By: Lucio S.B. No. 1615 A BILL TO BE ENTITLED AN ACT 1-1 relating to the creation and operation of health services 1-2 districts; granting the authority to issue bonds. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Subtitle D, Title 4, Health and Safety Code, is 1-5 amended by adding Chapter 287 to read as follows: 1-6 CHAPTER 287. HEALTH SERVICES DISTRICTS 1-7 SUBCHAPTER A. GENERAL PROVISIONS 1-8 Sec. 287.001. DEFINITIONS. In this chapter: 1-9 (1) "Board" means the board of directors of a 1-10 district. 1-11 (2) "District" means a health services district 1-12 created under this chapter. 1-13 (3) "Director" means a member of the board. 1-14 Sec. 287.002. DISTRICT AUTHORIZATION. A health services 1-15 district may be created and established and, if created, must be 1-16 maintained, operated, and financed in the manner provided by this 1-17 chapter. 1-18 (Sections 287.003-287.020 reserved for expansion) 1-19 SUBCHAPTER B. CREATION OF DISTRICT 1-20 Sec. 287.021. CREATION BY CONCURRENT ORDERS. (a) Except as 1-21 provided by Subsection (b), a county or hospital district and one 1-22 or more other counties or hospital districts may create a health 1-23 services district by adopting concurrent orders. 1-24 (b) A county or portion of a county that is in the 2-1 boundaries of a hospital district may not be a party to the 2-2 creation of a health services district or to a contract with a 2-3 health services district. The hospital district that serves the 2-4 county or portion of the county may create and contract with the 2-5 health services district for the boundaries of the hospital 2-6 district. 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 (d) A concurrent order to create a health services district 2-16 adopted by a hospital district for which the tax rate is set by the 2-17 commissioners court of the county in which the hospital district 2-18 operates must be approved by the commissioners court of that 2-19 county. 2-20 Sec. 287.022. CONTRACT TERMS. (a) A county or hospital 2-21 district that creates a district under this chapter shall contract 2-22 with the district to provide, at a minimum, the health care 2-23 services the county or hospital district is required to provide by 2-24 law or under the constitution. A contract with a county or 2-25 hospital district that created the health services district under 2-26 this chapter must: 3-1 (1) state the term of the contract, not to exceed six 3-2 years; 3-3 (2) specify the purpose, terms, rights, and duties of 3-4 the district, as authorized by this chapter; 3-5 (3) specify the financial contributions to be made by 3-6 each party to the contract to fund the district, as described by 3-7 Section 287.024; and 3-8 (4) specify the land, buildings, improvements, 3-9 equipment, and other assets owned by a party to the contract that 3-10 the district will be required to manage and operate. 3-11 (b) Chapter 791, Government Code, does not apply to a 3-12 contract made under this chapter. 3-13 Sec. 287.023. PURPOSE AND DUTIES. (a) A health services 3-14 district shall: 3-15 (1) provide health care services to indigent residents 3-16 of the district; 3-17 (2) manage the funds contributed to the district by 3-18 each county or hospital district that contracts with the district; 3-19 and 3-20 (3) plan and coordinate with public and private health 3-21 care providers and entities for the long-term provision of health 3-22 care services to residents of the district. 3-23 (b) A health services district may: 3-24 (1) provide health care services on a sliding-fee 3-25 scale to residents of the district who do not meet the basic income 3-26 and resources requirements established under Sections 61.006 and 4-1 61.008 to be eligible for assistance under Chapter 61 but who are 4-2 unable to pay for the full cost of health care services; and 4-3 (2) assume responsibility for management and operation 4-4 of the land, buildings, improvements, equipment, and other assets 4-5 that are acquired by the district or for which the district agrees 4-6 to assume responsibility under the terms of the contract. 