1-1                                   AN ACT
 1-2     relating to the creation of fire control, prevention, and emergency
 1-3     medical services districts by certain municipalities.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subtitle A, Title 11, Local Government Code, is
 1-6     amended by adding Chapter 344 to read as follows:
 1-7        CHAPTER 344.  FIRE CONTROL, PREVENTION, AND EMERGENCY MEDICAL
 1-8                             SERVICES DISTRICTS
 1-9                      SUBCHAPTER A.  GENERAL PROVISIONS
1-10           Sec. 344.001.  SHORT TITLE.  This chapter may be cited as the
1-11     Fire Control, Prevention, and Emergency Medical Services District
1-12     Act.
1-13           Sec. 344.002.  DEFINITIONS.  In this chapter:
1-14                 (1)  "Board" means the board of directors of a
1-15     district.
1-16                 (2)  "Director" means a member of a board.
1-17                 (3)  "District" means a fire control, prevention, and
1-18     emergency medical services district created under this chapter.
1-19           Sec. 344.003.  LIABILITY OF STATE.  The state is not
1-20     obligated for the support, maintenance, or dissolution of a
1-21     district created under this chapter.
1-22              (Sections 344.004-344.050 reserved for expansion
1-23           SUBCHAPTER B.  CREATION OF DISTRICT AND TEMPORARY BOARD
1-24           Sec. 344.051.  AUTHORITY OF MUNICIPALITY TO PROPOSE DISTRICT.
 2-1     (a)  The governing body of a municipality with a population of not
 2-2     less than 25,000 nor more than 550,000, or a municipality with a
 2-3     population of more than 1.9 million, may propose the creation of a
 2-4     fire control, prevention, and emergency medical services district
 2-5     under this chapter.
 2-6           (b)  The proposed district may include all or any part of the
 2-7     municipality.
 2-8           (c)  Except as provided by Subsection (f), a district may be
 2-9     created inside the boundaries of a rural fire prevention district
2-10     operating under Chapter 794, Health and Safety Code, or an
2-11     emergency services district operating under Chapter 775 or 776,
2-12     Health and Safety Code, only if the governing body of the rural
2-13     fire prevention district or the emergency services district gives
2-14     its written consent by order or resolution not later than the 60th
2-15     day after the date the governing body receives a request for its
2-16     consent.
2-17           (d)  If the governing body of the rural fire prevention
2-18     district or emergency services district consents to the inclusion
2-19     of territory inside its geographic boundaries, the territory may be
2-20     included in the district in the same manner as other territory is
2-21     included under this chapter.
2-22           (e)  The consent of the governing body of the rural fire
2-23     prevention district or emergency services district to include
2-24     territory in the district and to initiate proceedings to create a
2-25     district as prescribed by this chapter expires six months after the
2-26     date on which the consent is given.
2-27           (f)  Subsection (c) does not apply if:
 3-1                 (1)  on the effective date of this chapter, the
 3-2     municipality is providing fire suppression and prevention services
 3-3     and emergency medical services; or
 3-4                 (2)  the fire control, prevention, and emergency
 3-5     medical services plan of the proposed district proposes emergency
 3-6     services that, on the effective date of this chapter, are not
 3-7     provided by any rural fire prevention district or emergency
 3-8     services district inside the boundaries of the municipality.
 3-9           (g)  If the voters in a municipality with a population of
3-10     more than 1.9 million create a fire control, prevention, and
3-11     emergency medical services district under this chapter, the fire
3-12     department shall comply with the minimum standards established by
3-13     the National Fire Protection Association or its successor in
3-14     function regarding fire protection personnel operating at emergency
3-15     incidents.
3-16           Sec. 344.052.  TEMPORARY BOARD.  (a)  Not later than the 60th
3-17     day after the date the governing body proposes to create a district
3-18     under this chapter, the governing body shall appoint seven persons
3-19     to serve as temporary directors of the district.  The temporary
3-20     directors must reside in the proposed district.
3-21           (b)  Not later than the 75th day after the date the governing
3-22     body proposes to create the district, the temporary board shall
3-23     conduct a meeting to organize the board.  The temporary directors
3-24     shall elect one of its members as presiding officer of the board at
3-25     that meeting.
3-26           (c)  A temporary director other than the presiding officer
3-27     may designate another person to serve in the director's place.
 4-1           (d)  The governing body shall fill a vacancy in the office of
 4-2     a temporary director in the same manner that it originally filled
 4-3     the vacant position.
 4-4           (e)  The term "governing body" in this section means the
 4-5     mayor if the municipality creating the district has a population of
 4-6     1.9 million or more.
 4-7           Sec. 344.053.  ELECTION REQUIRED.  A proposed district may be
 4-8     created and a district tax may be authorized only if the creation
 4-9     and the tax are approved by a majority of the qualified voters of
4-10     the proposed district voting at an election called and held for
4-11     that purpose.
4-12           Sec. 344.054.  CONFIRMATION ELECTION ORDER.  (a)  The
4-13     temporary board may call and hold a confirmation election only
4-14     after the board adopts plans under Section 344.061.
4-15           (b)  An order calling an election under Subsection (a) must
4-16     state:
4-17                 (1)  the nature of the election, including the
4-18     proposition that is to appear on the ballot;
4-19                 (2)  the date of the election;
4-20                 (3)  the hours during which the polls will be open;
4-21                 (4)  the location of the polling places;
4-22                 (5)  a summary of the proposed district's budget plan
4-23     and fire control, prevention, and emergency medical services plan;
4-24     and
4-25                 (6)  the proposed rate of the sales and use tax for the
4-26     district.
4-27           Sec. 344.055.  SALES AND USE TAX.  (a)  A municipality that
 5-1     creates a district shall adopt a sales and use tax under Section
 5-2     321.106, Tax Code, for financing the operation of the district.
 5-3     The proposed rate for the district sales and use tax imposed under
 5-4     Subchapter B, Chapter 321, Tax Code, may be only:
 5-5                 (1)  one-eighth of one percent;
 5-6                 (2)  one-fourth of one percent;
 5-7                 (3)  three-eighths of one percent; or
 5-8                 (4)  one-half of one percent.
