HB 3788

relating to the operations of municipal hospital authorities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 262.011(b), Health and Safety Code, is
(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 a [the] resolution [authorizing the issuance of
bonds] or [by the] trust indenture described by Section 262.012
[securing the bonds].  A [However, a] reduction in the number of
directors may not shorten the term of an incumbent director.
SECTION 2.  Sections 262.012(a), (b), and (f), Health and
Safety Code, are amended to read as follows:
(a)  The governing body or governing bodies shall appoint the
initial 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
(b)  The board may prescribe in the [The] resolution
authorizing the issuance of revenue bonds or the trust indenture
securing the bonds, in an agreement securing notes of any kind
issued by the authority, or in another resolution [may prescribe]
the method of selecting [a majority of] the directors and the term
of office of those directors.  Except as provided by Subsections
(c), (d), and (e), the method of selecting the directors and the
term of office of those directors prescribed by the board may not be
changed except by a subsequent resolution adopted by the board.
The[, 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 any [the]
(f)  An officer or employee of a municipality in the
authority or an employee of the authority is not eligible for
SECTION 3.  Section 262.0331, Health and Safety Code, is
amended by amending Subsection (a) and adding Subsection (c) to
(a)  If, after the sale or closing of a hospital under
Section 262.033, the authority does not own or operate a hospital,
the board may use the authority's available assets to promote
public health and general welfare initiatives that the board
determines will benefit the residents served by the authority,
(1)  owning, operating, or funding an:
(B)  indigent health care clinic, medical
research facility, fitness or physical health center,  medical
training or education facility, or other health care facility;
(2)  providing direct or indirect financial assistance
to a nonprofit organization that:
(A)  owns or operates a hospital, indigent health
care clinic, medical research facility, medical training facility,
or other health care facility; or
(B)  supports an initiative promoting health
education, wellness, or disease prevention; and
(3)  undertaking any other activity that the board
determines is necessary or appropriate to improve public health,
promote wellness, prevent disease, or enhance the general welfare
of the residents served by the authority.
(c)  The authority may issue revenue bonds and other notes in
accordance with this chapter to undertake any initiative authorized
SECTION 4.  Section 262.039(a), Health and Safety Code, is
(a)  This section applies only to an authority that:
(A)  a county with a population of 2.4 million or
(B)  a municipality with a population of less than
(2)  has assets that exceed the amount of any
outstanding bonds issued under Subchapter D; and
(3)  does not operate a hospital.
SECTION 5.  Section 262.041, Health and Safety Code, is
Sec. 262.041.  REVENUE BONDS.  (a)  The authority may issue
revenue bonds to provide funds for any of the authority's purposes,
including the purposes described by Sections 262.0331 and 262.034,
regardless of whether the authority owns or operates a hospital.
(b)  Revenue bonds must be payable from, and secured by a
(1)  the operation of one or more hospitals and any
other revenues from the ownership or investment of [owning]
(2)  any initiative described by Section 262.0331 or
any facility or service described by Section 262.034.
(c)  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.
SECTION 6.  Sections 262.034(d), (e), (f), and (g), Health
SECTION 7.  This Act takes effect September 1, 2025.