1-1                                   AN ACT

 1-2     relating to the Fisher County Hospital District.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Section 2, Chapter 448, Acts of the 63rd

 1-5     Legislature, Regular Session, 1973, is amended to read as follows:

 1-6           Sec. 2.   The district herein authorized to be created shall

 1-7     take over, and there shall be transferred to it, title to any and

 1-8     all lands, buildings, improvements, equipment, cash, moneys,

 1-9     accounts receivable, negotiable bonds, and choses in action in

1-10     anywise pertaining to the hospital or hospital system that may be

1-11     owned by Fisher County, or any city or town within such county at

1-12     the time of the election for the creation of the district; and

1-13     thereafter, the district shall have full title to all such

1-14     properties (real, personal, mixed, concrete, or abstract) and

1-15     provide for the establishment of a hospital system by the purchase,

1-16     construction, acquisition, repair, or renovation of buildings and

1-17     equipment, and equipping same, and the administration thereof for

1-18     hospital purposes.  Such district shall assume all outstanding

1-19     obligations and indebtedness incurred by any city or town within

1-20     said county or by Fisher County for hospital purposes prior to the

1-21     creation of any district.  The district has full responsibility for

1-22     operating hospital facilities and for furnishing medical care and

1-23     hospital care for the district's needy residents.  In the

1-24     geographic service area designated by the board of directors, the

 2-1     district may operate or provide for:

 2-2                 (1)  the operation of a mobile emergency medical

 2-3     service; and

 2-4                 (2)  home health services, long-term care services,

 2-5     skilled nursing care services, intermediate nursing care services,

 2-6     assisted living services, hospice care, or other health-related

 2-7     services.

 2-8           SECTION 2.  Sections 4(c) and (f), Chapter 448, Acts of the

 2-9     63rd Legislature, Regular Session, 1973, are amended to read as

2-10     follows:

2-11           (c)  An election of directors shall be held on the first

2-12     Saturday in May [April] of each year to elect the appropriate

2-13     number of directors.  Notice of the election shall be published one

2-14     time in a newspaper of general circulation in the district at least

2-15     35 days before [not more than 45 nor less than 30 days prior to]

2-16     the date of an election of directors.  The notice shall state the

2-17     purpose for which the election is being called and the date of the

2-18     election and voting places for the election.

2-19           (f)  Except as provided by Section 4A of this Act, all [All]

2-20     directors shall be elected at-large [unless the board is presented

2-21     with a petition signed by at least 10 percent of the qualified

2-22     voters of the district asking that the directors be elected by

2-23     precincts.  On receiving the petition, the board shall order a

2-24     special election to determine if a majority of the qualified voters

2-25     of the district desire that the directors be elected by precincts.

2-26     The election shall be held within 30 days after the petition is

2-27     received by the board, and notice of the purpose of the election

 3-1     and the date and voting places for the election shall be given in a

 3-2     newspaper with general circulation in the district not less than 15

 3-3     days before the day of the election.  The ballot for the election

 3-4     shall be printed to provide for voting for or against the

 3-5     proposition:  'The election of directors of the Fisher County

 3-6     Hospital District from precincts.'  If a majority of the qualified

 3-7     voters of the district participating in the special election vote

 3-8     for the proposition, the board shall divide the district into four

 3-9     directors precincts coterminous with the four county commissioners

3-10     precincts, and at the next election for directors after the special

3-11     election, one director shall be elected at-large and one director

3-12     shall be elected from each precinct.  Except for the director

3-13     elected at-large, each director must be a resident of the precinct

3-14     which he represents.  Directors from odd-numbered precincts and the

3-15     director at-large shall serve initial terms of two years; the other

3-16     directors shall serve initial terms of one year.  Thereafter, each

3-17     director shall serve for a term of two years and until his

3-18     successor has been duly elected and has qualified].

