1-1     By:  Luna, Seaman (Senate Sponsor - Gallegos)         H.B. No. 1096
 1-2           (In the Senate - Received from the House May 4, 2001;
 1-3     May 7, 2001, read first time and referred to Committee on
 1-4     Intergovernmental Relations; May 11, 2001, reported favorably by
 1-5     the following vote:  Yeas 5, Nays 0; May 11, 2001, sent to
 1-6     printer.)
 1-7                            A BILL TO BE ENTITLED
 1-8                                   AN ACT
 1-9     relating to the creation of fire control, prevention, and emergency
1-10     medical services districts by certain municipalities.
1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12           SECTION 1.  Subtitle A, Title 11, Local Government Code, is
1-13     amended by adding Chapter 344 to read as follows:
1-14        CHAPTER 344.  FIRE CONTROL, PREVENTION, AND EMERGENCY MEDICAL
1-15                             SERVICES DISTRICTS
1-16                      SUBCHAPTER A.  GENERAL PROVISIONS
1-17           Sec. 344.001.  SHORT TITLE.  This chapter may be cited as the
1-18     Fire Control, Prevention, and Emergency Medical Services District
1-19     Act.
1-20           Sec. 344.002.  DEFINITIONS.  In this chapter:
1-21                 (1)  "Board" means the board of directors of a
1-22     district.
1-23                 (2)  "Director" means a member of a board.
1-24                 (3)  "District" means a fire control, prevention, and
1-25     emergency medical services district created under this chapter.
1-26           Sec. 344.003.  LIABILITY OF STATE.  The state is not
1-27     obligated for the support, maintenance, or dissolution of a
1-28     district created under this chapter.
1-29              (Sections 344.004-344.050 reserved for expansion
1-30           SUBCHAPTER B.  CREATION OF DISTRICT AND TEMPORARY BOARD
1-31           Sec. 344.051.  AUTHORITY OF MUNICIPALITY TO PROPOSE DISTRICT.
1-32     (a)  The governing body of a municipality with a population of not
1-33     less than 25,000 nor more than 550,000 may propose the creation of
1-34     a fire control, prevention, and emergency medical services district
1-35     under this chapter.
1-36           (b)  The proposed district may include all or any part of the
1-37     municipality.
1-38           (c)  Except as provided by Subsection (f), a district may be
1-39     created inside the boundaries of a rural fire prevention district
1-40     operating under Chapter 794, Health and Safety Code, or an
1-41     emergency services district operating under Chapter 775 or 776,
1-42     Health and Safety Code, only if the governing body of the rural
1-43     fire prevention district or the emergency services district gives
1-44     its written consent by order or resolution not later than the 60th
1-45     day after the date the governing body receives a request for its
1-46     consent.
1-47           (d)  If the governing body of the rural fire prevention
1-48     district or emergency services district consents to the inclusion
1-49     of territory inside its geographic boundaries, the territory may be
1-50     included in the district in the same manner as other territory is
1-51     included under this chapter.
1-52           (e)  The consent of the governing body of the rural fire
1-53     prevention district or emergency services district to include
1-54     territory in the district and to initiate proceedings to create a
1-55     district as prescribed by this chapter expires six months after the
1-56     date on which the consent is given.
1-57           (f)  Subsection (c) does not apply if:
1-58                 (1)  on the effective date of this chapter, the
1-59     municipality is providing fire suppression and prevention services
1-60     and emergency medical services; or
1-61                 (2)  the fire control, prevention, and emergency
1-62     medical services plan of the proposed district proposes emergency
1-63     services that, on the effective date of this chapter, are not
1-64     provided by any rural fire prevention district or emergency
 2-1     services district inside the boundaries of the municipality.
 2-2           Sec. 344.052.  TEMPORARY BOARD.  (a)  Not later than the 60th
 2-3     day after the date the governing body proposes to create a district
 2-4     under this chapter, the governing body shall appoint seven persons
 2-5     to serve as temporary directors of the district.  The temporary
 2-6     directors must reside in the proposed district.
 2-7           (b)  Not later than the 75th day after the date the governing
 2-8     body proposes to create the district, the temporary board shall
 2-9     conduct a meeting to organize the board.  The temporary directors
2-10     shall elect one of its members as presiding officer of the board at
2-11     that meeting.
2-12           (c)  A temporary director other than the presiding officer
2-13     may designate another person to serve in the director's place.
2-14           (d)  The governing body shall fill a vacancy in the office of
2-15     a temporary director in the same manner that it originally filled
2-16     the vacant position.
2-17           Sec. 344.053.  ELECTION REQUIRED.  A proposed district may be
2-18     created and a district tax may be authorized only if the creation
2-19     and the tax are approved by a majority of the qualified voters of
2-20     the proposed district voting at an election called and held for
2-21     that purpose.
2-22           Sec. 344.054.  CONFIRMATION ELECTION ORDER.  (a)  The
2-23     temporary board may call and hold a confirmation election only
2-24     after the board adopts plans under Section 344.061.
2-25           (b)  An order calling an election under Subsection (a) must
2-26     state:
2-27                 (1)  the nature of the election, including the
2-28     proposition that is to appear on the ballot;
2-29                 (2)  the date of the election;
2-30                 (3)  the hours during which the polls will be open;
2-31                 (4)  the location of the polling places;
2-32                 (5)  a summary of the proposed district's budget plan
2-33     and fire control, prevention, and emergency medical services plan;
2-34     and
2-35                 (6)  the proposed rate of the sales and use tax for the
2-36     district.
2-37           Sec. 344.055.  SALES AND USE TAX.  (a)  A municipality that
2-38     creates a district shall adopt a sales and use tax under Section
2-39     321.106, Tax Code, for financing the operation of the district.
2-40     The proposed rate for the district sales and use tax imposed under
2-41     Subchapter B, Chapter 321, Tax Code, may be only:
2-42                 (1)  one-eighth of one percent;
2-43                 (2)  one-fourth of one percent;
2-44                 (3)  three-eighths of one percent; or
2-45                 (4)  one-half of one percent.