4-7 Sec. 287.024. FUNDING. (a) Each county or hospital 4-8 district that contracts with the district shall contribute to the 4-9 district for its operation: 4-10 (1) a specified dollar amount from or a percentage of 4-11 the contracting entity's operating budget and reserves if the 4-12 contracting entity is a hospital district; 4-13 (2) a specified percentage, not less than the 4-14 percentage required under Section 61.037 for state assistance, of 4-15 the contracting entity's general revenue levy for each state fiscal 4-16 year for the term of the contract, if the contracting entity is a 4-17 county; 4-18 (3) state assistance received under Chapter 61; 4-19 (4) federal matching funds received by a hospital 4-20 district under the Medicaid disproportionate share program; and 4-21 (5) any funds that are: 4-22 (A) received under the Agreement Regarding 4-23 Disposition of Settlement Proceeds dated July 18, 1998, or 4-24 July 24, 1998, and filed in the United States District Court, 4-25 Eastern District of Texas, in the case styled The State of Texas v. 4-26 The American Tobacco Company, et al., No. 5-96CV-91; and 5-1 (B) received on or after the date on which the 5-2 district is created and before the district is dissolved. 5-3 (b) The district shall maintain an accounting of the funds 5-4 received from each county or hospital district that contracts with 5-5 the district. 5-6 (c) The district may administer the financial contributions 5-7 of all parties to the contract for district purposes. 5-8 (Sections 287.025-287.040 reserved for expansion) 5-9 SUBCHAPTER C. DISTRICT ADMINISTRATION 5-10 Sec. 287.041. BOARD OF DIRECTORS. (a) A county or hospital 5-11 district that creates the district and has a population of 125,000 5-12 or more shall appoint one director to the board for every 125,000 5-13 persons in the population of the county or hospital district, 5-14 rounded to the nearest 125,000. 5-15 (b) A county or hospital district that creates the district 5-16 and has a population of less than 125,000 may appoint one director 5-17 to the board. 5-18 (c) The county judges of a county that creates the district 5-19 shall appoint the directors to the board on behalf of the county. 5-20 The board of directors of a hospital district that creates the 5-21 district shall appoint the directors to the board on behalf of the 5-22 hospital district. 5-23 (d) Directors serve staggered two-year terms, with as near 5-24 as possible to one-half of the directors' terms expiring each year. 5-25 (e) The number of directors appointed to the board by each 5-26 county or hospital district that creates the district is determined 6-1 at the time of the initial appointment of directors under this 6-2 section and does not vary with subsequent variations in the 6-3 population of the county or hospital district. 6-4 Sec. 287.042. QUALIFICATIONS FOR OFFICE. (a) To be 6-5 eligible to serve as a director, a person must be a resident of the 6-6 county or hospital district that appoints the person under Section 6-7 287.041. 6-8 (b) An employee of the district may not serve as a director. 6-9 Sec. 287.043. BOND. (a) Before assuming the duties of the 6-10 office, each director must execute a bond for $5,000 payable to the 6-11 district, conditioned on the faithful performance of the person's 6-12 duties as director. 6-13 (b) The bond shall be kept in the permanent records of the 6-14 district. 6-15 (c) The board may pay for directors' bonds with district 6-16 funds. 6-17 Sec. 287.044. BOARD VACANCY. A vacancy in the office of 6-18 director shall be filled for the unexpired term in the same manner 6-19 as the original appointment. 6-20 Sec. 287.045. OFFICERS. (a) The board shall elect from 6-21 among its members a president and a vice president. 6-22 (b) The board shall appoint a secretary, who need not be a 6-23 director. 6-24 Sec. 287.046. OFFICERS' TERMS; VACANCY. (a) Each officer 6-25 of the board serves for a term of one year. 6-26 (b) The board shall fill a vacancy in a board office for the 7-1 unexpired term. 7-2 Sec. 287.047. COMPENSATION. (a) Directors and officers 7-3 serve without compensation but may be reimbursed for actual 7-4 expenses incurred in the performance of official duties. 