By Solis of Cameron                                   H.B. No. 3505
         76R8791 KLA-D                           
                                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 CONTRACT.  (a)  Except as provided
1-23     by Subsection (b), two or more political subdivisions of this
1-24     state, including a hospital district, may create a health services
 2-1     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
2-10     political subdivision;
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 political
2-14     subdivision.
2-15           Sec. 287.022.  CONTRACT TERMS.  (a)  A political subdivision
2-16     that creates a district under this chapter shall contract with the
2-17     district to provide, at a minimum, the health care services the
2-18     political subdivision is required to provide by law or under the
2-19     constitution.  A contract with a political subdivision that created
2-20     the health services district under this chapter must:
2-21                 (1)  state the term of the contract, not to exceed six
2-22     years;
2-23                 (2)  specify the purpose, terms, rights, and duties of
2-24     the district, as authorized by this chapter;
2-25                 (3)  specify the financial contributions to be made by
2-26     each party to the contract to fund the district, as described by
2-27     Section 287.024; and
 3-1                 (4)  specify the land, buildings, improvements,
 3-2     equipment, and other assets owned by a party to the contract that
 3-3     the district will be required to manage and operate.
 3-4           (b)  Chapter 791, Government Code, does not apply to a
 3-5     contract made under this chapter.
 3-6           Sec. 287.023.  PURPOSE AND DUTIES.  A health services
 3-7     district shall:
 3-8                 (1)  provide health care services to indigent residents
 3-9     of the district;
3-10                 (2)  provide health care services to non-indigent
3-11     residents of the district on a sliding-fee scale;
3-12                 (3)  manage the funds contributed to the district by
3-13     each political subdivision that contracts with the district;
3-14                 (4)  manage and operate the land, buildings,
3-15     improvements, equipment, and other assets for which the district
3-16     assumes responsibility for management and operation under the
3-17     contract or that are acquired by the district; and
3-18                 (5)  plan and coordinate with public and private health
3-19     care providers and entities for the long-term provision of health
3-20     care services to residents of the district.
3-21           Sec. 287.024.  FUNDING.  (a)  Each political subdivision that
3-22     contracts with the district shall contribute to the district for
3-23     its operation:
3-24                 (1)  a specified dollar amount from or a percentage of
3-25     the contracting entity's operating budget and reserves;
3-26                 (2)  state assistance received under Chapter 61;
3-27                 (3)  federal matching funds received under the Medicaid
 4-1     disproportionate share program; and
 4-2                 (4)  any funds received under the Agreement Regarding
 4-3     Disposition of Settlement Proceeds dated July 18, 1998, or July 24,
 4-4     1998, and filed in the United States District Court, Eastern
 4-5     District of Texas, in the case styled The State of Texas v. The
 4-6     American Tobacco Company, et al., No. 5-96CV-91.
 4-7           (b)  The district shall maintain an accounting of the funds
 4-8     received from each political subdivision that contracts with the
 4-9     district.
4-10           (c)  The district may commingle and administer the financial
4-11     contributions of all parties to the contract for district purposes.
4-12              (Sections 287.025-287.040 reserved for expansion)
4-14           Sec. 287.041.  BOARD OF DIRECTORS.  (a)  Each political
4-15     subdivision that creates the district shall appoint two directors
4-16     to the board.
4-17           (b)  In addition to the directors appointed to the board
4-18     under Subsection (a), the political subdivisions shall agree on and
4-19     collectively appoint one additional director.
4-20           (c)  Directors serve staggered two-year terms, with as near
4-21     as possible to one-half of the directors' terms expiring each year.
4-22           Sec. 287.042.  QUALIFICATIONS FOR OFFICE.  (a)  To be
4-23     eligible to serve as a director, a person must be:
4-24                 (1)  a resident of the political subdivision that
4-25     appoints the person, if the person is appointed under Section
4-26     287.041(a); or
4-27                 (2)  a resident of the district if the person is
 5-1     appointed under Section 287.041(b).
 5-2           (b)  An employee of the district may not serve as a director.
