A.R.S. tit. 48 ch. 13 — Arizona Revised Statutes Title 48 Chapter 13 — Hospital Districts

48-1901. Definitions In this article, unless the context otherwise requires: 1. "Federal act" means the hospital survey and construction act, Public Law 725 of the 79th Congress, and amendments thereof. 2. "Urgent care center" does not include a medical clinic but means a health care institution that operates twelve to twenty-four hours a day seven days a week without inpatient beds but with facilities and limited hospital services for the physical evaluation of outpatients and the diagnosis or treatment of patients including surgery under general anesthesia. 48-1902. Publication of notices A. When a notice is required by this article to be published in a newspaper, such notice shall be published in a newspaper of general circulation published within the district concerned. If none is published within the district, then the notice shall be published in a newspaper of general circulation published within the county in which the district is located. B. When a district is located in more than one county, notices shall be published in newspapers published within each county in which part of the district is located, as provided by subsection A. 48-1903. Establishment of a hospital district; approval In addition to the requirements for the establishment of a hospital district as set forth in section 48-261, no petition for the formation of a district shall be acted upon unless the area encompassed within the proposed district is first approved by the department of health services as an area needing additional hospital facilities. Notwithstanding section 48-261, subsection E, a hospital district may exclude natural geographic features such as watercourses. 48-1907. Powers of hospital district A. A hospital district may: 1. Adopt and use a corporate seal. 2. Sue and be sued in all courts and places and in all actions and proceedings. 3. Purchase, receive, have, take, hold, lease, use and enjoy property of every kind and description within the limits of the district, and control, dispose of, convey, encumber and create leasehold interests in such property for the benefit of the district. 4. Administer trusts declared or created for the hospital district, and receive by gift, devise or bequest and hold in trust or otherwise, property located within the state or elsewhere and, when not otherwise provided, dispose of such property for the benefit of the hospital district. 5. Provide for the operation and maintenance at a single location within the district of a hospital, urgent care center, combined hospital and ambulance service when authorized to do so pursuant to title 36, chapter 21.1, article 2, or combined urgent care center and ambulance service, when authorized to do so pursuant to title 36, chapter 21.1, article 2, owned or operated by the district. If the hospital district provides for the operation of an ambulance service, ambulance services shall be provided to all areas within the district. An existing hospital district that is located in a county with a population of less than five hundred thousand persons and that is operating at a single location may expand to a second location if the board of directors of the hospital district finds at a public hearing on the matter that an additional location is reasonably necessary for the persons served by the district. 6. Impose a secondary property tax on all taxable property within the district for the purpose of funding the operation and maintenance of a hospital, urgent care center, combined hospital and ambulance service or combined urgent care center and ambulance service that is owned or operated by the district or to pay costs of an ambulance service contract entered into pursuant to this section. The amount of the levy necessary for the operation and maintenance of the ambulance service, if any, shall be separately stated in the levy. Prior to the initial imposition of such a tax a majority of the qualified electors must approve such initial imposition. The continued imposition of such a tax must be approved by a majority of the qualified electors at least every five years from the date of the initial imposition. Elections under this paragraph must be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d). 7. Contract with an existing hospital, ambulance service, city, town or fire district within the district to provide ambulance related services. If the district does contract for ambulance services, the district shall ensure that ambulance services are provided to all areas within the district. No such contract may provide for the use of aircraft. B. The amount of a levy under subsection A, paragraph 6 shall not exceed the greater of: 1. Six hundred thousand dollars, adjusted annually from a 1989 base year according to the health services component of the metropolitan Phoenix consumer price index published by the bureau of business and economic research, college of business administration, Arizona state university, or its successor. 2. Ten per cent of the hospital's or urgent care center's total expenses for all purposes required or authorized by this chapter and incurred in the fiscal year ending immediately before the levy. C. An existing hospital may be converted into an urgent care center by a vote of the board of directors of the district if the conversion is in the best interests of the district. An existing urgent care center shall not be converted into a hospital unless the hospital district is created pursuant to section 48-261 and this chapter. 