3-19           SECTION 3.  Chapter 448, Acts of the 63rd Legislature,

3-20     Regular Session, 1973, is amended by adding Section 4A to read as

3-21     follows:

3-22           Sec. 4A.   (a)  On its own initiative or on receipt of a

3-23     petition that is signed by a number of residents of the district

3-24     equal to at least 10 percent of the registered voters in the

3-25     district, the board of directors by order shall seek input from the

3-26     residents of the district to determine whether to modify the method

3-27     of electing the board of directors under this Act so that the

 4-1     directors are elected by one of the following election methods:

 4-2                 (1)  four single-member districts and one at-large

 4-3     member;

 4-4                 (2)  five single-member districts;

 4-5                 (3)  four single-member districts, with each district

 4-6     coextensive with a county commissioner's precinct, and one at-large

 4-7     member; or

 4-8                 (4)  cumulative voting.

 4-9           (b)  Not later than the 30th day after the date on which the

4-10     board of directors enters an order under Subsection (a) of this

4-11     section, the board shall establish an advisory committee composed

4-12     of residents of the district to advise and assist the board in

4-13     making the determination required by Subsection (a) of this

4-14     section.  The members of the advisory committee must represent all

4-15     segments of the population of the district.

4-16           (c)  The advisory committee shall hold a public hearing

4-17     regarding the proposed change in the election format not later than

4-18     the 60th day after the date on which it is established.  Not later

4-19     than the 30th day after the date on which the public hearing is

4-20     held, the advisory committee shall submit a recommendation to the

4-21     board of directors that includes comments and concerns raised by

4-22     the residents of the district regarding any proposed change in the

4-23     election format.

4-24           (d)  After reviewing the recommendations of the advisory

4-25     committee under Subsection (c) of this section, the board of

4-26     directors may adopt an order changing the method by which the board

4-27     of directors is elected.

 5-1           (e)  A modified election format adopted by the board of

 5-2     directors under this section shall be implemented at the next

 5-3     general election for  the directors of the district for which the

 5-4     change can be implemented consistently with the Election Code and

 5-5     federal law.

 5-6           SECTION 4.  Section 5, Chapter 448, Acts of the 63rd

 5-7     Legislature, Regular Session, 1973, is amended to read as follows:

 5-8           Sec. 5.   (a)  The board of directors shall manage, control,

 5-9     and administer the hospital system and all funds and resources of

5-10     the district, but in no event shall any operating, depreciation, or

5-11     building fund reserves be invested in any funds or securities other

5-12     than those specified in Articles 836 or 837, Revised Civil Statutes

5-13     of Texas, 1925, as amended.  The district, through its board of

5-14     directors, shall have the power and authority to sue and be sued,

5-15     to promulgate rules and regulations governing the operation of the

5-16     hospital, hospital system, its staff, and its employees.

5-17           (b)  The board of directors shall appoint a qualified person

5-18     to be known as the administrator or manager of the hospital

5-19     district [and may in its discretion appoint an assistant to the

5-20     administrator or manager].  Such administrator or manager [and

5-21     assistant administrator or manager, if any,] shall serve at the

5-22     will of the board and shall receive such compensation as may be

5-23     fixed by the board.  The administrator or manager shall, upon

5-24     assuming his duties, execute a bond payable to the hospital

5-25     district in an amount to be set by the board of directors, [in no

5-26     event less than $5,000,] conditioned that he shall perform the

5-27     duties required of him, and containing such other conditions as the

 6-1     board may require.  The cost of the bond is the responsibility of

 6-2     the district.  The administrator or manager shall supervise all the

 6-3     work and activities of the district and shall have general

 6-4     direction of the affairs of the district, subject to the

 6-5     limitations as may be prescribed by the board.