 5-3           Sec. 287.043.  BOND.  (a)  Before assuming the duties of the
 5-4     office, each director must execute a bond for $5,000 payable to the
 5-5     district, conditioned on the faithful performance of the person's
 5-6     duties as director.
 5-7           (b)  The bond shall be kept in the permanent records of the
 5-8     district.
 5-9           (c)  The board may pay for directors' bonds with district
5-10     funds.
5-11           Sec. 287.044.  BOARD VACANCY.  A vacancy in the office of
5-12     director shall be filled for the unexpired term in the same manner
5-13     as the original appointment.
5-14           Sec. 287.045.  OFFICERS.  (a)  The board shall elect from
5-15     among its members a president and a vice president.
5-16           (b)  The board shall appoint a secretary who need not be a
5-17     director.
5-18           Sec. 287.046.  OFFICERS' TERMS; VACANCY.  (a)  Each officer
5-19     of the board serves for a term of one year.
5-20           (b)  The board shall fill a vacancy in a board office for the
5-21     unexpired term.
5-22           Sec. 287.047.  COMPENSATION.  (a)  Directors and officers
5-23     serve without compensation but may be reimbursed for actual
5-24     expenses incurred in the performance of official duties.
5-25           (b)  Expenses reimbursed under this section must be:
5-26                 (1)  reported in the district's minute book or other
5-27     district records; and
 6-1                 (2)  approved by the board.
 6-2           Sec. 287.048.  VOTING REQUIREMENT.  A majority of the members
 6-3     of the board voting must concur in a matter relating to the
 6-4     business of the district.
 6-6     ATTORNEY.  (a)  The board may appoint qualified persons as
 6-7     administrator of the district, assistant administrator, and
 6-8     attorney for the district.
 6-9           (b)  The administrator, assistant administrator, and attorney
6-10     serve at the will of the board.
6-11           (c)  The administrator, assistant administrator, and attorney
6-12     are entitled to compensation as determined by the board.
6-13           (d)  Before assuming the administrator's duties, the
6-14     administrator shall execute a bond payable to the health services
6-15     district in an amount not less than $5,000 as determined by the
6-16     board, conditioned on the faithful performance of the
6-17     administrator's duties under this chapter.  The board may pay for
6-18     the bond with district funds.
6-19           Sec. 287.050.  APPOINTMENTS TO STAFF.  The board may:
6-20                 (1)  appoint to the staff any doctors the board
6-21     considers necessary for the efficient operation of the district;
6-22     and
6-23                 (2)  make temporary appointments the board considers
6-24     necessary.
6-25           Sec. 287.051.  TECHNICIANS, NURSES, AND OTHER DISTRICT
6-26     EMPLOYEES.  (a)  The district may employ technicians, nurses,
6-27     fiscal agents, accountants, architects, additional attorneys, and
 7-1     other necessary employees.
 7-2           (b)  The board may delegate to the administrator the
 7-3     authority to employ persons for the district.
 7-4           Sec. 287.052.  GENERAL DUTIES OF ADMINISTRATOR.  The
 7-5     administrator shall:
 7-6                 (1)  supervise the work and activities of the district;
 7-7     and
 7-8                 (2)  direct the general affairs of the district,
 7-9     subject to the limitations prescribed by the board.
7-10           Sec. 287.053.  RETIREMENT BENEFITS.  The board may provide
7-11     retirement benefits for employees of the district by:
7-12                 (1)  establishing or administering a retirement
7-13     program; or
7-14                 (2)  electing to participate in the Texas County and
7-15     District Retirement System or in any other statewide retirement
7-16     system in which the district is eligible to participate.
