76R12022 E                           
         By Solis of Cameron                                   H.B. No. 3505
         Substitute the following for H.B. No. 3505:
         By Uresti                                         C.S.H.B. No. 3505
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the  creation and operation of health services
 1-3     districts; granting the power of eminent domain and the authority
 1-4     to issue bonds.
 1-6           SECTION 1.  Subtitle D, Title 4, Health and Safety Code, is
 1-7     amended by adding Chapter 287 to read as follows:
 1-8                   CHAPTER 287.  HEALTH SERVICES DISTRICTS
 1-9                      SUBCHAPTER A.  GENERAL PROVISIONS
1-10           Sec. 287.001.  DEFINITIONS.  In this chapter:
1-11                 (1)  "Board" means the board of directors of a
1-12     district.
1-13                 (2)  "District" means a health services district
1-14     created under this chapter.
1-15                 (3)  "Director" means a member of the board.
1-16           Sec. 287.002.  DISTRICT AUTHORIZATION.  A health services
1-17     district may be created and established and, if created, must be
1-18     maintained, operated, and financed in the manner provided by this
1-19     chapter.
1-20              (Sections 287.003-287.020 reserved for expansion)
1-21                     SUBCHAPTER B.  CREATION OF DISTRICT
1-22           Sec. 287.021.  CREATION BY CONCURRENT ORDERS.  (a)  Except as
1-23     provided by Subsection (b), a county or hospital district and one
1-24     or more other counties or hospital districts may create a health
 2-1     services district by adopting concurrent orders.
 2-2           (b)  A county that is in the service area of a hospital
 2-3     district may not be a party to the creation of a health services
 2-4     district or to a contract with a health services district.  The
 2-5     hospital district that serves the county may create and contract
 2-6     with the health services district for its service area.
 2-7           (c)  A concurrent order to create a health services district
 2-8     must:
 2-9                 (1)  be approved by the governing body of each creating
2-10     county and hospital district;
2-11                 (2)  contain identical provisions; and
2-12                 (3)  define the boundaries of the district to be
2-13     coextensive with the combined boundaries of each creating county
2-14     and hospital district.
2-15           Sec. 287.022.  CONTRACT TERMS.  (a)  A county or hospital
2-16     district that creates a district under this chapter shall contract
2-17     with the district to provide, at a minimum, the health care
2-18     services the county or hospital district is required to provide by
2-19     law or under the constitution.  A contract with a county or
2-20     hospital district that created the health services district under
2-21     this chapter must:
2-22                 (1)  state the term of the contract, not to exceed six
2-23     years;
2-24                 (2)  specify the purpose, terms, rights, and duties of
2-25     the district, as authorized by this chapter;
2-26                 (3)  specify the financial contributions to be made by
2-27     each party to the contract to fund the district, as described by
 3-1     Section 287.024; and
 3-2                 (4)  specify the land, buildings, improvements,
 3-3     equipment, and other assets owned by a party to the contract that
 3-4     the district will be required to manage and operate.
 3-5           (b)  Chapter 791, Government Code, does not apply to a
 3-6     contract made under this chapter.
 3-7           Sec. 287.023.  PURPOSE AND DUTIES.  A health services
 3-8     district shall:
 3-9                 (1)  provide health care services to indigent residents
3-10     of the district;
3-11                 (2)  provide health care services to nonindigent
3-12     residents of the district on a sliding-fee scale;
3-13                 (3)  acquire or construct buildings and improvements
3-14     necessary for providing health care services to residents of the
3-15     district;
3-16                 (4)  manage the funds contributed to the district by
3-17     each county or hospital district that contracts with the district;
3-18                 (5)  manage and operate the land, buildings,
3-19     improvements, equipment, and other assets for which the district
3-20     assumes responsibility for management and operation under the
3-21     contract or that are acquired or constructed by the district;
3-22                 (6)  plan and coordinate with public and private health
3-23     care providers and entities for the long-term provision of health
3-24     care services to residents of the district; and
3-25                 (7)  ensure the provision of quality health care by
3-26     health care providers employed by or under contract with the
3-27     district.
