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 (c) A health services district may not: 4-8 (1) establish, conduct, or maintain an institution as 4-9 defined by Section 242.002; or 4-10 (2) establish or operate a personal care facility as 4-11 defined by Section 247.002. 4-12 Sec. 287.024. FUNDING. (a) Each county or hospital 4-13 district that contracts with the district shall contribute to the 4-14 district for its operation: 4-15 (1) a specified dollar amount from or a percentage of 4-16 the contracting entity's operating budget and reserves if the 4-17 contracting entity is a hospital district; 4-18 (2) a specified percentage, not less than the 4-19 percentage required under Section 61.037 for state assistance, of 4-20 the contracting entity's general revenue levy for each state fiscal 4-21 year for the term of the contract, if the contracting entity is a 4-22 county; 4-23 (3) state assistance received under Chapter 61; 4-24 (4) federal matching funds received by a hospital 4-25 district under the Medicaid disproportionate share program; and 4-26 (5) any funds that are: 5-1 (A) received under the Agreement Regarding 5-2 Disposition of Settlement Proceeds dated July 18, 1998, or 5-3 July 24, 1998, and filed in the United States District Court, 5-4 Eastern District of Texas, in the case styled The State of Texas v. 5-5 The American Tobacco Company, et al., No. 5-96CV-91; and 5-6 (B) received on or after the date on which the 5-7 district is created and before the district is dissolved. 5-8 (b) The district shall maintain an accounting of the funds 5-9 received from each county or hospital district that contracts with 5-10 the district. 5-11 (c) The district may administer the financial contributions 5-12 of all parties to the contract for district purposes. 5-13 (Sections 287.025-287.040 reserved for expansion) 5-14 SUBCHAPTER C. DISTRICT ADMINISTRATION 5-15 Sec. 287.041. BOARD OF DIRECTORS. (a) A county or hospital 5-16 district that creates the district and has a population of 125,000 5-17 or more shall appoint one director to the board for every 125,000 5-18 persons in the population of the county or hospital district, 5-19 rounded to the nearest 125,000. 5-20 (b) A county or hospital district that creates the district 5-21 and has a population of less than 125,000 may appoint one director 5-22 to the board. 5-23 (c) The county judges of a county that creates the district 5-24 shall appoint the directors to the board on behalf of the county. 5-25 The board of directors of a hospital district that creates the 5-26 district shall appoint the directors to the board on behalf of the 6-1 hospital district. 6-2 (d) Directors serve staggered two-year terms, with as near 6-3 as possible to one-half of the directors' terms expiring each year. 6-4 (e) The number of directors appointed to the board by each 6-5 county or hospital district that creates the district is determined 6-6 at the time of the initial appointment of directors under this 6-7 section and does not vary with subsequent variations in the 6-8 population of the county or hospital district. 6-9 Sec. 287.042. QUALIFICATIONS FOR OFFICE. (a) To be 6-10 eligible to serve as a director, a person must be a resident of the 6-11 county or hospital district that appoints the person under Section 6-12 287.041. 6-13 (b) An employee of the district may not serve as a director. 6-14 Sec. 287.043. BOND. (a) Before assuming the duties of the 6-15 office, each director must execute a bond for $5,000 payable to the 6-16 district, conditioned on the faithful performance of the person's 6-17 duties as director. 6-18 (b) The bond shall be kept in the permanent records of the 6-19 district. 6-20 (c) The board may pay for directors' bonds with district 6-21 funds. 6-22 Sec. 287.044. BOARD VACANCY. A vacancy in the office of 6-23 director shall be filled for the unexpired term in the same manner 6-24 as the original appointment. 6-25 Sec. 287.045. OFFICERS. (a) The board shall elect from 6-26 among its members a president and a vice president. 7-1 (b) The board shall appoint a secretary, who need not be a 7-2 director. 7-3 Sec. 287.046. OFFICERS' TERMS; VACANCY. (a) Each officer 7-4 of the board serves for a term of one year. 7-5 (b) The board shall fill a vacancy in a board office for the 7-6 unexpired term. 7-7 Sec. 287.047. COMPENSATION. (a) Directors and officers 7-8 serve without compensation but may be reimbursed for actual 7-9 expenses incurred in the performance of official duties. 7-10 (b) Expenses reimbursed under this section must be: 7-11 (1) reported in the district's minute book or other 7-12 district records; and 7-13 (2) approved by the board. 7-14 Sec. 287.048. VOTING REQUIREMENT. A majority of the members 7-15 of the board voting must concur in a matter relating to the 7-16 business of the district. 