7-17              (Sections 287.054-287.070 reserved for expansion
7-18                      SUBCHAPTER D.  POWERS AND DUTIES
7-19           Sec. 287.071.  RESPONSIBILITY OF GOVERNMENTAL ENTITY.  On
7-20     creation of a district, a county, municipality, hospital district,
7-21     or other governmental entity in which the district is located shall
7-22     transfer to the district:
7-23                 (1)  management and operation of any land, buildings,
7-24     improvements, and equipment related to the hospital system located
7-25     wholly in the district that are owned by the county, municipality,
7-26     hospital district, or other governmental entity in which the
7-27     district is located, as specified in the contract with the
 8-1     political subdivisions that created the district; and
 8-2                 (2)  operating funds and reserves for operating
 8-3     expenses and funds that have been budgeted by the county,
 8-4     municipality, hospital district, or other governmental entity in
 8-5     which the district is located to provide medical care for residents
 8-6     of the district, as specified in the contract with the political
 8-7     subdivisions that created the district.
 8-8           Sec. 287.072.  DISTRICT RESPONSIBILITIES.  On creation of a
 8-9     district, the district assumes the duties required under Section
8-10     287.023 and any additional duties specified in the contract with
8-11     the political subdivisions that created the district.
8-12           Sec. 287.073.  MANAGEMENT, CONTROL, AND ADMINISTRATION.  The
8-13     board shall manage, control, and administer the hospital system and
8-14     the funds and resources of the district that are transferred under
8-15     Section 287.071.
8-16           Sec. 287.074.  DISTRICT RULES.  The board may adopt rules
8-17     governing the operation of the district and the duties, functions,
8-18     and responsibilities of district staff and employees.
8-19           Sec. 287.075.  METHODS AND PROCEDURES.  The board may
8-20     prescribe:
8-21                 (1)  the method of making purchases and expenditures by
8-22     and for the district; and
8-23                 (2)  accounting and control procedures for the
8-24     district.
8-26     (a)  The board shall determine:
8-27                 (1)  the type, number, and location of buildings
 9-1     required to establish and maintain an adequate hospital system; and
 9-2                 (2)  the type of equipment necessary for hospital care.
 9-3           (b)  The board may:
 9-4                 (1)  acquire property, facilities, and equipment for
 9-5     the district for use in the hospital system;
 9-6                 (2)  mortgage or pledge the property, facilities, or
 9-7     equipment acquired as security for the payment of the purchase
 9-8     price;
 9-9                 (3)  transfer by lease to physicians, individuals,
9-10     companies, corporations, or other legal entities or acquire by
9-11     lease district hospital facilities;
9-12                 (4)  sell or otherwise dispose of property, facilities,
9-13     or equipment acquired by the district; and
9-14                 (5)  contract with a state agency to provide facilities
9-15     and health care services.
9-16           Sec. 287.077.  CONSTRUCTION CONTRACTS.  (a)  The board may
9-17     enter into construction contracts for the district.
9-18           (b)  The board may enter into construction contracts that
9-19     involve spending more than $10,000 only after competitive bidding
9-20     as provided by Subchapter B, Chapter 271, Local Government Code.
9-21           (c)  Chapter 2253, Government Code, as it relates to
9-22     performance and payment bonds, applies to construction contracts
9-23     let by the district.
9-25     The board may enter into operating or management contracts relating
9-26     to hospital facilities owned by the district or for which the
9-27     district assumes responsibility for managing and operating under
 10-1    the terms of the contract with the political subdivisions that
 10-2    created the district.
 10-3          Sec. 287.079.  EMINENT DOMAIN.  (a)  A district may exercise
 10-4    the power of eminent domain to acquire a fee simple or other
 10-5    interest in property located in the territory of the district if
 10-6    the property interest is necessary to the exercise of the rights or
 10-7    authority conferred by this chapter.
 10-8          (b)  A district must exercise the power of eminent domain in
 10-9    the manner provided by Chapter 21, Property Code, but the district
10-10    is not required to deposit in the trial court money or a bond as
10-11    provided by Section 21.021(a), Property Code.
10-12          (c)  In a condemnation proceeding brought by a district, the
10-13    district is not required to:
10-14                (1)  pay in advance or give bond or other security for
10-15    costs in the trial court;
10-16                (2)  give bond for the issuance of a temporary
10-17    restraining order or a temporary injunction; or
10-18                (3)  give bond for costs or supersedeas on an appeal or
10-19    writ of error.