 4-1           Sec. 287.024.  FUNDING.  (a)  Each county or hospital
 4-2     district that contracts with the district shall contribute to the
 4-3     district for its operation:
 4-4                 (1)  a specified dollar amount from or a percentage of
 4-5     the contracting entity's operating budget and reserves;
 4-6                 (2)  state assistance received under Chapter 61;
 4-7                 (3)  federal matching funds received under the Medicaid
 4-8     disproportionate share program; and
 4-9                 (4)  any funds that are:
4-10                       (A)  received under the Agreement Regarding
4-11     Disposition of Settlement Proceeds dated July 18, 1998, or July 24,
4-12     1998, and filed in the United States District Court, Eastern
4-13     District of Texas, in the case styled The State of Texas v. The
4-14     American Tobacco Company, et al., No. 5-96CV-91; and
4-15                       (B)  received on or after the date on which the
4-16     district is created and before the district is dissolved.
4-17           (b)  The district shall maintain an accounting of the funds
4-18     received from each county or hospital district that contracts with
4-19     the district.
4-20           (c)  The district may commingle and administer the financial
4-21     contributions of all parties to the contract for district purposes.
4-22              (Sections 287.025-287.040 reserved for expansion)
4-24           Sec. 287.041.  BOARD OF DIRECTORS.  (a)  Each county or
4-25     hospital district that creates the district shall appoint two
4-26     directors to the board.
4-27           (b)  In addition to the directors appointed to the board
 5-1     under Subsection (a), the creating counties and hospital districts
 5-2     shall agree on and collectively appoint one additional director.
 5-3           (c)  Directors serve staggered two-year terms, with as near
 5-4     as possible to one-half of the directors' terms expiring each year.
 5-5           Sec. 287.042.  QUALIFICATIONS FOR OFFICE.  (a)  To be
 5-6     eligible to serve as a director, a person must be:
 5-7                 (1)  a resident of the county or hospital district that
 5-8     appoints the person, if the person is appointed under Section
 5-9     287.041(a); or
5-10                 (2)  a resident of the district if the person is
5-11     appointed under Section 287.041(b).
5-12           (b)  An employee of the district may not serve as a director.
5-13           Sec. 287.043.  BOND.  (a)  Before assuming the duties of the
5-14     office, each director must execute a bond for $5,000 payable to the
5-15     district, conditioned on the faithful performance of the person's
5-16     duties as director.
5-17           (b)  The bond shall be kept in the permanent records of the
5-18     district.
5-19           (c)  The board may pay for directors' bonds with district
5-20     funds.
5-21           Sec. 287.044.  BOARD VACANCY.  A vacancy in the office of
5-22     director shall be filled for the unexpired term in the same manner
5-23     as the original appointment.
5-24           Sec. 287.045.  OFFICERS.  (a)  The board shall elect from
5-25     among its members a president and a vice president.
5-26           (b)  The board shall appoint a secretary who need not be a
5-27     director.
 6-1           Sec. 287.046.  OFFICERS' TERMS; VACANCY.  (a)  Each officer
 6-2     of the board serves for a term of one year.
 6-3           (b)  The board shall fill a vacancy in a board office for the
 6-4     unexpired term.
 6-5           Sec. 287.047.  COMPENSATION.  (a)  Directors and officers
 6-6     serve without compensation but may be reimbursed for actual
 6-7     expenses incurred in the performance of official duties.
 6-8           (b)  Expenses reimbursed under this section must be:
 6-9                 (1)  reported in the district's minute book or other
6-10     district records; and
6-11                 (2)  approved by the board.
6-12           Sec. 287.048.  VOTING REQUIREMENT.  A majority of the members
6-13     of the board voting must concur in a matter relating to the
6-14     business of the district.
6-15           Sec. 287.049.  ADMINISTRATOR AND ADDITIONAL STAFF.  (a)  The
6-16     board may appoint qualified persons as administrator of the
6-17     district and as additional administrative staff members as the
6-18     board considers necessary for the efficient operation of the
6-19     district.
6-20           (b)  The administrator and other administrative staff members
6-21     serve at the will of the board.
6-22           (c)  The administrator and other administrative staff members
6-23     are entitled to compensation as determined by the board.
6-24           (d)  Before assuming the administrator's duties, the
6-25     administrator shall execute a bond payable to the health services
6-26     district in an amount not less than $5,000 as determined by the
6-27     board, conditioned on the faithful performance of the
 7-1     administrator's duties under this chapter.  The board may pay for
 7-2     the bond with district funds.
 7-3           Sec. 287.050.  APPOINTMENTS TO STAFF.  The board may:
 7-4                 (1)  appoint to the staff any doctors the board
 7-5     considers necessary for the efficient operation of the district;
 7-6     and
 7-7                 (2)  make temporary appointments the board considers
 7-8     necessary.