7-5 (b) Expenses reimbursed under this section must be: 7-6 (1) reported in the district's minute book or other 7-7 district records; and 7-8 (2) approved by the board. 7-9 Sec. 287.048. VOTING REQUIREMENT. A majority of the members 7-10 of the board voting must concur in a matter relating to the 7-11 business of the district. 7-12 Sec. 287.049. ADMINISTRATOR AND ADDITIONAL STAFF. (a) The 7-13 board may appoint qualified persons as administrator of the 7-14 district and as additional administrative staff members as the 7-15 board considers necessary for the efficient operation of the 7-16 district. 7-17 (b) The administrator and other administrative staff members 7-18 serve at the will of the board. 7-19 (c) The administrator and other administrative staff members 7-20 are entitled to compensation as determined by the board. 7-21 (d) Before assuming the administrator's duties, the 7-22 administrator shall execute a bond payable to the health services 7-23 district in an amount not less than $5,000 as determined by the 7-24 board, conditioned on the faithful performance of the 7-25 administrator's duties under this chapter. The board may pay for 7-26 the bond with district funds. 8-1 Sec. 287.050. APPOINTMENTS TO STAFF. The board may: 8-2 (1) appoint to the staff any doctors the board 8-3 considers necessary for the efficient operation of the district; 8-4 and 8-5 (2) make temporary appointments the board considers 8-6 necessary. 8-7 Sec. 287.051. TECHNICIANS, NURSES, AND OTHER DISTRICT 8-8 EMPLOYEES. (a) The district may employ technicians, nurses, 8-9 fiscal agents, accountants, architects, additional attorneys, and 8-10 other necessary employees. 8-11 (b) The board may delegate to the administrator the 8-12 authority to employ persons for the district. 8-13 Sec. 287.052. GENERAL DUTIES OF ADMINISTRATOR. The 8-14 administrator shall: 8-15 (1) supervise the work and activities of the district; 8-16 and 8-17 (2) direct the general affairs of the district, 8-18 subject to the limitations prescribed by the board. 8-19 Sec. 287.053. RETIREMENT BENEFITS. The board may provide 8-20 retirement benefits for employees of the district by: 8-21 (1) establishing or administering a retirement 8-22 program; or 8-23 (2) electing to participate in the Texas County and 8-24 District Retirement System or in any other statewide retirement 8-25 system in which the district is eligible to participate. 9-1 (Sections 287.054-287.070 reserved for expansion 9-2 SUBCHAPTER D. POWERS AND DUTIES 9-3 Sec. 287.071. RESPONSIBILITY OF GOVERNMENTAL ENTITY. On 9-4 creation of a district, a county or hospital district that creates 9-5 the district may transfer to the district: 9-6 (1) management and operation of any land, buildings, 9-7 improvements, and equipment related to the health care system 9-8 located wholly in the district that are owned by the county or 9-9 hospital district in which the district is located, as specified in 9-10 the contract with the counties and hospital districts that created 9-11 the district; and 9-12 (2) operating funds and reserves for operating 9-13 expenses and funds that have been budgeted by the county or 9-14 hospital district in which the district is located to provide 9-15 medical care for residents of the district, as specified in the 9-16 contract with the counties and hospital districts that created the 9-17 district. 9-18 Sec. 287.072. DISTRICT RESPONSIBILITIES. On creation of a 9-19 district, the district assumes the duties required under Section 9-20 287.023 and any additional duties specified in the contract with 9-21 the counties and hospital districts that created the district. 9-22 Sec. 287.073. MANAGEMENT, CONTROL, AND ADMINISTRATION. The 9-23 board shall manage, control, and administer the health care system 9-24 and the funds and resources of the district that are transferred 9-25 under Section 287.071. 9-26 Sec. 287.074. DISTRICT RULES. The board may adopt rules 10-1 governing the operation of the district and the duties, functions, 10-2 and responsibilities of district staff and employees. 10-3 Sec. 287.075. METHODS AND PROCEDURES. The board may 10-4 prescribe: 10-5 (1) the method of making purchases and expenditures by 10-6 and for the district; and 10-7 (2) accounting and control procedures for the 10-8 district. 