The McCulloch County Hospital District, a Special Purpose Taxing Authority, was formed in 1969. Somewhere along the line between then and now, they took an assumed name and began doing business as (dba) "Heart of Texas Memorial Hospital". MCHD operation is governed by Section 9, Article IX of the Texas Constitution and Texas Special District Local Laws Code Chapter 1059.

In November of 2010, Heart of Texas Healthcare System was formed. It is a tax-exempt corporation set up to "... perform the functions of, or to carry out the purposes of Heart of Texas Memorial Hospital". The 83rd Texas Legislature passed special legislation (HB 1920) that allows the McCulloch County Hospital District to lease the Brady hospital facilities to any person.

In April of 2011, the Hospital District leased the hospital to Healthcare System. Since then, the business structure of Brady Hospital has become incredibly complex with multiple tax-exempt corporations involved.

By delegating their functions to the tax-exempt Heart of Texas Healthcare System, the MCHD Board of Directors effectively removed daily hospital operation from compliance with the state laws mentioned above, including Texas Open Meetings and Open Records requirements. Other than the annual IRS Form 990, Healthcare System is not required to reveal anything about daily operation or financing to the public. It is a private corporation.

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