 7-9           Sec. 287.051.  TECHNICIANS, NURSES, AND OTHER DISTRICT
7-10     EMPLOYEES.  (a)  The district may employ or contract for services
7-11     with technicians, nurses, fiscal agents, accountants, architects,
7-12     attorneys, and other necessary employees.
7-13           (b)  The board may delegate to the administrator the
7-14     authority to employ persons for the district.
7-15           Sec. 287.052.  GENERAL DUTIES OF ADMINISTRATOR.  The
7-16     administrator shall:
7-17                 (1)  supervise the work and activities of the district;
7-18     and
7-19                 (2)  direct the general affairs of the district,
7-20     subject to the limitations prescribed by the board.
7-21           Sec. 287.053.  RETIREMENT BENEFITS.  The board may provide
7-22     retirement benefits for employees of the district by:
7-23                 (1)  establishing or administering a retirement
7-24     program; or
7-25                 (2)  electing to participate in the Texas County and
7-26     District Retirement System or in any other statewide retirement
7-27     system in which the district is eligible to participate.
 8-1              (Sections 287.054-287.070 reserved for expansion
 8-2                      SUBCHAPTER D.  POWERS AND DUTIES
 8-3           Sec. 287.071.  RESPONSIBILITY OF GOVERNMENTAL ENTITY.  On
 8-4     creation of a district, a county or hospital district in which the
 8-5     district is located shall transfer to the district:
 8-6                 (1)  management and operation of any land, buildings,
 8-7     improvements, and equipment related to the health care system
 8-8     located wholly in the district that are owned by the county or
 8-9     hospital district in which the district is located, as specified in
8-10     the contract with the counties and hospital districts that created
8-11     the district; and
8-12                 (2)  operating funds and reserves for operating
8-13     expenses and funds that have been budgeted by the county or
8-14     hospital district in which the district is located to provide
8-15     medical care for residents of the district, as specified in the
8-16     contract with the counties and hospital districts that created the
8-17     district.
8-18           Sec. 287.072.  DISTRICT RESPONSIBILITIES.  On creation of a
8-19     district, the district assumes the duties required under Section
8-20     287.023 and any additional duties specified in the contract with
8-21     the counties and hospital districts that created the district.
8-22           Sec. 287.073.  MANAGEMENT, CONTROL, AND ADMINISTRATION.  The
8-23     board shall manage, control, and administer the health care system
8-24     and the funds and resources of the district that are transferred
8-25     under Section 287.071.
8-26           Sec. 287.074.  DISTRICT RULES.  The board may adopt rules
8-27     governing the operation of the district and the duties, functions,
 9-1     and responsibilities of district staff and employees.
 9-2           Sec. 287.075.  METHODS AND PROCEDURES.  The board may
 9-3     prescribe:
 9-4                 (1)  the method of making purchases and expenditures by
 9-5     and for the district; and
 9-6                 (2)  accounting and control procedures for the
 9-7     district.
 9-8           Sec. 287.076.  HEALTH CARE PROPERTY, FACILITIES, AND
 9-9     EQUIPMENT.  (a)  The board shall determine:
9-10                 (1)  the type, number, and location of buildings
9-11     required to establish and maintain an adequate health care system;
9-12     and
9-13                 (2)  the type of equipment necessary for health care.
9-14           (b)  The board may:
9-15                 (1)  acquire property, facilities, and equipment for
9-16     the district for use in the health care system;
9-17                 (2)  mortgage or pledge the property, facilities, or
9-18     equipment acquired as security for the payment of the purchase
9-19     price;
9-20                 (3)  transfer by lease to physicians, individuals,
9-21     companies, corporations, or other legal entities or acquire by
9-22     lease district health care facilities;
9-23                 (4)  sell or otherwise dispose of property, facilities,
9-24     or equipment acquired by the district; and
9-25                 (5)  contract with a state agency to provide facilities
9-26     and health care services.
9-27           Sec. 287.077.  CONSTRUCTION CONTRACTS.  (a)  The board may
 10-1    enter into construction contracts for the district.
 10-2          (b)  The board may enter into construction contracts that
 10-3    involve spending more than $10,000 only after competitive bidding
 10-4    as provided by Subchapter B, Chapter 271, Local Government Code.
 10-5          (c)  Chapter 2253, Government Code, as it relates to
 10-6    performance and payment bonds, applies to construction contracts
 10-7    let by the district.