48-1908. Board of directors; members; qualifications; terms; organization A. The board of directors of the district shall be composed of five citizens who are resident real property owners within the district, none of whom is an elective or appointive state, county or city official. B. Directors shall serve four year terms beginning on the first day of the month immediately following declaration of election to office. Elections shall be held on either the fourth Tuesday in February, the second Tuesday in June or the first Tuesday after the first Monday in November of every even numbered year. C. Candidates for a district board office shall file nominating petitions with the board of supervisors as prescribed by title 16, chapter 3. If only one person files or no person files a nominating petition for an election to fill a position on the board for which the term of office is to expire, then the board may cancel the election for that position and appoint the person who filed a nominating petition to fill the position. If no person files a nominating petition for an election to fill a district office, the board of supervisors may cancel the election for that office and that office is deemed vacant and shall be filled as otherwise provided by law. Vacancies occurring other than by expiration of term may be filled by the remaining directors, except that if the remaining directors do not constitute a quorum, the county board of supervisors shall make the appointment to fill the vacancy. D. The board shall be a body corporate, under the name "board of directors for ______ hospital," or "board of directors for ______ urgent care center" with the name of the hospital or urgent care center inserted. E. Not later than sixty days after an election the board shall meet and reorganize by electing from its membership a chairman and a vice-chairman. In addition thereto, the board may appoint a secretary who shall not be a member of the board and who may be paid a salary fixed by the board. 48-1909. Compensation of directors Members of the board of directors shall serve without compensation, but each shall be allowed necessary travel and incidental expenses actually incurred in the performance of official business of the district as approved by the board, and statutory per diem when away from the district on business of the district. 48-1910. Powers of board of directors; transaction privilege tax; election A. The board of directors may purchase surgical instruments, hospital equipment, ambulance equipment and other property and supplies necessary for equipping a hospital, urgent care center, combined hospital and ambulance service or combined urgent care center and ambulance service, except that the board shall not purchase, rent or contract for the use of aircraft. The board may purchase real property, and erect or rent and equip buildings or rooms necessary for the hospital, urgent care center, combined hospital and ambulance service or combined urgent care center and ambulance service. B. The board of directors shall lease the hospital as provided by section 48-1911, provided however that after all bonded indebtedness of the district has been paid the board of directors may lease the hospital and its equipment to any person or corporation for the purpose of conducting a health care facility upon such terms and conditions as the board of directors of the district deems to be beneficial to the hospital district. C. For a hospital district with boundaries that are coterminous with a county's boundaries, that is located in a county with a population of less than forty-five thousand persons and in which no more than six per cent of the real property by area in that county is subject to taxation, the board of directors may request that the board of supervisors place the question of a levy of a transaction privilege tax to support the district on the next ballot for a countywide election. On the request of the board of directors, the county board of supervisors may call a special election on the question of a levy of transaction privilege tax or may place the question on the ballot for the next regular countywide election. The question shall include the rate of the transaction privilege tax. The rate of the transaction privilege tax shall not be more than ten per cent of the transaction privilege tax rate prescribed by section 42-5010, subsection A, applying, as of January 1, 1990, to each person engaging in or continuing in the district in a business taxed under title 42, chapter 5, article 1. If a hospital district already has a property tax pursuant to section 48-1907, subsection A, paragraph 6, the question shall require that the property tax be repealed on the imposition of a transaction privilege tax. On approval by a majority of those persons voting on the question, the county board of supervisors shall levy and the department of revenue shall collect a transaction privilege tax pursuant to this section to be used and spent for the purposes described in this chapter. The initial levy of the tax shall be for a period of up to five years and may be renewed by a subsequent vote of the county's qualified electors for additional periods of five years. Each month the state treasurer shall remit to the county treasurer the net revenues collected pursuant to this subsection during the second preceding month. The county treasurer shall remit the monies to the hospital district treasurer who shall deposit the monies in the district's general fund. D. A hospital district shall not levy a transaction privilege tax at the same time that it is imposing a secondary property tax pursuant to section 48-1907. 48-1911. Leases of hospital or urgent care center and equipment; provisions; cancellation for failure to pay rent; re-lease; auction; notice A. A lease of the hospital or urgent care center and its equipment, as required under section 48-1910 for districts with bonded indebtedness, executed by the board of directors of the district, shall: 1. Contain terms and provisions necessary to assure compliance by the district with the provisions of the federal act and any amendments thereto. 