 5-9           (b)  A sales and use tax adopted under this chapter may be
5-10     charged in addition to any other sales and use tax authorized by
5-11     law, and is included in computing a combined sales and use tax rate
5-12     for purposes of any limitation provided by law on the maximum
5-13     combined sales and use tax rate of political subdivisions.
5-14           Sec. 344.056.  NOTICE OF ELECTION.  In addition to the notice
5-15     required by Section 4.003(c), Election Code, the temporary
5-16     directors of a proposed district shall give notice of an election
5-17     to create a district by publishing a substantial copy of the
5-18     election order in a newspaper with general circulation in the
5-19     proposed district once a week for two consecutive weeks.  The first
5-20     publication must appear before the 35th day before the date set for
5-21     the election.
5-22           Sec. 344.057.  ELECTION DATE. The election shall be held on
5-23     the next uniform election date authorized by Section 41.001(a),
5-24     Election Code, after the date on which the election is ordered that
5-25     affords sufficient time for election procedures to be carried out.
5-26           Sec. 344.058.  BALLOT PROPOSITION.  The ballot for an
5-27     election to create a district shall be printed to permit voting for
 6-1     or against the proposition:  "The creation of the ______ (name of
 6-2     the municipality proposing to create the district) Fire Control,
 6-3     Prevention, and Emergency Medical Services District dedicated to
 6-4     fire safety and emergency medical services programs and the
 6-5     adoption of a proposed local sales and use tax at a rate of _______
 6-6     (rate specified in the election order)."
 6-7           Sec. 344.059.  CANVASSING RETURNS.  (a)  Not earlier than the
 6-8     second day and not later than the 13th day after the date of the
 6-9     election, the temporary board shall meet and canvass the returns of
6-10     the election.
6-11           (b)  If a majority of the votes cast in the election favor
6-12     the creation of the district, the temporary board shall issue an
6-13     order declaring the district created.
6-14           (c)  If less than a majority of the votes cast in the
6-15     election favor the creation of the district, the temporary board
6-16     may order another election on the matter not earlier than the first
6-17     anniversary of the date of the preceding election.
6-18           Sec. 344.060.  DISSOLUTION OF TEMPORARY BOARD.  If a district
6-19     has not been created under this chapter before the fifth
6-20     anniversary of the date a district is first proposed by the
6-21     governing body or mayor, as appropriate, under Section 344.051:
6-22                 (1)  the temporary board is dissolved on that date; and
6-23                 (2)  the proposed district may not be created under
6-24     this chapter.
6-25           Sec. 344.061.  FIRE CONTROL, PREVENTION, AND EMERGENCY
6-26     MEDICAL SERVICES PLAN AND BUDGET PLAN.  (a)  The temporary board
6-27     shall develop and adopt a two-year fire control, prevention, and
 7-1     emergency medical services plan and a two-year budget plan.  The
 7-2     fire control, prevention, and emergency medical services plan must
 7-3     include:
 7-4                 (1)  a detailed list of the fire control, prevention,
 7-5     and emergency medical services strategies to be supported by the
 7-6     district; and
 7-7                 (2)  the method of evaluating each year the
 7-8     effectiveness and efficiency of individual fire control,
 7-9     prevention, and emergency medical services strategies.
7-10           (b)  The budget plan must include:
7-11                 (1)  the amount of money budgeted by the district for
7-12     each fire control, prevention, and emergency medical services
7-13     strategy;
7-14                 (2)  the amount of money budgeted by the district and
7-15     the percentage of the total budget of the district for
7-16     administration, with individual amounts showing the cost of the
7-17     administration that would be conducted by the district and the cost
7-18     of administration that would be conducted by private or public
7-19     entities;
7-20                 (3)  the estimated amount of money available to the
7-21     district from all sources during the subsequent year;
7-22                 (4)  the account balances expected at the end of the
7-23     years for which the budget is prepared; and
7-24                 (5)  the estimated tax rate that will be required to
7-25     support the budget.
7-26           (c)  Plans under this section must be adopted in the same
7-27     manner as provided for adoption of a proposed annual budget under
 8-1     Section 344.204.
 8-2           (d)  The temporary board shall coordinate its efforts in
 8-3     developing its plans under this section with appropriate local
 8-4     officials and entities.
 8-5           Sec. 344.062.  FINANCING CREATION OF DISTRICT.  (a)  A
 8-6     municipality creating a district shall pay the entire cost of
 8-7     creating the district.
 8-8           (b)  If a district is created, the district shall reimburse
 8-9     the municipality for the actual expenses the municipality incurred
8-10     in the creation of the district.
8-11              (Sections 344.063-344.100 reserved for expansion
8-12                        SUBCHAPTER C. ADMINISTRATION
8-13           Sec. 344.101.  BOARD OF DIRECTORS.  (a)  Except as provided
8-14     by Subsections (e) and (f), a district is governed by a board of
8-15     seven directors appointed in the same manner as provided by Section
8-16     344.052(a) for the appointment of temporary directors.
8-17           (b)  Initial appointees under this section shall draw lots to
8-18     determine their terms so that:
8-19                 (1)  three directors serve terms that expire on
8-20     September 1 of the first year following creation of the district;
8-21     and
8-22                 (2)  four directors serve terms that expire on
8-23     September 1 of the second year following creation of the district. 
8-24           (c)  Directors serve staggered two-year terms.
8-25           (d)  A vacancy in the office of director shall be filled for
8-26     the unexpired term in the same manner that the vacant position was
8-27     originally filled.
 9-1           (e)  The governing body of a municipality by resolution may
 9-2     appoint the governing body's membership as the board of directors
 9-3     of the district, if the appointment is approved by the voters in a
 9-4     creation election or continuation referendum under this chapter.  A
 9-5     member of a governing body appointed under this section as an ex
 9-6     officio director serves a term concurrent with the member's term as
 9-7     a member of the governing body.
 9-8           (f)  In a district for which the governing body of the
 9-9     municipality does not serve as the district's board of directors,
9-10     the governing body may create a board of directors for which one
9-11     director is appointed by each member of the governing body to serve
9-12     at the pleasure of that member for a term not to exceed two years
9-13     and that expires when the member of the governing body that
9-14     appointed the director leaves office.
