By:  Van de Putte                                                 S.B. No. 402
	(In the Senate - Filed February 6, 2003; February 17, 2003, 
read first time and referred to Committee on Intergovernmental 
Relations; April 7, 2003, reported adversely, with favorable 
Committee Substitute by the following vote:  Yeas 3, Nays 0; 
April 7, 2003, sent to printer.)


COMMITTEE SUBSTITUTE FOR S.B. No. 402                                    By:  Madla


A BILL TO BE ENTITLED

AN ACT


relating to granting certain hospital districts the authority to 
issue certificates of obligation.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  The heading of Subchapter F, Chapter 281, Health 
and Safety Code, is amended to read as follows:

SUBCHAPTER F.  DISTRICT BONDS AND CERTIFICATES OF OBLIGATION
	SECTION 2.  Subchapter F, Chapter 281, Health and Safety 
Code, is amended by adding Section 281.106 to read as follows:
	Sec. 281.106.  AUTHORITY TO ISSUE CERTIFICATES OF 
OBLIGATION.  With the approval of the commissioners court, the 
board may issue certificates of obligation in accordance with 
Subchapter C, Chapter 271, Local Government Code, for district 
purposes as authorized by this chapter.
	SECTION 3.  The heading of Section 281.121, Health and 
Safety Code, is amended to read as follows:
	Sec. 281.121.  TAXES TO PAY BONDS AND CERTIFICATES OF 
OBLIGATION; TAX ASSESSMENT AND COLLECTION.
	SECTION 4.  Subsections (a) and (c), Section 281.121, Health 
and Safety Code, are amended to read as follows:
	(a) When the district issues bonds or certificates of 
obligation payable from and secured by taxes under this chapter, 
the commissioners court shall impose a tax for the benefit of the 
district on all property subject to district taxation.  The 
commissioners court may impose the tax for the entire year in which 
the district is created in order to finance initial district 
operation and to pay bonds assumed by the district.
	(c)  The proceeds of the tax may be used:                                      
		(1)  to pay the interest on and create a sinking fund 
for bonds that may be assumed or issued by the district for hospital 
purposes in accordance with this chapter;
		(2)  to provide for the operation and maintenance of 
the hospital or hospital system; [and]
		(3)  if requested by the board and approved by the 
commissioners court, to make further improvements and additions to 
the hospital system, including acquiring necessary sites by 
purchase, lease, or condemnation; and
		(4)  to pay for certificates of obligation issued under 
Section 281.106 that are payable from and secured by taxes.
	SECTION 5.  Subdivision (7), Section 271.043, Local 
Government Code, is amended to read as follows:
		(7)  "Issuer" means a municipality, [or] county, or 
hospital district established under Chapter 281, Health and Safety 
Code.
	SECTION 6.  This Act takes effect September 1, 2003.                           



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