 6-6           (c)  The board of directors shall have the authority to

 6-7     appoint to the staff such doctors as it may deem necessary for the

 6-8     efficient operation of the district, and may provide for temporary

 6-9     appointments to the staff if warranted by circumstances.  The board

6-10     may delegate to the administrator or manager the authority to

6-11     employ medical practitioners, technicians, nurses, and employees of

6-12     the district and to incur reasonable and necessary expenses

6-13     relating to the search, recruitment, and hiring of medical

6-14     practitioners and employees for the district, including contracting

6-15     with a private entity such as a professional recruiting service.

6-16           (d)  Such board shall be authorized to contract with any

6-17     other political subdivision or governmental agency whereby the

6-18     district will provide investigatory or other services as to the

6-19     medical, hospital, or welfare needs of the inhabitants of the

6-20     district and shall be authorized to contract with any municipality,

6-21     county, special district, or other political subdivision of the

6-22     state, or a public or private hospital, private corporation,

6-23     partnership, or cooperative, [or incorporated municipality] located

6-24     inside or outside its boundaries for the care and treatment of the

6-25     sick, diseased, or injured persons of any such county, [or]

6-26     municipality, special district, or political subdivision, and shall

6-27     have the authority to contract with the State of Texas or agencies

 7-1     of the federal government for the treatment of the sick, diseased,

 7-2     or injured persons.

 7-3           (e)  This Act does not limit or prohibit the district from

 7-4     providing health care services to any ill or injured person,

 7-5     regardless of whether the person is a resident of the district.

 7-6     For purposes of this subsection, "health care service" includes

 7-7     home health care services, respiratory or physical therapy

 7-8     services, mobile emergency medical services, and clinic services.

 7-9           SECTION 5.  Section 6, Chapter 448, Acts of the 63rd

7-10     Legislature, Regular Session, 1973, is amended to read as follows:

7-11           Sec. 6.   (a)  The district shall be operated on the basis of

7-12     a fiscal year as established from time to time by the board of

7-13     directors of the district, provided such fiscal year shall not be

7-14     changed more often than once in any 24-month period.  The board

7-15     shall cause an independent audit to be made of the financial

7-16     condition of the district, which, together with other records of

7-17     the district, shall be open to inspection at the principal office

7-18     of the district, such audit to be made covering such fiscal year,

7-19     and the same shall be filed at the office of the district as soon

7-20     as it is completed.  The administrator or manager shall prepare an

7-21     annual budget for approval by the board of directors.  The proposed

7-22     budget must [shall also] contain a complete financial statement of

7-23     the district that includes:

7-24                 (1)  the [showing all] outstanding obligations of the

7-25     district;

7-26                 (2)  the amount of cash on hand to the credit of each

7-27     [and every] fund of the district;

 8-1                 (3)  the amount of money received by the district [,

 8-2     the funds received] from all sources during the previous year;

 8-3                 (4)  [,] the amount of money [funds] available to the

 8-4     district from all sources during the ensuing year;

 8-5                 (5)  the amount of the [, with] balances expected at

 8-6     the [year] end of the year in which the budget is being prepared;

 8-7                 (6)  the [, and] estimated amount of revenues and

 8-8     balances available to cover the proposed budget; and

 8-9                 (7)  the estimated tax rate which will be required[,

8-10     and the proposed expenditures and disbursements and the estimated

8-11     receipts and collections for the following fiscal year].

8-12           (b)  A public hearing on the annual budget shall be held by

8-13     the board of directors after notice of such hearing has been

8-14     published one time at least 10 days before the date set therefor.

8-15     Notice of the budget hearing shall be published in a newspaper or

8-16     newspapers which individually or collectively provide general

8-17     circulation in the hospital district.  Any property taxpayer of the

8-18     district shall have the right to be present and participate in said

8-19     hearing within such rules of decorum and procedures as may be

8-20     prescribed by the board.  At the conclusion of the hearing, the

8-21     budget, as proposed by the administrator, shall be acted upon by

8-22     the board of directors, and as modified or approved, such budget

8-23     shall become final.

