1-1 By: Lucio S.B. No. 1615 1-2 (In the Senate - Filed March 12, 1999; March 15, 1999, read 1-3 first time and referred to Committee on State Affairs; 1-4 April 29, 1999, reported adversely, with favorable Committee 1-5 Substitute by the following vote: Yeas 8, Nays 0; April 29, 1999, 1-6 sent to printer.) 1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1615 By: Lucio 1-8 A BILL TO BE ENTITLED 1-9 AN ACT 1-10 relating to the creation and operation of health services 1-11 districts; granting the power of eminent domain and the authority 1-12 to issue bonds. 1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-14 SECTION 1. Subtitle D, Title 4, Health and Safety Code, is 1-15 amended by adding Chapter 287 to read as follows: 1-16 CHAPTER 287. HEALTH SERVICES DISTRICTS 1-17 SUBCHAPTER A. GENERAL PROVISIONS 1-18 Sec. 287.001. DEFINITIONS. In this chapter: 1-19 (1) "Board" means the board of directors of a 1-20 district. 1-21 (2) "District" means a health services district 1-22 created under this chapter. 1-23 (3) "Director" means a member of the board. 1-24 Sec. 287.002. DISTRICT AUTHORIZATION. A health services 1-25 district may be created and established and, if created, must be 1-26 maintained, operated, and financed in the manner provided by this 1-27 chapter. 1-28 (Sections 287.003-287.020 reserved for expansion) 1-29 SUBCHAPTER B. CREATION OF DISTRICT 1-30 Sec. 287.021. CREATION BY CONCURRENT ORDERS. (a) Except as 1-31 provided by Subsection (b), a county or hospital district and one 1-32 or more other counties or hospital districts may create a health 1-33 services district by adopting concurrent orders. 1-34 (b) A county or portion of a county that is in the 1-35 boundaries of a hospital district may not be a party to the 1-36 creation of a health services district or to a contract with a 1-37 health services district. The hospital district that serves the 1-38 county or portion of the county may create and contract with the 1-39 health services district for the boundaries of the hospital 1-40 district. 1-41 (c) A concurrent order to create a health services district 1-42 must: 1-43 (1) be approved by the governing body of each creating 1-44 county and hospital district; 1-45 (2) contain identical provisions; and 1-46 (3) define the boundaries of the district to be 1-47 coextensive with the combined boundaries of each creating county 1-48 and hospital district. 1-49 (d) A concurrent order to create a health services district 1-50 adopted by a hospital district for which the tax rate is set by the 1-51 commissioners court of the county in which the hospital district 1-52 operates must be approved by the commissioners court of that 1-53 county. 1-54 Sec. 287.022. CONTRACT TERMS. (a) A county or hospital 1-55 district that creates a district under this chapter shall contract 1-56 with the district to provide, at a minimum, the health care 1-57 services the county or hospital district is required to provide by 1-58 law or under the constitution. A contract with a county or 1-59 hospital district that created the health services district under 1-60 this chapter must: 1-61 (1) state the term of the contract, not to exceed six 1-62 years; 1-63 (2) specify the purpose, terms, rights, and duties of 1-64 the district, as authorized by this chapter; 2-1 (3) specify the financial contributions to be made by 2-2 each party to the contract to fund the district, as described by 2-3 Section 287.024; and 2-4 (4) specify the land, buildings, improvements, 2-5 equipment, and other assets owned by a party to the contract that 2-6 the district will be required to manage and operate. 2-7 (b) Chapter 791, Government Code, does not apply to a 2-8 contract made under this chapter. 2-9 Sec. 287.023. PURPOSE AND DUTIES. (a) A health services 2-10 district shall: 2-11 (1) provide health care services to indigent residents 2-12 of the district; 2-13 (2) manage the funds contributed to the district by 2-14 each county or hospital district that contracts with the district; 2-15 and 2-16 (3) plan and coordinate with public and private health 2-17 care providers and entities for the long-term provision of health 2-18 care services to residents of the district. 