SPECTOR, Justice,
delivered the opinion for the Court,
in which PHILLIPS, Chief Justice, and HECHT, CORNYN, ENOCH, OWEN and BAKER, Justices, joined, in Parts I and IV of which GONZALEZ, Justice, joined, and in Parts I, III, and IV of which ABBOTT, Justice, joined.
In this medical malpractice case we consider whether a mother and father may recover mental anguish damages resulting from the delivery of a stillborn fetus. The jury found that Edinburg Hospital Authority, d/b/a Ed-inburg General Hospital, and its employees had negligently caused the mother and father mental anguish resulting from the loss of the fetus, and the trial court awarded damages to both. The court of appeals affirmed. 904 S.W.2d 831. We hold that the mother has [78]*78stated a negligence cause of action but failed to present adequate proof of mental anguish damages under this Court’s decision in Krishnan v. Sepulveda, 916 S.W.2d 478 (Tex.1996). We hold also that neither the mother nor the father is entitled to mental anguish damages as a bystander to the loss of the fetus. Accordingly, we reverse the judgment of the court of appeals, remanding in part and rendering in part.
I.
Shirley Mora (formerly Trevino) and Oscar Trevino were expecting their first child in the spring of 1989. Mora’s water broke, indicating the start of labor, on May 27, 1989. For unexplained reasons, Mora waited a day before admitting herself to Edinburg General Hospital. Dr. Carl Gruener was the attending physician for the delivery.
After Mora had been in the hospital several hours, Dr. Gruener determined that labor was progressing too slowly and ordered the administration of Pitocin, a drug used to augment labor. Mora soon began to hemorrhage, and Dr. Gruener performed an emergency caesarean section. The fetus was stillborn. Trevino was with his wife in the hospital up until the time she was taken into surgery, but he did not witness the actual delivery.
Mora sued Dr. Gruener and the hospital, alleging that their negligent treatment caused the stillbirth. Mora contended that the doctor and the hospital negligently monitored the administration of the Pitocin and the fetal heartbeat equipment. Trevino intervened, claiming that he suffered mental anguish as a bystander witnessing the events leading up to the stillbirth. Dr. Gruener eventually settled with both Mora and Trevi-ño before the trial.
The jury found that the hospital employees’ negligence in the use of the hospital’s tangible personal property caused Mora’s and Treviño’s mental anguish as a result of the stillbirth. The jury awarded Mora and Treviño $750,000 each in damages. The trial court reduced the damages to $250,000 each under the Texas Tort Claims Act. See Tex. Civ.Prac. & Rem.Code § 101.028(c).
II.
Initially, we must determine if Mora asserted a valid cause of action against the hospital and its employees. Because the hospital is a governmental unit, sovereign immunity prevents liability unless Mora can show property damage, personal injury, or death “caused by a condition or use of tangible personal or real property if the governmental unit would, were it a private person, be liable to the claimant according to Texas law.” Tex.Civ.PRAC. & Rem.Code § 101.021(2).
In her first amended petition, Mora pleaded two causes of action in support of her mental anguish damages. First, she alleged that the hospital’s treatment of her resulted in the loss of her fetus and constituted negligent infliction of mental anguish. Second, Mora alleged that she “was a bystander at the death of her infant,” and that witnessing this event caused her great mental anguish. She alleged no other claims against the hospital or its employees in the trial court.
No cause of action for wrongful death existed at common law; the right to sue for wrongful death is “purely a creature of statute.” Witty v. American Gen. Capital Distribs., Inc., 727 S.W.2d 503, 504 (Tex.1987). In Witty, we explained that the Texas Wrongful Death Act precludes recovery for the loss of a fetus when there has been no live birth. Id. This holding was based on the language of the Act viewed in light of the longstanding common law rule that the rights of a fetus were contingent on live birth. Id. at 505. Similarly, there is no survival cause of action for the loss of a fetus or for negligent medical treatment of a fetus not bom alive. Id. at 506; see Pietila v. Crites, 851 S.W.2d 185, 186 (Tex.1993); Yandell v. Delgado, 471 S.W.2d 569, 570 (Tex.1971). Without these causes of action, parents “are precluded from recovering damages for then-loss of society, companionship, and affection suffered as a result of the loss of the fetus.” Krishnan, 916 S.W.2d at 482.