2-46           (b)  A sales and use tax adopted under this chapter may be
2-47     charged in addition to any other sales and use tax authorized by
2-48     law, and one-eighth of one percent or less of a sales and use tax
2-49     adopted under this chapter is not included in computing a combined
2-50     sales and use tax rate for purposes of any limitation provided by
2-51     law on the maximum combined sales and use tax rate of political
2-52     subdivisions.
2-53           Sec. 344.056.  NOTICE OF ELECTION.  In addition to the notice
2-54     required by Section 4.003(c), Election Code, the temporary
2-55     directors of a proposed district shall give notice of an election
2-56     to create a district by publishing a substantial copy of the
2-57     election order in a newspaper with general circulation in the
2-58     proposed district once a week for two consecutive weeks.  The first
2-59     publication must appear before the 35th day before the date set for
2-60     the election.
2-61           Sec. 344.057.  ELECTION DATE. The election shall be held on
2-62     the next uniform election date authorized by Section 41.001(a),
2-63     Election Code, after the date on which the election is ordered that
2-64     affords sufficient time for election procedures to be carried out.
2-65           Sec. 344.058.  BALLOT PROPOSITION.  The ballot for an
2-66     election to create a district shall be printed to permit voting for
2-67     or against the proposition:  "The creation of the ______ (name of
2-68     the municipality proposing to create the district) Fire Control,
2-69     Prevention, and Emergency Medical Services District dedicated to
 3-1     fire safety and emergency medical services programs and the
 3-2     adoption of a proposed local sales and use tax at a rate of _______
 3-3     (rate specified in the election order)."
 3-4           Sec. 344.059.  CANVASSING RETURNS.  (a)  Not earlier than the
 3-5     second day and not later than the 13th day after the date of the
 3-6     election, the temporary board shall meet and canvass the returns of
 3-7     the election.
 3-8           (b)  If a majority of the votes cast in the election favor
 3-9     the creation of the district, the temporary board shall issue an
3-10     order declaring the district created.
3-11           (c)  If less than a majority of the votes cast in the
3-12     election favor the creation of the district, the temporary board
3-13     may order another election on the matter not earlier than the first
3-14     anniversary of the date of the preceding election.
3-15           Sec. 344.060.  DISSOLUTION OF TEMPORARY BOARD.  If a district
3-16     has not been created under this chapter before the fifth
3-17     anniversary of the date a district is first proposed by the
3-18     governing body under Section 344.051:
3-19                 (1)  the temporary board is dissolved on that date; and
3-20                 (2)  the proposed district may not be created under
3-21     this chapter.
3-22           Sec. 344.061.  FIRE CONTROL, PREVENTION, AND EMERGENCY
3-23     MEDICAL SERVICES PLAN AND BUDGET PLAN.  (a)  The temporary board
3-24     shall develop and adopt a two-year fire control, prevention, and
3-25     emergency medical services plan and a two-year budget plan.  The
3-26     fire control, prevention, and emergency medical services plan must
3-27     include:
3-28                 (1)  a detailed list of the fire control, prevention,
3-29     and emergency medical services strategies to be supported by the
3-30     district; and
3-31                 (2)  the method of evaluating each year the
3-32     effectiveness and efficiency of individual fire control,
3-33     prevention, and emergency medical services strategies.
3-34           (b)  The budget plan must include:
3-35                 (1)  the amount of money budgeted by the district for
3-36     each fire control, prevention, and emergency medical services
3-37     strategy;
3-38                 (2)  the amount of money budgeted by the district and
3-39     the percentage of the total budget of the district for
3-40     administration, with individual amounts showing the cost of the
3-41     administration that would be conducted by the district and the cost
3-42     of administration that would be conducted by private or public
3-43     entities;
3-44                 (3)  the estimated amount of money available to the
3-45     district from all sources during the subsequent year;
3-46                 (4)  the account balances expected at the end of the
3-47     years for which the budget is prepared; and
3-48                 (5)  the estimated tax rate that will be required to
3-49     support the budget.
3-50           (c)  Plans under this section must be adopted in the same
3-51     manner as provided for adoption of a proposed annual budget under
3-52     Section 344.204.
3-53           (d)  The temporary board shall coordinate its efforts in
3-54     developing its plans under this section with appropriate local
3-55     officials and entities.
3-56           Sec. 344.062.  FINANCING CREATION OF DISTRICT.  (a)  A
3-57     municipality creating a district shall pay the entire cost of
3-58     creating the district.
3-59           (b)  If a district is created, the district shall reimburse
3-60     the municipality for the actual expenses the municipality incurred
3-61     in the creation of the district.
3-62              (Sections 344.063-344.100 reserved for expansion
3-63                        SUBCHAPTER C. ADMINISTRATION
3-64           Sec. 344.101.  BOARD OF DIRECTORS.  (a)  Except as provided
3-65     by Subsections (e) and (f), a district is governed by a board of
3-66     seven directors appointed in the same manner as provided by Section
3-67     344.052(a) for the appointment of temporary directors.
3-68           (b)  Initial appointees under this section shall draw lots to
3-69     determine their terms so that:
 4-1                 (1)  three directors serve terms that expire on
 4-2     September 1 of the first year following creation of the district;
 4-3     and
 4-4                 (2)  four directors serve terms that expire on
 4-5     September 1 of the second year following creation of the district. 
 4-6           (c)  Directors serve staggered two-year terms.
 4-7           (d)  A vacancy in the office of director shall be filled for
 4-8     the unexpired term in the same manner that the vacant position was
 4-9     originally filled.
4-10           (e)  The governing body of a municipality by resolution may
4-11     appoint the governing body's membership as the board of directors
4-12     of the district, if the appointment is approved by the voters in a
4-13     creation election or continuation referendum under this chapter.  A
4-14     member of a governing body appointed under this section as an ex
4-15     officio director serves a term concurrent with the member's term as
4-16     a member of the governing body.