10-9 Sec. 287.076. HEALTH CARE PROPERTY, FACILITIES, AND 10-10 EQUIPMENT. (a) The board shall determine: 10-11 (1) the type, number, and location of buildings 10-12 required to establish and maintain an adequate health care system; 10-13 and 10-14 (2) the type of equipment necessary for health care. 10-15 (b) The board may: 10-16 (1) acquire property, facilities, and equipment for 10-17 the district for use in the health care system; 10-18 (2) mortgage or pledge the property, facilities, or 10-19 equipment acquired as security for the payment of the purchase 10-20 price; 10-21 (3) transfer by lease to physicians, individuals, 10-22 companies, corporations, or other legal entities or acquire by 10-23 lease district health care facilities; 10-24 (4) sell or otherwise dispose of property, facilities, 10-25 or equipment acquired by the district; and 10-26 (5) contract with a state agency or other qualified 11-1 provider to provide services. 11-2 Sec. 287.077. CONSTRUCTION CONTRACTS. (a) The board may 11-3 enter into construction contracts for the district. 11-4 (b) The board may enter into construction contracts that 11-5 involve spending more than $10,000 only after competitive bidding 11-6 as provided by Subchapter B, Chapter 271, Local Government Code. 11-7 (c) Chapter 2253, Government Code, as it relates to 11-8 performance and payment bonds, applies to construction contracts 11-9 let by the district. 11-10 Sec. 287.078. DISTRICT OPERATING AND MANAGEMENT CONTRACTS. 11-11 The board may enter into operating or management contracts relating 11-12 to health care facilities owned by the district or for which the 11-13 district assumes responsibility for managing and operating under 11-14 the terms of the contract with the counties and hospital districts 11-15 that created the district. 11-16 Sec. 287.079. PAYMENT FOR HEALTH CARE SERVICES. (a) The 11-17 district without charge shall supply to a patient residing in the 11-18 district the care and treatment that the patient or a relative of 11-19 the patient who is legally responsible for the patient's support 11-20 cannot pay. 11-21 (b) Not later than the first day of each operating year, the 11-22 district shall adopt an application procedure to determine 11-23 eligibility for assistance that complies with Section 61.053. 11-24 (c) The administrator of the district may have an inquiry 11-25 made into the financial circumstances of: 11-26 (1) a patient residing in the district and admitted to 12-1 a district facility; and 12-2 (2) a relative of the patient who is legally 12-3 responsible for the patient's support. 12-4 (d) The board may adopt a sliding-fee scale for health care 12-5 services provided to a patient who can pay for some, but not all, 12-6 of the care and treatment provided by the district. 12-7 (e) A county that created and contracted with the district 12-8 may credit a district expenditure for the care and treatment of an 12-9 eligible county resident to the same extent and in the same manner 12-10 the county would be able to claim the expenditure under Chapter 61 12-11 if the county made the expenditure. 12-12 (f) The board shall adopt rules regarding the collection of 12-13 money that is owed to the district for health care services 12-14 provided to a patient who is determined to be able to pay for all 12-15 or any part of the services from a patient, a patient's estate, or 12-16 a relative who is legally responsible for the patient's support. 12-17 Sec. 287.080. REIMBURSEMENT FOR SERVICES. (a) The board 12-18 shall require reimbursement from a county, municipality, or public 12-19 hospital located outside the boundaries of the district for the 12-20 district's care and treatment of a sick, diseased, or injured 12-21 person of that county, municipality, or public hospital as provided 12-22 by Chapter 61. 12-23 (b) The board shall require reimbursement from the sheriff 12-24 or police chief of a county or municipality for the district's care 12-25 and treatment of a person confined in a jail facility of the county 12-26 or municipality who is not a resident of the district, as 13-1 determined in the same manner as the person's residence is 13-2 determined under Chapter 61. 