In Krishnan, this Court addressed “whether a mother may recover mental anguish damages suffered because of the loss of her fetus resulting from an injury to the mother which was caused by the physician’s allegedly negligent treatment of the mother.” Id. at [79]*79840 (emphasis added). We held that, because mental anguish damages are available in personal injury actions generally, they are recoverable when suffered as a result of a negligently inflicted injury to the woman “which includes the loss of her fetus.” Id. at 481-82. Because Mora pleaded that she suffered a personal injury including the loss of her fetus resulting from a breach of a legal duty owed to her, she has stated a valid cause of action.
Although Mora has a negligence claim against the hospital for the personal injury she sustained in losing the fetus, she does not have a viable cause of action as a bystander for the loss of her fetus. We adopted the bystander cause of action in Texas based on guidelines set forth in a California case. See Dillon v. Legg, 68 Cal.2d 728, 69 Cal.Rptr. 72, 441 P.2d 912 (1968), construed in Freeman v. City of Pasadena, 744 S.W.2d 923, 923 (Tex.1988). As we stated in Boyles v. Kerr, “[b]efore a bystander may recover, he or she must establish that the defendant has negligently inflicted serious or fatal injuries on the primary victim.” 855 S.W.2d 593, 598 (Tex.1993). The hospital could not be held hable for a negligent injury to Mora’s fetus because, under established law, it does not owe a duty to a fetus that is not bom alive. See Krishnan, 916 S.W.2d at 479; Yandell, 471 S.W.2d at 570. Additionally, Mora cannot be a bystander to her own personal injury. The hospital thus cannot be held hable to Mora under a bystander cause of action. Mora’s only viable cause of action must be for the hospital’s neghgent treatment that resulted in personal injury to her.
At trial, Mora sought to prove mental anguish damages in part by presenting evidence that she had made preparations in expectation of the arrival of her baby: she had set aside a room in her home for the baby and purchased furniture for the room. She also testified that the loss of the fetus “still hurts [her] like it was yesterday,” that she carries a clipping of the funeral service with her, and that her marriage deteriorated after the loss of the fetus. This evidence relates to the grief that Mora felt over the loss of the fetus as a separate individual and not as part of her own body. Krishnan and our decision today clarify that a woman can recover mental anguish damages resulting from negligent treatment that causes the loss of a fetus as part of the woman’s body. Mora did not have the guidance provided by Boyles and Krishnan in this area of law, since both opinions were released after the trial in this case had occurred. This Court has broad discretion to remand for a new trial in the interest of justice when a party may have proceeded under the wrong legal theory. See Boyles, 855 S.W.2d at 603; American Title Ins. Co. v. Byrd, 384 S.W.2d 683 (Tex.1964). We therefore reverse the judgment of the court of appeals as to Mora and remand this part of the cause to the trial court for a new trial under the cause of action we recognized in Krishnan.1
III.
We next determine whether Trevino may recover mental anguish damages against the hospital. In his petition in intervention, Trevino alleges that he suffered severe mental anguish after witnessing the negligent treatment of his wife, Shirley Mora. Under Krishnan, the hospital owes no legal duty to Trevino to provide competent medical care to Mora or the fetus. 916 S.W.2d at 482; see also Cathey v. Booth, 900 S.W.2d 339, 342 (Tex.1995). Trevino instead argues that he should be permitted to recover mental anguish damages against the hospital as a bystander to Mora’s treatment.2
[80]*80Trevifio’s bystander cause of action alleges that he was injured because he witnessed the nurses negligently administering the Pitocin and failing to timely administer anesthesia to Mora. He also witnessed the “failure of the nursing personnel to recognize signs of placental abruption as indicated on the contraction monitor.” Treviño also saw Mora bleed heavily after some contractions and testified that he noticed blood clots in her bedpan that he thought were the fetus. Additionally, Treviño alleges mental anguish as a result of waiting for his wife to undergo an emergency caesarean section that resulted in the stillbirth. Treviño was not present for the stillbirth, however, and learned of it from a doctor only after the surgery.