4-17           (f)  In a district for which the governing body of the
4-18     municipality does not serve as the district's board of directors,
4-19     the governing body may create a board of directors for which one
4-20     director is appointed by each member of the governing body to serve
4-21     at the pleasure of that member for a term not to exceed two years
4-22     and that expires when the member of the governing body that
4-23     appointed the director leaves office.
4-24           Sec. 344.102.  PERFORMANCE BOND.  (a)  Before assuming the
4-25     duties of the office, each director or officer must execute a bond
4-26     for $5,000 payable to the district, conditioned on the faithful
4-27     performance of the person's duties as director or officer.
4-28           (b)  The bond shall be kept in the permanent records of the
4-29     district.
4-30           (c)  The board may pay for the bonds of directors or officers
4-31     with district funds.
4-32           (d)  The board and the district may issue and sell bonds
4-33     conditioned on the faithful performance of a person's duties as a
4-34     director as provided by this section.
4-35           Sec. 344.103.  OFFICERS.  (a)  The board shall elect from
4-36     among its members a president and vice president.
4-37           (b)  The board shall appoint a secretary.  The secretary may
4-38     be a director.
4-39           (c)  The person who performs the duties of auditor for the
4-40     municipality shall serve as treasurer of the district.
4-41           (d)  Each officer of the board serves for a term of one year.
4-42           (e)  A vacancy in a board office shall be filled by the board
4-43     for the unexpired term.
4-44           Sec. 344.104.  COMPENSATION.  A director or officer serves
4-45     without compensation, but a director or officer may be reimbursed
4-46     for actual expenses incurred in the performance of official duties.
4-47     Those expenses must be reported in the district's minute book or
4-48     other district record and must be approved by the board.
4-49           Sec. 344.105.  VOTING REQUIREMENT.  A concurrence of a
4-50     majority of the members of the board is necessary in matters
4-51     relating to the business of a district.  A two-thirds majority vote
4-52     of the board is required to reject any application for funding
4-53     available under this chapter.
4-54           Sec. 344.106.  CONTRACT FOR ADMINISTRATIVE ASSISTANCE.  The
4-55     board may contract with a public agency or private vendor to assist
4-56     the board in the administration or management of the district or to
4-57     assist the board in the review of applications for funding
4-58     available under this chapter.
4-59              (Sections 344.107-344.150 reserved for expansion
4-60                      SUBCHAPTER D. POWERS AND DUTIES 
4-61           Sec. 344.151.  FINANCING DISTRICT PROGRAMS.  (a)  The
4-62     district may finance all costs of a fire control, prevention, and
4-63     emergency medical services district program, including costs for
4-64     personnel, administration, expansion, enhancement, and capital
4-65     expenditures.
4-66           (b)  The program may include:
4-67                 (1)  fire apparatus and equipment;
4-68                 (2)  a bomb disposal unit and related equipment;
4-69                 (3)  compensation of fire protection and prevention
 5-1     personnel for specialized training regarding:
 5-2                       (A)  arson;
 5-3                       (B)  bomb disposal;
 5-4                       (C)  hazardous materials;
 5-5                       (D)  technical rescue;
 5-6                       (E)  paramedic certification; and
 5-7                       (F)  any other specialized training under the
 5-8     program;
 5-9                 (4)  funding for turn-out gear, self-contained
5-10     breathing apparatus, and protective uniforms or other firefighter
5-11     safety equipment;
5-12                 (5)  additional compensation for municipal
5-13     fire-fighting personnel, including overtime compensation for
5-14     unforeseen staffing needs; and
5-15                 (6)  funding for the construction and maintenance of
5-16     fire stations, training facilities, or the equipment needed for
5-17     those stations or facilities.
5-18           (c)  The program may include an enhanced emergency
5-19     communications center or other emergency communications programs
5-20     and equipment, including:
5-21                 (1)  emergency medical dispatch training;
5-22                 (2)  additional fire and emergency medical service
5-23     dispatchers;
5-24                 (3)  uniformed fire deployment and communications
5-25     officers;
5-26                 (4)  real-time weather information; and
5-27                 (5)  computer databases and systems maintenance
5-28     personnel for hazardous materials responses.
5-29           (d)  The program may include a public training program,
5-30     including:
5-31                 (1)  a juvenile fire starter program;
5-32                 (2)  an urban survival program, including school
5-33     programs for fire safety, gun safety, and safety with strangers;
5-34                 (3)  a fire prevention program;
5-35                 (4)  a fire education program;
5-36                 (5)  a hazardous materials education program;
5-37                 (6)  a psychological intervention program; and
5-38                 (7)  a citizen's ride-along program or home inspection
5-39     program.
5-40           (e)  The program may include public preventive health
5-41     programs, including:
5-42                 (1)  juvenile inoculations;
5-43                 (2)  weekend health days;
5-44                 (3)  first aid and cardiopulmonary resuscitation
5-45     training;
5-46                 (4)  injury prevention; and
5-47                 (5)  drug and alcohol awareness.
5-48           (f)  The program may include response training programs,
5-49     equipment, facilities, and instructors, including:
5-50                 (1)  a regional training center for fire, rescue,
5-51     hazardous materials, and emergency medical services;
5-52                 (2)  staff personnel to support the center;
5-53                 (3)  equipment and apparatus to support the center;
5-54                 (4)  computer-aided continuing education training
5-55     conducted in-station; and
5-56                 (5)  training regarding hazardous material storage and
5-57     response.
5-58           (g)  The program may include computers and other systems to
5-59     support information management systems to:
5-60                 (1)  maintain occupancy information;
5-61                 (2)  track incident analyses;
5-62                 (3)  track incident reports;
5-63                 (4)  track internal communications and reporting;
5-64                 (5)  maintain inventory; and
5-65                 (6)  serve other information management needs.
5-66           (h)  The program may include capital items needed to improve
5-67     emergency response and increase service efficiency, including
5-68     equipment, apparatus, vehicles, and training material or equipment.
5-69           Sec. 344.152.  COORDINATION; EVALUATION; GRANTS.  (a)  The
 6-1     district shall coordinate its efforts with local agencies in
 6-2     developing its fire control, prevention, and emergency medical
 6-3     services program.