10-21    UTILITIES.  If, in exercising the power of eminent domain, the
10-22    board requires relocating, raising, lowering, rerouting, changing
10-23    the grade, or altering the construction of any railroad, highway,
10-24    pipeline, or electric transmission and electric distribution,
10-25    telegraph, or telephone lines, conduits, poles, or facilities, the
10-26    district must bear the actual cost of relocating, raising,
10-27    lowering, rerouting, changing the grade, or altering the
 11-1    construction to provide comparable replacement without enhancement
 11-2    of a facility, after deducting the net salvage value derived from
 11-3    the old facility.
 11-4          Sec. 287.081.  PAYMENT FOR HEALTH CARE SERVICES.  (a)  The
 11-5    district without charge shall supply to a patient residing in the
 11-6    district the care and treatment that the patient or a relative of
 11-7    the patient who is legally responsible for the patient's support
 11-8    cannot pay.
 11-9          (b)  Not later than the first day of each operating year, the
11-10    district shall adopt an application procedure to determine
11-11    eligibility for assistance that complies with Section 61.053.
11-12          (c)  The administrator of the district may have an inquiry
11-13    made into the financial circumstances of:
11-14                (1)  a patient residing in the district and admitted to
11-15    a district facility; and
11-16                (2)  a relative of the patient who is legally
11-17    responsible for the patient's support.
11-18          (d)  On finding that a patient or a relative of the patient
11-19    legally responsible for the patient's support can pay for all or
11-20    any part of the care and treatment provided by the district, the
11-21    administrator shall report that finding to the board, and the board
11-22    shall issue an order directing the patient or the relative to pay
11-23    the district each week a specified amount that the individual is
11-24    able to pay.
11-25          (e)  The board may adopt a sliding-fee scale for health care
11-26    services provided to a patient who can pay for some, but not all,
11-27    of the care and treatment provided by the district.
 12-1          (f)  Notwithstanding Section 61.036, a county that created
 12-2    and contracted with the district may credit a district expenditure
 12-3    for the care and treatment of a county resident who qualifies for
 12-4    payment on the sliding-fee scale adopted under Subsection (e)
 12-5    toward eligibility for state assistance even if the resident does
 12-6    not meet the eligibility standards under Chapter 61.
 12-7          (g)  The administrator may collect money owed to the district
 12-8    from the estate of a patient or from that of a relative who was
 12-9    legally responsible for the patient's support in the manner
12-10    provided by law for collection of expenses in the last illness of a
12-11    deceased person.
12-12          (h)  If there is a dispute relating to an individual's
12-13    ability to pay or if the administrator has any doubt concerning an
12-14    individual's ability to pay, the board shall call witnesses, hear
12-15    and resolve the question, and issue a final order.  An appeal from
12-16    a final order of the board must be made to a district court in the
12-17    county in which the district is located, and the substantial
12-18    evidence rule applies.
12-19          Sec. 287.082.  REIMBURSEMENT FOR SERVICES.  (a)  The board
12-20    shall require reimbursement from a county, municipality, or public
12-21    hospital located outside the boundaries of the district for the
12-22    district's care and treatment of a sick, diseased, or injured
12-23    person of that county, municipality, or public hospital as provided
12-24    by Chapter 61.
12-25          (b)  The board shall require reimbursement from the sheriff
12-26    or police chief of a county or municipality for the district's care
12-27    and treatment of a person confined in a jail facility of the county
 13-1    or municipality who is not a resident of the district.
 13-2          (c)  The board may contract with the state or federal
 13-3    government for the state or federal government to reimburse the
 13-4    district for treatment of a sick, diseased, or injured person.
 13-5          Sec. 287.083.  SERVICE CONTRACTS.  The board may contract
 13-6    with a municipality, county, special district, or other political
 13-7    subdivision of the state or with a state or federal agency for the
 13-8    district to:
 13-9                (1)  furnish a mobile emergency medical service; or
13-10                (2)  provide for the investigatory or welfare needs of
13-11    inhabitants of the district.