2. Extend for a term to be determined by the board, but not less than five nor more than ten years. 3. Be executed to a corporation not for pecuniary profit, duly organized under the laws of this state for the purpose of conducting a hospital, urgent care center, combined hospital and ambulance service or combined urgent care center and ambulance service. 4. Provide for a rental upon terms and in an amount which will provide a fair return to the district on its investment, be sufficient to meet the payments of principal and interest of bonds issued under this article, and provide amounts necessary to meet the expenses of the district. B. If a lessee of the hospital or urgent care center and its equipment fails to make the payment of rental required by the lease, the board of directors of the district, at its option, may cancel the lease for such failure. If the lease is cancelled and if the board is then unable to re-lease the hospital or urgent care center and its equipment to a lessee qualified under the provisions of this article at a rental sufficient to meet the payments of principal and interest on any bonds issued by the district and to provide the amounts necessary to meet expenses of the district, the board shall, at public auction, offer to lease the hospital or urgent care center and its equipment to the highest responsible and qualified bidder for such term as the board prescribes, and shall lease the hospital and its equipment to the bidder who bids the highest rental for the prescribed period. C. Notice of the auction shall be given in a newspaper as provided by section 48-1902 at least once each week for four weeks immediately preceding the auction. 48-1912. Bonds A. Bonds may be issued by the hospital district for the purpose of carrying out any of the provisions of this article. If the board of directors determines that bonds should be issued, application shall be made to the board of supervisors by the board, and the board of supervisors shall submit to a vote of the real property taxpaying electors residing in the district the question in the manner provided by title 35, chapter 3, article 3, and if the majority of the electors voting on the issue approve, the bonds shall be issued as provided by law. Elections under this subsection must be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d). B. Any bonds issued under this article may contain a provision requiring the establishment of a reserve or reserves in an amount equal to the requirements of principal and interest payments for the two years during the life of the bonds requiring the largest amount of principal and interest payments, and the district shall maintain the reserve during the life of the bond issue for the purpose of protecting against any deficiency in rental payments or tax collections. If it becomes necessary to withdraw funds from the reserve to protect against any deficiency, the board of directors of the district shall levy a tax on all the taxable property in the district sufficient to maintain the reserve fund in an amount equal to the original amount thereof. In making the levy for the payment of principal and interest for the last year when the bonds mature, the board of directors shall take into consideration the amount of money then in the reserve fund and shall levy an amount sufficient to pay the principal and interest on the bonds, less the amount then in the reserve fund. 48-1913. Limit of bonded indebtedness No hospital district shall incur a bonded indebtedness exceeding ten per cent of the assessed value of all taxable property in the district as shown by the last assessment roll of the county. 48-1914. Budget A. Annually, not later than July 15, the board of directors shall furnish to the board of supervisors of the county in which the district or any part thereof is located a report of the operation of the district for the past year together with an estimate in writing of the amount of money needed to be raised by taxation for all purposes required or authorized by this article during the next fiscal year. B. The board of supervisors of each county where a district or part thereof is located shall thereupon levy upon the taxable property of the district a tax which will, together with other funds on hand or which will accrue during the ensuing fiscal year, exclusive of reserves, provide sufficient funds to meet the financial needs of the district as provided under subsection A. The tax shall be computed, entered upon the tax rolls and collected in the same manner as other secondary property taxes in the respective county or counties in which the district or part thereof is located. Monies collected on behalf of the district shall be remitted promptly to and shall be handled by the county treasurer of the organizing county as other special district funds are handled. The district shall be governed by the budget limitation laws of the state. C. If a district lies in more than one county, the total budget estimate shall be divided by the board of directors in proportion to the value of the real property included within the district in each county, such value to be determined from the equalized values of the last assessment rolls of the counties. When such division of the estimate has been made the directors shall furnish the boards of supervisors of the respective counties a written statement of that part of the estimates apportioned to each county. 