 6-4           (b)  The district shall conduct an annual evaluation program
 6-5     to study the impact, efficiency, and effectiveness of new or
 6-6     expanded fire control, prevention, and emergency medical services
 6-7     programs.
 6-8           (c)  The board may seek the assistance of the Office of
 6-9     State-Federal Relations in identifying and applying for federal
6-10     grants for fire control, prevention, and emergency medical services
6-11     programs.
6-12           (d)  The district may apply for and receive grants for fire
6-13     control, prevention, and emergency medical services programs from a
6-14     state or federal agency.
6-15           Sec. 344.153.  GENERAL BOARD POWER OVER FUNDS.  The board
6-16     shall manage, control, and administer the district finances except
6-17     as provided by Section 344.205.
6-18           Sec. 344.154.  USE OF REVENUE.  The board may spend revenue
6-19     derived from the sales and use tax distributed under Section
6-20     321.106, Tax Code, only for a purpose authorized by Section
6-21     344.151.
6-22           Sec. 344.155.  RULES AND PROCEDURES.  (a)  A board may adopt
6-23     rules governing programs financed by the district and the functions
6-24     of district staff.
6-25           (b)  The board may prescribe accounting and control
6-26     procedures for the district.
6-27           (c)  The board is subject to Chapter 2001, Government Code.
6-28           Sec. 344.156.  PURCHASING.  (a)  Except as provided by
6-29     Subsection (b), the board may prescribe the method of making
6-30     purchases and expenditures by and for the district.
6-31           (b)  To the extent competitive bidding procedures in Title 8
6-32     apply, the board may not enter into a purchasing contract for more
6-33     than $15,000 unless the board complies with Chapter 252.
6-34           (c)  If the municipality that created the district has a
6-35     purchasing agent authorized by law, that agent shall serve as
6-36     purchasing agent for the district.
6-37           Sec. 344.157.  PROPERTY TO BE USED IN ADMINISTRATION.  The
6-38     board may lease or acquire in another manner facilities, equipment,
6-39     or other property for the sole purpose of administering the
6-40     district.
6-41           Sec. 344.158.  REIMBURSEMENT FOR SERVICES.  (a)  A county or
6-42     municipality located outside the boundaries of a district on the
6-43     district's request shall reimburse the district for the district's
6-44     cost of including a resident of that county or municipality who is
6-45     not a resident of that district in a district program.
6-46           (b)  On behalf of the district, the board may contract with a
6-47     municipal or county government or with the state or federal
6-48     government for the municipal, county, state, or federal government
6-49     to reimburse the district for including a person in a district
6-50     program.
6-51           Sec. 344.159.  SERVICE CONTRACTS.  The board may contract
6-52     with the following entities to furnish the staff, facilities,
6-53     equipment, programs, or services the board considers necessary for
6-54     the effective operation of the district:
6-55                 (1)  a municipality, county, special district, or other
6-56     political subdivision of the state;
6-57                 (2)  a state or federal agency;
6-58                 (3)  an individual; or
6-59                 (4)  a private person.
6-60           Sec. 344.160.  DONATIONS, GIFTS, AND ENDOWMENTS.  On behalf
6-61     of the district, the board or the temporary board may accept a
6-62     donation, gift, or endowment.  The district may hold a donation,
6-63     gift, or endowment in trust for any purpose and under any
6-64     direction, limitation, or other provision prescribed in writing by
6-65     the donor that is consistent with this chapter and the proper
6-66     management of the district.
6-67           Sec. 344.161.  AUTHORITY TO SUE AND BE SUED.  The board may
6-68     sue and be sued in the name of the district.
6-69              (Sections 344.162-344.200 reserved for expansion
 7-1                       SUBCHAPTER E. DISTRICT FINANCES
 7-2           Sec. 344.201.  FISCAL YEAR.  (a)  The board shall establish
 7-3     the fiscal year for the district, and the district shall operate on
 7-4     the basis of that year.
 7-5           (b)  The fiscal year may not be changed more than once in a
 7-6     24-month  period.
 7-7           Sec. 344.202.  AUDITS AND DISTRICT RECORDS.  (a)  The board
 7-8     shall have an annual audit made of the financial condition of the
 7-9     district by an independent auditor.
7-10           (b)  The annual audit and other district records shall be
7-11     open to inspection during regular business hours at the principal
7-12     office of the district.
7-13           Sec. 344.203.  ANNUAL BUDGET PROPOSAL.  (a)  The board shall
7-14     propose an annual budget.  The board shall consider the
7-15     applications for program funding in preparing the proposed budget. 
7-16           (b)  The proposed budget must contain a complete financial
7-17     statement, including a statement of:
7-18                 (1)  the outstanding obligations of the district;
7-19                 (2)  the amount of cash on hand to the credit of each
7-20     fund of the district;
7-21                 (3)  the amount of money received by the district from
7-22     all sources during the previous year;
7-23                 (4)  the estimated amount of money available to the
7-24     district from all sources during the current fiscal year;
7-25                 (5)  the amount of money needed to fund programs
7-26     approved for funding by the board;
7-27                 (6)  the amount of money requested for programs that
7-28     were not approved  for funding by the board;
7-29                 (7)  the tax rate for the next fiscal year;
7-30                 (8)  the amount of the balances expected at the end of
7-31     the year in which the budget is being prepared; and
7-32                 (9)  the estimated amount of revenues and balances
7-33     available to cover the proposed budget.
7-34           Sec. 344.204.  ADOPTION OF BUDGET.  (a)  Not later than the
7-35     100th day before the date each fiscal year begins, the board shall
7-36     hold a public hearing to consider the proposed annual budget.
7-37           (b)  The board shall publish notice of the hearing in a
7-38     newspaper with general circulation in the district not later than
7-39     the 10th day before the date of the hearing.
7-40           (c)  A resident of the district is entitled to participate in
7-41     the hearing.
7-42           (d)  Not later than the 80th day before the date each fiscal
7-43     year begins, the board shall adopt a budget.  The board may make
7-44     any changes in the proposed budget that the interests of the
7-45     taxpayers demand.