9-15           Sec. 344.102.  PERFORMANCE BOND.  (a)  Before assuming the
9-16     duties of the office, each director or officer must execute a bond
9-17     for $5,000 payable to the district, conditioned on the faithful
9-18     performance of the person's duties as director or officer.
9-19           (b)  The bond shall be kept in the permanent records of the
9-20     district.
9-21           (c)  The board may pay for the bonds of directors or officers
9-22     with district funds.
9-23           (d)  The board and the district may issue and sell bonds
9-24     conditioned on the faithful performance of a person's duties as a
9-25     director as provided by this section.
9-26           Sec. 344.103.  OFFICERS.  (a)  The board shall elect from
9-27     among its members a president and vice president.
 10-1          (b)  The board shall appoint a secretary.  The secretary may
 10-2    be a director.
 10-3          (c)  The person who performs the duties of auditor for the
 10-4    municipality shall serve as treasurer of the district.
 10-5          (d)  Each officer of the board serves for a term of one year.
 10-6          (e)  A vacancy in a board office shall be filled by the board
 10-7    for the unexpired term.
 10-8          Sec. 344.104.  COMPENSATION.  A director or officer serves
 10-9    without compensation, but a director or officer may be reimbursed
10-10    for actual expenses incurred in the performance of official duties.
10-11    Those expenses must be reported in the district's minute book or
10-12    other district record and must be approved by the board.
10-13          Sec. 344.105.  VOTING REQUIREMENT.  A concurrence of a
10-14    majority of the members of the board is necessary in matters
10-15    relating to the business of a district.  A two-thirds majority vote
10-16    of the board is required to reject any application for funding
10-17    available under this chapter.
10-18          Sec. 344.106.  CONTRACT FOR ADMINISTRATIVE ASSISTANCE.  The
10-19    board may contract with a public agency or private vendor to assist
10-20    the board in the administration or management of the district or to
10-21    assist the board in the review of applications for funding
10-22    available under this chapter.
10-23             (Sections 344.107-344.150 reserved for expansion
10-24                     SUBCHAPTER D. POWERS AND DUTIES 
10-25          Sec. 344.151.  FINANCING DISTRICT PROGRAMS.  (a)  The
10-26    district may finance all costs of a fire control, prevention, and
10-27    emergency medical services district program, including costs for
 11-1    personnel, administration, expansion, enhancement, and capital
 11-2    expenditures.
 11-3          (b)  The program may include:
 11-4                (1)  fire apparatus and equipment;
 11-5                (2)  a bomb disposal unit and related equipment;
 11-6                (3)  compensation of fire protection and prevention
 11-7    personnel for specialized training regarding:
 11-8                      (A)  arson;
 11-9                      (B)  bomb disposal;
11-10                      (C)  hazardous materials;
11-11                      (D)  technical rescue;
11-12                      (E)  paramedic certification; and
11-13                      (F)  any other specialized training under the
11-14    program;
11-15                (4)  funding for turn-out gear, self-contained
11-16    breathing apparatus, and protective uniforms or other firefighter
11-17    safety equipment;
11-18                (5)  additional compensation for municipal
11-19    fire-fighting personnel, including overtime compensation for
11-20    unforeseen staffing needs; and
11-21                (6)  funding for the construction and maintenance of
11-22    fire stations, training facilities, or the equipment needed for
11-23    those stations or facilities.
11-24          (c)  The program may include an enhanced emergency
11-25    communications center or other emergency communications programs
11-26    and equipment, including:
11-27                (1)  emergency medical dispatch training;
 12-1                (2)  additional fire and emergency medical service
 12-2    dispatchers;
 12-3                (3)  uniformed fire deployment and communications
 12-4    officers;
 12-5                (4)  real-time weather information; and
 12-6                (5)  computer databases and systems maintenance
 12-7    personnel for hazardous materials responses.
 12-8          (d)  The program may include a public training program,
 12-9    including:
12-10                (1)  a juvenile fire starter program;
12-11                (2)  an urban survival program, including school
12-12    programs for fire safety, gun safety, and safety with strangers;
12-13                (3)  a fire prevention program;
12-14                (4)  a fire education program;
12-15                (5)  a hazardous materials education program;
12-16                (6)  a psychological intervention program; and
12-17                (7)  a citizen's ride-along program or home inspection
12-18    program.
12-19          (e)  The program may include public preventive health
12-20    programs, including:
12-21                (1)  juvenile inoculations;
12-22                (2)  weekend health days;
12-23                (3)  first aid and cardiopulmonary resuscitation
12-24    training;
12-25                (4)  injury prevention; and
12-26                (5)  drug and alcohol awareness.
12-27          (f)  The program may include response training programs,
 13-1    equipment, facilities, and instructors, including:
 13-2                (1)  a regional training center for fire, rescue,
 13-3    hazardous materials, and emergency medical services;
 13-4                (2)  staff personnel to support the center;
 13-5                (3)  equipment and apparatus to support the center;
 13-6                (4)  computer-aided continuing education training
 13-7    conducted in-station; and
 13-8                (5)  training regarding hazardous material storage and
 13-9    response.
13-10          (g)  The program may include computers and other systems to
13-11    support information management systems to:
13-12                (1)  maintain occupancy information;
13-13                (2)  track incident analyses;
13-14                (3)  track incident reports;
13-15                (4)  track internal communications and reporting;
13-16                (5)  maintain inventory; and
13-17                (6)  serve other information management needs.
13-18          (h)  The program may include capital items needed to improve
13-19    emergency response and increase service efficiency, including
13-20    equipment, apparatus, vehicles, and training material or equipment.
13-21          Sec. 344.152.  COORDINATION; EVALUATION; GRANTS.  (a)  The
13-22    district shall coordinate its efforts with local agencies in
13-23    developing its fire control, prevention, and emergency medical
13-24    services program.
13-25          (b)  The district shall conduct an annual evaluation program
13-26    to study the impact, efficiency, and effectiveness of new or
13-27    expanded fire control, prevention, and emergency medical services
 14-1    programs.