8-24           (c) [(b)]  The board of directors shall have authority to

8-25     make changes in the budget as in their judgment the law warrants

8-26     and the interest of the taxpayer demands.  The annual budget may be

8-27     amended as the circumstances require but the budget and amendments

 9-1     shall be approved by the board of directors.  As soon as

 9-2     practicable after the close of each fiscal year, the administrator

 9-3     or manager shall prepare for the board a full sworn statement of

 9-4     all moneys belonging to the district and a full account of the

 9-5     disbursement of same.

 9-6           SECTION 6.  Section 7, Chapter 448, Acts of the 63rd

 9-7     Legislature, Regular Session, 1973, is amended to read as follows:

 9-8           Sec. 7.   The board of directors shall have the power and

 9-9     authority to issue and sell bonds in the name and upon the faith

9-10     and credit of such hospital district for the purchase,

9-11     construction, acquisition, repair, or renovation of buildings and

9-12     improvements and equipping the same for hospital purposes, the

9-13     acquisition and operation of a mobile emergency medical service,

9-14     and for any or all [of such] purposes designed to provide, improve,

9-15     or expand the health care services of the district.  At the time of

9-16     the issuance of any bonds, except those for which provision is made

9-17     in Section 8, a tax shall be levied by the board sufficient to

9-18     create an interest and sinking fund to pay the interest on and

9-19     principal thereon as same mature, providing such tax together with

9-20     any other taxes levied for said district shall not exceed the rate

9-21     of tax voted under the provisions of Section 3 of this Act.  Except

9-22     as provided in Section 8, no bonds shall be issued by or on behalf

9-23     of such hospital district until authorized by a majority of the

9-24     qualified electors of the district who own taxable property therein

9-25     and who have duly rendered the same for taxation voting at an

9-26     election called for such purpose.  The order for bond election

9-27     shall specify the date of the election, the amount of bonds to be

 10-1    authorized, the maximum maturity thereof, the maximum rate of

 10-2    interest they are to bear, the place or places where the election

 10-3    shall be held, the presiding judge and alternate judge for each

 10-4    voting place, and provide for clerks as in county elections.

 10-5    Notice of any bond election shall be given as provided in Article

 10-6    704, Revised Civil Statutes of Texas, 1925, as amended, and shall

 10-7    be conducted in accordance with the Election Code [general laws of

 10-8    Texas pertaining to general elections], except as modified by the

 10-9    provisions of this Act; provided, however, an election to authorize

10-10    the issuance of bonds may be held at the same time as the election

10-11    for which provision is made in Section 3, and in such event notice

10-12    of a bond election may be given in the manner provided in said

10-13    Section 3.

10-14          SECTION 7.  Section 11, Chapter 448, Acts of the 63rd

10-15    Legislature, Regular Session, 1973, is amended to read as follows:

10-16          Sec. 11.   The board of directors of such district shall have

10-17    the power to prescribe the method and manner of making purchases

10-18    and expenditures by and for such hospital district, and shall also

10-19    be authorized to prescribe all accounting and control procedures.

10-20    All contracts for construction involving the expenditure of more

10-21    than $10,000 [$2,000] may be made only after advertising in the

10-22    manner provided by Chapter 252, Local Government Code [Chapter 163,

10-23    Acts of the 42nd Legislature, Regular Session, 1931, as amended

10-24    (Article 2368a, Vernon's Texas Civil Statutes)].  The provisions of

10-25    Chapter 2253, Government Code [Article 5160, Revised Civil Statutes

10-26    of Texas, 1925, as amended], relating to performance and payment

10-27    bonds, shall apply to construction contracts let by the district.

 11-1    The district may acquire equipment for use in its hospital system

 11-2    and mortgage or pledge the property so acquired as security for the

 11-3    payment of the purchase price, but any such contract shall provide

 11-4    for the entire obligation of the district to be retired within five

 11-5    years from the date of the contract.  Except as permitted in the

 11-6    preceding sentence and as permitted by Sections 7 and 8 of this

 11-7    Act, the board may not incur any obligation payable from any

 11-8    revenues of the district, taxes or otherwise, except from funds on

 11-9    hand or to be on hand within the then current and following fiscal

11-10    year of the district.