A bystander may recover mental anguish damages under Texas law after witnessing a close relative suffer a traumatic injury because of a defendant’s negligent action. See Freeman, 744 S.W.2d at 923. This recovery is permitted because we recognize that there are certain situations in which a tortfeasor will owe a bystander a duty of care beyond that owed to the public in general. See id. at 924. A bystander who witnesses a negligently inflicted serious or fatal injury may recover for mental anguish if:
(1) The bystander was located near the scene of the accident as contrasted with one who was a distance away from it.
(2) The shock resulted from a direct emotional impact upon the bystander from the sensory and contemporaneous observance of the accident, as contrasted with learning of the accident from others after its occurrence.
(3) The bystander and the victim were closely related, as contrasted with an absence of any relationship or the presence of only a distant relationship.
Freeman, 744 S.W.2d at 924 (citing Dillon, 69 Cal.Rptr. at 80, 441 P.2d at 920); see also Boyles, 855 S.W.2d at 597-98. These factors are to be interpreted flexibly, however, and the court should determine in each case “whether the accident and harm was reasonably foreseeable.” Freeman, 744 S.W.2d at 924.
This Court has never considered whether a bystander to medical malpractice can recover mental anguish damages. To recover damages under the Dillon standard, a bystander must show a contemporaneous sensory perception of an accident. See Freeman, 744 S.W.2d at 924. In Ochoa v. Superior Court, 39 Cal.3d 159, 216 Cal.Rptr. 661, 703 P.2d 1 (1985), the California Supreme Court determined that a medical malpractice plaintiff did not need to witness a sudden and brief occurrence to recover emotional damages as a bystander. Id. 216 Cal.Rptr. at 666-67, 703 P.2d at 7. Instead, the court held that the bystander had stated a valid cause of action “when there is observation of the defendant’s conduct and the [patient’s] injury and contemporaneous awareness [on the part of the bystander that] the defendant’s conduct or lack thereof is causing harm to the [patient].” Id. 216 Cal.Rptr. at 668, 703 P.2d at 8. This relaxed standard permitted the plaintiff in Ochoa to recover mental anguish damages after she had repeatedly requested that a doctor examine her sick son, only to have her requests ignored and her son’s condition deteriorate. Because the plaintiff in Ochoa witnessed her son’s condition deteriorate as a direct result of the defendant hospital’s conduct, and because she connected her son’s injury with the hospital’s conduct, the court found she had stated a valid bystander cause of action. Id. New Jersey has followed California’s lead and relaxed the standard for bystander recovery in the medical malpractice context. See Gendek v. Poblete, 139 N.J. 291, 654 A.2d 970 (1995) (allowing medical malpractice bystander recovery when malpractice was connected with an injury and bystander suffered severe emotional distress).
Other jurisdictions, however, have refused to recognize a bystander cause of action in medical malpractice as the likelihood of hospitals’ substantially curtailing patient visitation to prevent bystander suits. See, e.g., Maloney v. Conroy, 208 Conn. 392, 545 A.2d 1059, 1064 (1988). Other courts have decided [81]*81to allow recovery for only those bystanders who are within the zone of danger and suffer emotional distress as a result of a reasonable fear of a physical injury to themselves. See Asaro v. Cardinal Glennon Mem. Hosp., 799 S.W.2d 595, 599 (Mo.1990); Vaillancourt v. Medical Ctr. Hosp. of Vermont, Inc., 139 Vt. 138, 425 A.2d 92, 95 (1980). Because medical malpractice cases rarely involve a situation in which the bystander would fear physical injury, the zone of danger standard effectively precludes bystander recovery in these cases. See Asaro, 799 S.W.2d at 600. There are still other jurisdictions that have limited bystander recovery in medical malpractice eases by holding that the hospital has no duty of care to nonpatients. See O’Hara v. Holy Cross Hosp., 137 Ill.2d 332, 148 Ill.Dec. 712, 714, 561 N.E.2d 18, 20 (1990).