 14-2          (c)  The board may seek the assistance of the Office of
 14-3    State-Federal Relations in identifying and applying for federal
 14-4    grants for fire control, prevention, and emergency medical services
 14-5    programs.
 14-6          (d)  The district may apply for and receive grants for fire
 14-7    control, prevention, and emergency medical services programs from a
 14-8    state or federal agency.
 14-9          Sec. 344.153.  GENERAL BOARD POWER OVER FUNDS.  The board
14-10    shall manage, control, and administer the district finances except
14-11    as provided by Section 344.205.
14-12          Sec. 344.154.  USE OF REVENUE.  The board may spend revenue
14-13    derived from the sales and use tax distributed under Section
14-14    321.106, Tax Code, only for a purpose authorized by Section
14-15    344.151.
14-16          Sec. 344.155.  RULES AND PROCEDURES.  (a)  A board may adopt
14-17    rules governing programs financed by the district and the functions
14-18    of district staff.
14-19          (b)  The board may prescribe accounting and control
14-20    procedures for the district.
14-21          (c)  The board is subject to Chapter 2001, Government Code.
14-22          Sec. 344.156.  PURCHASING.  (a)  Except as provided by
14-23    Subsection (b), the board may prescribe the method of making
14-24    purchases and expenditures by and for the district.
14-25          (b)  To the extent competitive bidding procedures in Title 8
14-26    apply, the board may not enter into a purchasing contract for more
14-27    than $15,000 unless the board complies with Chapter 252.
 15-1          (c)  If the municipality that created the district has a
 15-2    purchasing agent authorized by law, that agent shall serve as
 15-3    purchasing agent for the district.
 15-4          Sec. 344.157.  PROPERTY TO BE USED IN ADMINISTRATION.  The
 15-5    board may lease or acquire in another manner facilities, equipment,
 15-6    or other property for the sole purpose of administering the
 15-7    district.
 15-8          Sec. 344.158.  REIMBURSEMENT FOR SERVICES.  (a)  A county or
 15-9    municipality located outside the boundaries of a district on the
15-10    district's request shall reimburse the district for the district's
15-11    cost of including a resident of that county or municipality who is
15-12    not a resident of that district in a district program.
15-13          (b)  On behalf of the district, the board may contract with a
15-14    municipal or county government or with the state or federal
15-15    government for the municipal, county, state, or federal government
15-16    to reimburse the district for including a person in a district
15-17    program.
15-18          Sec. 344.159.  SERVICE CONTRACTS.  The board may contract
15-19    with the following entities to furnish the staff, facilities,
15-20    equipment, programs, or services the board considers necessary for
15-21    the effective operation of the district:
15-22                (1)  a municipality, county, special district, or other
15-23    political subdivision of the state;
15-24                (2)  a state or federal agency;
15-25                (3)  an individual; or
15-26                (4)  a private person.
15-27          Sec. 344.160.  DONATIONS, GIFTS, AND ENDOWMENTS.  On behalf
 16-1    of the district, the board or the temporary board may accept a
 16-2    donation, gift, or endowment.  The district may hold a donation,
 16-3    gift, or endowment in trust for any purpose and under any
 16-4    direction, limitation, or other provision prescribed in writing by
 16-5    the donor that is consistent with this chapter and the proper
 16-6    management of the district.
 16-7          Sec. 344.161.  AUTHORITY TO SUE AND BE SUED.  The board may
 16-8    sue and be sued in the name of the district.
 16-9             (Sections 344.162-344.200 reserved for expansion
16-10                      SUBCHAPTER E. DISTRICT FINANCES
16-11          Sec. 344.201.  FISCAL YEAR.  (a)  The board shall establish
16-12    the fiscal year for the district, and the district shall operate on
16-13    the basis of that year.
16-14          (b)  The fiscal year may not be changed more than once in a
16-15    24-month  period.
16-16          Sec. 344.202.  AUDITS AND DISTRICT RECORDS.  (a)  The board
16-17    shall have an annual audit made of the financial condition of the
16-18    district by an independent auditor.
16-19          (b)  The annual audit and other district records shall be
16-20    open to inspection during regular business hours at the principal
16-21    office of the district.
16-22          Sec. 344.203.  ANNUAL BUDGET PROPOSAL.  (a)  The board shall
16-23    propose an annual budget.  The board shall consider the
16-24    applications for program funding in preparing the proposed budget. 
16-25          (b)  The proposed budget must contain a complete financial
16-26    statement, including a statement of:
16-27                (1)  the outstanding obligations of the district;
 17-1                (2)  the amount of cash on hand to the credit of each
 17-2    fund of the district;
 17-3                (3)  the amount of money received by the district from
 17-4    all sources during the previous year;
 17-5                (4)  the estimated amount of money available to the
 17-6    district from all sources during the current fiscal year;
 17-7                (5)  the amount of money needed to fund programs
 17-8    approved for funding by the board;
 17-9                (6)  the amount of money requested for programs that
17-10    were not approved  for funding by the board;
17-11                (7)  the tax rate for the next fiscal year;
17-12                (8)  the amount of the balances expected at the end of
17-13    the year in which the budget is being prepared; and
17-14                (9)  the estimated amount of revenues and balances
17-15    available to cover the proposed budget.
17-16          Sec. 344.204.  ADOPTION OF BUDGET.  (a)  Not later than the
17-17    100th day before the date each fiscal year begins, the board shall
17-18    hold a public hearing to consider the proposed annual budget.
17-19          (b)  The board shall publish notice of the hearing in a
17-20    newspaper with general circulation in the district not later than
17-21    the 10th day before the date of the hearing.
17-22          (c)  A resident of the district is entitled to participate in
17-23    the hearing.
17-24          (d)  Not later than the 80th day before the date each fiscal
17-25    year begins, the board shall adopt a budget.  The board may make
17-26    any changes in the proposed budget that the interests of the
17-27    taxpayers demand.
 18-1          (e)  Not later than the 10th day after the date the budget is
 18-2    adopted, the board shall submit the budget to the governing body of
 18-3    the municipality that created the district.
 18-4          (f)  The board by rule may adopt alternative procedures for
 18-5    adopting a budget that differ from the procedures outlined in this
 18-6    subchapter.  The board must hold at least one public hearing
 18-7    related to the alternative procedures before their adoption.