13-12          Sec. 287.084.  GIFTS AND ENDOWMENTS.  On behalf of the
13-13    district, the board may accept gifts and endowments to be held in
13-14    trust for any purpose and under any direction, limitation, or
13-15    provision prescribed in writing by the donor that is consistent
13-16    with the proper management of the district.
13-17          Sec. 287.085.  AUTHORITY TO SUE AND BE SUED.  The board may
13-18    sue and be sued on behalf of the district.
13-19             (Sections 287.086-287.100 reserved for expansion
13-21          Sec. 287.101.  DISSOLUTION.  A district shall be dissolved if
13-22    the contract with the political subdivisions that created the
13-23    district expires and is not renewed.
13-24          Sec. 287.102.  TRANSFER OF ASSETS AFTER DISSOLUTION.  (a) If
13-25    the district is dissolved, the board shall:
13-26                (1)  transfer the land, buildings, improvements,
13-27    equipment, and other assets acquired by the district to the county
 14-1    or other governmental entity in which the property is located; or
 14-2                (2)  administer the property, assets, and debts in
 14-3    accordance with Section 287.103.
 14-4          (b)  If the district transfers its land, buildings,
 14-5    improvements, equipment, and other assets to a county or other
 14-6    governmental entity, the county or entity assumes all debts and
 14-7    obligations of the district related to the land, buildings,
 14-8    improvements, equipment, or assets at the time of the transfer, and
 14-9    the district is dissolved.
14-11    AFTER DISSOLUTION.  (a)  If the district does not transfer its
14-12    land, buildings, improvements, equipment, and other assets to a
14-13    county or another governmental entity in the district, the board
14-14    shall continue to control and administer the property, debts, and
14-15    assets of the district until all funds have been disposed of and
14-16    all district debts have been paid or settled.
14-17          (b)  If, after administering the property and assets, the
14-18    board determines that the district's property and assets are
14-19    insufficient to pay the debts of the district, the district shall
14-20    transfer the remaining debts to the political subdivisions that
14-21    created the district in proportion to the funds contributed to the
14-22    district by that political subdivision.
14-23          (c)  If, after administering the property and assets, the
14-24    board determines that unused funds remain, the board shall transfer
14-25    the unused funds to the political subdivisions that created the
14-26    district in proportion to the funds contributed to the district by
14-27    each political subdivision.
 15-1          Sec. 287.104.  ACCOUNTING.  After the district has paid all
 15-2    its debts and has disposed of all its assets and funds as
 15-3    prescribed by Sections 287.102 and 287.103, the board shall provide
 15-4    an accounting to each political subdivision that created and
 15-5    contracted with the district.  The accounting must show the manner
 15-6    in which the assets and debts of the district were distributed.
 15-7             (Sections 287.105-287.120 reserved for expansion
 15-8                     SUBCHAPTER F.  DISTRICT FINANCES
 15-9          Sec. 287.121.  FISCAL YEAR.  (a)  The district operates on
15-10    the fiscal year established by the board.
15-11          (b)  The fiscal year may not be changed if revenue bonds of
15-12    the district are outstanding or more than once in a 24-month
15-13    period.
15-14          Sec. 287.122.  ANNUAL AUDIT.  (a)  The board annually shall
15-15    have an audit made of the financial condition of the district.
15-16          (b)  A copy of the audit must be provided to each political
15-17    subdivision that created and contracted with the district.
15-18          Sec. 287.123.  DISTRICT AUDIT AND RECORDS.  The annual audit
15-19    and other district records are open to inspection during regular
15-20    business hours at the principal office of the district.
15-21          Sec. 287.124.  ANNUAL BUDGET.  (a)  The administrator of the
15-22    district shall prepare a proposed annual budget for the district.
15-23          (b)  The proposed budget must contain a complete financial
15-24    statement, including a statement of:
15-25                (1)  the outstanding obligations of the district;
15-26                (2)  the amount of cash on hand to the credit of each
15-27    fund of the district;
 16-1                (3)  the amount of money received by the district from
 16-2    all sources during the previous year;
 16-3                (4)  the amount of money available to the district from
 16-4    all sources during the ensuing year;
 16-5                (5)  the amount of the balances expected at the end of
 16-6    the year in which the budget is being prepared; and
 16-7                (6)  the estimated amount of revenues and balances
 16-8    available to cover the proposed budget.