11-11          SECTION 8.  Section 12, Chapter 448, Acts of the 63rd

11-12    Legislature, Regular Session, 1973, is amended to read as follows:

11-13          Sec. 12.   The board of directors of the district shall name

11-14    one or more banks within or without, either or both, its boundaries

11-15    to serve as depository for the funds of the district.  All funds of

11-16    the district, except those invested as provided in Section 5 of

11-17    this Act, and those transmitted to a bank or banks of payment for

11-18    bonds or obligations issued or assumed by the district, shall be

11-19    deposited as received with the depository bank and shall remain on

11-20    deposit, provided that nothing herein shall limit the power of the

11-21    board to place a portion of such funds on time deposit or purchase

11-22    certificates of deposit.  Before the district deposits the

11-23    district's funds in a bank in an amount that exceeds the maximum

11-24    amount secured by the Federal Deposit Insurance Corporation, the

11-25    bank must execute a bond or other security in an amount sufficient

11-26    to secure from loss the district funds that exceed the amount

11-27    secured by the Federal Deposit Insurance Corporation.

 12-1          SECTION 9.  Section 15, Chapter 448, Acts of the 63rd

 12-2    Legislature, Regular Session, 1973, is amended to read as follows:

 12-3          Sec. 15.   The district shall have the right and power of

 12-4    eminent domain for the purpose of acquiring by condemnation any and

 12-5    all property of any kind and character in fee simple, or any lesser

 12-6    interest therein, within the boundaries of the district necessary

 12-7    to the powers, rights, and privileges conferred by this Act, in the

 12-8    manner provided by Chapter 21, Property Code, but the district is

 12-9    not required to deposit in the trial court money or a bond as

12-10    provided by Section 21.021(a), Property Code [the general law with

12-11    respect to condemnation by counties, provided that the district

12-12    shall not be required to make deposits in the registry of the trial

12-13    court of the sum required by Paragraph 2 of Article 3268, Revised

12-14    Civil Statutes of Texas, 1925, as amended, or to make bond as

12-15    therein provided].  In condemnation proceedings being prosecuted by

12-16    the district, the district shall not be required to pay in advance

12-17    or give bond or other security for costs in the trial court, nor to

12-18    give any bond otherwise required for the issuance of a temporary

12-19    restraining order or a temporary injunction nor to give bond for

12-20    costs or for supersedeas on any appeal or writ of error.

12-21          SECTION 10.  Section 16, Chapter 448, Acts of the 63rd

12-22    Legislature, Regular Session, 1973, is amended to read as follows:

12-23          Sec. 16.   (a)  The directors shall have the authority to

12-24    levy taxes for the entire year in which the district is established

12-25    as the result of the election herein provided. [All taxes of the

12-26    district shall be assessed and collected on county tax values as

12-27    provided in Subsection (b) hereof unless the directors, by majority

 13-1    vote, elect to have taxes assessed and collected by its own tax

 13-2    assessor-collector under Subsection (c) hereof.  Any such election

 13-3    may be made prior to December 1 annually and shall govern the

 13-4    manner in which taxes are thereafter assessed and collected, until

 13-5    changed by a similar resolution.]

 13-6          (b)  The Tax Code governs the appraisal, assessment, and

 13-7    collection of district taxes.  [Under this subsection, district

 13-8    taxes shall be assessed and collected on county tax values in the

 13-9    same manner as provided by law with relation to county taxes.  The

13-10    tax assessor-collector of the county in which said district is

13-11    situated shall be charged and required to accomplish the assessment

13-12    and collection of all taxes levied by and on behalf of the

13-13    district.  The assessor-collector of taxes shall charge and deduct

13-14    from payments to the hospital district an amount as fees for

13-15    assessing and collecting the taxes at a rate of one percent of the

13-16    taxes assessed and two percent of the taxes collected, but in no

13-17    event shall the amount paid exceed $5,000 in any one calendar year.