 10-9    The board may enter into operating or management contracts relating
10-10    to health care facilities owned by the district or for which the
10-11    district assumes responsibility for managing and operating under
10-12    the terms of the contract with the counties and hospital districts
10-13    that created the district.
10-14          Sec. 287.079.  EMINENT DOMAIN.  (a)  A district may exercise
10-15    the power of eminent domain to acquire a fee simple or other
10-16    interest in property located in the territory of the district if
10-17    the property interest is necessary to the exercise of the rights or
10-18    authority conferred by this chapter.
10-19          (b)  A district must exercise the power of eminent domain in
10-20    the manner provided by Chapter 21, Property Code, but the district
10-21    is not required to deposit in the trial court money or a bond as
10-22    provided by Section 21.021(a), Property Code.
10-23          (c)  In a condemnation proceeding brought by a district, the
10-24    district is not required to:
10-25                (1)  pay in advance or give bond or other security for
10-26    costs in the trial court;
10-27                (2)  give bond for the issuance of a temporary
 11-1    restraining order or a temporary injunction; or
 11-2                (3)  give bond for costs or supersedeas on an appeal or
 11-3    writ of error.
 11-5    UTILITIES.  If, in exercising the power of eminent domain, the
 11-6    board requires relocating, raising, lowering, rerouting, changing
 11-7    the grade, or altering the construction of any railroad, highway,
 11-8    pipeline, or electric transmission and electric distribution,
 11-9    telegraph, or telephone lines, conduits, poles, or facilities, the
11-10    district must bear the actual cost of relocating, raising,
11-11    lowering, rerouting, changing the grade, or altering the
11-12    construction to provide comparable replacement without enhancement
11-13    of a facility, after deducting the net salvage value derived from
11-14    the old facility.
11-15          Sec. 287.081.  PAYMENT FOR HEALTH CARE SERVICES.  (a)  The
11-16    district without charge shall supply to a patient residing in the
11-17    district the care and treatment for which the patient, the
11-18    patient's guardian out of the estate of the patient, or a relative
11-19    of the patient who is legally responsible for the patient's support
11-20    cannot pay.  In determining the type and degree of care and
11-21    treatment required by a patient, a health care professional
11-22    employed by or under contract with the district may not consider
11-23    that the patient or the patient's relative who is responsible for
11-24    the patient's support cannot pay for the care and treatment of the
11-25    patient.
11-26          (b)  Not later than the first day of each operating year, the
11-27    district shall adopt an application procedure to determine
 12-1    eligibility for assistance that complies with Section 61.053.
 12-2          (c)  The administrator of the district may have an inquiry
 12-3    made into the financial circumstances of:
 12-4                (1)  a patient residing in the district and admitted to
 12-5    a district facility, including the size of the patient's estate;
 12-6    and
 12-7                (2)  a relative of the patient who is legally
 12-8    responsible for the patient's support, including the size of the
 12-9    relative's estate.
12-10          (d)  The board may adopt a sliding-fee scale for health care
12-11    services provided to a patient who can pay for some, but not all,
12-12    of the care and treatment provided by the district.  The fees for
12-13    health care services provided to a patient described by this
12-14    subsection must be based on the income level and size of the estate
12-15    of the patient or relative of the patient who is legally
12-16    responsible for the patient's support.
12-17          (e)  A county that created and contracted with the district
12-18    may credit a district expenditure for the care and treatment of an
12-19    eligible county resident to the same extent and in the same manner
12-20    the county would be able to claim the expenditure under Chapter 61
12-21    if the county made the expenditure.
12-22          (f)  The board shall adopt rules regarding the collection of
12-23    money that is owed to the district for health care services
12-24    provided to a patient who is determined to be able to pay for all
12-25    or any part of the services from a patient, a patient's estate, or
12-26    a relative who is legally responsible for the patient's support.
12-27          Sec. 287.082.  REIMBURSEMENT FOR SERVICES.  (a)  The board
 13-1    shall require reimbursement from a county, municipality, or public
 13-2    hospital located outside the boundaries of the district for the
 13-3    district's care and treatment of a sick, diseased, or injured
 13-4    person of that county, municipality, or public hospital as provided
 13-5    by Chapter 61.
 13-6          (b)  The board shall require reimbursement from the sheriff
 13-7    or police chief of a county or municipality for the district's care
 13-8    and treatment of a person confined in a jail facility of the county
 13-9    or municipality who is not a resident of the district.