We believe that the better-reasoned approach is not to permit bystander recovery in medical malpractice cases. The very nature of medical treatment is often traumatic to the layperson. Even when a medical procedure proves to be beneficial to the patient, it may shock the senses of the ordinary bystander who witnesses it. A bystander may not be able to distinguish between medical treatment that helps the patient and conduct that is harmful. A physician’s primary duty is to the patient, not to the patient’s relatives. Guided by these policy concerns, we hold that Texas’ bystander cause of action precludes bystander recovery in medical malpractice cases.
We do not doubt that Mora’s labor and the subsequent stillbirth were difficult and traumatic for Trevino, but Treviño claimed that he was injured as a bystander who witnessed malpractice upon his wife. Because we do not recognize bystander recovery in medical malpractice cases, Trevifio has failed to state a valid cause of action. We accordingly reverse the judgment of the court of appeals as to Treviño.
IV.
We next consider whether a settlement must be offset before or after applying the Tort Claims Act’s damages cap. Although resolution of this issue is not essential to our disposition of this ease, we address it to provide the trial court with guidance in the retrial of Mora’s case. See Palestine Contractors, Inc. v. Perkins, 386 S.W.2d 764, 773 (Tex.1964); Parker v. Bailey, 15 S.W.2d 1033, 1035 (Tex. Comm’n App.1929, holding approved).
Before the trial of this case, Mora’s doctor, Carl Gruener, settled with Mora for $44,000. Mora then obtained a jury verdict against the hospital authority for $750,000. The trial court offset the verdict by the settlement amount. Because this $706,000 amount was greater than the hospital authority’s liability limit under the Tort Claims Act, the trial court then reduced Mora’s recovery down to what it determined to be the authority’s liability cap and held it liable for that maximum amount. Edinburg Hospital Authority argues that the trial court should have first reduced the verdict down to the liability limit and then offset the settlement amount, thus holding the authority liable for its liability cap minus the settlement amount. We disagree.
Before the Legislature enacted the Tort Claims Act, Tex.Civ.PRAC. & Rem.Code chapter 101, governmental liability was limited to proprietary functions. See Joe R. Greenhill & Thomas V. Murto III, Governmental Immunity, 49 Tex.L.Rev. 462, 462 (1971). The Legislature enacted the Tort Claims Act to provide a limited waiver of sovereign immunity. Id. at 467; see Tex.Civ. Prao. & Rem.Code § 101.025. The Act’s waiver of immunity is limited in at least two ways: by the types of claims that can be brought against a governmental unit, Tex. Civ.PraC. & Rem.Code § 101.021, and by a cap on damages. Id. at § 101.023. Section 101.023 does not circumscribe a plaintiffs total recovery for a given injury. Instead, it delineates the extent of the government’s waiver of immunity from liability for that injury. See University of Texas at El Paso v. Nava, 701 S.W.2d 71, 72 (Tex.App.—El Paso 1985, no writ). When a plaintiff suffers an injury that falls within the Tort Claims Act, the Legislature has agreed to hold the government liable up to a specified dollar amount. That a plaintiff may have settled with some defendants does not affect the [82]*82degree of waiver of sovereign immunity that the Legislature has prescribed.
Thus, while the dollar amount of a settlement must be reduced from the verdict under the “one satisfaction” rule, Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 5-7 (Tex.1991), the settlement does not affect the maximum dollar amount to which the government has agreed to waive its immunity. A settlement with one tortfeasor should thus be offset before the verdict against the governmental unit is reduced to the statutory maximum. A contrary rule, taken to its logical end, would completely bar recovery against a tortfeasing municipal hospital authority when a plaintiff settles with another defendant for more than the hospital authority’s damages cap. Such a result cannot be the intent of the Legislature. On remand, should Mora be awarded a verdict against the hospital authority greater than its statutorily-imposed liability limit, the settlement with Dr. Gruener must be deducted from the verdict before the trial court reduces the verdict to the statutory limit.
V.
Mora alleged negligent treatment of her that resulted in the loss of her fetus, as well as her own injury as a bystander; only the former is a cognizable cause of action in Texas. Mora failed, however, to prove mental anguish damages in accordance with our opinions in Krishnan and today. Treviño claimed to be a bystander to the medical malpractice allegedly committed upon his wife, which is not a valid cause of action against the hospital. We accordingly reverse the judgment of the court of appeals. We render judgment that Treviño take nothing on his bystander claim, and remand only Mora’s portion of the case for a new trial in the interest of justice.
