             THE    ATTORNEY           GENERAL
                          OF   TEXAS

                          February 23, 1988




    Honorabl'e Ashley Smith               Opinion No. JR-864
    Chairman
    Government Organization               Re: Authority of Amarillo
       Committee                          Hospital District   to dis-
    Texas House of Representatives        pose of Northwest     Texas
    P. 0. Box 2910                        Hospital  (RQ-1277)
    Austin, Texas    78769

    Dear Representative    Smith:

          You ask several questions pertaining to the City of
     Amarillo Hospital District (AHD). The AHD was authorized
     by article IX, section 5, of the Texas Constitution   and
     created by Acts 1957, 55th Leg., ch. 136, at 298. Because
     the creating statute predated the effective date of the
C   ~constitutional amendment  authorizing  the district,  the
     legislature Walidatedql the enabling statute by enacting
     House Bill No. 70 by Acts 1959, 56th Leg., ch. 32, at 59.
     House Bill No. 70 was essentially a reenactment of the
     earlier statute with a few amendments.

           The boundaries of the AHD are coextensive with the
    boundaries of the city of Amarillo.     Tex . Const. art. IX,
    95(a).    The constitutional  provision as originally adopted
    authorized the legislature to permit Potter County to levy
    a tax in that portion of the county outside the city
    limits of Amarillo    to render financial aid to the dis-
    trict. Art. IX, 55(b).       A similar provision  relating to
    Randall County was added to the constitution in 1987.
    Art. IX, 55(e). Thus, Potter and Randall County residents
    who are not residents of a hospital district may be served
    by the AHD.~ Acts 1957, 55th Leg., ch. 136, 516, at 304,
    as amended by Acts 1959, 56th Leg., ch. 32, 516, at 66 and
    Acts 1987, 70th Leg., 2nd C.S., ch. 71, 54, at 454.




          1. Randall County has not yet held an          election on
    the question of participating in the AHD.




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     We restate your questions as follows:

          1. Does the AHD board of managers or the
       Amarillo City Commission own and operate the
       Northwest Texas Hospital?

          2. Who has final authority      to sell,
       lease, or close the hospital?  Which entity,
       the hospital district board or the Amarillo
       City Commission,  must determine   that the
       sale, lease, or closure of the hospital
       is in the best interest of the district's
       residents?

          3. Is an election required to approve
       the sale or lease of the Northwest Texas
       Hospital to another entity?

          4. If the hospital   is sold, leased, or
       closed, what is the hospital      district's
       responsibility to the persons it serves?

      The AHD operates the Northwest Texas Hospital.   Con-
fusion about the authority of the board of managers      of
the hospital district may stem from the fact that the
governing body of the city of Amarillo   also has statutory
responsibilities in relation to this hospital     district.
The district's enabling legislation provides   in pertinent
part:

          Sec. 1. The City of Amarillo, Texas, may
       be constituted a Hospital District . . . for
       the nurnose of ownina and oneratina a hos-
       pital or hOsnita1    svstem for indiaent and
       need!? nersons. . . .

          . . . .

          Sec. 4. a.  Any lands, buildinas or eouin-
       ment that may be jointly or separately  owned
       by the City of Amarillo and the County of
       Potter, within the hospital district, and by
       which medical services or hospital care are
       furnished to the indiaent . . . shall become
       the nrooertv  of the HosDital District:     and
       title thereto  shall vest   in the HOSDital
       District. . . ,

          Sec. 5. a. The aovernina bodv of the Citv
       of Amarillo shall annoint a Board of HOSDital




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Honorable Ashley Smith - Page 3 (JM-864)




       Manaaers .         whose duties shall be to
       manaae. control and administer the hosnital
       gr hosDita1    sv tem of the HOSDital    Dis-
       trict. . . .    T:e Board is authorized    to
       promula t    rules and reculations   for the
       0Dera tiEne of   the hOSDita1   or   hosoital
       svstem. . . .

          Sec. 6. The governing body of the City of
       Amarillo shall have the power to prescribe
       the method and manner of making purchases and
       expenditures by and for such Hospital    Dis-
       trict . . . or may delegate any or all such
       powers to the Board of Managers. . . .

          . . . .

          Sec. 9. a. The Hospital   District . . .
       shall have the right and power of. eminent
       domain. . . .

          b. The HOSDital District shall have the
       power to take by purchase    or lease lands
       within or without the district    as may be
       required for its purpose: and it mav sell or
       lease anv lands owned bv it at DUblic        r
       private   sale: nrovided.  h wever. that io
       real estate mav be sold zr leased until
       titer there h s been a determination bv the
       aovernina bodt of the Citv of Amarillo    that
       either the lands are      1 a r reouired   f
       the nurnoses   of the %.t%      or that t:E
       arantee or lessee will use the DroDertv    for
       hOSDita1 nurnoses or ourDOses incidental   and
       JIecessarv to hosDita1 DurDoses.     (Emphasis
       added.)

Acts 1957, 55th Leg., ch.   136 as   amended by Acts    1959,
56th Leg., ch. 32.

     In answer to your first question,   it is clear from
the language quoted above in sections 4, 5, and 9 that the
hospital district owns Northwest Texas Hospital   and that
the board of managers operates the facility.