13-10          (c)  The board may contract with the state or federal
13-11    government for the state or federal government to reimburse the
13-12    district for treatment of a sick, diseased, or injured person.
13-13          Sec. 287.083.  SERVICE CONTRACTS.  The board may contract
13-14    with a municipality, county, special district, or other political
13-15    subdivision of the state or with a state or federal agency for the
13-16    district to:
13-17                (1)  furnish a mobile emergency medical service; or
13-18                (2)  provide for the investigatory or welfare needs of
13-19    inhabitants of the district.
13-20          Sec. 287.084.  GIFTS, GRANTS, AND ENDOWMENTS.  On behalf of
13-21    the district, the board may accept gifts, grants, and endowments to
13-22    be held in trust for any purpose and under any direction,
13-23    limitation, or provision prescribed in writing by the donor that is
13-24    consistent with the proper management of the district.
13-25          Sec. 287.085.  AUTHORITY TO SUE AND BE SUED.  The board may
13-26    sue and be sued on behalf of the district.
13-27             (Sections 287.086-287.100 reserved for expansion
 14-2          Sec. 287.101.  DISSOLUTION.  A district shall be dissolved if
 14-3    the contract with the counties and hospital districts that created
 14-4    the district expires and is not renewed.
 14-5          Sec. 287.102.  TRANSFER OF ASSETS AFTER DISSOLUTION.  (a) If
 14-6    the district is dissolved, the board shall:
 14-7                (1)  transfer the land, buildings, improvements,
 14-8    equipment, and other assets acquired by the district to the county
 14-9    or other governmental entity in which the property is located; or
14-10                (2)  administer the property, assets, and debts in
14-11    accordance with Section 287.103.
14-12          (b)  If the district transfers its land, buildings,
14-13    improvements, equipment, and other assets to a county or other
14-14    governmental entity, the county or entity assumes all debts and
14-15    obligations of the district related to the land, buildings,
14-16    improvements, equipment, or assets at the time of the transfer, and
14-17    the district is dissolved.
14-19    AFTER DISSOLUTION.  (a)  If the district does not transfer its
14-20    land, buildings, improvements, equipment, and other assets to a
14-21    county or another governmental entity in the district, the board
14-22    shall continue to control and administer the property, debts, and
14-23    assets of the district until all funds have been disposed of and
14-24    all district debts have been paid or settled.
14-25          (b)  If, after administering the property and assets, the
14-26    board determines that the district's property and assets are
14-27    insufficient to pay the debts of the district, the district shall
 15-1    transfer the remaining debts to the counties and hospital districts
 15-2    that created the district in proportion to the funds contributed to
 15-3    the district by each county or hospital district.
 15-4          (c)  If, after administering the property and assets, the
 15-5    board determines that unused funds remain, the board shall transfer
 15-6    the unused funds to the counties and hospital districts that
 15-7    created the district in proportion to the funds contributed to the
 15-8    district by each county or hospital district.
 15-9          Sec. 287.104.  ACCOUNTING.  After the district has paid all
15-10    its debts and has disposed of all its assets and funds as
15-11    prescribed by Sections 287.102 and 287.103, the board shall provide
15-12    an accounting to each county and hospital district that created and
15-13    contracted with the district.  The accounting must show the manner
15-14    in which the assets and debts of the district were distributed.
15-15             (Sections 287.105-287.120 reserved for expansion
15-16                     SUBCHAPTER F.  DISTRICT FINANCES
15-17          Sec. 287.121.  FISCAL YEAR.  (a)  The district operates on
15-18    the fiscal year established by the board.
15-19          (b)  The fiscal year may not be changed if revenue bonds of
15-20    the district are outstanding or more than once in a 24-month
15-21    period.
15-22          Sec. 287.122.  ANNUAL AUDIT.  (a)  The board annually shall
15-23    have an audit made of the financial condition of the district.
15-24          (b)  A copy of the audit must be provided to each county and
15-25    hospital district that created and contracted with the district.
15-26          Sec. 287.123.  DISTRICT AUDIT AND RECORDS.  The annual audit
15-27    and other district records are open to inspection during regular
 16-1    business hours at the principal office of the district.
 16-2          Sec. 287.124.  ANNUAL BUDGET.  (a)  The administrator of the
 16-3    district shall prepare a proposed annual budget for the district.
