Sec. 281.041.  TRANSFER OF COUNTY AND MUNICIPAL HOSPITAL PROPERTY AND FUNDS.  (a)  Except as provided by Subsection (e), on the creation of a district under this chapter and the appointment and qualification of the district board, the county owning the hospital or hospital system, the county and municipality jointly operating a hospital or hospital system, or the municipality owning a hospital or hospital system shall execute and deliver to the district board a written instrument conveying to the district the title to land, buildings, and equipment jointly or separately owned by the county and municipality and used to provide medical services or hospital care, including geriatric care, to indigent or needy persons of the county or municipality.
(b)  On the creation of a district under this chapter and the appointment and qualification of the district board, the county owning the hospital or hospital system, the county and municipality jointly operating a hospital or hospital system, or the municipality owning a hospital or hospital system shall, on the receipt of a certificate executed by the board's chairman stating that a depository for the district has been chosen and qualified, transfer to the district:
(1)  all joint or separate county and municipal funds that are the proceeds of any bonds assumed by the district under Section 281.044;  and
(2)  all unexpended joint or separate county and municipal funds that have been established or appropriated by the county or municipality to support and maintain the hospital facilities for the year in which the district is created, to be used by the district to operate and maintain those facilities for the remainder of the year.
(c)  Funds transferred to the district under this section may be used only for a purpose for which the county or the municipality that transferred the funds could lawfully have used the funds if the funds had remained the property and funds of the county or municipality.
(d)  On the creation of the district, the board of managers of the county or municipal hospital system shall continue to manage and control the property and affairs of that system until the board of the district is appointed and organized.  At that time, the county or municipal board of managers shall transfer to the district board all county and municipal hospital system records, property, and affairs and shall cease to exist.
(e)  A county or municipality transferring property or funds under this section is not required to transfer to the district:
(1)  a medical facility used primarily for the treatment of inmates of a jail or any other correctional facilities, including juvenile justice facilities;
(2)  property owned by the municipality that is used in connection with the provision of utility services, including electricity, water, wastewater, and sewer services;
(3)  any real property or other assets related to a medical clinic facility on which construction has begun, but has not been completed, by the date on which the board members have been appointed and qualified to serve;
(4)  a building and related land owned by the county or municipality that are used for purposes related or unrelated to the hospital or hospital system, except that:
(A)  if the county or municipality retains ownership of the building and related land, the county or municipality shall lease the space used for hospital or hospital system purposes to the district for an initial term of three years unless a shorter term is otherwise agreed to by the district and the transferring entity;  or
(B)  if the county or municipality transfers the building and related land to the district, the district shall lease to the transferring entity the space not used for hospital or hospital system purposes for an initial term of three years unless a shorter term is otherwise agreed to by the district and the transferring entity;
(5)  any or all of the public health services and related facilities of the county or municipality, other than a hospital or hospital district, unless the transfer of the public health services or a related facility to the district is mutually agreed to by the district and the transferring entity;  or
(6)  an ambulance service, emergency medical service, search and rescue service, or medical transport service that is owned or operated by the county or municipality, unless the transfer of all or part of the service and related buildings and equipment to the district is mutually agreed to by the district and the transferring entity.
(f)  A transfer of an asset under this section, including a federally qualified health center, that would violate federal or state law unless a waiver or other authorization or approval is granted by a federal or state agency may not occur until the required waiver, authorization, or approval is obtained.  A facility designated as a federally qualified health center under 42 U.S.C. Section 1396d(l)(2)(B), as amended, may not be transferred to the district until the district board has confirmed that the transfer will not jeopardize the federal designation of that facility.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.  Amended by Acts 2003, 78th Leg., ch. 198, Sec. 2.212, eff. Sept. 1, 2003.