Relating to the operation of Wood County Central Hospital District of Wood County, Texas.
ModeratePlan for compliance
Low Cost
Effective:2025-09-01
Enforcing Agencies
Wood County Central Hospital District Board of Directors
01
Compliance Analysis
Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
Effective Date: September 1, 2025
Compliance Deadline: September 30, 2025 (Target for appointing temporary director and updating Investment Policy)
Agency Rulemaking: No state agency rulemaking required; however, the District Board must pass internal resolutions to formalize the new audit cycle and banking selection criteria immediately post-enactment.
Immediate Action Plan
Execute a Board resolution to appoint the temporary seventh director immediately after September 1, 2025.
Review all outstanding bond indentures to determine if an annual audit is contractually required despite the statutory relaxation.
Issue a new Request for Proposal (RFP) for depository services, soliciting bids from regional and statewide institutions previously ineligible.
Update the District’s Investment Policy Statement to explicitly mandate compliance with Government Code Chapter 2256.
Notify the D&O insurance carrier of the Board expansion to ensure coverage for the new appointee.
Operational Changes Required
Contracts
Depository Agreements: The statutory two-year term limit for bank contracts is repealed; you may now negotiate longer terms (e.g., 3-5 years). Geographic exclusivity is removed, allowing the District to contract with banks located outside Wood County.
Audit Engagements: Existing multi-year engagement letters with CPA firms must be reviewed. If the Board moves to a biennial or triennial audit cycle, these contracts require amendment to avoid breach or unnecessary fees.
Hiring/Training
Board Appointment: The Board must execute a selection process to appoint a temporary seventh director immediately following the effective date.
Financial Compliance: Finance staff must be retrained to ensure all asset allocations strictly comply with Government Code Chapter 2256 (Public Funds Investment Act), as the law removes previous investment discretion.
Reporting & Record-Keeping
Investment Policy Statement (IPS): You must update the IPS to explicitly cite Chapter 2256 as the sole authority for investments.
Audit Filing: Remove the December 1 deadline for filing the audit with the Comptroller from your compliance calendar; this statutory filing requirement is repealed.
Fees & Costs
Audit Savings: Potential reduction in professional service fees if the audit frequency is reduced from annual to triennial.
Banking Fees: Potential reduction in banking fees due to the ability to solicit competitive bids from regional or statewide institutions.
Strategic Ambiguities & Considerations
Audit Frequency vs. Bond Covenants: While HB 5664 permits a triennial audit, existing bond indentures or credit agreements likely mandate annual audits. Relying solely on this state statute could trigger a technical default on debt obligations. Legal counsel must cross-reference bond documents before altering the audit schedule.
Multiple Depositories: The law authorizes the use of "one or more banks" but does not specify allocation protocols. If utilizing multiple banks, the Board must establish clear internal controls for funds distribution to prevent liquidity mismanagement.
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The bill author has informed the committee that the Wood County Central Hospital District is responsible for providing health care services within its jurisdiction, and would benefit from enhancements to its governance, financial oversight, and operational efficiency. H.B. 5664 seeks to address this issue by revising provisions relating to the administration and finances of the district.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
H.B. 5664 amends the Special District Local Laws Code to revise provisions relating to the operation of the Wood County Central Hospital District of Wood County, Texas.
H.B. 5664 increases from six to seven the number of directors elected to the district board from the district at large unless the boundaries of the district are expanded under applicable law. The bill changes the frequency with which an independent audit of the district's books and records is required to be conducted from annually to as determined necessary by the board, but in no event less often than every three years. The bill removes the requirement for the board, not later than December 1 of each year, to file a copy of the audit with the comptroller of public accounts and the district.
H.B. 5664 establishes that the board may invest district funds only in funds or securities specified by the Public Funds Investment Act. The bill revises provisions relating to the depository of the district as follows:
·replaces the requirement for the board by resolution to designate a bank in Wood County as the district's depository with the requirement for the board by resolution to select one or more banks inside or outside the district to serve as the district's depository;
·removes a provision establishing that a designated bank serves for two years and until a successor is designated; and
·clarifies that the requirement for all district money to be deposited in the depository and secured in the manner provided for securing county funds applies to money other than the money invested in authorized funds and securities as provided by the bill.
H.B. 5664 requires the board to appoint a temporary director to serve until the date of the regular election of directors in 2026 following the bill's effective date.
EFFECTIVE DATE
On passage, or, if the bill does not receive the necessary vote, September 1, 2025.
HB 5664 mandates the expansion of the Wood County Central Hospital District Board from six to seven members and significantly deregulates the District's financial operations. The legislation removes geographic restrictions on banking partners, repeals the mandatory annual audit requirement in favor of a flexible schedule, and strictly tethers investment strategies to the Public Funds Investment Act. Implementation Timeline Effective Date: September 1, 2025 Compliance Deadline: September 30, 2025 (Target for appointing temporary director and updating Investment Policy) Agency Rulemaking: No state agency rulemaking required; however, the District Board must pass internal resolutions to formalize the new audit cycle and banking selection criteria immediately post-enactment.
Q
Who authored HB5664?
HB5664 was authored by Texas Representative Cole Hefner during the Regular Session.
Q
When was HB5664 signed into law?
HB5664 was signed into law by Governor Greg Abbott on June 20, 2025.
Q
Which agencies enforce HB5664?
HB5664 is enforced by Wood County Central Hospital District Board of Directors.
Q
How urgent is compliance with HB5664?
The compliance urgency for HB5664 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of HB5664?
The cost impact of HB5664 is estimated as "low". This may vary based on industry and implementation requirements.
Q
What topics does HB5664 address?
HB5664 addresses topics including wood county central hospital district of wood county, special districts & authorities, special districts & authorities--hospital, financial and financial--banks.
Legislative data provided by LegiScanLast updated: November 25, 2025
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