2-19 (b) A health services district may: 2-20 (1) provide health care services on a sliding-fee 2-21 scale to residents of the district who do not meet the basic income 2-22 and resources requirements established under Sections 61.006 and 2-23 61.008 to be eligible for assistance under Chapter 61 but who are 2-24 unable to pay for the full cost of health care services; and 2-25 (2) assume responsibility for management and operation 2-26 of the land, buildings, improvements, equipment, and other assets 2-27 that are acquired by the district or for which the district agrees 2-28 to assume responsibility under the terms of the contract. 2-29 Sec. 287.024. FUNDING. (a) Each county or hospital 2-30 district that contracts with the district shall contribute to the 2-31 district for its operation: 2-32 (1) a specified dollar amount from or a percentage of 2-33 the contracting entity's operating budget and reserves if the 2-34 contracting entity is a hospital district; 2-35 (2) a specified percentage, not less than the 2-36 percentage required under Section 61.037 for state assistance, of 2-37 the contracting entity's general revenue levy for each state fiscal 2-38 year for the term of the contract, if the contracting entity is a 2-39 county; 2-40 (3) state assistance received under Chapter 61; 2-41 (4) federal matching funds received by a hospital 2-42 district under the Medicaid disproportionate share program; and 2-43 (5) any funds that are: 2-44 (A) received under the Agreement Regarding 2-45 Disposition of Settlement Proceeds dated July 18, 1998, or 2-46 July 24, 1998, and filed in the United States District Court, 2-47 Eastern District of Texas, in the case styled The State of Texas v. 2-48 The American Tobacco Company, et al., No. 5-96CV-91; and 2-49 (B) received on or after the date on which the 2-50 district is created and before the district is dissolved. 2-51 (b) The district shall maintain an accounting of the funds 2-52 received from each county or hospital district that contracts with 2-53 the district. 2-54 (c) The district may administer the financial contributions 2-55 of all parties to the contract for district purposes. 2-56 (Sections 287.025-287.040 reserved for expansion) 2-57 SUBCHAPTER C. DISTRICT ADMINISTRATION 2-58 Sec. 287.041. BOARD OF DIRECTORS. (a) A county or hospital 2-59 district that creates the district and has a population of 125,000 2-60 or more shall appoint one director to the board for every 125,000 2-61 persons in the population of the county or hospital district, 2-62 rounded to the nearest 125,000. 2-63 (b) A county or hospital district that creates the district 2-64 and has a population of less than 125,000 may appoint one director 2-65 to the board. 2-66 (c) The county judges of a county that creates the district 2-67 shall appoint the directors to the board on behalf of the county. 2-68 The board of directors of a hospital district that creates the 2-69 district shall appoint the directors to the board on behalf of the 3-1 hospital district. 3-2 (d) Directors serve staggered two-year terms, with as near 3-3 as possible to one-half of the directors' terms expiring each year. 3-4 (e) The number of directors appointed to the board by each 3-5 county or hospital district that creates the district is determined 3-6 at the time of the initial appointment of directors under this 3-7 section and does not vary with subsequent variations in the 3-8 population of the county or hospital district. 3-9 Sec. 287.042. QUALIFICATIONS FOR OFFICE. (a) To be 3-10 eligible to serve as a director, a person must be a resident of the 3-11 county or hospital district that appoints the person under Section 3-12 287.041. 3-13 (b) An employee of the district may not serve as a director. 3-14 Sec. 287.043. BOND. (a) Before assuming the duties of the 3-15 office, each director must execute a bond for $5,000 payable to the 3-16 district, conditioned on the faithful performance of the person's 3-17 duties as director. 