 16-4          (b)  The proposed budget must contain a complete financial
 16-5    statement, including a statement of:
 16-6                (1)  the outstanding obligations of the district;
 16-7                (2)  the amount of cash on hand to the credit of each
 16-8    fund of the district;
 16-9                (3)  the amount of money received by the district from
16-10    all sources during the previous year;
16-11                (4)  the amount of money available to the district from
16-12    all sources during the ensuing year;
16-13                (5)  the amount of the balances expected at the end of
16-14    the year in which the budget is being prepared; and
16-15                (6)  the estimated amount of revenues and balances
16-16    available to cover the proposed budget.
16-17          Sec. 287.125.  NOTICE; HEARING; ADOPTION OF BUDGET.  (a)  The
16-18    board shall hold a public hearing on the proposed annual budget.
16-19          (b)  The board shall publish notice of the hearing in a
16-20    newspaper of general circulation in the district not later than the
16-21    10th day before the date of the hearing.
16-22          (c)  Any resident of the district is entitled to be present
16-23    and participate at the hearing.
16-24          (d)  At the conclusion of the hearing, the board shall adopt
16-25    a budget by acting on the budget proposed by the administrator.
16-26    The board may make any changes in the proposed budget that in its
16-27    judgment the interests of the residents of the district demand.
 17-1          (e)  The budget is effective only after adoption by the
 17-2    board.
 17-3          Sec. 287.126.  AMENDING BUDGET.  After adoption, the annual
 17-4    budget may be amended on the board's approval.
 17-5          Sec. 287.127.  LIMITATION OF EXPENDITURES.  (a)  Money may
 17-6    not be spent for an expense not included in the annual budget or an
 17-7    amendment to it.
 17-8          (b)  The annual budget for administrative expenses may not
 17-9    exceed 10 percent of the total annual budget of the district
17-10    unless, after notice and hearing in the same manner as required for
17-11    the adoption of the annual budget under Section 287.125, the board
17-12    approves an amendment to increase the budget for administrative
17-13    expenses.
17-14          Sec. 287.128.  SWORN STATEMENT.  As soon as practicable after
17-15    the close of the fiscal year, the administrator shall prepare for
17-16    the board a sworn statement of the amount of money that belongs to
17-17    the district and an account of the disbursements of that money.
17-18          Sec. 287.129.  SPENDING AND INVESTMENT LIMITATIONS.  (a)
17-19    Except for construction contracts under Section 287.077(a) or as
17-20    provided by Sections 287.142 and 287.143, the district may not
17-21    incur a debt payable from revenues of the district other than the
17-22    revenues on hand or to be on hand in the current and immediately
17-23    following fiscal year of the district.
17-24          (b)  The board may invest operating, depreciation, or
17-25    building reserves only in funds or securities specified by Article
17-26    836 or 837, Revised Statutes.
17-27          Sec. 287.130.  DEPOSITORY.  (a)  The board shall name at
 18-1    least one bank to serve as depository for district funds.
 18-2          (b)  District funds, other than those invested as provided by
 18-3    Section 287.129(b) and those transmitted to a bank of payment for
 18-4    bonds or obligations issued or assumed by the district, shall be
 18-5    deposited as received with the depository bank and must remain on
 18-6    deposit.  This subsection does not limit the power of the board to
 18-7    place a portion of district funds on time deposit or to purchase
 18-8    certificates of deposit.
 18-9          (c)  Before the district deposits funds in a bank in an
18-10    amount that exceeds the maximum amount secured by the Federal
18-11    Deposit Insurance Corporation, the bank must execute a bond or
18-12    other security in an amount sufficient to secure from loss the
18-13    district funds that exceed the amount secured by the Federal
18-14    Deposit Insurance Corporation.
18-15          Sec. 287.131.  AD VALOREM TAXATION.  A district may not
18-16    impose an ad valorem tax.
18-17             (Sections 287.132-287.140 reserved for expansion
18-18                           SUBCHAPTER G.  BONDS
18-19          Sec. 287.141.  GENERAL OBLIGATION BONDS.  A district may not
18-20    issue general obligation bonds.
18-21          Sec. 287.142.  REVENUE BONDS.  (a)  The board may issue
18-22    revenue bonds to:
18-23                (1)  purchase, construct, acquire, repair, equip, or
18-24    renovate buildings or improvements for district purposes;
18-25                (2)  acquire sites to be used for district purposes; or
18-26                (3)  acquire and operate a mobile emergency medical
18-27    service to assist the district in carrying out its purposes.