7-46           (e)  Not later than the 10th day after the date the budget is
7-47     adopted, the board shall submit the budget to the governing body of
7-48     the municipality that created the district.
7-49           (f)  The board by rule may adopt alternative procedures for
7-50     adopting a budget that differ from the procedures outlined in this
7-51     subchapter.  The board must hold at least one public hearing
7-52     related to the alternative procedures before their adoption.
7-53           Sec. 344.205.  APPROVAL OF BUDGET.   (a)  Not later than the
7-54     45th day before the date each fiscal year begins, the governing
7-55     body of the municipality that created the district shall hold a
7-56     public hearing to consider the budget adopted by the board and
7-57     submitted to the governing body.
7-58           (b)  The governing body must publish notice of the hearing in
7-59     a newspaper with general circulation in the district not later than
7-60     the 10th day before the date of the hearing.
7-61           (c)  A resident of the district is entitled to participate in
7-62     the hearing.
7-63           (d)  Not later than the 30th day before the date the fiscal
7-64     year begins, the governing body shall approve or reject the budget
7-65     submitted by the board.  The governing body may not amend the
7-66     budget.
7-67           (e)  If the governing body rejects the budget submitted by
7-68     the board, the governing body and the board shall meet and together
7-69     amend and approve the budget before the beginning of the fiscal
 8-1     year.
 8-2           (f)  The budget may be amended after the beginning of the
 8-3     fiscal year on approval by the board and the governing body.
 8-4           Sec. 344.206.  LIMITATIONS ON EXPENDITURES AND INVESTMENTS.
 8-5     (a)  The district may spend money only for an expense included in
 8-6     the annual budget or an amendment to the budget.
 8-7           (b)  A district may not incur a debt payable from revenues of
 8-8     the district other than the revenues on hand or to be on hand in
 8-9     the current or immediately following fiscal year of the district.
8-10           (c)  The board may not invest district money in funds or
8-11     securities other than those specified by Chapter 2256, Government
8-12     Code.
8-13           Sec. 344.207.  ACCOUNT OF DISBURSEMENTS OF DISTRICT.  Not
8-14     later than the 60th day after the last day of each fiscal year, an
8-15     administrator shall prepare for the board a sworn statement of the
8-16     amount of money that belongs to the district and an account of the
8-17     disbursements of that money.
8-18           Sec. 344.208.  DEPOSIT OF MONEY.  (a)  The board shall
8-19     deposit district money in a special account in the treasury of the
8-20     municipality that created the district.
8-21           (b)  District money, other than that invested as provided by
8-22     Section 344.206(c), shall be deposited as received in the treasury
8-23     of the municipality and must remain on deposit.
8-24           (c)  The board shall reimburse the municipality for any
8-25     costs, other than personnel costs, the municipality incurs for
8-26     performing the duties under this section.
8-27           Sec. 344.209.  APPLICATIONS FOR PROGRAM FUNDING.  (a)  An
8-28     officer of the municipality that created the district or the head
8-29     of a department of that municipality may, with the consent of the
8-30     governing body of the municipality, apply to the board for funding
8-31     of a program described by Section 344.151.
8-32           (b)  The officer must apply under this section not later than
8-33     the 140th day before the date the fiscal year begins, unless the
8-34     board by rule has adopted an exception.
8-35           (c)  The board by rule may adopt application procedures.
8-36           Sec. 344.210.  BONDS PROHIBITED.  The board may not issue or
8-37     sell general obligation bonds, revenue bonds, or refunding bonds.
8-38              (Sections 344.211-344.250 reserved for expansion
8-39     SUBCHAPTER F. REFERENDUM ON CONTINUATION OR DISSOLUTION OF DISTRICT
8-40           Sec. 344.251.  REFERENDUM AUTHORIZED.  (a)  The board may
8-41     call and hold a referendum election on the question of whether to:
8-42                 (1)  continue the district; or
8-43                 (2)  dissolve the district.
8-44           (b)  A board may order a referendum election on its own
8-45     motion.
8-46           (c)  The board shall order a referendum election:
8-47                 (1)  on receipt of a petition that requests
8-48     continuation or dissolution of the district and complies with the
8-49     requirements of Sections 344.252-344.256; or
8-50                 (2)  if the governing body of the municipality that
8-51     created the district, after notice and a public hearing on the
8-52     matter, by resolution requests a referendum on continuation or
8-53     dissolution.
8-54           (d)  The board may not hold a referendum election under this
8-55     subchapter before the fifth anniversary of the date the district
8-56     was created or before the third anniversary of the date of the last
8-57     continuation or dissolution referendum election.
8-58           (e)  For a continuation referendum election, the ballot shall
8-59     be printed to permit voting for or against the proposition:
8-60     "Whether the ____________ (name of the municipality that created
8-61     the district) Fire Control, Prevention, and Emergency Medical
8-62     Services District should be continued and whether the fire control,
8-63     prevention, and emergency medical services district sales and use
8-64     tax should be continued."
8-65           (f)  For a dissolution referendum, the ballot shall be
8-66     printed to permit voting for or against the proposition:  "Whether
8-67     the ____________ (name of the municipality that created the
8-68     district)  Fire Control, Prevention, and Emergency Medical Services
8-69     District should be dissolved and whether the fire control,
 9-1     prevention, and emergency medical services district sales and use
 9-2     tax should be abolished."
 9-3           (g)  The governing body of a municipality that creates a
 9-4     district under this chapter may specify the number of years for
 9-5     which the district should be continued.  The board or the governing
 9-6     body of a municipality may continue a district for 5, 10, 15, or 20
 9-7     years.  For a continuation referendum election under this
 9-8     subsection, the ballot shall be printed to permit voting for or
 9-9     against the proposition:  "Whether the ______ (name of the
9-10     municipality that created the district) Fire Control, Prevention,
9-11     and Emergency Medical Services District should be continued for
9-12     ______ years and whether the fire control, prevention, and
9-13     emergency medical services district sales and use tax should be
9-14     continued for _____ years."