7-17 Sec. 287.049. ADMINISTRATOR AND ADDITIONAL STAFF. (a) The 7-18 board may appoint qualified persons as administrator of the 7-19 district and as additional administrative staff members as the 7-20 board considers necessary for the efficient operation of the 7-21 district. 7-22 (b) The administrator and other administrative staff members 7-23 serve at the will of the board. 7-24 (c) The administrator and other administrative staff members 7-25 are entitled to compensation as determined by the board. 7-26 (d) Before assuming the administrator's duties, the 8-1 administrator shall execute a bond payable to the health services 8-2 district in an amount not less than $5,000 as determined by the 8-3 board, conditioned on the faithful performance of the 8-4 administrator's duties under this chapter. The board may pay for 8-5 the bond with district funds. 8-6 Sec. 287.050. APPOINTMENTS TO STAFF. The board may: 8-7 (1) appoint to the staff any doctors the board 8-8 considers necessary for the efficient operation of the district; 8-9 and 8-10 (2) make temporary appointments the board considers 8-11 necessary. 8-12 Sec. 287.051. TECHNICIANS, NURSES, AND OTHER DISTRICT 8-13 EMPLOYEES. (a) The district may employ technicians, nurses, 8-14 fiscal agents, accountants, architects, additional attorneys, and 8-15 other necessary employees. 8-16 (b) The board may delegate to the administrator the 8-17 authority to employ persons for the district. 8-18 Sec. 287.052. GENERAL DUTIES OF ADMINISTRATOR. The 8-19 administrator shall: 8-20 (1) supervise the work and activities of the district; 8-21 and 8-22 (2) direct the general affairs of the district, 8-23 subject to the limitations prescribed by the board. 8-24 Sec. 287.053. RETIREMENT BENEFITS. The board may provide 8-25 retirement benefits for employees of the district by: 8-26 (1) establishing or administering a retirement 9-1 program; or 9-2 (2) electing to participate in the Texas County and 9-3 District Retirement System or in any other statewide retirement 9-4 system in which the district is eligible to participate. 9-5 (Sections 287.054-287.070 reserved for expansion 9-6 SUBCHAPTER D. POWERS AND DUTIES 9-7 Sec. 287.071. RESPONSIBILITY OF GOVERNMENTAL ENTITY. On 9-8 creation of a district, a county or hospital district that creates 9-9 the district may transfer to the district: 9-10 (1) management and operation of any land, buildings, 9-11 improvements, and equipment related to the health care system 9-12 located wholly in the district that are owned by the county or 9-13 hospital district in which the district is located, as specified in 9-14 the contract with the counties and hospital districts that created 9-15 the district; and 9-16 (2) operating funds and reserves for operating 9-17 expenses and funds that have been budgeted by the county or 9-18 hospital district in which the district is located to provide 9-19 medical care for residents of the district, as specified in the 9-20 contract with the counties and hospital districts that created the 9-21 district. 9-22 Sec. 287.072. DISTRICT RESPONSIBILITIES. On creation of a 9-23 district, the district assumes the duties required under Section 9-24 287.023 and any additional duties specified in the contract with 9-25 the counties and hospital districts that created the district. 9-26 Sec. 287.073. MANAGEMENT, CONTROL, AND ADMINISTRATION. The 10-1 board shall manage, control, and administer the health care system 10-2 and the funds and resources of the district that are transferred 10-3 under Section 287.071. 10-4 Sec. 287.074. DISTRICT RULES. The board may adopt rules 10-5 governing the operation of the district and the duties, functions, 10-6 and responsibilities of district staff and employees. 10-7 Sec. 287.075. METHODS AND PROCEDURES. The board may 10-8 prescribe: 10-9 (1) the method of making purchases and expenditures by 10-10 and for the district; and 10-11 (2) accounting and control procedures for the 10-12 district. 10-13 Sec. 287.076. HEALTH CARE PROPERTY, FACILITIES, AND 10-14 EQUIPMENT. (a) The board shall determine: 10-15 (1) the type, number, and location of buildings 10-16 required to establish and maintain an adequate health care system; 10-17 and 10-18 (2) the type of equipment necessary for health care. 10-19 (b) The board may: 10-20 (1) acquire property, facilities, and equipment for 10-21 the district for use in the health care system; 10-22 (2) mortgage or pledge the property, facilities, or 10-23 equipment acquired as security for the payment of the purchase 10-24 price; 10-25 (3) transfer by lease to physicians, individuals, 10-26 companies, corporations, or other legal entities or acquire by 11-1 lease district health care facilities; 11-2 (4) sell or otherwise dispose of property, facilities, 11-3 or equipment acquired by the district; and 11-4 (5) contract with a state agency or other qualified 11-5 provider to provide services. 