3-18 (b) The bond shall be kept in the permanent records of the 3-19 district. 3-20 (c) The board may pay for directors' bonds with district 3-21 funds. 3-22 Sec. 287.044. BOARD VACANCY. A vacancy in the office of 3-23 director shall be filled for the unexpired term in the same manner 3-24 as the original appointment. 3-25 Sec. 287.045. OFFICERS. (a) The board shall elect from 3-26 among its members a president and a vice president. 3-27 (b) The board shall appoint a secretary, who need not be a 3-28 director. 3-29 Sec. 287.046. OFFICERS' TERMS; VACANCY. (a) Each officer 3-30 of the board serves for a term of one year. 3-31 (b) The board shall fill a vacancy in a board office for the 3-32 unexpired term. 3-33 Sec. 287.047. COMPENSATION. (a) Directors and officers 3-34 serve without compensation but may be reimbursed for actual 3-35 expenses incurred in the performance of official duties. 3-36 (b) Expenses reimbursed under this section must be: 3-37 (1) reported in the district's minute book or other 3-38 district records; and 3-39 (2) approved by the board. 3-40 Sec. 287.048. VOTING REQUIREMENT. A majority of the members 3-41 of the board voting must concur in a matter relating to the 3-42 business of the district. 3-43 Sec. 287.049. ADMINISTRATOR AND ADDITIONAL STAFF. (a) The 3-44 board may appoint qualified persons as administrator of the 3-45 district and as additional administrative staff members as the 3-46 board considers necessary for the efficient operation of the 3-47 district. 3-48 (b) The administrator and other administrative staff members 3-49 serve at the will of the board. 3-50 (c) The administrator and other administrative staff members 3-51 are entitled to compensation as determined by the board. 3-52 (d) Before assuming the administrator's duties, the 3-53 administrator shall execute a bond payable to the health services 3-54 district in an amount not less than $5,000 as determined by the 3-55 board, conditioned on the faithful performance of the 3-56 administrator's duties under this chapter. The board may pay for 3-57 the bond with district funds. 3-58 Sec. 287.050. APPOINTMENTS TO STAFF. The board may: 3-59 (1) appoint to the staff any doctors the board 3-60 considers necessary for the efficient operation of the district; 3-61 and 3-62 (2) make temporary appointments the board considers 3-63 necessary. 3-64 Sec. 287.051. TECHNICIANS, NURSES, AND OTHER DISTRICT 3-65 EMPLOYEES. (a) The district may employ technicians, nurses, 3-66 fiscal agents, accountants, architects, additional attorneys, and 3-67 other necessary employees. 3-68 (b) The board may delegate to the administrator the 3-69 authority to employ persons for the district. 4-1 Sec. 287.052. GENERAL DUTIES OF ADMINISTRATOR. The 4-2 administrator shall: 4-3 (1) supervise the work and activities of the district; 4-4 and 4-5 (2) direct the general affairs of the district, 4-6 subject to the limitations prescribed by the board. 4-7 Sec. 287.053. RETIREMENT BENEFITS. The board may provide 4-8 retirement benefits for employees of the district by: 4-9 (1) establishing or administering a retirement 4-10 program; or 4-11 (2) electing to participate in the Texas County and 4-12 District Retirement System or in any other statewide retirement 4-13 system in which the district is eligible to participate. 4-14 (Sections 287.054-287.070 reserved for expansion 4-15 SUBCHAPTER D. POWERS AND DUTIES 4-16 Sec. 287.071. RESPONSIBILITY OF GOVERNMENTAL ENTITY. On 4-17 creation of a district, a county or hospital district that creates 4-18 the district may transfer to the district: 4-19 (1) management and operation of any land, buildings, 4-20 improvements, and equipment related to the health care system 4-21 located wholly in the district that are owned by the county or 4-22 hospital district in which the district is located, as specified in 4-23 the contract with the counties and hospital districts that created 4-24 the district; and 4-25 (2) operating funds and reserves for operating 4-26 expenses and funds that have been budgeted by the county or 4-27 hospital district in which the district is located to provide 4-28 medical care for residents of the district, as specified in the 4-29 contract with the counties and hospital districts that created the 4-30 district. 