HECHT, Justice, concurring, joined by PHILLIPS, Chief Justice, and GONZALEZ, ENOCH, OWEN, BAKER and ABBOTT, Justices.
PHILLIPS, Chief Justice, GONZALEZ, ENOCH, OWEN, BAKER and ABBOTT, Justices and I join in this opinion, making it the opinion of the Court on the issue addressed. In addition, PHILLIPS, Chief Justice, ENOCH, OWEN and BAKER, Justices, and I join in, Justice SPECTOR’S opinion for the Court. GONZALEZ, Justice, joins only in Parts I and IV of Justice SPECTOR’S opinion and dissents from the Court’s judgment. ABBOTT, Justice, joins only in Parts I, III, and IV of Justice SPECTOR’S opinion and concurs in the Court’s judgment.
The court of appeals held that under the Tort Claims Act, a hospital authority created under the Hospital Authority Act is subject to the liability limits for municipalities rather than the lower limits for units of local government. 904 S.W.2d at 840-841. The court of appeals’ holding conflicts with Huckabay v. Irving Hospital Authority, 879 S.W.2d 64 (Tex.App.—Dallas 1993, writ dism’d by agr.). We consider this issue, as the Court considers the question of the settlement offset in Part IV of its opinion, “[t]o provide additional guidance to the trial court upon remand.” Ante at 81. We disagree with the court of appeals.
The Tort Claims Act provides for a limited waiver of governmental immunity. One limit is on the dollar amount of liability. The limit has changed over time. When the Act was first passed in 1969, it contained a single limit on the liability of all “units of government”: “Liability hereunder shall be limited to $100,000 per person and $300,000 for any single occurrence for bodily injury or death.” Act of May 14,1969, 61st Leg., R.S., ch. 292, §§ 2, 3, 1969 Tex.Gen.Laws 874, 875. In 1973 the Act was amended to add a limit of “$10,000 for any single occurrence for injury to or destruction of property.” Act of April II, 1973, 63rd Leg., R.S., ch. 50, § 1, 1973 Tex.Gen.Laws 77.
In 1983 the Act was amended to distinguish between state and local governments, to provide a higher $250,000/$500,000 cap on state government liability for bodily injury and death, and to set the property damage cap for both state and local governments at $100,000. State government was defined as “an agency, board, commission, department, or office, other than a district or authority created under Article XVI, Section 59, of the Texas Constitution, that: (1) was created by the constitution or a statute of this state; [83]*83and (2) has statewide jurisdiction.” Act of May 28, 1988, 68th Leg., R.S., eh. 530, § 1, 1988 Tex.Gen.Laws. 3084. In 1985 the Act was recodified as part of the Civil Practice and Remedies Code. Act of May 17, 1985, 69th Leg., R.S., ch. 959, 1985 Tex.Gen.Laws 3242. The definition of state government was moved verbatim to section 101.001(5) of the Code, where it remains unchanged. The provisions limiting liability became section 101.023, as follows:
(a) Liability of the state government under this chapter is limited to money damages in a maximum amount of $250,000 for each person and $500,000 for each single occurrence for bodily injury or death and $100,000 for each single occurrence for injury to or destruction of property.
(b) Liability of a unit of local government under this chapter is limited to money damages in a maximum amount of $100,000 for each person and $300,000 for each single occurrence for bodily injury or death and $100,000 for each single occurrence for injury to or destruction of property.
Act of May 17, 1985, 69th Leg., R.S., ch. 959, 1985 Tex.Gen.Laws 3242, 3303.