11-6 Sec. 287.077. CONSTRUCTION CONTRACTS. (a) The board may 11-7 enter into construction contracts for the district. 11-8 (b) The board may enter into construction contracts that 11-9 involve spending more than $10,000 only after competitive bidding 11-10 as provided by Subchapter B, Chapter 271, Local Government Code. 11-11 (c) Chapter 2253, Government Code, as it relates to 11-12 performance and payment bonds, applies to construction contracts 11-13 let by the district. 11-14 Sec. 287.078. DISTRICT OPERATING AND MANAGEMENT CONTRACTS. 11-15 The board may enter into operating or management contracts relating 11-16 to health care facilities owned by the district or for which the 11-17 district assumes responsibility for managing and operating under 11-18 the terms of the contract with the counties and hospital districts 11-19 that created the district. 11-20 Sec. 287.079. PAYMENT FOR HEALTH CARE SERVICES. (a) The 11-21 district without charge shall supply to a patient residing in the 11-22 district the care and treatment that the patient or a relative of 11-23 the patient who is legally responsible for the patient's support 11-24 cannot pay. 11-25 (b) Not later than the first day of each operating year, the 11-26 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; and 12-6 (2) a relative of the patient who is legally 12-7 responsible for the patient's support. 12-8 (d) The board may adopt a sliding-fee scale for health care 12-9 services provided to a patient who can pay for some, but not all, 12-10 of the care and treatment provided by the district. 12-11 (e) A county that created and contracted with the district 12-12 may credit a district expenditure for the care and treatment of an 12-13 eligible county resident to the same extent and in the same manner 12-14 the county would be able to claim the expenditure under Chapter 61 12-15 if the county made the expenditure. 12-16 (f) The board shall adopt rules regarding the collection of 12-17 money that is owed to the district for health care services 12-18 provided to a patient who is determined to be able to pay for all 12-19 or any part of the services from a patient, a patient's estate, or 12-20 a relative who is legally responsible for the patient's support. 12-21 Sec. 287.080. REIMBURSEMENT FOR SERVICES. (a) The board 12-22 shall require reimbursement from a county, municipality, or public 12-23 hospital located outside the boundaries of the district for the 12-24 district's care and treatment of a sick, diseased, or injured 12-25 person of that county, municipality, or public hospital as provided 12-26 by Chapter 61. 13-1 (b) The board shall require reimbursement from the sheriff 13-2 or police chief of a county or municipality for the district's care 13-3 and treatment of a person confined in a jail facility of the county 13-4 or municipality who is not a resident of the district, as 13-5 determined in the same manner as the person's residence is 13-6 determined under Chapter 61. 13-7 (c) The board may contract with a state or federal agency or 13-8 political subdivision of the state to provide health care services. 13-9 Sec. 287.081. SERVICE CONTRACTS. The board may contract 13-10 with a municipality, county, special district, or other political 13-11 subdivision of the state or with a state or federal agency for the 13-12 district to: 13-13 (1) furnish a mobile emergency medical service; or 13-14 (2) provide for the investigatory or welfare needs of 13-15 inhabitants of the district. 13-16 Sec. 287.082. GIFTS AND ENDOWMENTS. On behalf of the 13-17 district, the board may accept gifts and endowments to be held in 13-18 trust for any purpose and under any direction, limitation, or 13-19 provision prescribed in writing by the donor that is consistent 13-20 with the proper management of the district. 13-21 Sec. 287.083. AUTHORITY TO SUE AND BE SUED. The board may 13-22 sue and be sued on behalf of the district. 13-23 (Sections 287.084-287.100 reserved for expansion 13-24 SUBCHAPTER E. DISSOLUTION OF DISTRICT 13-25 Sec. 287.101. DISSOLUTION. (a) A district shall be 13-26 dissolved if: 14-1 (1) the contract with the counties and hospital 14-2 districts that created the district expires and is not renewed; or 14-3 (2) the counties and hospital districts that created 14-4 the district adopt concurrent orders to terminate the contract and 14-5 dissolve the district and the concurrent orders: 14-6 (A) are approved by the governing bodies of each 14-7 county and hospital district; and 14-8 (B) contain identical provisions. 