4-31 Sec. 287.072. DISTRICT RESPONSIBILITIES. On creation of a 4-32 district, the district assumes the duties required under Section 4-33 287.023 and any additional duties specified in the contract with 4-34 the counties and hospital districts that created the district. 4-35 Sec. 287.073. MANAGEMENT, CONTROL, AND ADMINISTRATION. The 4-36 board shall manage, control, and administer the health care system 4-37 and the funds and resources of the district that are transferred 4-38 under Section 287.071. 4-39 Sec. 287.074. DISTRICT RULES. The board may adopt rules 4-40 governing the operation of the district and the duties, functions, 4-41 and responsibilities of district staff and employees. 4-42 Sec. 287.075. METHODS AND PROCEDURES. The board may 4-43 prescribe: 4-44 (1) the method of making purchases and expenditures by 4-45 and for the district; and 4-46 (2) accounting and control procedures for the 4-47 district. 4-48 Sec. 287.076. HEALTH CARE PROPERTY, FACILITIES, AND 4-49 EQUIPMENT. (a) The board shall determine: 4-50 (1) the type, number, and location of buildings 4-51 required to establish and maintain an adequate health care system; 4-52 and 4-53 (2) the type of equipment necessary for health care. 4-54 (b) The board may: 4-55 (1) acquire property, facilities, and equipment for 4-56 the district for use in the health care system; 4-57 (2) mortgage or pledge the property, facilities, or 4-58 equipment acquired as security for the payment of the purchase 4-59 price; 4-60 (3) transfer by lease to physicians, individuals, 4-61 companies, corporations, or other legal entities or acquire by 4-62 lease district health care facilities; 4-63 (4) sell or otherwise dispose of property, facilities, 4-64 or equipment acquired by the district; and 4-65 (5) contract with a state agency or other qualified 4-66 provider to provide services. 4-67 Sec. 287.077. CONSTRUCTION CONTRACTS. (a) The board may 4-68 enter into construction contracts for the district. 4-69 (b) The board may enter into construction contracts that 5-1 involve spending more than $10,000 only after competitive bidding 5-2 as provided by Subchapter B, Chapter 271, Local Government Code. 5-3 (c) Chapter 2253, Government Code, as it relates to 5-4 performance and payment bonds, applies to construction contracts 5-5 let by the district. 5-6 Sec. 287.078. DISTRICT OPERATING AND MANAGEMENT CONTRACTS. 5-7 The board may enter into operating or management contracts relating 5-8 to health care facilities owned by the district or for which the 5-9 district assumes responsibility for managing and operating under 5-10 the terms of the contract with the counties and hospital districts 5-11 that created the district. 5-12 Sec. 287.079. EMINENT DOMAIN. (a) A district may exercise 5-13 the power of eminent domain to acquire a fee simple or other 5-14 interest in property located in the territory of the district if 5-15 the property interest is necessary to the exercise of the rights or 5-16 authority conferred by this chapter. 5-17 (b) A district must exercise the power of eminent domain in 5-18 the manner provided by Chapter 21, Property Code, but the district 5-19 is not required to deposit in the trial court money or a bond as 5-20 provided by Section 21.021(a), Property Code. 5-21 (c) In a condemnation proceeding brought by a district, the 5-22 district is not required to: 5-23 (1) pay in advance or give bond or other security for 5-24 costs in the trial court; 5-25 (2) give bond for the issuance of a temporary 5-26 restraining order or a temporary injunction; or 5-27 (3) give bond for costs or supersedeas on an appeal or 5-28 writ of error. 