 16-9          Sec. 287.125.  NOTICE; HEARING; ADOPTION OF BUDGET.  (a)  The
16-10    board shall hold a public hearing on the proposed annual budget.
16-11          (b)  The board shall publish notice of the hearing in a
16-12    newspaper of general circulation in the district not later than the
16-13    10th day before the date of the hearing.
16-14          (c)  Any resident of the district is entitled to be present
16-15    and participate at the hearing.
16-16          (d)  At the conclusion of the hearing, the board shall adopt
16-17    a budget by acting on the budget proposed by the administrator.
16-18    The board may make any changes in the proposed budget that in its
16-19    judgment the interests of the residents of the district demand.
16-20          (e)  The budget is effective only after adoption by the
16-21    board.
16-22          Sec. 287.126.  AMENDING BUDGET.  After adoption, the annual
16-23    budget may be amended on the board's approval.
16-24          Sec. 287.127.  LIMITATION OF EXPENDITURES.  Money may not be
16-25    spent for an expense not included in the annual budget or an
16-26    amendment to it.
16-27          Sec. 287.128.  SWORN STATEMENT.  As soon as practicable after
 17-1    the close of the fiscal year, the administrator shall prepare for
 17-2    the board a sworn statement of the amount of money that belongs to
 17-3    the district and an account of the disbursements of that money.
 17-4          Sec. 287.129.  SPENDING AND INVESTMENT LIMITATIONS.  (a)
 17-5    Except for construction contracts under Section 287.077(a) or as
 17-6    provided by Sections 287.142 and 287.143, the district may not
 17-7    incur a debt payable from revenues of the district other than the
 17-8    revenues on hand or to be on hand in the current and immediately
 17-9    following fiscal year of the district.
17-10          (b)  The board may invest operating, depreciation, or
17-11    building reserves only in funds or securities specified by Article
17-12    836 or 837, Revised Statutes.
17-13          Sec. 287.130.  DEPOSITORY.  (a)  The board shall name at
17-14    least one bank to serve as depository for district funds.
17-15          (b)  District funds, other than those invested as provided by
17-16    Section 287.129(b) and those transmitted to a bank of payment for
17-17    bonds or obligations issued or assumed by the district, shall be
17-18    deposited as received with the depository bank and must remain on
17-19    deposit.  This subsection does not limit the power of the board to
17-20    place a portion of district funds on time deposit or to purchase
17-21    certificates of deposit.
17-22          (c)  Before the district deposits funds in a bank in an
17-23    amount that exceeds the maximum amount secured by the Federal
17-24    Deposit Insurance Corporation, the bank must execute a bond or
17-25    other security in an amount sufficient to secure from loss the
17-26    district funds that exceed the amount secured by the Federal
17-27    Deposit Insurance Corporation.
 18-1          Sec. 287.131.  AD VALOREM TAXATION.  A district may not
 18-2    impose an ad valorem tax.
 18-3             (Sections 287.132-287.140 reserved for expansion
 18-4                           SUBCHAPTER G.  BONDS
 18-5          Sec. 287.141.  GENERAL OBLIGATION BONDS.  A district may not
 18-6    issue general obligation bonds.
 18-7          Sec. 287.142.  REVENUE BONDS.  (a)  The board may issue
 18-8    revenue bonds to:
 18-9                (1)  purchase, construct, acquire, repair, equip, or
18-10    renovate buildings or improvements for district purposes;
18-11                (2)  acquire sites to be used for district purposes; or
18-12                (3)  acquire and operate a mobile emergency medical
18-13    service to assist the district in carrying out its purposes.
18-14          (b)  The bonds must be payable from and secured by a pledge
18-15    of all or part of the revenues derived from the operation of the
18-16    district's hospital system.  The bonds may be additionally secured
18-17    by a mortgage or deed of trust lien on all or part of district
18-18    property.