13-3 (c) The board may contract with a state or federal agency or 13-4 political subdivision of the state to provide health care services. 13-5 Sec. 287.081. 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. 287.082. 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. 287.083. AUTHORITY TO SUE AND BE SUED. The board may 13-18 sue and be sued on behalf of the district. 13-19 (Sections 287.084-287.100 reserved for expansion 13-20 SUBCHAPTER E. DISSOLUTION OF DISTRICT 13-21 Sec. 287.101. DISSOLUTION. A district shall be dissolved 13-22 if: 13-23 (1) the contract with the counties and hospital 13-24 districts that created the district expires and is not renewed; or 13-25 (2) the counties and hospital districts that created 13-26 the district adopt concurrent orders to terminate the contract and 14-1 dissolve the district and the concurrent orders: 14-2 (A) are approved by the governing bodies of each 14-3 county and hospital district; and 14-4 (B) contain identical provisions. 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 hospital district 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 hospital 14-14 district, the county or hospital district 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. 14-18 Sec. 287.103. ADMINISTRATION OF PROPERTY, DEBTS, AND ASSETS 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 hospital district in the district, the board shall 14-22 continue to control and administer the property, debts, and assets 14-23 of the district until all funds have been disposed of and all 14-24 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 15-1 insufficient to pay the debts of the district, the district shall 15-2 transfer the remaining debts to the counties and hospital districts 15-3 that created the district in proportion to the funds contributed to 15-4 the district by each county or hospital district. 15-5 (c) If, after administering the property and assets, the 15-6 board determines that unused funds remain, the board shall transfer 15-7 the unused funds to the counties and hospital districts that 15-8 created the district in proportion to the funds contributed to the 15-9 district by each county or hospital district. 15-10 Sec. 287.104. ACCOUNTING. After the district has paid all 15-11 its debts and has disposed of all its assets and funds as 15-12 prescribed by Sections 287.102 and 287.103, the board shall provide 15-13 an accounting to each county and hospital district that created and 15-14 contracted with the district. The accounting must show the manner 15-15 in which the assets and debts of the district were distributed. 15-16 (Sections 287.105-287.120 reserved for expansion 15-17 SUBCHAPTER F. DISTRICT FINANCES 15-18 Sec. 287.121. FISCAL YEAR. (a) The district operates on 15-19 the fiscal year established by the board. 15-20 (b) The fiscal year may not be changed if revenue bonds of 15-21 the district are outstanding or more than once in a 24-month 15-22 period. 15-23 Sec. 287.122. ANNUAL AUDIT. (a) The board annually shall 15-24 have an independent audit made of the financial condition of the 15-25 district. 15-26 (b) A copy of the audit must be provided to: 16-1 (1) each county and hospital district that created and 16-2 contracted with the district; 16-3 (2) each state and federal agency with which the 16-4 district contracts; and 16-5 (3) each other entity that contributes substantial 16-6 funds to the district. 16-7 Sec. 287.123. DISTRICT AUDIT AND RECORDS. The annual audit 16-8 and other district records are open to inspection during regular 16-9 business hours at the principal office of the district. 16-10 Sec. 287.124. ANNUAL BUDGET. (a) The administrator of the 16-11 district shall prepare a proposed annual budget for the district. 16-12 (b) The proposed budget must contain a complete financial 16-13 statement, including a statement of: 16-14 (1) the outstanding obligations of the district; 16-15 (2) the amount of cash on hand to the credit of each 16-16 fund of the district; 16-17 (3) the amount of money received by the district from 16-18 all sources during the previous year; 16-19 (4) the amount of money available to the district from 16-20 all sources during the ensuing year; 16-21 (5) the amount of the balances expected at the end of 16-22 the year in which the budget is being prepared; and 16-23 (6) the estimated amount of revenues and balances 16-24 available to cover the proposed budget. 