5-29 Sec. 287.080. EXPENSES FOR MOVING FACILITIES OF RAILROADS OR 5-30 UTILITIES. If, in exercising the power of eminent domain, the 5-31 board requires relocating, raising, lowering, rerouting, changing 5-32 the grade of, or altering the construction of any railroad, 5-33 highway, pipeline, or electric transmission and electric 5-34 distribution, telegraph, or telephone lines, conduits, poles, or 5-35 facilities, the district must bear the actual cost of relocating, 5-36 raising, lowering, rerouting, changing the grade, or altering the 5-37 construction to provide comparable replacement without enhancement 5-38 of a facility, after deducting the net salvage value derived from 5-39 the old facility. 5-40 Sec. 287.081. PAYMENT FOR HEALTH CARE SERVICES. (a) The 5-41 district without charge shall supply to a patient residing in the 5-42 district the care and treatment that the patient or a relative of 5-43 the patient who is legally responsible for the patient's support 5-44 cannot pay. 5-45 (b) Not later than the first day of each operating year, the 5-46 district shall adopt an application procedure to determine 5-47 eligibility for assistance that complies with Section 61.053. 5-48 (c) The administrator of the district may have an inquiry 5-49 made into the financial circumstances of: 5-50 (1) a patient residing in the district and admitted to 5-51 a district facility; and 5-52 (2) a relative of the patient who is legally 5-53 responsible for the patient's support. 5-54 (d) The board may adopt a sliding-fee scale for health care 5-55 services provided to a patient who can pay for some, but not all, 5-56 of the care and treatment provided by the district. 5-57 (e) A county that created and contracted with the district 5-58 may credit a district expenditure for the care and treatment of an 5-59 eligible county resident to the same extent and in the same manner 5-60 the county would be able to claim the expenditure under Chapter 61 5-61 if the county made the expenditure. 5-62 (f) The board shall adopt rules regarding the collection of 5-63 money that is owed to the district for health care services 5-64 provided to a patient who is determined to be able to pay for all 5-65 or any part of the services from a patient, a patient's estate, or 5-66 a relative who is legally responsible for the patient's support. 5-67 Sec. 287.082. REIMBURSEMENT FOR SERVICES. (a) The board 5-68 shall require reimbursement from a county, municipality, or public 5-69 hospital located outside the boundaries of the district for the 6-1 district's care and treatment of a sick, diseased, or injured 6-2 person of that county, municipality, or public hospital as provided 6-3 by Chapter 61. 6-4 (b) The board shall require reimbursement from the sheriff 6-5 or police chief of a county or municipality for the district's care 6-6 and treatment of a person confined in a jail facility of the county 6-7 or municipality who is not a resident of the district, as 6-8 determined in the same manner as the person's residence is 6-9 determined under Chapter 61. 6-10 (c) The board may contract with a state or federal agency or 6-11 political subdivision of the state to provide health care services. 6-12 Sec. 287.083. SERVICE CONTRACTS. The board may contract 6-13 with a municipality, county, special district, or other political 6-14 subdivision of the state or with a state or federal agency for the 6-15 district to: 6-16 (1) furnish a mobile emergency medical service; or 6-17 (2) provide for the investigatory or welfare needs of 6-18 inhabitants of the district. 6-19 Sec. 287.084. GIFTS AND ENDOWMENTS. On behalf of the 6-20 district, the board may accept gifts and endowments to be held in 6-21 trust for any purpose and under any direction, limitation, or 6-22 provision prescribed in writing by the donor that is consistent 6-23 with the proper management of the district. 6-24 Sec. 287.085. AUTHORITY TO SUE AND BE SUED. The board may 6-25 sue and be sued on behalf of the district. 6-26 (Sections 287.086-287.100 reserved for expansion 6-27 SUBCHAPTER E. DISSOLUTION OF DISTRICT 6-28 Sec. 287.101. DISSOLUTION. A district shall be dissolved 6-29 if: 6-30 (1) the contract with the counties and hospital 6-31 districts that created the district expires and is not renewed; or 6-32 (2) the counties and hospital districts that created 6-33 the district adopt concurrent orders to terminate the contract and 6-34 dissolve the district and the concurrent orders: 6-35 (A) are approved by the governing bodies of each 6-36 county and hospital district; and 6-37 (B) contain identical provisions. 