9-15           Sec. 344.252.  APPLICATION FOR PETITION.  (a)  On written
9-16     application of 10 or more registered voters of the district, the
9-17     clerk of the municipality that created the district shall issue to
9-18     the applicants a petition to be circulated among registered voters
9-19     for their signatures.
9-20           (b)  An application for a petition to continue the district
9-21     must contain:
9-22                 (1)  the heading:  "Application for a Petition for a
9-23     Local Option Referendum to Continue the Fire Control, Prevention,
9-24     and Emergency Medical Services District and to Continue the Fire
9-25     Control, Prevention, and Emergency Medical Services District Sales
9-26     and Use Tax";
9-27                 (2)  the statement: "Whether the ______ (name of the
9-28     municipality that created the district)  Fire Control, Prevention,
9-29     and Emergency Medical Services District should be continued and
9-30     whether the fire control, prevention, and emergency medical
9-31     services district sales and use tax should be continued";
9-32                 (3)  immediately above the signatures of the
9-33     applicants, the statement:  "It is the purpose and intent of the
9-34     applicants whose signatures appear below that the fire control,
9-35     prevention, and emergency medical services district be continued
9-36     and that the fire control, prevention, and emergency medical
9-37     services district sales and use tax in ___________ (name of the
9-38     municipality that created the district) be continued"; and
9-39                 (4)  the printed name, signature, residence address,
9-40     and voter  registration certificate number of each applicant.
9-41           (c)  An application for a petition to dissolve the district
9-42     must contain:
9-43                 (1)  the heading:  "Application for a Petition for a
9-44     Local Option Referendum to Dissolve the Fire Control, Prevention,
9-45     and Emergency Medical Services District and to Abolish the Fire
9-46     Control, Prevention, and Emergency Medical Services District Sales
9-47     and Use Tax";
9-48                 (2)  the statement:  "Whether the ___________ (name of
9-49     the municipality that created the district)  Fire Control,
9-50     Prevention, and Emergency Medical Services District should be
9-51     dissolved and whether the fire control, prevention, and emergency
9-52     medical services district sales and use tax should be abolished";
9-53                 (3)  immediately above the signatures of the
9-54     applicants, the statement:  "It is the purpose and intent of the
9-55     applicants whose signatures appear below that the fire control,
9-56     prevention, and emergency medical services district be dissolved
9-57     and that the fire control, prevention, and emergency medical
9-58     services district sales and use tax in ___________ (name of the
9-59     municipality that created the district) be abolished"; and
9-60                 (4)  the printed name, signature, residence address,
9-61     and voter  registration certificate number of each applicant.
9-62           Sec. 344.253.  PETITION.  (a)  A petition for a referendum to
9-63     continue a district must contain:
9-64                 (1)  the heading:  "Petition for a Local Option
9-65     Referendum to Continue the ____________ (name of the municipality
9-66     that created the district) Fire Control, Prevention, and Emergency
9-67     Medical Services District and to Continue the Fire Control,
9-68     Prevention, and Emergency Medical Services District Sales and Use
9-69     Tax";
 10-1                (2)  a statement of the issue to be voted on in the
 10-2    same words used in the application;
 10-3                (3)  immediately above the signatures of the
 10-4    petitioners, the statement:  "It is the purpose and intent of the
 10-5    petitioners whose signatures appear below that the fire control,
 10-6    prevention, and emergency medical services district be continued
 10-7    and that the fire control, prevention, and emergency medical
 10-8    services district sales and use tax in ___________ (name of the
 10-9    municipality that created the district) be continued";
10-10                (4)  lines and spaces for the names, signatures,
10-11    residence addresses, and voter registration certificate numbers of
10-12    the petitioners; and
10-13                (5)  the date of issuance, the serial number, and the
10-14    seal of the clerk of the municipality on each page.
10-15          (b)  A petition for a referendum to dissolve a district must
10-16    contain:
10-17                (1)  the heading:  "Petition for a Local Option
10-18    Referendum to Dissolve the __________ (name of the municipality
10-19    that created the district) Fire Control, Prevention, and Emergency
10-20    Medical Services District and to Abolish the Fire Control,
10-21    Prevention, and Emergency Medical Services District Sales and Use
10-22    Tax";
10-23                (2)  a statement of the issue to be voted on in the
10-24    same words used in the application;
10-25                (3)  immediately above the signatures of the
10-26    petitioners, the statement:  "It is the purpose and intent of the
10-27    petitioners whose signatures appear below that the fire control,
10-28    prevention, and emergency medical services district be dissolved
10-29    and that the fire control, prevention, and emergency medical
10-30    services district sales and use tax in ___________ (name of the
10-31    municipality that created the district) be abolished";
10-32                (4)  lines and spaces for the names, signatures,
10-33    residence addresses, and voter registration certificate numbers of
10-34    the petitioners; and
10-35                (5)  the date of issuance, the serial number, and the
10-36    seal of the clerk of the municipality on each page.
10-37          Sec. 344.254.  COPIES OF APPLICATION AND PETITION.  The clerk
10-38    or secretary of the municipality shall keep an application and a
10-39    copy of the petition in the files of the clerk's or secretary's
10-40    office.  The clerk shall issue to the applicants as many copies as
10-41    they request.
10-42          Sec. 344.255.  FILING OF PETITION.  To form the basis for the
10-43    ordering of a referendum, the petition must:
10-44                (1)  be filed with the clerk or secretary of the
10-45    municipality not later than the 60th day after the date of its
10-46    issuance; and
10-47                (2)  contain at least a number of signatures of
10-48    registered voters of the municipality equal to five percent of the
10-49    number of votes cast in the municipality for all candidates for
10-50    governor in the most recent gubernatorial general election.
10-51          Sec. 344.256.  REVIEW BY CLERK OR SECRETARY.  (a)  The clerk
10-52    or secretary of the municipality shall, on the request of any
10-53    person, check each name on a petition to determine whether the
10-54    signer is a registered voter of the district.  A person requesting
10-55    verification by the clerk or secretary of the municipality shall
10-56    pay the clerk or secretary a sum equal to 20 cents for each name on
10-57    the petition before the verification begins.