 18-8          Sec. 344.205.  APPROVAL OF BUDGET.   (a)  Not later than the
 18-9    45th day before the date each fiscal year begins, the governing
18-10    body of the municipality that created the district shall hold a
18-11    public hearing to consider the budget adopted by the board and
18-12    submitted to the governing body.
18-13          (b)  The governing body must publish notice of the hearing in
18-14    a newspaper with general circulation in the district not later than
18-15    the 10th day before the date of the hearing.
18-16          (c)  A resident of the district is entitled to participate in
18-17    the hearing.
18-18          (d)  Not later than the 30th day before the date the fiscal
18-19    year begins, the governing body shall approve or reject the budget
18-20    submitted by the board.  The governing body may not amend the
18-21    budget.
18-22          (e)  If the governing body rejects the budget submitted by
18-23    the board, the governing body and the board shall meet and together
18-24    amend and approve the budget before the beginning of the fiscal
18-25    year.
18-26          (f)  The budget may be amended after the beginning of the
18-27    fiscal year on approval by the board and the governing body.
 19-1          Sec. 344.206.  LIMITATIONS ON EXPENDITURES AND INVESTMENTS.
 19-2    (a)  The district may spend money only for an expense included in
 19-3    the annual budget or an amendment to the budget.
 19-4          (b)  A district may not incur a debt payable from revenues of
 19-5    the district other than the revenues on hand or to be on hand in
 19-6    the current or immediately following fiscal year of the district.
 19-7          (c)  The board may not invest district money in funds or
 19-8    securities other than those specified by Chapter 2256, Government
 19-9    Code.
19-10          Sec. 344.207.  ACCOUNT OF DISBURSEMENTS OF DISTRICT.  Not
19-11    later than the 60th day after the last day of each fiscal year, an
19-12    administrator shall prepare for the board a sworn statement of the
19-13    amount of money that belongs to the district and an account of the
19-14    disbursements of that money.
19-15          Sec. 344.208.  DEPOSIT OF MONEY.  (a)  The board shall
19-16    deposit district money in a special account in the treasury of the
19-17    municipality that created the district.
19-18          (b)  District money, other than that invested as provided by
19-19    Section 344.206(c), shall be deposited as received in the treasury
19-20    of the municipality and must remain on deposit.
19-21          (c)  The board shall reimburse the municipality for any
19-22    costs, other than personnel costs, the municipality incurs for
19-23    performing the duties under this section.
19-24          Sec. 344.209.  APPLICATIONS FOR PROGRAM FUNDING.  (a)  An
19-25    officer of the municipality that created the district or the head
19-26    of a department of that municipality may, with the consent of the
19-27    governing body of the municipality, apply to the board for funding
 20-1    of a program described by Section 344.151.
 20-2          (b)  The officer must apply under this section not later than
 20-3    the 140th day before the date the fiscal year begins, unless the
 20-4    board by rule has adopted an exception.
 20-5          (c)  The board by rule may adopt application procedures.
 20-6          Sec. 344.210.  BONDS PROHIBITED.  The board may not issue or
 20-7    sell general obligation bonds, revenue bonds, or refunding bonds.
 20-8             (Sections 344.211-344.250 reserved for expansion
 20-9    SUBCHAPTER F. REFERENDUM ON CONTINUATION OR DISSOLUTION OF DISTRICT
20-10          Sec. 344.251.  REFERENDUM AUTHORIZED.  (a)  The board may
20-11    call and hold a referendum election on the question of whether to:
20-12                (1)  continue the district; or
20-13                (2)  dissolve the district.
20-14          (b)  A board may order a referendum election on its own
20-15    motion.
20-16          (c)  The board shall order a referendum election:
20-17                (1)  on receipt of a petition that requests
20-18    continuation or dissolution of the district and complies with the
20-19    requirements of Sections 344.252-344.256; or
20-20                (2)  if the governing body of the municipality that
20-21    created the district, after notice and a public hearing on the
20-22    matter, by resolution requests a referendum on continuation or
20-23    dissolution.
20-24          (d)  The board may not hold a referendum election under this
20-25    subchapter before the fifth anniversary of the date the district
20-26    was created or before the third anniversary of the date of the last
20-27    continuation or dissolution referendum election.
 21-1          (e)  For a continuation referendum election, the ballot shall
 21-2    be printed to permit voting for or against the proposition:
 21-3    "Whether the ____________ (name of the municipality that created
 21-4    the district) Fire Control, Prevention, and Emergency Medical
 21-5    Services District should be continued and whether the fire control,
 21-6    prevention, and emergency medical services district sales and use
 21-7    tax should be continued."
 21-8          (f)  For a dissolution referendum, the ballot shall be
 21-9    printed to permit voting for or against the proposition:  "Whether
21-10    the ____________ (name of the municipality that created the
21-11    district)  Fire Control, Prevention, and Emergency Medical Services
21-12    District should be dissolved and whether the fire control,
21-13    prevention, and emergency medical services district sales and use
21-14    tax should be abolished."
21-15          (g)  The governing body of a municipality that creates a
21-16    district under this chapter may specify the number of years for
21-17    which the district should be continued.  The board or the governing
21-18    body of a municipality may continue a district for 5, 10, 15, or 20
21-19    years.  For a continuation referendum election under this
21-20    subsection, the ballot shall be printed to permit voting for or
21-21    against the proposition:  "Whether the ______ (name of the
21-22    municipality that created the district) Fire Control, Prevention,
21-23    and Emergency Medical Services District should be continued for
21-24    ______ years and whether the fire control, prevention, and
21-25    emergency medical services district sales and use tax should be
21-26    continued for _____ years."
21-27          Sec. 344.252.  APPLICATION FOR PETITION.  (a)  On written
 22-1    application of 10 or more registered voters of the district, the
 22-2    clerk of the municipality that created the district shall issue to
 22-3    the applicants a petition to be circulated among registered voters
 22-4    for their signatures.