6-38 Sec. 287.102. TRANSFER OF ASSETS AFTER DISSOLUTION. (a) If 6-39 the district is dissolved, the board shall: 6-40 (1) transfer the land, buildings, improvements, 6-41 equipment, and other assets acquired by the district to the county 6-42 or hospital district in which the property is located; or 6-43 (2) administer the property, assets, and debts in 6-44 accordance with Section 287.103. 6-45 (b) If the district transfers its land, buildings, 6-46 improvements, equipment, and other assets to a county or hospital 6-47 district, the county or hospital district assumes all debts and 6-48 obligations of the district related to the land, buildings, 6-49 improvements, equipment, or assets at the time of the transfer, and 6-50 the district is dissolved. 6-51 Sec. 287.103. ADMINISTRATION OF PROPERTY, DEBTS, AND ASSETS 6-52 AFTER DISSOLUTION. (a) If the district does not transfer its 6-53 land, buildings, improvements, equipment, and other assets to a 6-54 county or hospital district in the district, the board shall 6-55 continue to control and administer the property, debts, and assets 6-56 of the district until all funds have been disposed of and all 6-57 district debts have been paid or settled. 6-58 (b) If, after administering the property and assets, the 6-59 board determines that the district's property and assets are 6-60 insufficient to pay the debts of the district, the district shall 6-61 transfer the remaining debts to the counties and hospital districts 6-62 that created the district in proportion to the funds contributed to 6-63 the district by each county or hospital district. 6-64 (c) If, after administering the property and assets, the 6-65 board determines that unused funds remain, the board shall transfer 6-66 the unused funds to the counties and hospital districts that 6-67 created the district in proportion to the funds contributed to the 6-68 district by each county or hospital district. 6-69 Sec. 287.104. ACCOUNTING. After the district has paid all 7-1 its debts and has disposed of all its assets and funds as 7-2 prescribed by Sections 287.102 and 287.103, the board shall provide 7-3 an accounting to each county and hospital district that created and 7-4 contracted with the district. The accounting must show the manner 7-5 in which the assets and debts of the district were distributed. 7-6 (Sections 287.105-287.120 reserved for expansion 7-7 SUBCHAPTER F. DISTRICT FINANCES 7-8 Sec. 287.121. FISCAL YEAR. (a) The district operates on 7-9 the fiscal year established by the board. 7-10 (b) The fiscal year may not be changed if revenue bonds of 7-11 the district are outstanding or more than once in a 24-month 7-12 period. 7-13 Sec. 287.122. ANNUAL AUDIT. (a) The board annually shall 7-14 have an independent audit made of the financial condition of the 7-15 district. 7-16 (b) A copy of the audit must be provided to: 7-17 (1) each county and hospital district that created and 7-18 contracted with the district; 7-19 (2) each state and federal agency with which the 7-20 district contracts; and 7-21 (3) each other entity that contributes substantial 7-22 funds to the district. 7-23 Sec. 287.123. DISTRICT AUDIT AND RECORDS. The annual audit 7-24 and other district records are open to inspection during regular 7-25 business hours at the principal office of the district. 7-26 Sec. 287.124. ANNUAL BUDGET. (a) The administrator of the 7-27 district shall prepare a proposed annual budget for the district. 7-28 (b) The proposed budget must contain a complete financial 7-29 statement, including a statement of: 7-30 (1) the outstanding obligations of the district; 7-31 (2) the amount of cash on hand to the credit of each 7-32 fund of the district; 7-33 (3) the amount of money received by the district from 7-34 all sources during the previous year; 7-35 (4) the amount of money available to the district from 7-36 all sources during the ensuing year; 7-37 (5) the amount of the balances expected at the end of 7-38 the year in which the budget is being prepared; and 7-39 (6) the estimated amount of revenues and balances 7-40 available to cover the proposed budget. 