While the state and its subdivisions created for purely public purposes are immune from liability for all their actions, a municipality or other governmental unit created only partly for public purposes is immune from liability only for its governmental conduct, not for its proprietary conduct. City of Galveston v. Posnainsky, 62 Tex. 118, 125 (1884). Prior to 1987 the line between a municipality’s governmental and proprietary conduct was judicially drawn. In 1987 the Constitution was amended to authorize the Legislature to exercise this power, Tex. Const, art. 11, § 13, and the Legislature did so by adding section 101.0215 to the Tort Claims Act. Act of June 3, 1987, 70th Leg., 1st C.S., ch. 2, § 3.02,1987 Tex.Gen.Laws 37, 47-48. The Legislature defined almost all the functions of a municipality as governmental, thus shrouding them with immunity from liability. Id. In exchange for this added protection, the Legislature increased the liability limits on bodily injury and death liability for municipalities by amending section 101.023(b) to begin, “Except as provided in Subsection (c),” and adding subsection (c) as follows:
(c)Liability of a municipality under this chapter is limited to money damages in a maximum amount of $250,000 for each person and $500,000 for each single occurrence for bodily injury or death and $100,-000 for each single occurrence for injury to or destruction of property.
Act of June 3,1987, 70th Leg., 1st C.S., eh. 2, § 3.03, 1987 Tex.Gen.Laws 37, 48. In effect, the Legislature separated municipalities from other units of local government. This legislation was part of a “tort reform” package enacted as Senate Bill 5.
The court of appeals held that “municipality” in the context of section 101.023(c) includes hospital authorities created under the Hospital Authority Act, chapter 262 of the Health and Safety Code. (The Code also authorizes municipal hospitals in chapter 261, county hospitals in chapter 263, county hospital authorities in chapter 264, joint municipal and county hospitals in chapter 265, and hospital districts in subtitle D. We consider only hospital authorities under chapter 262.) Hospital authorities were first permitted by the Legislature in 1957. Act of May 17, 1957, 55th Leg., R.S., ch. 472, 1957 Tex.Gen. Laws 1379, formerly Tex.Rev.Civ.Stat. ann. art. 4437e (West 1976). A hospital authority is a “body politic and corporate” that “does not have taxing power”, created by ordinance by one or more municipalities. Tex.Health & Safety Code § 262.003. It is governed by a board of directors, id. § 262.011, appointed— with certain exceptions — for two-year terms by the governing body of the municipality that created it (governing bodies, if more than one municipality), id. § 262.012. A hospital authority may sue and be sued, id. § 262.021(b)(2), may own, operate and maintain hospitals, id. § 262.022, may issue revenue bonds to fund its purposes, id. § 262.041, and may exercise the power of eminent domain under the Property Code as if it were a municipal corporation, id. § 262.028.
Nothing in the history or purpose of Senate Bill 5 suggests that the Legislature intended to raise the liability caps on hospital authorities when it raised them on municipal[84]*84ities. The purpose of Senate Bill 5 was to give municipalities greater certainty as to the extent of their liability. It did so by reclassifying many of a municipality’s proprietary functions — for which it had unlimited liability — as governmental functions — for which its liability is limited by the Tort Claims Act. Tex.Civ.Prac. & Rem.Code § 101.0215. In exchange, the Legislature raised the limits of municipalities’ liability. Id. § 101.023(e). As a result, municipalities enjoyed immunity for more of their functions even though their maximum liability exposure when immunity was waived increased. Unlike municipalities, hospital authorities have only governmental functions and thus have always been immune from liability for all their actions, except to the extent immunity is waived by the Tort Claims Act. See Classen v. Irving Healthcare Sys., 898 S.W.2d 300 (Tex.1995); Childs v. Greenville Hosp. Auth., 479 S.W.2d 399 (Tex.Civ.App.—Texarkana 1972, writ ref'd n.r.e.). Hospital authorities therefore could not benefit from a reclassification of proprietary functions as governmental. If Senate Bill 5 raised the limits on hospital authorities’ liability, it did so without giving them the same benefit of broader immunity that it gave municipalities. It is unlikely that the Legislature would have done this without comment.