 22-5          (b)  An application for a petition to continue the district
 22-6    must contain:
 22-7                (1)  the heading:  "Application for a Petition for a
 22-8    Local Option Referendum to Continue the Fire Control, Prevention,
 22-9    and Emergency Medical Services District and to Continue the Fire
22-10    Control, Prevention, and Emergency Medical Services District Sales
22-11    and Use Tax";
22-12                (2)  the statement: "Whether the ______ (name of the
22-13    municipality that created the district)  Fire Control, Prevention,
22-14    and Emergency Medical Services District should be continued and
22-15    whether the fire control, prevention, and emergency medical
22-16    services district sales and use tax should be continued";
22-17                (3)  immediately above the signatures of the
22-18    applicants, the statement:  "It is the purpose and intent of the
22-19    applicants whose signatures appear below that the fire control,
22-20    prevention, and emergency medical services district be continued
22-21    and that the fire control, prevention, and emergency medical
22-22    services district sales and use tax in ___________ (name of the
22-23    municipality that created the district) be continued"; and
22-24                (4)  the printed name, signature, residence address,
22-25    and voter  registration certificate number of each applicant.
22-26          (c)  An application for a petition to dissolve the district
22-27    must contain:
 23-1                (1)  the heading:  "Application for a Petition for a
 23-2    Local Option Referendum to Dissolve the Fire Control, Prevention,
 23-3    and Emergency Medical Services District and to Abolish the Fire
 23-4    Control, Prevention, and Emergency Medical Services District Sales
 23-5    and Use Tax";
 23-6                (2)  the statement:  "Whether the ___________ (name of
 23-7    the municipality that created the district)  Fire Control,
 23-8    Prevention, and Emergency Medical Services District should be
 23-9    dissolved and whether the fire control, prevention, and emergency
23-10    medical services district sales and use tax should be abolished";
23-11                (3)  immediately above the signatures of the
23-12    applicants, the statement:  "It is the purpose and intent of the
23-13    applicants whose signatures appear below that the fire control,
23-14    prevention, and emergency medical services district be dissolved
23-15    and that the fire control, prevention, and emergency medical
23-16    services district sales and use tax in ___________ (name of the
23-17    municipality that created the district) be abolished"; and
23-18                (4)  the printed name, signature, residence address,
23-19    and voter  registration certificate number of each applicant.
23-20          Sec. 344.253.  PETITION.  (a)  A petition for a referendum to
23-21    continue a district must contain:
23-22                (1)  the heading:  "Petition for a Local Option
23-23    Referendum to Continue the ____________ (name of the municipality
23-24    that created the district) Fire Control, Prevention, and Emergency
23-25    Medical Services District and to Continue the Fire Control,
23-26    Prevention, and Emergency Medical Services District Sales and Use
23-27    Tax";
 24-1                (2)  a statement of the issue to be voted on in the
 24-2    same words used in the application;
 24-3                (3)  immediately above the signatures of the
 24-4    petitioners, the statement:  "It is the purpose and intent of the
 24-5    petitioners whose signatures appear below that the fire control,
 24-6    prevention, and emergency medical services district be continued
 24-7    and that the fire control, prevention, and emergency medical
 24-8    services district sales and use tax in ___________ (name of the
 24-9    municipality that created the district) be continued";
24-10                (4)  lines and spaces for the names, signatures,
24-11    residence addresses, and voter registration certificate numbers of
24-12    the petitioners; and
24-13                (5)  the date of issuance, the serial number, and the
24-14    seal of the clerk of the municipality on each page.
24-15          (b)  A petition for a referendum to dissolve a district must
24-16    contain:
24-17                (1)  the heading:  "Petition for a Local Option
24-18    Referendum to Dissolve the __________ (name of the municipality
24-19    that created the district) Fire Control, Prevention, and Emergency
24-20    Medical Services District and to Abolish the Fire Control,
24-21    Prevention, and Emergency Medical Services District Sales and Use
24-22    Tax";
24-23                (2)  a statement of the issue to be voted on in the
24-24    same words used in the application;
24-25                (3)  immediately above the signatures of the
24-26    petitioners, the statement:  "It is the purpose and intent of the
24-27    petitioners whose signatures appear below that the fire control,
 25-1    prevention, and emergency medical services district be dissolved
 25-2    and that the fire control, prevention, and emergency medical
 25-3    services district sales and use tax in ___________ (name of the
 25-4    municipality that created the district) be abolished";
 25-5                (4)  lines and spaces for the names, signatures,
 25-6    residence addresses, and voter registration certificate numbers of
 25-7    the petitioners; and
 25-8                (5)  the date of issuance, the serial number, and the
 25-9    seal of the clerk of the municipality on each page.
25-10          Sec. 344.254.  COPIES OF APPLICATION AND PETITION.  The clerk
25-11    or secretary of the municipality shall keep an application and a
25-12    copy of the petition in the files of the clerk's or secretary's
25-13    office.  The clerk shall issue to the applicants as many copies as
25-14    they request.
25-15          Sec. 344.255.  FILING OF PETITION.  To form the basis for the
25-16    ordering of a referendum, the petition must:
25-17                (1)  be filed with the clerk or secretary of the
25-18    municipality not later than the 60th day after the date of its
25-19    issuance; and
25-20                (2)  contain at least a number of signatures of
25-21    registered voters of the municipality equal to five percent of the
25-22    number of votes cast in the municipality for all candidates for
25-23    governor in the most recent gubernatorial general election.
25-24          Sec. 344.256.  REVIEW BY CLERK OR SECRETARY.  (a)  The clerk
25-25    or secretary of the municipality shall, on the request of any
25-26    person, check each name on a petition to determine whether the
25-27    signer is a registered voter of the district.  A person requesting
 26-1    verification by the clerk or secretary of the municipality shall
 26-2    pay the clerk or secretary a sum equal to 20 cents for each name on
 26-3    the petition before the verification begins.
 26-4          (b)  The clerk or secretary of the municipality may not count
 26-5    a signature if the clerk or secretary has a reason to believe that:
 26-6                (1)  it is not the actual signature of the purported
 26-7    signer;
 26-8                (2)  the voter registration certificate number is not
 26-9    correct;
26-10                (3)  it is a duplication either of a name or of
26-11    handwriting used in any other signature on the petition;
26-12                (4)  the residence address of the signer is not
26-13    correct; or
26-14                (5)  the name of the voter is not signed exactly as it
26-15    appears on the official copy of the current list of registered
26-16    voters for the voting year in which the petition is issued.