7-41 Sec. 287.125. NOTICE; HEARING; ADOPTION OF BUDGET. (a) The 7-42 board shall hold a public hearing on the proposed annual budget. 7-43 (b) The board shall publish notice of the hearing in a 7-44 newspaper of general circulation in the district not later than the 7-45 10th day before the date of the hearing. 7-46 (c) Any resident of the district is entitled to be present 7-47 and participate at the hearing. 7-48 (d) At the conclusion of the hearing, the board shall adopt 7-49 a budget by acting on the budget proposed by the administrator. 7-50 The board may make any changes in the proposed budget that in its 7-51 judgment the interests of the residents of the district demand. 7-52 (e) The budget is effective only after adoption by the 7-53 board. 7-54 Sec. 287.126. AMENDING BUDGET. After adoption, the annual 7-55 budget may be amended on the board's approval. 7-56 Sec. 287.127. LIMITATION OF EXPENDITURES. Money may not be 7-57 spent for an expense not included in the annual budget or an 7-58 amendment to it. 7-59 Sec. 287.128. SWORN STATEMENT. As soon as practicable after 7-60 the close of the fiscal year, the administrator shall prepare for 7-61 the board a sworn statement of the amount of money that belongs to 7-62 the district and an account of the disbursements of that money. 7-63 Sec. 287.129. SPENDING AND INVESTMENT LIMITATIONS. 7-64 (a) Except for construction contracts under Section 287.077(a) or 7-65 as provided by Sections 287.142 and 287.143, the district may not 7-66 incur a debt payable from revenues of the district other than the 7-67 revenues on hand or to be on hand in the current and immediately 7-68 following fiscal year of the district. 7-69 (b) The board may invest operating, depreciation, or 8-1 building reserves only in funds or securities specified by Article 8-2 836 or 837, Revised Statutes. 8-3 Sec. 287.130. DEPOSITORY. (a) The board shall name at 8-4 least one bank to serve as depository for district funds. 8-5 (b) District funds, other than those invested as provided by 8-6 Section 287.129(b) and those transmitted to a bank of payment for 8-7 bonds or obligations issued or assumed by the district, shall be 8-8 deposited as received with the depository bank and must remain on 8-9 deposit. This subsection does not limit the power of the board to 8-10 place a portion of district funds on time deposit or to purchase 8-11 certificates of deposit. 8-12 (c) Before the district deposits funds in a bank in an 8-13 amount that exceeds the maximum amount secured by the Federal 8-14 Deposit Insurance Corporation, the bank must execute a bond or 8-15 other security in an amount sufficient to secure from loss the 8-16 district funds that exceed the amount secured by the Federal 8-17 Deposit Insurance Corporation. 8-18 Sec. 287.131. AD VALOREM TAXATION. A district may not 8-19 impose an ad valorem tax. 8-20 (Sections 287.132-287.140 reserved for expansion 8-21 SUBCHAPTER G. BONDS 8-22 Sec. 287.141. GENERAL OBLIGATION BONDS. A district may not 8-23 issue general obligation bonds. 8-24 Sec. 287.142. REVENUE BONDS. (a) The board may issue 8-25 revenue bonds to: 8-26 (1) purchase, construct, acquire, repair, equip, or 8-27 renovate buildings or improvements for district purposes; 8-28 (2) acquire sites to be used for district purposes; or 8-29 (3) acquire and operate a mobile emergency medical 8-30 service to assist the district in carrying out its purposes. 8-31 (b) The bonds must be payable from and secured by a pledge 8-32 of all or part of the revenues derived from the operation of the 8-33 district. The bonds may be additionally secured by a mortgage or 8-34 deed of trust lien on all or part of district property. 8-35 (c) The bonds must be issued in the manner provided by 8-36 Sections 264.042, 264.043, 264.046, 264.047, 264.048, and 264.049 8-37 for issuance of revenue bonds by county hospital authorities. 