14-9 (b) The governing body of a county or hospital district may 14-10 adopt orders to terminate the contract with the district and end 14-11 the county's or hospital district's participation in the district. 14-12 The county or hospital district must give written notice to the 14-13 district at least one fiscal year, as established by the board 14-14 under Section 287.121, before terminating the contract and ending 14-15 participation in the district. On termination of the contract with 14-16 the district, the district shall transfer to the county or hospital 14-17 district all unspent funds contributed by the county or hospital 14-18 district to the district and the land, buildings, improvements, 14-19 equipment, and other assets acquired by the district that are 14-20 located in the county or hospital district. The termination of the 14-21 contract by a county or hospital district does not affect the 14-22 operation of the district with respect to each other county or 14-23 hospital district that created the district. 14-24 Sec. 287.102. TRANSFER OF ASSETS AFTER DISSOLUTION. (a) If 14-25 the district is dissolved, the board shall: 14-26 (1) transfer the land, buildings, improvements, 15-1 equipment, and other assets acquired by the district to the county 15-2 or hospital district in which the property is located; or 15-3 (2) administer the property, assets, and debts in 15-4 accordance with Section 287.103. 15-5 (b) If the district transfers its land, buildings, 15-6 improvements, equipment, and other assets to a county or hospital 15-7 district, the county or hospital district assumes all debts and 15-8 obligations of the district related to the land, buildings, 15-9 improvements, equipment, or assets at the time of the transfer, and 15-10 the district is dissolved. 15-11 Sec. 287.103. ADMINISTRATION OF PROPERTY, DEBTS, AND ASSETS 15-12 AFTER DISSOLUTION. (a) If the district does not transfer its 15-13 land, buildings, improvements, equipment, and other assets to a 15-14 county or hospital district in the district, the board shall 15-15 continue to control and administer the property, debts, and assets 15-16 of the district until all funds have been disposed of and all 15-17 district debts have been paid or settled. 15-18 (b) If, after administering the property and assets, the 15-19 board determines that the district's property and assets are 15-20 insufficient to pay the debts of the district, the district shall 15-21 transfer the remaining debts to the counties and hospital districts 15-22 that created the district in proportion to the funds contributed to 15-23 the district by each county or hospital district. 15-24 (c) If, after administering the property and assets, the 15-25 board determines that unused funds remain, the board shall transfer 15-26 the unused funds to the counties and hospital districts that 16-1 created the district in proportion to the funds contributed to the 16-2 district by each county or hospital district. 16-3 Sec. 287.104. ACCOUNTING. After the district has paid all 16-4 its debts and has disposed of all its assets and funds as 16-5 prescribed by Sections 287.102 and 287.103, the board shall provide 16-6 an accounting to each county and hospital district that created and 16-7 contracted with the district. The accounting must show the manner 16-8 in which the assets and debts of the district were distributed. 16-9 (Sections 287.105-287.120 reserved for expansion 16-10 SUBCHAPTER F. DISTRICT FINANCES 16-11 Sec. 287.121. FISCAL YEAR. (a) The district operates on 16-12 the fiscal year established by the board. 16-13 (b) The fiscal year may not be changed if revenue bonds of 16-14 the district are outstanding or more than once in a 24-month 16-15 period. 16-16 Sec. 287.122. ANNUAL AUDIT. (a) The board annually shall 16-17 have an independent audit made of the financial condition of the 16-18 district. 16-19 (b) A copy of the audit must be provided to: 16-20 (1) each county and hospital district that created and 16-21 contracted with the district; 16-22 (2) each state and federal agency with which the 16-23 district contracts; and 16-24 (3) each other entity that contributes substantial 16-25 funds to the district. 16-26 Sec. 287.123. DISTRICT AUDIT AND RECORDS. The annual audit 17-1 and other district records are open to inspection during regular 17-2 business hours at the principal office of the district. 17-3 Sec. 287.124. ANNUAL BUDGET. (a) The administrator of the 17-4 district shall prepare a proposed annual budget for the district. 