26-17          Sec. 344.257.  CERTIFICATION.  Not later than the 40th day
26-18    after the date a petition is filed, excluding Saturdays, Sundays,
26-19    and legal holidays, the clerk or secretary of the municipality
26-20    shall certify to the board the number of registered voters signing
26-21    the petition.
26-22          Sec. 344.258.  ELECTION ORDER.  (a)  The board shall record
26-23    on its minutes the date the petition is filed and the date it is
26-24    certified by the clerk or secretary of the municipality.
26-25          (b)  If the petition contains the required number of
26-26    signatures and is in proper order, the board shall, at its next
26-27    regular session after the certification by the clerk or secretary
 27-1    of the municipality, order a referendum election to be held at the
 27-2    regular polling place in each election precinct in the municipality
 27-3    on the next uniform election date authorized by Section 41.001(a),
 27-4    Election Code, that occurs at least 20 days after the date of the
 27-5    order.
 27-6          (c)  The board shall state in the order the proposition to be
 27-7    voted on in the referendum election.  The order is prima facie
 27-8    evidence of compliance with all provisions necessary to give it
 27-9    validity.
27-10          Sec. 344.259.  APPLICABILITY OF ELECTION CODE.  A referendum
27-11    election authorized by this subchapter shall be held and the
27-12    returns shall be prepared and canvassed in conformity with the
27-13    Election Code.
27-14          Sec. 344.260.  RESULTS OF REFERENDUM.  (a)  If less than a
27-15    majority of the votes cast in a continuation referendum election
27-16    are for the continuation of a district or if a majority of the
27-17    votes cast in a dissolution referendum are for dissolution of the
27-18    district:
27-19                (1)  the board shall certify that fact to the secretary
27-20    of state not later than the 10th day after the date of the canvass
27-21    of the returns; and
27-22                (2)  the district is dissolved and ceases to operate.
27-23          (b)  If a majority of the votes cast in a continuation
27-24    referendum election are for the continuation of the district or if
27-25    less than a majority of the votes cast in a dissolution referendum
27-26    election are for dissolution of the district, another referendum
27-27    may not be held except as authorized by Section 344.251.
 28-1          Sec. 344.261.  ELECTION CONTEST.  Not later than the 30th day
 28-2    after the date the result of a referendum is declared, any
 28-3    qualified voter of the district may contest the election by filing
 28-4    a petition in a district court located in the district.
 28-5             (Sections 344.262-344.300 reserved for expansion
 28-6                    SUBCHAPTER G. DISTRICT DISSOLUTION
 28-7          Sec. 344.301.  TIME FOR DISSOLUTION OF DISTRICT.  (a)  A
 28-8    district is dissolved five years after the date the municipality
 28-9    began to impose taxes for district purposes if the district has not
28-10    held a continuation or dissolution referendum.
28-11          (b)  The district is dissolved on the fifth anniversary of
28-12    the date of the most recent continuation or dissolution referendum.
28-13          (c)  Subsection (b) does not apply to a district that is
28-14    continued under Section 344.251(g), and that district is dissolved
28-15    on the expiration of the period for which it was continued.
28-16          Sec. 344.302.  DISSOLUTION OF DISTRICT.  (a)  On the date
28-17    that the district is dissolved, the district shall convey or
28-18    transfer, as provided by Subsection (h):
28-19                (1)  title to land, buildings, real and tangible
28-20    improvements, and equipment owned by the district;
28-21                (2)  operating money and reserves for operating
28-22    expenses and money that has been budgeted by the district for the
28-23    remainder of the fiscal year in which the district is dissolved to
28-24    support fire control, prevention, and emergency medical services
28-25    activities and programs for residents of the municipality that
28-26    created the district;
28-27                (3)  taxes imposed for the district during the current
 29-1    year for fire control, prevention, and emergency medical services
 29-2    purposes;
 29-3                (4)  each fund established for payment of indebtedness
 29-4    assumed by the district; and
 29-5                (5)  any money accumulated in an employee retirement
 29-6    fund.
 29-7          (b)  After the date the district is dissolved, taxes may not
 29-8    be imposed for district purposes or for providing fire control,
 29-9    prevention, and emergency medical services activities and programs
29-10    for the residents of the district.
29-11          (c)  If on the date that the district is dissolved the
29-12    district has outstanding short-term or long-term liabilities, the
29-13    board shall, not later than the 30th day after the date of the
29-14    dissolution, adopt a resolution certifying each outstanding
29-15    short-term and long-term liability.  The municipality that created
29-16    the district shall assume the outstanding short-term and long-term
29-17    liabilities.  The municipality shall collect the sales and use tax
29-18    under Chapter 321, Tax Code, for the remainder of the calendar year
29-19    and may by resolution of its governing body continue to collect the
29-20    tax for an additional calendar year if the revenue from the tax is
29-21    needed to retire liabilities of the district that were assumed by
29-22    the  municipality.  The governing body shall notify the comptroller
29-23    of this continuation not later than the 60th day before the date
29-24    the tax would otherwise expire. A tax collected after the
29-25    liabilities have been retired shall be transferred or conveyed as
29-26    provided by Subsection (a).
29-27          (d)  The district and the board may continue to operate for a
 30-1    period not to exceed two months after carrying out the
 30-2    responsibilities required by Subsections (a) and (c).  The board
 30-3    and the district are continued for the purpose of satisfying these
 30-4    responsibilities.
 30-5          (e)  If the board and the district are continued under
 30-6    Subsection (d), the board and district are dissolved entirely on
 30-7    the first day of the month following the month in which the board
 30-8    issues an order certifying to the secretary of state that the
 30-9    responsibilities of Subsections (a) and (c) are satisfied.
30-10          (f)  A district or board that continues to operate under
30-11    Subsection (d) may not incur any new liabilities without the
30-12    approval of the governing body of the municipality that created the
30-13    district.  Not later than the 60th day after the date of the
30-14    dissolution referendum, the governing body shall review the
30-15    outstanding liabilities of the district and set a specific date by
30-16    which the municipality must retire the district's outstanding
30-17    liabilities.