13-18    Such fees shall be deposited in the officers' salary fund of the

13-19    county and reported as fees of office of the county tax

13-20    assessor-collector.  Interest and penalties on taxes paid to the

13-21    hospital district shall be the same as in the case of county taxes.

13-22    Discounts shall be the same as allowed by the county.  The residue

13-23    of tax collections after deduction of discounts and fees for

13-24    assessing and collecting shall be deposited in the district's

13-25    depository.  The bond of the county tax assessor-collector shall

13-26    stand as security for the proper performance of his duties as

13-27    assessor-collector of the district; or, if in the judgment of the

 14-1    district board of directors it is necessary, additional bond

 14-2    payable to the district may be required.  In all matters pertaining

 14-3    to the assessment, collection, and enforcement of taxes for the

 14-4    district, the county tax assessor-collector shall be authorized to

 14-5    act in all respects according to the laws of the State of Texas

 14-6    relating to state and county taxes.]

 14-7          (c)  The board may provide for the appointment of a tax

 14-8    assessor-collector for the district or may contract for the

 14-9    assessment and collection of taxes as provided by the Tax Code.

14-10    [Under this subsection, taxes shall be assessed and collected by a

14-11    tax assessor-collector appointed by the directors, who shall also

14-12    fix the terms of his employment, compensation, and requirement for

14-13    bond to assure the faithful performance of his duties, but in no

14-14    event shall such bond be for less than $5,000.  The directors shall

14-15    also annually appoint five persons to serve as a board of

14-16    equalization and shall fix their compensation.  Each member of the

14-17    board and the tax assessor-collector shall be residents of the

14-18    district and own real property subject to hospital district

14-19    taxation, and each shall have the same duties, including the

14-20    obligation to subscribe the oath of office, as required by county

14-21    officials exercising such powers and duties.  Except as in this law

14-22    provided to the contrary, all the provisions of Title 122, Revised

14-23    Civil Statutes of Texas, 1925, as amended, shall apply to the

14-24    district.]

14-25          SECTION 11.  Chapter 448, Acts of the 63rd Legislature,

14-26    Regular Session, 1973, is amended by adding Section 17A to read as

14-27    follows:

 15-1          Sec. 17A.   (a)  If the board of directors of the district

 15-2    declares that funds are not available to meet lawfully authorized

 15-3    obligations of the district and that an emergency exists, the board

 15-4    may borrow money at a rate not to exceed the maximum annual

 15-5    percentage rate allowed by law for district obligations at the time

 15-6    the loan is made.

 15-7          (b)  To secure a loan, the board of directors may pledge:

 15-8                (1)  revenues of the district that are not pledged to

 15-9    pay bonded indebtedness of the district;

15-10                (2)  district taxes to be imposed by the district

15-11    during the 12-month period following the date of the pledge that

15-12    are not pledged to pay the principal of or interest on district

15-13    bonds; or

15-14                (3)  district bonds that have been authorized but not

15-15    sold.

15-16          SECTION 12.  Chapter 448, Acts of the 63rd Legislature,

15-17    Regular Session, 1973, is amended by adding Section 23A to read as

15-18    follows:

15-19          Sec. 23A.   (a)  The district may be dissolved and its assets

15-20    and liabilities sold or transferred to another entity or person

15-21    only if the dissolution and sale or transfer are approved by a

15-22    majority of the qualified voters of the district voting in an

15-23    election called and held for that purpose.

15-24          (b)  The board of directors may order an election on the

15-25    question of dissolving the district and disposing of the district's

15-26    assets and liabilities.