     Next you ask about the authority to sell, lease, or
close the hospital.     Section 9(b) of the district's
enabling statute quoted above addresses the sale of m.
However, article 4437c-2, V.T.C.S., is a later enactment
of the legislature that is specifically concerned with the



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Honorable Ashley Smith - Page 4 (JM-864)




sale, lease, or closure of hospitals.     In our opinion,
this article answers your second and third questions. The
statute provides in pertinent part:

          Section 1. In this Act, 'official action'
       means . . . a resolution    adopted by   the
       governing body of a hospital district.

          Section 2. (a) The governing     body   of
       . . . a hospital district by official  action
       may order the sale, lease, or closure of all
       or any part of, including real property,    a
       hospital owned and operated by the political
       subdivision.   The   official   action   must
       include a finding by the governing body that
       the sale, lease, or closure is in the best
       interest of the residents   of the political
       subdivision.

          .   .   .   .

           (c) The sale or closure of a hospital   is
       contingent on the right of the voters       by
       petition  to require a referendum     on the
       issue. The sale or closure may not take
       effect sooner than the expiration of the time
       for a petition to be filed under Section 3 of
       this Act and, if a valid petition is filed,
       the sale or closure is contingent on voter
       approval.

          .   .   .   .

          Section 3. (a) If before the 31st day
      after the date on which the governing      body
      orders that a hospital be sold or closed the
      governing body receives a petition signed by
      at least 10 percent of the qualified    voters
      of the political subdivision    requesting   an
      election on the question, the governing    body
      .shall order and conduct an election.

           (b) . . . If a majority of the qualified
       voters voting on the question approve the
       sale or closure, the hospital may be sold or
       closed.

V.T.C.S. art. 4437c-2.




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Honorable Ashley Smith - Page 5    (JM-864)




     Pursuant to article 4437c-2, V.T.C.S., the board of
managers of the hospital  district has authority to sell,
lease, or close the Northwest Texas Hospital after the
board determines that such action is in the best interest
of the district's residents.

     Article 4437c-2, V.T.C.S., does not give the city of
Amarillo's governing body any authority to participate in
a decision by the hospital district's board of managers to
sell, lease, or close its hospital       facility.  If the
proposed action .is a sale or closure of the facility, the
voters may petition     for an election on the issue of
approving or disapproving   the proposed   sale or closure.
An election is not required unless the petition reguire-
ments of article 4437c-2, V.T.C.S.,    are satisfied.    See
Jackson   Countv Hosrdtal    District v. Jackson      County
Citizens For Continued HOSDital Care, 669 S.W.2d 147 (Tex.
APP. - Corpus Christi 1984, no writ).
     Finally, you ask about the hospital district's     re-
sponsibility to the persons    it serves if the Northwest
Texas Hospital is sold, leased, or closed. The constitu-
tional provision and statute governing the AHD require the
district to provide medical care to the needy inhabitants
of the district   and   to residents  of Potter County who
are outside the district's boundaries.    Tex. Const. art.
IX, 55; Acts   1957, 55th Leg., ch. 136, as amended.     If
apprpved by the voters of Randall     County, the district
will also be responsible for the care of Randall     County
residents who do not reside in a hospital district.

      Pursuant to the Indigent Health Care and Treatment
Act (article 4438f, V.T.C.S.)    a hospital district   has a
mandatory   duty to provide the health        care services
required under the Texas Constitution and the statute
creating the district.    V.T.C.S. art. 4438f,   511.02. In
accordance with section 11.03 of the Indigent Health Care
and Treatment Act, a hospital district may arrange to
provide health     care services     through  other   public
facilities, by contracting with a private provider,       or
through the purchase of insurance for eligible residents.
The district may      also affiliate with      other public
hospitals, hospital districts or governmental    entities to
provide regional administration     and delivery  of health
care services.     &S   Attorney   General   Opinion JM-858
 (1988).

     Regardless of the method chosen by the hospital
district to provide services to its eligible recipients,
the district is liable for the health care services    as




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Honorable Ashley Smith - Page 6    (JM-864)




provided by  the constitution  and its statute. V.T.C.S.
art. 4438f, 512.01(b). Thus, the sale, closure, or lease
of the Northwest Texas Hospital will have no effect on the     -
legal responsibility that the AHD has towards the persons
it serves.

                       SUMMARY

            The City of Amarillo Hospital   District
       owns the Northwest Texas Hospital.  The board
       of managers of the hospital district operates
      .the facility.

            Pursuant to article 4437c-2, V.T.C.S.,
       the hospital district's board of managers may
       sell, lease, or close a hospital     after a
       finding that such action    is in the best
       interest of the district's   residents.   The
       voters of the district may petition for an
       election on the issue of selling or closing a
       hospital.

            If the Northwest Texas Hospital is sold,
       leased, or closed, the City of Amarillo                 ,-.
       Hospital District continues   to be legally
       responsible  for   providing   medical   care
       pursuant to the Indigent Health Care and
       Treatment Act.




                                  Ll htJ%
                                   Very truly yo   ,

                                        /L
                                   JIM     MATTOX
                                   Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General
                                                               ‘I
RICK GILPIN
Chairman, Opinion Committee

Prepared by Karen C. Gladney
Assistant Attorney General
