board of the hospital district has approved changes in the district's enabling legislation to allow the district and its hospital to incorporate revisions to correspond with current law. H.B. 2542 establishes terms and procedures for elected officials and specifies provisions for district employment. In addition, this bill establishes procedures providing for the dissolution of the district. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 4.03(d), Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, to require the appropriate number of successor directors to be elected for three-year, rather than two-year, terms. SECTION 2. Amends Section 4.04, Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, to require notice of the election to be published not earlier than 30 days or later than 10 days, rather than at least 35 days, before the date of an election of directors. SECTION 3. Amends Section 4.06, Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, by adding Subsection (d), to prohibit a person formerly employed by the district from serving as a director before the second anniversary of the date of the termination of that person's employment by the district. SECTION 4. Amends Section 4.15, Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, by adding Subsection (c), to prohibit the district from employing a person who is related to a director within the second degree by consanguinity or affinity, as defined by Subchapter B (Relationships by Consanguinity or by Affinity), Chapter 573, Government Code, during that director's term of office. Requires a district employee who is related to a person elected as a director within the second degree by consanguinity or affinity to resign form employment when that director takes office. SECTION 5. Amends Section 5.07(a), Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, to authorize the board to enter into construction contracts that involve spending more than $15,000, rather than $10,000, as provided by Subchapter B (Competitive Bidding on Certain Public Works Contracts), Chapter 271, Local Government Code. SECTION 6. Amends Section 5.11(c), Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, to provide that the application procedure described in this section must comply with Chapter 61 (Indigent Health Care and Treatment Act), Health and Safety Code, rather than Section 10.03, Article 4438f, V.T.C.S. (repealed). SECTION 7. Amends Section 5.12(a), Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, to require the board to require reimbursement from certain entities described by this section, as provided by Chapter 61, Health and Safety Code, rather than Article 4438f, V.T.C.S. (repealed). SECTION 8. Amends Section 7.04(c), Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, to specify that the bonds must be issued in the manner provided by Sections 264.042 (Form and Procedure), 264.043 (Terms), 264.046 (Junior Lien Bonds; Parity Bonds), 264.047 (Bond Proceeds; Investment of Funds), 264.048 (Refunding Bonds), and 264.049 (Approval and Registration of Bonds), Health and Safety Code, rather than Sections 8, 10, 11, 12, and 13, Article 4494r, V.T.C.S. (County Hospital Authority Act), for issuance of revenue bonds by county hospital authorities. SECTION 9. Amends Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, by adding Article 10, as follows: ARTICLE 10. DISSOLUTION Sec. 10.01. DISSOLUTION. (a) Authorizes the district to be dissolved only if the dissolution is approved by a majority of the qualified voters of the district voting in an election called and held for that purpose. (b) Authorizes the board to order an election on the question of dissolving the district and disposing of the district's assets and obligations. Requires the board to order an election if the board receives a petition requesting an election that is signed by a number of residents of the district equal to at least 15 percent of the registered voters in the district. (c) Requires the election to be held not later than the 60th day after the date the election is ordered. Provides that Section 41.001(a) (Uniform Election Dates), Election Code, does not apply to an election ordered under this section. Specifies the required content of the order calling the election. (d) Requires the board to give notice of the election by publishing the election order in a newspaper with general circulation in the district once a week for two consecutive weeks. Provides that the first publication must appear not less than 35 days before the date set for the election. Requires the ballot for the election to be printed to permit voting for or against the proposition: "The dissolution of the McCulloch County Hospital District." (e) Requires the board to find that the district is dissolved if a majority of the votes in the election favor dissolution. Requires the board to continue to administer the district and prohibits another election on the question of dissolution from being held before the first anniversary of the most recent election to dissolve the district, if a majority of the votes in the election do not favor dissolution. (f) Sets forth required procedures for the board, if a majority of the votes in the election favor dissolution. (g) Provides that the county or entity assumes all debts and obligations of the district at the time of the transfer, and the district is dissolved, if the district transfers the land, buildings, improvements, equipment, and other assets to a county or other governmental entity. (h) Sets forth required procedures for the board after the board finds that the district is dissolved. (i) Requires the board to order the secretary to return the pro rata share of all unused tax money to each district taxpayer, when all outstanding debts and obligations of the district are paid. (j) Authorizes a taxpayer to request that the taxpayer's share of surplus tax money be credited to the taxpayer's county taxes. Requires the board to direct the secretary to transmit the funds to the county tax assessor-collector if a taxpayer requests the credit. (k) Requires the board to file a written report with the Commissioners Court of McCulloch County setting forth a summary of the board's actions in dissolving the district, after the district has paid all its debts and has disposed of all its assets and funds as prescribed by this section. (l) Requires the Commissioners Court of McCulloch County to enter an order dissolving the district and releasing the board of directors of the district from any further duty or obligation, not later than the 10th day after the date it receives the report and determines that the requirements of this section have been fulfilled. (m) Prohibits the dissolution of the district unless the board provides for the sale or transfer of the district's assets and liabilities to another person or entity. Prohibits the dissolution of the district and the sale or transfer of the district's assets or liabilities from contravening a trust indenture or bond resolution relating to the outstanding bonds of the district. Provides that 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. (n) Specifies that the sale or transfer of the district's assets and liabilities must satisfy the debt and bond obligation of the district in a manner that protects the interests of the residents of the district, including the residents' collective property rights in the district's assets. Specifies that a grant from federal funds is an obligation to be repaid in satisfaction. Prohibits the district from transferring or disposing of the district's assets except for due compensation unless the transfer is made to another governmental entity that serves the district and the transferred assets are to be used for the benefit of the residents of the district. SECTION 10. (a) Makes application of this Act to Sections 4.03(d) and 4.06, Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, prospective. (b) Makes Section 4.15, Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, applicable to all employees regardless of the date on which application began. Requires affected employees to resign from employment. (c) Makes application of this Act to Section 5.07(a), Chapter 51, Acts of the 71st Legislature, Regular Session, 1989, prospective. SECTION 11. Effective date: September 1, 1999. SECTION 12. Emergency clause.