18-19          (c)  The bonds must be issued in the manner provided by
18-20    Sections 264.042, 264.043, 264.046, 264.047, 264.048, and 264.049
18-21    for issuance of revenue bonds by county hospital authorities.
18-22          Sec. 287.143.  REFUNDING BONDS.  (a)  Refunding bonds of the
18-23    district may be issued to refund an outstanding indebtedness the
18-24    district has issued or assumed.
18-25          (b)  The bonds must be issued in the manner provided by
18-26    Chapter 784, Acts of the 61st Legislature, Regular Session, 1969
18-27    (Article 717k-3, Vernon's Texas Civil Statutes).
 19-1          (c)  The refunding bonds may be sold and the proceeds applied
 19-2    to the payment of outstanding indebtedness or may be exchanged in
 19-3    whole or in part for not less than a similar principal amount of
 19-4    outstanding indebtedness.  If the refunding bonds are to be sold
 19-5    and the proceeds applied to the payment of outstanding
 19-6    indebtedness, the refunding bonds must be issued and payments made
 19-7    in the manner provided by Chapter 503, Acts of the 54th
 19-8    Legislature, Regular Session, 1955 (Article 717k, Vernon's Texas
 19-9    Civil Statutes).
19-10          Sec. 287.144.  INTEREST AND MATURITY.  District bonds must
19-11    mature not later than the 50th anniversary of the date of their
19-12    issuance and must bear interest at a rate not to exceed that
19-13    provided by Chapter 3, Acts of the 61st Legislature, Regular
19-14    Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes).
19-15          Sec. 287.145.  EXECUTION OF BONDS.  The president of the
19-16    board shall execute the bonds in the name of the district, and the
19-17    secretary of the board shall countersign the bonds in the manner
19-18    provided by the Texas Uniform Facsimile Signature of Public
19-19    Officials Act (Article 717j-1, Vernon's Texas Civil Statutes).
19-20          Sec. 287.146.  APPROVAL AND REGISTRATION OF BONDS.  (a)
19-21    District bonds are subject to the same requirements with regard to
19-22    approval by the attorney general and registration by the
19-23    comptroller as the law provides for approval and registration of
19-24    bonds issued by counties.
19-25          (b)  On approval by the attorney general and registration by
19-26    the comptroller, the bonds are incontestable for any cause.
19-27          Sec. 287.147.  BONDS AS INVESTMENTS.  District bonds and
 20-1    indebtedness assumed by the district are legal and authorized
 20-2    investments for:
 20-3                (1)  banks;
 20-4                (2)  savings banks;
 20-5                (3)  trust companies;
 20-6                (4)  savings and loan associations;
 20-7                (5)  insurance companies;
 20-8                (6)  fiduciaries;
 20-9                (7)  trustees;
20-10                (8)  guardians; and
20-11                (9)  sinking funds of municipalities, counties, school
20-12    districts, and other political subdivisions of the state and other
20-13    public funds of the state and its agencies, including the permanent
20-14    school fund.
20-15          Sec. 287.148.  BONDS AS SECURITY FOR DEPOSITS.  District
20-16    bonds are eligible to secure deposits of public funds of the state
20-17    and of municipalities, counties, school districts, and other
20-18    political subdivisions of the state.  The bonds are lawful and
20-19    sufficient security for deposits to the extent of their value if
20-20    accompanied by all unmatured coupons.
20-21          Sec. 287.149.  TAX STATUS OF BONDS.  Because the district
20-22    created under this chapter is a public entity performing an
20-23    essential public function, bonds issued by the district, any
20-24    transaction relating to the bonds, and profits made in the sale of
20-25    the bonds are free from taxation by the state or by any
20-26    municipality, county, special district, or other political
20-27    subdivision of the state.
 21-1          SECTION 2.  This Act takes effect September 1, 1999.
 21-2          SECTION 3.  The importance of this legislation and the
 21-3    crowded condition of the calendars in both houses create an
 21-4    emergency and an imperative public necessity that the
 21-5    constitutional rule requiring bills to be read on three several
 21-6    days in each house be suspended, and this rule is hereby suspended.