10-58          (b)  The clerk or secretary of the municipality may not count
10-59    a signature if the clerk or secretary has a reason to believe that:
10-60                (1)  it is not the actual signature of the purported
10-61    signer;
10-62                (2)  the voter registration certificate number is not
10-63    correct;
10-64                (3)  it is a duplication either of a name or of
10-65    handwriting used in any other signature on the petition;
10-66                (4)  the residence address of the signer is not
10-67    correct; or
10-68                (5)  the name of the voter is not signed exactly as it
10-69    appears on the official copy of the current list of registered
 11-1    voters for the voting year in which the petition is issued.
 11-2          Sec. 344.257.  CERTIFICATION.  Not later than the 40th day
 11-3    after the date a petition is filed, excluding Saturdays, Sundays,
 11-4    and legal holidays, the clerk or secretary of the municipality
 11-5    shall certify to the board the number of registered voters signing
 11-6    the petition.
 11-7          Sec. 344.258.  ELECTION ORDER.  (a)  The board shall record
 11-8    on its minutes the date the petition is filed and the date it is
 11-9    certified by the clerk or secretary of the municipality.
11-10          (b)  If the petition contains the required number of
11-11    signatures and is in proper order, the board shall, at its next
11-12    regular session after the certification by the clerk or secretary
11-13    of the municipality, order a referendum election to be held at the
11-14    regular polling place in each election precinct in the municipality
11-15    on the next uniform election date authorized by Section 41.001(a),
11-16    Election Code, that occurs at least 20 days after the date of the
11-17    order.
11-18          (c)  The board shall state in the order the proposition to be
11-19    voted on in the referendum election.  The order is prima facie
11-20    evidence of compliance with all provisions necessary to give it
11-21    validity.
11-22          Sec. 344.259.  APPLICABILITY OF ELECTION CODE.  A referendum
11-23    election authorized by this subchapter shall be held and the
11-24    returns shall be prepared and canvassed in conformity with the
11-25    Election Code.
11-26          Sec. 344.260.  RESULTS OF REFERENDUM.  (a)  If less than a
11-27    majority of the votes cast in a continuation referendum election
11-28    are for the continuation of a district or if a majority of the
11-29    votes cast in a dissolution referendum are for dissolution of the
11-30    district:
11-31                (1)  the board shall certify that fact to the secretary
11-32    of state not later than the 10th day after the date of the canvass
11-33    of the returns; and
11-34                (2)  the district is dissolved and ceases to operate.
11-35          (b)  If a majority of the votes cast in a continuation
11-36    referendum election are for the continuation of the district or if
11-37    less than a majority of the votes cast in a dissolution referendum
11-38    election are for dissolution of the district, another referendum
11-39    may not be held except as authorized by Section 344.251.
11-40          Sec. 344.261.  ELECTION CONTEST.  Not later than the 30th day
11-41    after the date the result of a referendum is declared, any
11-42    qualified voter of the district may contest the election by filing
11-43    a petition in a district court located in the district.
11-44             (Sections 344.262-344.300 reserved for expansion
11-45                    SUBCHAPTER G. DISTRICT DISSOLUTION
11-46          Sec. 344.301.  TIME FOR DISSOLUTION OF DISTRICT.  (a)  A
11-47    district is dissolved five years after the date the municipality
11-48    began to impose taxes for district purposes if the district has not
11-49    held a continuation or dissolution referendum.
11-50          (b)  The district is dissolved on the fifth anniversary of
11-51    the date of the most recent continuation or dissolution referendum.
11-52          (c)  Subsection (b) does not apply to a district that is
11-53    continued under Section 344.251(g), and that district is dissolved
11-54    on the expiration of the period for which it was continued.
11-55          Sec. 344.302.  DISSOLUTION OF DISTRICT.  (a)  On the date
11-56    that the district is dissolved, the district shall convey or
11-57    transfer, as provided by Subsection (h):
11-58                (1)  title to land, buildings, real and tangible
11-59    improvements, and equipment owned by the district;
11-60                (2)  operating money and reserves for operating
11-61    expenses and money that has been budgeted by the district for the
11-62    remainder of the fiscal year in which the district is dissolved to
11-63    support fire control, prevention, and emergency medical services
11-64    activities and programs for residents of the municipality that
11-65    created the district;
11-66                (3)  taxes imposed for the district during the current
11-67    year for fire control, prevention, and emergency medical services
11-68    purposes;
11-69                (4)  each fund established for payment of indebtedness
 12-1    assumed by the district; and
 12-2                (5)  any money accumulated in an employee retirement
 12-3    fund.
 12-4          (b)  After the date the district is dissolved, taxes may not
 12-5    be imposed for district purposes or for providing fire control,
 12-6    prevention, and emergency medical services activities and programs
 12-7    for the residents of the district.
 12-8          (c)  If on the date that the district is dissolved the
 12-9    district has outstanding short-term or long-term liabilities, the
12-10    board shall, not later than the 30th day after the date of the
12-11    dissolution, adopt a resolution certifying each outstanding
12-12    short-term and long-term liability.  The municipality that created
12-13    the district shall assume the outstanding short-term and long-term
12-14    liabilities.  The municipality shall collect the sales and use tax
12-15    under Chapter 321, Tax Code, for the remainder of the calendar year
12-16    and may by resolution of its governing body continue to collect the
12-17    tax for an additional calendar year if the revenue from the tax is
12-18    needed to retire liabilities of the district that were assumed by
12-19    the  municipality.  The governing body shall notify the comptroller
12-20    of this continuation not later than the 60th day before the date
12-21    the tax would otherwise expire. A tax collected after the
12-22    liabilities have been retired shall be transferred or conveyed as
12-23    provided by Subsection (a).
12-24          (d)  The district and the board may continue to operate for a
12-25    period not to exceed two months after carrying out the
12-26    responsibilities required by Subsections (a) and (c).  The board
12-27    and the district are continued for the purpose of satisfying these
12-28    responsibilities.