The court of appeals based its holding on the control a municipality has over a hospital authority it creates, and the dependency of the authority on the municipality: “A hospital authority is formed by the municipality, governed by directors appointed by that municipality, and subject to dissolution by the municipality. It has no ability to raise money through taxes.” 904 S.W.2d at 841. Thus, the court concluded, a hospital authority “is an extension of the municipality and is not a ‘unit of local government.’ ” Id. But the interrelationship between a municipality and a hospital authority does not lessen the fact that the two entities are separate. In the Local Government Code “municipality” means a city. Tex.Loc.Gov’t Code § 1.005(3). In chapter 29 of the Government Code “ ‘municipality’ means an incorporated city, town, or village.” Tex.Gov’t Code § 29.001. We are not aware of an instance when “municipality” is used to describe a governmental unit with a special, limited purpose, like a hospital authority. Three statutes list municipalities and hospital districts as separate governmental entities. Tex.Civ. Prac. & Rem.Code § 9.002(b); Tex.Health & Safety Code 61.002(7); Tex.Loc.Gov’t Code § 271.021. Many other statutes list municipalities separately from authorities generally. E.g., Tex.Gov’t Code §§ 419.021(4), 431.035(b), 431.045(b), 431.056(a), 441.031(3), 441.151(8), 554.001(2), 609.001(6), 810.001(1), 2251.001(4), 2252.001(2), 2254.002(1); Tex. Health & Safety Code § 773.003(17); Tex. Lab.Code §§ 22.001(6), 92.002(5); Tex.Loc. Gov’t Code § 201.003(7), 201.007, 271.003(4), 271.903, 391.002(1); Tex.Rev.Civ.Stat.Ann. art. 601i, § 1(5) (Vernon Supp.1996). So consistently do the statutes treat municipalities and authorities separately that it is most unlikely that the Legislature should have intended to treat them the same in one statute absent some clear indication to the contrary. No evidence of such intent can be found in Senate Bill 5.
Perhaps the most persuasive indication of legislative intent is found in section 262.035 of the Health and Safety Code. That statute, enacted in 1993 (Act of May 27, 1993, 73rd Leg., R.S., ch. 558, 1993 Tex.Gen.Laws 2068), “applies only to an authority created in a county with a population of at least 350,000 in which a hospital district is not located.” Tex.Health & Safety Code § 262.035(a). (Seven counties — Bexar, Dallas, El Paso, Harris, Hidalgo, Tarrant, and Travis have more than 350,000 in population. Dallas Morning News, Texas Almanac 133-283 (1995). It appears that two of them, Hidalgo and Travis, presently do not have hospital districts.) The statute authorizes a municipality to lease a hospital and other facilities owned by the municipality to a hospital authority. In that event, the municipality has more control over the authority than it would have otherwise. For example, the municipality may retain the power to appoint all directors of the authority, notwithstanding the exceptions set out in section 262.012, and if the municipality retains this power, it may remove any member at any time for cause. Id. § 262.035(b)(1), (c). The authority must perform specified services on the municipali[85]*85ty’s behalf and cannot eliminate them without the municipality’s approval. Id. § 262.035(b)(2), (4). The authority cannot contract for management of the hospital without the municipality’s consent. And authority employees may participate in the municipality’s employee benefit plans.
Nevertheless, section 262.035(d) expressly provides that for purposes of the Tort Claims Act “a municipal hospital authority subject to this section is a unit of local government and not a municipality”. Id. § 262.035(d). It is implausible that the Legislature would treat the more independent hospital authorities as municipalities, but hospital authorities that are subject to greater control by municipalities as other units of local government. The result would be that hospital authorities least like municipally owned hospitals would still be subject to the liability caps for those hospitals, while hospital authorities most like municipally owned hospitals would not be. There is no indication in the statutes that the Legislature intended this result.
The Trevifios argue that to treat a hospital authority as a unit of local government but a municipally owned hospital as a municipality, subjecting them to different liability caps under the Tort Claims Act, denies the Trevi-fios equal rights in violation of Article I, Section 3 of the Texas Constitution. The Court rejected a similar argument in Guillory v. Port of Houston Authority, 845 S.W.2d 812, 815 (Tex.1993): “one governmental unit cannot be denied the immunity to which it would otherwise be entitled simply because the Legislature has waived immunity for another governmental unit. One may disagree with the choices made by the Legislature, but one can hardly deny its power to choose.”
Nor will we infer from the Legislature’s possession of discretion that it has acted arbitrarily or irrationally, especially when a logical explanation for its action is apparent. It is clear to us that the Legislature intended only municipalities — cities and towns — to be subject to higher liability limits under section 101.023(c) of the Tort Claims Act. Thus, we hold that hospital authorities continue to be units of local government within the meaning of section 101.023(b) of the Tort Claims Act.