16-25 Sec. 287.125. NOTICE; HEARING; ADOPTION OF BUDGET. (a) The 16-26 board shall hold a public hearing on the proposed annual budget. 17-1 (b) The board shall publish notice of the hearing in a 17-2 newspaper of general circulation in the district not later than the 17-3 10th day before the date of the hearing. 17-4 (c) Any resident of the district is entitled to be present 17-5 and participate at the hearing. 17-6 (d) At the conclusion of the hearing, the board shall adopt 17-7 a budget by acting on the budget proposed by the administrator. 17-8 The board may make any changes in the proposed budget that in its 17-9 judgment the interests of the residents of the district demand. 17-10 (e) The budget is effective only after adoption by the 17-11 board. 17-12 Sec. 287.126. AMENDING BUDGET. After adoption, the annual 17-13 budget may be amended on the board's approval. 17-14 Sec. 287.127. LIMITATION OF EXPENDITURES. Money may not be 17-15 spent for an expense not included in the annual budget or an 17-16 amendment to it. 17-17 Sec. 287.128. SWORN STATEMENT. As soon as practicable after 17-18 the close of the fiscal year, the administrator shall prepare for 17-19 the board a sworn statement of the amount of money that belongs to 17-20 the district and an account of the disbursements of that money. 17-21 Sec. 287.129. SPENDING AND INVESTMENT LIMITATIONS. 17-22 (a) Except for construction contracts under Section 287.077(a) or 17-23 as provided by Sections 287.142 and 287.143, the district may not 17-24 incur a debt payable from revenues of the district other than the 17-25 revenues on hand or to be on hand in the current and immediately 17-26 following fiscal year of the district. 18-1 (b) The board may invest operating, depreciation, or 18-2 building reserves only in funds or securities specified by Article 18-3 836 or 837, Revised Statutes. 18-4 Sec. 287.130. DEPOSITORY. (a) The board shall name at 18-5 least one bank to serve as depository for district funds. 18-6 (b) District funds, other than those invested as provided by 18-7 Section 287.129(b) and those transmitted to a bank of payment for 18-8 bonds or obligations issued or assumed by the district, shall be 18-9 deposited as received with the depository bank and must remain on 18-10 deposit. This subsection does not limit the power of the board to 18-11 place a portion of district funds on time deposit or to purchase 18-12 certificates of deposit. 18-13 (c) Before the district deposits funds in a bank in an 18-14 amount that exceeds the maximum amount secured by the Federal 18-15 Deposit Insurance Corporation, the bank must execute a bond or 18-16 other security in an amount sufficient to secure from loss the 18-17 district funds that exceed the amount secured by the Federal 18-18 Deposit Insurance Corporation. 18-19 Sec. 287.131. AD VALOREM TAXATION. A district may not 18-20 impose an ad valorem tax. 18-21 (Sections 287.132-287.140 reserved for expansion 18-22 SUBCHAPTER G. BONDS 18-23 Sec. 287.141. GENERAL OBLIGATION BONDS. A district may not 18-24 issue general obligation bonds. 18-25 Sec. 287.142. REVENUE BONDS. (a) The board may issue 18-26 revenue bonds to: 19-1 (1) purchase, construct, acquire, repair, equip, or 19-2 renovate buildings or improvements for district purposes; 19-3 (2) acquire sites to be used for district purposes; or 19-4 (3) acquire and operate a mobile emergency medical 19-5 service to assist the district in carrying out its purposes. 19-6 (b) The bonds must be payable from and secured by a pledge 19-7 of all or part of the revenues derived from the operation of the 19-8 district. The bonds may be additionally secured by a mortgage or 19-9 deed of trust lien on all or part of district property. 19-10 (c) The bonds must be issued in the manner provided by 19-11 Sections 264.042, 264.043, 264.046, 264.047, 264.048, and 264.049 19-12 for issuance of revenue bonds by county hospital authorities. 