 19-1          (b)  The bonds must be payable from and secured by a pledge
 19-2    of all or part of the revenues derived from the operation of the
 19-3    district's health care system.  The bonds may be additionally
 19-4    secured by a mortgage or deed of trust lien on all or part of
 19-5    district property.
 19-6          (c)  The bonds must be issued in the manner provided by
 19-7    Sections 264.042, 264.043, 264.046, 264.047, 264.048, and 264.049
 19-8    for issuance of revenue bonds by county hospital authorities.
 19-9          Sec. 287.143.  REFUNDING BONDS.  (a)  Refunding bonds of the
19-10    district may be issued to refund an outstanding indebtedness the
19-11    district has issued or assumed.
19-12          (b)  The bonds must be issued in the manner provided by
19-13    Chapter 784, Acts of the 61st Legislature, Regular Session, 1969
19-14    (Article 717k-3, Vernon's Texas Civil Statutes).
19-15          (c)  The refunding bonds may be sold and the proceeds applied
19-16    to the payment of outstanding indebtedness or may be exchanged in
19-17    whole or in part for not less than a similar principal amount of
19-18    outstanding indebtedness.  If the refunding bonds are to be sold
19-19    and the proceeds applied to the payment of outstanding
19-20    indebtedness, the refunding bonds must be issued and payments made
19-21    in the manner provided by Chapter 503, Acts of the 54th
19-22    Legislature, Regular Session, 1955 (Article 717k, Vernon's Texas
19-23    Civil Statutes).
19-24          Sec. 287.144.  INTEREST AND MATURITY.  District bonds must
19-25    mature not later than the 50th anniversary of the date of their
19-26    issuance and must bear interest at a rate not to exceed that
19-27    provided by Chapter 3, Acts of the 61st Legislature, Regular
 20-1    Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes).
 20-2          Sec. 287.145.  EXECUTION OF BONDS.  The president of the
 20-3    board shall execute the bonds in the name of the district, and the
 20-4    secretary of the board shall countersign the bonds in the manner
 20-5    provided by the Texas Uniform Facsimile Signature of Public
 20-6    Officials Act (Article 717j-1, Vernon's Texas Civil Statutes).
 20-7          Sec. 287.146.  APPROVAL AND REGISTRATION OF BONDS.  (a)
 20-8    District bonds are subject to the same requirements with regard to
 20-9    approval by the attorney general and registration by the
20-10    comptroller as the law provides for approval and registration of
20-11    bonds issued by counties.
20-12          (b)  On approval by the attorney general and registration by
20-13    the comptroller, the bonds are incontestable for any cause.
20-14          Sec. 287.147.  BONDS AS INVESTMENTS.  District bonds and
20-15    indebtedness assumed by the district are legal and authorized
20-16    investments for:
20-17                (1)  banks;
20-18                (2)  savings banks;
20-19                (3)  trust companies;
20-20                (4)  savings and loan associations;
20-21                (5)  insurance companies;
20-22                (6)  fiduciaries;
20-23                (7)  trustees;
20-24                (8)  guardians; and
20-25                (9)  sinking funds of municipalities, counties, school
20-26    districts, and other political subdivisions of the state and other
20-27    public funds of the state and its agencies, including the permanent
 21-1    school fund.
 21-2          Sec. 287.148.  BONDS AS SECURITY FOR DEPOSITS.  District
 21-3    bonds are eligible to secure deposits of public funds of the state
 21-4    and of municipalities, counties, school districts, and other
 21-5    political subdivisions of the state.  The bonds are lawful and
 21-6    sufficient security for deposits to the extent of their value if
 21-7    accompanied by all unmatured coupons.
 21-8          Sec. 287.149.  TAX STATUS OF BONDS.  Because the district
 21-9    created under this chapter is a public entity performing an
21-10    essential public function, bonds issued by the district, any
21-11    transaction relating to the bonds, and profits made in the sale of
21-12    the bonds are free from taxation by the state or by any
21-13    municipality, county, special district, or other political
21-14    subdivision of the state.
21-15          SECTION 2.  This Act takes effect September 1, 1999.
21-16          SECTION 3.  The importance of this legislation and the
21-17    crowded condition of the calendars in both houses create an
21-18    emergency and an imperative public necessity that the
21-19    constitutional rule requiring bills to be read on three several
21-20    days in each house be suspended, and this rule is hereby suspended.