15-27          (c)  The board of directors shall order an election on the

 16-1    question of dissolving the district and disposing of the district's

 16-2    assets and liabilities if the board receives a petition requesting

 16-3    an election on the issue that is signed by at least 300 of the

 16-4    registered voters of the district, according to the most recent

 16-5    official list of registered voters.  The election shall be called

 16-6    not later than the 60th day after the date the petition is

 16-7    presented to the district.

 16-8          (d)  The order calling the election must state:

 16-9                (1)  the nature of the election, including the

16-10    proposition that is to appear on the ballot;

16-11                (2)  the date of the election;

16-12                (3)  the hours during which the polls will be open; and

16-13                (4)  the location of the polling places.

16-14          (e)  The board of directors shall give notice of the election

16-15    by publishing a substantial copy of the election order in a

16-16    newspaper with general circulation in the district once a week for

16-17    two consecutive weeks.  The first publication must appear at least

16-18    35 days before the date set for the election.

16-19          (f)  The election shall be held not less than 45 days nor

16-20    more than 60 days after the date on which the election is ordered.

16-21    Section 41.001(a), Election Code, does not apply to an election

16-22    ordered under this Act.

16-23          (g)  The ballot for the election shall be printed to permit

16-24    voting for or against the proposition:  "The dissolution of the

16-25    Fisher County Hospital District and the ________ (transfer or sale,

16-26    as appropriate) of its assets and liabilities in the following

16-27    manner:  _________________."

 17-1          (h)  The board of directors shall canvass the returns of the

 17-2    election.  If the board finds that the election results are

 17-3    favorable to the proposition to dissolve the district and transfer

 17-4    or sell its assets and liabilities, the board shall issue an order

 17-5    declaring the district dissolved and shall proceed with the sale or

 17-6    transfer of its assets and liabilities according to the plan

 17-7    proposed on the ballot.  If the board finds that the election

 17-8    results are not favorable to the proposition to dissolve the

 17-9    district, the board shall continue to administer the district and

17-10    another dissolution election may not be held before the first

17-11    anniversary of the date of the most recent election at which voters

17-12    disapproved the proposition.

17-13          (i)  Notwithstanding any other provision of this Act, the

17-14    district may not be dissolved unless the board provides for the

17-15    sale or transfer of the district's assets and liabilities to

17-16    another entity or person.

17-17          (j)  The dissolution of the district and the sale or transfer

17-18    of the district's assets and liabilities may not:

17-19                (1)  contravene a trust indenture or bond resolution

17-20    relating to the outstanding bonds of the district; or

17-21                (2)  diminish or impair the rights of a holder of any

17-22    outstanding bond, warrant, or other obligation of the district.

17-23          (k)  The sale or transfer of the district's assets and

17-24    liabilities must satisfy the debt and bond obligations of the

17-25    district in a manner that protects the interests of the residents

17-26    of the district, including the residents' collective property

17-27    rights in the district's assets.  A grant from federal funds is an

 18-1    obligation that must be repaid in full.  The district may transfer

 18-2    or sell the district's assets only for due compensation, unless the

 18-3    transfer or sale is made to another governmental agency serving the

 18-4    district and using the transferred or purchased assets for the

 18-5    benefit of the residents formerly in the district.

 18-6          SECTION 13.  This Act takes effect September 1, 1997.

 18-7          SECTION 14.  The importance of this legislation and the

 18-8    crowded condition of the calendars in both houses create an

 18-9    emergency and an imperative public necessity that the

18-10    constitutional rule requiring bills to be read on three several

18-11    days in each house be suspended, and this rule is hereby suspended.

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I certify that H.B. No. 2277 was passed by the House on April

         11, 1997, by a non-record vote.

                                             _______________________________

                                                 Chief Clerk of the House

               I certify that H.B. No. 2277 was passed by the Senate on May

         5, 1997, by the following vote:  Yeas 31, Nays 0.

                                             _______________________________

                                                 Secretary of the Senate

         APPROVED:  _____________________

                            Date

                    _____________________

                          Governor