30-18          (g)  On the date that the district is dissolved, programs
30-19    funded by the district shall immediately terminate and personnel
30-20    paid from district funds, except personnel required to retire the
30-21    responsibilities of the district, are terminated.
30-22          (h)  The board shall convey or transfer the value of the
30-23    items described by Subsection (a) to the municipality that created
30-24    the district.
30-25          SECTION 2.  Subchapter B, Chapter 321, Tax Code, is amended
30-26    by adding Section 321.106 to read as follows:
30-27          Sec. 321.106.  FIRE CONTROL DISTRICT TAX.  (a)  Subject to an
 31-1    election held in accordance with Chapter 344, Local Government
 31-2    Code,  a municipality in which a fire control, prevention, and
 31-3    emergency medical services district is established shall adopt a
 31-4    sales and use tax in the area of the district for the purpose of
 31-5    financing the operation of the fire control, prevention, and
 31-6    emergency medical services district.  The revenue from the tax may
 31-7    be used only for the purpose of financing the operation of the fire
 31-8    control, prevention, and emergency medical services district.  The
 31-9    proposition for adopting a tax under this section and the
31-10    proposition for creation of a fire control, prevention, and
31-11    emergency medical services district shall be submitted at the same
31-12    election.  For purposes of Section 321.101, a tax under this
31-13    section is not an additional sales and use tax.
31-14          (b)  A tax adopted for a district under this section for
31-15    financing the operation of the district may be decreased in
31-16    increments of one-eighth of one percent by order of the board of
31-17    directors of the district.
31-18          (c)  The rate of a tax adopted for a district under this
31-19    section may be increased in increments of one-eighth of one
31-20    percent, not to exceed a total tax rate of one-half percent, for
31-21    financing the operation of the fire control, prevention, and
31-22    emergency medical services district by order of the board of
31-23    directors of the fire control, prevention, and emergency medical
31-24    services district if approved by a majority of the qualified voters
31-25    voting at an election called by the board and held in the district
31-26    on the question of increasing the tax rate.  At the election, the
31-27    ballot shall be printed to provide for voting for or against the
 32-1    proposition:  "The increase of the __________ (name of the
 32-2    municipality  that created the district) Fire Control, Prevention,
 32-3    and Emergency Medical Services District sales and use tax rate to
 32-4    ______ percent."  If there is an increase or decrease under this
 32-5    section in the rate of a tax imposed under this section, the new
 32-6    rate takes effect on the first day of the next calendar quarter
 32-7    after the expiration of one calendar quarter after the comptroller
 32-8    receives notice of the increase or decrease.  However, if the
 32-9    comptroller notifies the president of the board of directors of the
32-10    district in writing within 10 days after receipt of the
32-11    notification that the comptroller requires more time to implement
32-12    reporting and collection procedures, the comptroller may delay
32-13    implementation of the rate change for one calendar quarter, and the
32-14    new rate takes effect on the first day of the calendar quarter that
32-15    follows the elapsed quarter.
32-16          (d)  The comptroller shall remit to the municipality amounts
32-17    collected at the rate imposed under this section as part of the
32-18    regular allocation of other municipal tax revenue collected by the
32-19    comptroller.  The municipality shall remit that amount to the
32-20    district.  A retailer may not be required to use  allocation and
32-21    reporting procedures in the collection of taxes under this section
32-22    that are different from the procedures that retailers use in the
32-23    collection of other sales and use taxes under this chapter.  An
32-24    item, transaction, or service that is taxable in a municipality
32-25    under a sales or use tax authorized by another section of this
32-26    chapter is taxable under this section.  An item, transaction, or
32-27    service that is not taxable in a municipality under a sales or use
 33-1    tax authorized by another section of this chapter is not taxable
 33-2    under this section.
 33-3          (e)  If, in a municipality where a fire control, prevention,
 33-4    and emergency medical services district is composed of the whole
 33-5    municipality, a municipal sales  and use tax or a municipal sales
 33-6    and use tax rate increase for the purpose of financing a fire
 33-7    control, prevention, and emergency medical services district is
 33-8    approved, the municipality is responsible for distributing to the
 33-9    district that portion of the municipal sales and use tax revenue
33-10    received from the comptroller that is to be used for the purposes
33-11    of financing the fire control, prevention, and emergency medical
33-12    services district.  Not later than the 10th day after the date the
33-13    municipality receives money under this section from the
33-14    comptroller, the municipality shall make the distribution in the
33-15    proportion that the fire control, prevention, and emergency medical
33-16    services portion of the tax rate bears to the total sales and use
33-17    tax rate of the municipality.  The amounts distributed to a fire
33-18    control, prevention, and emergency medical services district are
33-19    not considered to be sales and use tax revenue for the purpose of
33-20    property tax reduction and computation of the municipal tax rate
33-21    under Section 26.041.
33-22          (f)  For purposes of the tax imposed under this section, a
33-23    reference in this chapter to the municipality as the territory in
33-24    which the tax or an incident of the tax applies means only the
33-25    territory located in the fire control, prevention, and emergency
33-26    medical services district, if that district is composed of an area
33-27    less than an entire municipality.
 34-1          (g)  The comptroller may adopt rules and the municipality's
 34-2    governing body may adopt orders to administer this section.
 34-3          SECTION 3.  This Act takes effect June 1, 2001.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I certify that H.B. No. 1096 was passed by the House on May
         3, 2001, by the following vote:  Yeas 108, Nays 35, 2 present, not
         voting; and that the House concurred in Senate amendments to H.B.
         No. 1096 on May 24, 2001, by the following vote:  Yeas 130, Nays 0,
         2 present, not voting.
                                             _______________________________
                                                 Chief Clerk of the House
               I certify that H.B. No. 1096 was passed by the Senate, with
         amendments, on May 21, 2001, by the following vote:  Yeas 29, Nays
         1, 1 present, not voting.
                                             _______________________________
                                                 Secretary of the Senate
         APPROVED:  __________________________
                              Date
                    __________________________
                            Governor