12-29          (e)  If the board and the district are continued under
12-30    Subsection (d), the board and district are dissolved entirely on
12-31    the first day of the month following the month in which the board
12-32    issues an order certifying to the secretary of state that the
12-33    responsibilities of Subsections (a) and (c) are satisfied.
12-34          (f)  A district or board that continues to operate under
12-35    Subsection (d) may not incur any new liabilities without the
12-36    approval of the governing body of the municipality that created the
12-37    district.  Not later than the 60th day after the date of the
12-38    dissolution referendum, the governing body shall review the
12-39    outstanding liabilities of the district and set a specific date by
12-40    which the municipality must retire the district's outstanding
12-41    liabilities.
12-42          (g)  On the date that the district is dissolved, programs
12-43    funded by the district shall immediately terminate and personnel
12-44    paid from district funds, except personnel required to retire the
12-45    responsibilities of the district, are terminated.
12-46          (h)  The board shall convey or transfer the value of the
12-47    items described by Subsection (a) to the municipality that created
12-48    the district.
12-49          SECTION 2.  Subchapter B, Chapter 321, Tax Code, is amended
12-50    by adding Section 321.106 to read as follows:
12-51          Sec. 321.106.  FIRE CONTROL DISTRICT TAX.  (a)  Subject to an
12-52    election held in accordance with Chapter 344, Local Government
12-53    Code,  a municipality in which a fire control, prevention, and
12-54    emergency medical services district is established shall adopt a
12-55    sales and use tax in the area of the district for the purpose of
12-56    financing the operation of the fire control, prevention, and
12-57    emergency medical services district.  The revenue from the tax may
12-58    be used only for the purpose of financing the operation of the fire
12-59    control, prevention, and emergency medical services district.  The
12-60    proposition for adopting a tax under this section and the
12-61    proposition for creation of a fire control, prevention, and
12-62    emergency medical services district shall be submitted at the same
12-63    election.  For purposes of Section 321.101, a tax under this
12-64    section is not an additional sales and use tax.
12-65          (b)  A tax adopted for a district under this section for
12-66    financing the operation of the district may be decreased in
12-67    increments of one-eighth of one percent by order of the board of
12-68    directors of the district.
12-69          (c)  The rate of a tax adopted for a district under this
 13-1    section may be increased in increments of one-eighth of one
 13-2    percent, not to exceed a total tax rate of one-half percent, for
 13-3    financing the operation of the fire control, prevention, and
 13-4    emergency medical services district by order of the board of
 13-5    directors of the fire control, prevention, and emergency medical
 13-6    services district if approved by a majority of the qualified voters
 13-7    voting at an election called by the board and held in the district
 13-8    on the question of increasing the tax rate.  At the election, the
 13-9    ballot shall be printed to provide for voting for or against the
13-10    proposition:  "The increase of the __________ (name of the
13-11    municipality  that created the district) Fire Control, Prevention,
13-12    and Emergency Medical Services District sales and use tax rate to
13-13    ______ percent."  If there is an increase or decrease under this
13-14    section in the rate of a tax imposed under this section, the new
13-15    rate takes effect on the first day of the next calendar quarter
13-16    after the expiration of one calendar quarter after the comptroller
13-17    receives notice of the increase or decrease.  However, if the
13-18    comptroller notifies the president of the board of directors of the
13-19    district in writing within 10 days after receipt of the
13-20    notification that the comptroller requires more time to implement
13-21    reporting and collection procedures, the comptroller may delay
13-22    implementation of the rate change for one calendar quarter, and the
13-23    new rate takes effect on the first day of the calendar quarter that
13-24    follows the elapsed quarter.
13-25          (d)  The comptroller shall remit to the municipality amounts
13-26    collected at the rate imposed under this section as part of the
13-27    regular allocation of other municipal tax revenue collected by the
13-28    comptroller.  The municipality shall remit that amount to the
13-29    district.  A retailer may not be required to use  allocation and
13-30    reporting procedures in the collection of taxes under this section
13-31    that are different from the procedures that retailers use in the
13-32    collection of other sales and use taxes under this chapter.  An
13-33    item, transaction, or service that is taxable in a municipality
13-34    under a sales or use tax authorized by another section of this
13-35    chapter is taxable under this section.  An item, transaction, or
13-36    service that is not taxable in a municipality under a sales or use
13-37    tax authorized by another section of this chapter is not taxable
13-38    under this section.
13-39          (e)  If, in a municipality where a fire control, prevention,
13-40    and emergency medical services district is composed of the whole
13-41    municipality, a municipal sales  and use tax or a municipal sales
13-42    and use tax rate increase for the purpose of financing a fire
13-43    control, prevention, and emergency medical services district is
13-44    approved, the municipality is responsible for distributing to the
13-45    district that portion of the municipal sales and use tax revenue
13-46    received from the comptroller that is to be used for the purposes
13-47    of financing the fire control, prevention, and emergency medical
13-48    services district.  Not later than the 10th day after the date the
13-49    municipality receives money under this section from the
13-50    comptroller, the municipality shall make the distribution in the
13-51    proportion that the fire control, prevention, and emergency medical
13-52    services portion of the tax rate bears to the total sales and use
13-53    tax rate of the municipality.  The amounts distributed to a fire
13-54    control, prevention, and emergency medical services district are
13-55    not considered to be sales and use tax revenue for the purpose of
13-56    property tax reduction and computation of the municipal tax rate
13-57    under Section 26.041.
13-58          (f)  For purposes of the tax imposed under this section, a
13-59    reference in this chapter to the municipality as the territory in
13-60    which the tax or an incident of the tax applies means only the
13-61    territory located in the fire control, prevention, and emergency
13-62    medical services district, if that district is composed of an area
13-63    less than an entire municipality.
13-64          (g)  The comptroller may adopt rules and the municipality's
13-65    governing body may adopt orders to administer this section.
13-66          SECTION 3.  This Act takes effect June 1, 2001.
13-67                                 * * * * *