17-5 (b) The proposed budget must contain a complete financial 17-6 statement, including a statement of: 17-7 (1) the outstanding obligations of the district; 17-8 (2) the amount of cash on hand to the credit of each 17-9 fund of the district; 17-10 (3) the amount of money received by the district from 17-11 all sources during the previous year; 17-12 (4) the amount of money available to the district from 17-13 all sources during the ensuing year; 17-14 (5) the amount of the balances expected at the end of 17-15 the year in which the budget is being prepared; and 17-16 (6) the estimated amount of revenues and balances 17-17 available to cover the proposed budget. 17-18 Sec. 287.125. NOTICE; HEARING; ADOPTION OF BUDGET. (a) The 17-19 board shall hold a public hearing on the proposed annual budget. 17-20 (b) The board shall publish notice of the hearing in a 17-21 newspaper of general circulation in the district not later than the 17-22 10th day before the date of the hearing. 17-23 (c) Any resident of the district is entitled to be present 17-24 and participate at the hearing. 17-25 (d) At the conclusion of the hearing, the board shall adopt 17-26 a budget by acting on the budget proposed by the administrator. 18-1 The board may make any changes in the proposed budget that in its 18-2 judgment the interests of the residents of the district demand. 18-3 (e) The budget is effective only after adoption by the 18-4 board. 18-5 Sec. 287.126. AMENDING BUDGET. After adoption, the annual 18-6 budget may be amended on the board's approval. 18-7 Sec. 287.127. LIMITATION OF EXPENDITURES. Money may not be 18-8 spent for an expense not included in the annual budget or an 18-9 amendment to it. 18-10 Sec. 287.128. SWORN STATEMENT. As soon as practicable after 18-11 the close of the fiscal year, the administrator shall prepare for 18-12 the board a sworn statement of the amount of money that belongs to 18-13 the district and an account of the disbursements of that money. 18-14 Sec. 287.129. SPENDING AND INVESTMENT LIMITATIONS. 18-15 (a) Except for construction contracts under Section 287.077(a) or 18-16 as provided by Sections 287.142 and 287.143, the district may not 18-17 incur a debt payable from revenues of the district other than the 18-18 revenues on hand or to be on hand in the current and immediately 18-19 following fiscal year of the district. 18-20 (b) The board may invest operating, depreciation, or 18-21 building reserves only in funds or securities specified by Article 18-22 836 or 837, Revised Statutes. 18-23 Sec. 287.130. DEPOSITORY. (a) The board shall name at 18-24 least one bank to serve as depository for district funds. 18-25 (b) District funds, other than those invested as provided by 18-26 Section 287.129(b) and those transmitted to a bank of payment for 19-1 bonds or obligations issued or assumed by the district, shall be 19-2 deposited as received with the depository bank and must remain on 19-3 deposit. This subsection does not limit the power of the board to 19-4 place a portion of district funds on time deposit or to purchase 19-5 certificates of deposit. 19-6 (c) Before the district deposits funds in a bank in an 19-7 amount that exceeds the maximum amount secured by the Federal 19-8 Deposit Insurance Corporation, the bank must execute a bond or 19-9 other security in an amount sufficient to secure from loss the 19-10 district funds that exceed the amount secured by the Federal 19-11 Deposit Insurance Corporation. 19-12 Sec. 287.131. AD VALOREM TAXATION. A district may not 19-13 impose an ad valorem tax. 19-14 (Sections 287.132-287.140 reserved for expansion 19-15 SUBCHAPTER G. BONDS 19-16 Sec. 287.141. GENERAL OBLIGATION BONDS. A district may not 19-17 issue general obligation bonds. 19-18 Sec. 287.142. REVENUE BONDS. (a) The board may issue 19-19 revenue bonds to: 19-20 (1) purchase, construct, acquire, repair, equip, or 19-21 renovate buildings or improvements for district purposes; 19-22 (2) acquire sites to be used for district purposes; or 19-23 (3) acquire and operate a mobile emergency medical 19-24 service to assist the district in carrying out its purposes. 19-25 (b) The bonds must be payable from and secured by a pledge 19-26 of all or part of the revenues derived from the operation of the 20-1 district. The bonds may be additionally secured by a mortgage or 20-2 deed of trust lien on all or part of district property. 20-3 (c) The bonds must be issued in the manner provided by 20-4 Sections 264.042, 264.043, 264.046, 264.047, 264.048, and 264.049 20-5 for issuance of revenue bonds by county hospital authorities. 20-6 (d) Revenue derived from the operation of the district and 20-7 pledged to the repayment of revenue bonds issued by the district 20-8 must be used to repay the principal and interest owed on the bonds 20-9 before being used to repay any other obligation of the district, 20-10 including money owed to physicians who are employed by or who 20-11 contract with the district. 