19-13 (d) Revenue derived from the operation of the district and 19-14 pledged to the repayment of revenue bonds issued by the district 19-15 must be used to repay the principal and interest owed on the bonds 19-16 before being used to repay any other obligation of the district, 19-17 including money owed to physicians who are employed by or who 19-18 contract with the district. 19-19 Sec. 287.143. REFUNDING BONDS. (a) Refunding bonds of the 19-20 district may be issued to refund an outstanding indebtedness the 19-21 district has issued or assumed. 19-22 (b) The bonds must be issued in the manner provided by 19-23 Chapter 784, Acts of the 61st Legislature, Regular Session, 1969 19-24 (Article 717k-3, Vernon's Texas Civil Statutes). 19-25 (c) The refunding bonds may be sold and the proceeds applied 19-26 to the payment of outstanding indebtedness or may be exchanged in 20-1 whole or in part for not less than a similar principal amount of 20-2 outstanding indebtedness. If the refunding bonds are to be sold 20-3 and the proceeds applied to the payment of outstanding 20-4 indebtedness, the refunding bonds must be issued and payments made 20-5 in the manner provided by Chapter 503, Acts of the 54th 20-6 Legislature, Regular Session, 1955 (Article 717k, Vernon's Texas 20-7 Civil Statutes). 20-8 Sec. 287.144. INTEREST AND MATURITY. District bonds must 20-9 mature not later than the 50th anniversary of the date of their 20-10 issuance and must bear interest at a rate not to exceed that 20-11 provided by Chapter 3, Acts of the 61st Legislature, Regular 20-12 Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes). 20-13 Sec. 287.145. EXECUTION OF BONDS. The president of the 20-14 board shall execute the bonds in the name of the district, and the 20-15 secretary of the board shall countersign the bonds in the manner 20-16 provided by the Texas Uniform Facsimile Signature of Public 20-17 Officials Act (Article 717j-1, Vernon's Texas Civil Statutes). 20-18 Sec. 287.146. APPROVAL AND REGISTRATION OF BONDS. 20-19 (a) District bonds are subject to the same requirements with 20-20 regard to approval by the attorney general and registration by the 20-21 comptroller as the law provides for approval and registration of 20-22 bonds issued by counties. 20-23 (b) On approval by the attorney general and registration by 20-24 the comptroller, the bonds are incontestable for any cause. 20-25 Sec. 287.147. BONDS AS INVESTMENTS. District bonds and 20-26 indebtedness assumed by the district are legal and authorized 21-1 investments for: 21-2 (1) banks; 21-3 (2) savings banks; 21-4 (3) trust companies; 21-5 (4) savings and loan associations; 21-6 (5) insurance companies; 21-7 (6) fiduciaries; 21-8 (7) trustees; 21-9 (8) guardians; and 21-10 (9) sinking funds of municipalities, counties, school 21-11 districts, and other political subdivisions of the state and other 21-12 public funds of the state and its agencies, including the permanent 21-13 school fund. 21-14 Sec. 287.148. BONDS AS SECURITY FOR DEPOSITS. District 21-15 bonds are eligible to secure deposits of public funds of the state 21-16 and of municipalities, counties, school districts, and other 21-17 political subdivisions of the state. The bonds are lawful and 21-18 sufficient security for deposits to the extent of their value if 21-19 accompanied by all unmatured coupons. 21-20 Sec. 287.149. TAX STATUS OF BONDS. Because the district 21-21 created under this chapter is a public entity performing an 21-22 essential public function, bonds issued by the district, any 21-23 transaction relating to the bonds, and profits made in the sale of 21-24 the bonds are free from taxation by the state or by any 21-25 municipality, county, special district, or other political 21-26 subdivision of the state. 22-1 SECTION 2. This Act takes effect September 1, 1999. 22-2 SECTION 3. The importance of this legislation and the 22-3 crowded condition of the calendars in both houses create an 22-4 emergency and an imperative public necessity that the 22-5 constitutional rule requiring bills to be read on three several 22-6 days in each house be suspended, and this rule is hereby suspended.