48-1915. Deposit and payment of district monies; investment and reinvestment of sinking fund A. Monies received for a hospital district from any source shall be deposited with the county treasurer of the organizing county to the credit of the hospital district, and paid out only on warrants approved by the board of directors of the district. B. The board of directors of the district, with the consent of the board of supervisors, may invest and reinvest all monies belonging or credited to the district as a sinking fund. The investment shall be made for the best interests of the district. C. The monies in the fund may be invested and reinvested under the authority of the federal farm credit act of 1933, or invested and reinvested in any of the following: 1. Bonds or other evidences of indebtedness of the United States of America or any of its agencies or instrumentalities when such obligations are guaranteed as to principal and interest by the United States of America or by any agency or instrumentality thereof. 2. Bonds or other evidences of indebtedness of this state or of any of the counties, incorporated cities or towns or duly organized school districts of this state. 3. Bonds, notes or evidences of indebtedness of any county, municipality or municipal district utility within this state that are payable from revenues or earnings specifically pledged for the payment of the principal and interest on such obligations, and for the payment of which a lawful sinking fund or reserve fund has been established and is being maintained, but only if no default in payment of principal or interest on the obligations to be purchased has occurred within five years of the date of investment therein, or, if such obligations were issued less than five years prior to the date of investment, no default in payment of principal or interest has occurred on the obligations to be purchased, nor on any other obligations of the issuer within five years of such an investment. 4. Bonds, notes or evidences of indebtedness issued by any municipal improvement district in this state to finance local improvements authorized by law, if the principal and interest of such obligations are payable from assessments on real property within such a local improvement district. No such investment shall be made if the face value of all such obligations, and similar obligations outstanding, exceed fifty percent of the market value of the real property and improvements on which such bonds or the assessments for the payment of principal and interest thereon are liens inferior only to the liens for general ad valorem property taxes. Such an investment shall be made only if no default in payment of principal or interest on the obligations to be purchased has occurred within five years of the date of investment therein, or, if such obligations were issued less than five years prior to the date of investment, no default in payment of principal or interest has occurred on the obligations to be purchased, nor on any other obligation of the issuer within five years of such an investment. 5. Interest-bearing saving accounts or certificates of deposit insured in banks or savings and loan associations doing business in Arizona by the federal deposit insurance corporation, or the federal savings and loan insurance corporation, but only if they are secured by the depository to the same extent and in the same manner as required by the general depository law of the state. Security shall not be required for that portion of any deposit that is insured under any law of the United States. 6. Deposits placed in accordance with the procedures prescribed in section 35-323.01. D. The purchase of the securities shall be made by the county treasurer on authority of a resolution of the board of directors, approved by the board of supervisors. The county treasurer shall be the custodian of all securities so purchased. The bonds may be sold on an order of the board of directors with the consent of the board of supervisors. E. All monies earned as interest or otherwise derived by virtue of this section shall be credited to the sinking fund. 48-1916. Disposition and use of rental from hospital or urgent care center or medical clinic and equipment Rentals received from the lease of the hospital or urgent care center and its equipment shall be applied first against expenses of the district other than for principal and interest on bonds of the district, and secondly to the payment of principal and interest on issued and outstanding bonds. 48-1917. Capital outlays A. The board of directors may establish a fund for capital outlays. After a capital outlay fund is created, the board of directors may transfer to the fund any unincumbered surplus funds remaining on hand in the district at the end of a fiscal year. B. When a capital outlay fund is established, it shall be used only for capital outlay purposes, but the board of directors may, by a four - fifths vote of all members, if it finds that the fund is no longer necessary or that there remain in the fund monies which are no longer required for capital outlay purposes, discontinue the fund or transfer as much of it as is no longer required for capital outlay purposes to the payment of outstanding bonds, or if there are none, to any fund for payment of current expenses of the district. 48-1918. Dissolution of district A district organized under this article may be dissolved by the majority vote of all real property taxpaying electors voting on the question of dissolution at a special election called to vote on the question. The election shall be called by the board of supervisors upon application of the board of directors of the district or upon filing a petition signed by twenty-five per cent of the electors of the district. If a district is dissolved, all property, buildings, equipment and other items owned by the district shall thereupon become the property of the county. 48-1919. Reimbursement for county services Services provided by a county to a hospital district are subject to reimbursement pursuant to section 11-251.06.