8-38 (d) Revenue derived from the operation of the district and 8-39 pledged to the repayment of revenue bonds issued by the district 8-40 must be used to repay the principal and interest owed on the bonds 8-41 before being used to repay any other obligation of the district, 8-42 including money owed to physicians who are employed by or who 8-43 contract with the district. 8-44 Sec. 287.143. REFUNDING BONDS. (a) Refunding bonds of the 8-45 district may be issued to refund an outstanding indebtedness the 8-46 district has issued or assumed. 8-47 (b) The bonds must be issued in the manner provided by 8-48 Chapter 784, Acts of the 61st Legislature, Regular Session, 1969 8-49 (Article 717k-3, Vernon's Texas Civil Statutes). 8-50 (c) The refunding bonds may be sold and the proceeds applied 8-51 to the payment of outstanding indebtedness or may be exchanged in 8-52 whole or in part for not less than a similar principal amount of 8-53 outstanding indebtedness. If the refunding bonds are to be sold 8-54 and the proceeds applied to the payment of outstanding 8-55 indebtedness, the refunding bonds must be issued and payments made 8-56 in the manner provided by Chapter 503, Acts of the 54th 8-57 Legislature, Regular Session, 1955 (Article 717k, Vernon's Texas 8-58 Civil Statutes). 8-59 Sec. 287.144. INTEREST AND MATURITY. District bonds must 8-60 mature not later than the 50th anniversary of the date of their 8-61 issuance and must bear interest at a rate not to exceed that 8-62 provided by Chapter 3, Acts of the 61st Legislature, Regular 8-63 Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes). 8-64 Sec. 287.145. EXECUTION OF BONDS. The president of the 8-65 board shall execute the bonds in the name of the district, and the 8-66 secretary of the board shall countersign the bonds in the manner 8-67 provided by the Texas Uniform Facsimile Signature of Public 8-68 Officials Act (Article 717j-1, Vernon's Texas Civil Statutes). 8-69 Sec. 287.146. APPROVAL AND REGISTRATION OF BONDS. 9-1 (a) District bonds are subject to the same requirements with 9-2 regard to approval by the attorney general and registration by the 9-3 comptroller as the law provides for approval and registration of 9-4 bonds issued by counties. 9-5 (b) On approval by the attorney general and registration by 9-6 the comptroller, the bonds are incontestable for any cause. 9-7 Sec. 287.147. BONDS AS INVESTMENTS. District bonds and 9-8 indebtedness assumed by the district are legal and authorized 9-9 investments for: 9-10 (1) banks; 9-11 (2) savings banks; 9-12 (3) trust companies; 9-13 (4) savings and loan associations; 9-14 (5) insurance companies; 9-15 (6) fiduciaries; 9-16 (7) trustees; 9-17 (8) guardians; and 9-18 (9) sinking funds of municipalities, counties, school 9-19 districts, and other political subdivisions of the state and other 9-20 public funds of the state and its agencies, including the permanent 9-21 school fund. 9-22 Sec. 287.148. BONDS AS SECURITY FOR DEPOSITS. District 9-23 bonds are eligible to secure deposits of public funds of the state 9-24 and of municipalities, counties, school districts, and other 9-25 political subdivisions of the state. The bonds are lawful and 9-26 sufficient security for deposits to the extent of their value if 9-27 accompanied by all unmatured coupons. 9-28 Sec. 287.149. TAX STATUS OF BONDS. Because the district 9-29 created under this chapter is a public entity performing an 9-30 essential public function, bonds issued by the district, any 9-31 transaction relating to the bonds, and profits made in the sale of 9-32 the bonds are free from taxation by the state or by any 9-33 municipality, county, special district, or other political 9-34 subdivision of the state. 9-35 SECTION 2. This Act takes effect September 1, 1999. 9-36 SECTION 3. The importance of this legislation and the 9-37 crowded condition of the calendars in both houses create an 9-38 emergency and an imperative public necessity that the 9-39 constitutional rule requiring bills to be read on three several 9-40 days in each house be suspended, and this rule is hereby suspended. 9-41 * * * * *