20-12 Sec. 287.143. REFUNDING BONDS. (a) Refunding bonds of the 20-13 district may be issued to refund an outstanding indebtedness the 20-14 district has issued or assumed. 20-15 (b) The bonds must be issued in the manner provided by 20-16 Chapter 784, Acts of the 61st Legislature, Regular Session, 1969 20-17 (Article 717k-3, Vernon's Texas Civil Statutes). 20-18 (c) The refunding bonds may be sold and the proceeds applied 20-19 to the payment of outstanding indebtedness or may be exchanged in 20-20 whole or in part for not less than a similar principal amount of 20-21 outstanding indebtedness. If the refunding bonds are to be sold 20-22 and the proceeds applied to the payment of outstanding 20-23 indebtedness, the refunding bonds must be issued and payments made 20-24 in the manner provided by Chapter 503, Acts of the 54th 20-25 Legislature, Regular Session, 1955 (Article 717k, Vernon's Texas 20-26 Civil Statutes). 21-1 Sec. 287.144. INTEREST AND MATURITY. District bonds must 21-2 mature not later than the 50th anniversary of the date of their 21-3 issuance and must bear interest at a rate not to exceed that 21-4 provided by Chapter 3, Acts of the 61st Legislature, Regular 21-5 Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes). 21-6 Sec. 287.145. EXECUTION OF BONDS. The president of the 21-7 board shall execute the bonds in the name of the district, and the 21-8 secretary of the board shall countersign the bonds in the manner 21-9 provided by the Texas Uniform Facsimile Signature of Public 21-10 Officials Act (Article 717j-1, Vernon's Texas Civil Statutes). 21-11 Sec. 287.146. APPROVAL AND REGISTRATION OF BONDS. 21-12 (a) District bonds are subject to the same requirements with 21-13 regard to approval by the attorney general and registration by the 21-14 comptroller as the law provides for approval and registration of 21-15 bonds issued by counties. 21-16 (b) On approval by the attorney general and registration by 21-17 the comptroller, the bonds are incontestable for any cause. 21-18 Sec. 287.147. BONDS AS INVESTMENTS. District bonds and 21-19 indebtedness assumed by the district are legal and authorized 21-20 investments for: 21-21 (1) banks; 21-22 (2) savings banks; 21-23 (3) trust companies; 21-24 (4) savings and loan associations; 21-25 (5) insurance companies; 21-26 (6) fiduciaries; 22-1 (7) trustees; 22-2 (8) guardians; and 22-3 (9) sinking funds of municipalities, counties, school 22-4 districts, and other political subdivisions of the state and other 22-5 public funds of the state and its agencies, including the permanent 22-6 school fund. 22-7 Sec. 287.148. BONDS AS SECURITY FOR DEPOSITS. District 22-8 bonds are eligible to secure deposits of public funds of the state 22-9 and of municipalities, counties, school districts, and other 22-10 political subdivisions of the state. The bonds are lawful and 22-11 sufficient security for deposits to the extent of their value if 22-12 accompanied by all unmatured coupons. 22-13 Sec. 287.149. TAX STATUS OF BONDS. Because the district 22-14 created under this chapter is a public entity performing an 22-15 essential public function, bonds issued by the district, any 22-16 transaction relating to the bonds, and profits made in the sale of 22-17 the bonds are free from taxation by the state or by any 22-18 municipality, county, special district, or other political 22-19 subdivision of the state. 22-20 SECTION 2. This Act takes effect September 1, 1999. 22-21 SECTION 3. The importance of this legislation and the 22-22 crowded condition of the calendars in both houses create an 22-23 emergency and an imperative public necessity that the 22-24 constitutional rule requiring bills to be read on three several 22-25 days in each house be suspended, and this rule is hereby suspended. S.B. No. 1615 ________________________________ ________________________________ President of the Senate Speaker of the House I hereby certify that S.B. No. 1615 passed the Senate on May 10, 1999, by a viva-voce vote; May 27, 1999, Senate refused to concur in House amendments and requested appointment of Conference Committee; May 28, 1999, House granted request of the Senate; May 30, 1999, Senate adopted Conference Committee Report by a viva-voce vote. _______________________________ Secretary of the Senate I hereby certify that S.B. No. 1615 passed the House, with amendments, on May 22, 1999, by a non-record vote; May 28, 1999, House granted request of the Senate for appointment of Conference Committee; May 30, 1999, House adopted Conference Committee Report by a non-record vote. _______________________________ Chief Clerk of the House Approved: ________________________________ Date ________________________________ Governor