H.B. No. 1108


   AN ACT


  relating to emergency services districts.


	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:


	SECTION 1.  Section 775.013(a), Health and Safety Code,
as amended by Chapters 886 and 1333, Acts of the 77th
Legislature, Regular Session, 2001, is reenacted and
amended to read as follows:


	(a)  The petition prescribed by Section 775.011 or 775.012
must show:


		(1)  that the district is to be created and is to operate
under Article III, Section 48-e, Texas Constitution,
and Chapter 775;


		(2)  the name of the proposed district;


		(3)  the proposed district's boundaries as designated
by metes and bounds or other sufficient legal description;


		(4)  the services that the proposed district will provide;


		(5)  that the creation of the proposed district complies
with Sections 775.020 and 775.0205; [and]


		(6)  the mailing address of each petitioner; and


		(7) [(6)]  the name of each
municipality whose consent must be obtained under Section
775.014.


	SECTION 2.  Section 775.022, Health and Safety Code,
is amended by amending Subsections (a), (b), and (c)
and adding Subsections (e) and (f) to read as follows:


	(a)  If a municipality completes all other procedures
necessary to annex [annexes] territory
in a district and if the municipality intends to
provide emergency services to the territory by the
use of municipal personnel or by some method other
than by use of the district, the municipality shall
send written notice of that fact to the board.  The
municipality must send the notice to the secretary
of the board by certified mail, return receipt requested.
 The territory remains part of the district and does
not become part of the municipality until the secretary
of the board receives the notice.  On[,
the board shall, on] receipt of the notice,
the board shall [a written request of the
municipality,] immediately change its records
to show that [disannex] the territory
has been disannexed from the district and shall
cease to provide further services to the residents
of that territory.


	(b)  The disannexation of territory under this section
does not diminish or impair the rights of the holders
of any outstanding and unpaid bonds, warrants, or other
obligations of the district including loans and
lease-purchase agreements.


	(c)  If a municipality annexes territory in [a
portion of] a district, the municipality shall
compensate the district immediately after disannexation
of the territory under Subsection (a) in an amount
equal to the annexed territory's pro rata share of
the district's bonded and other indebtedness as
computed according to the formula in Subsection (e)
[based on the unpaid principal balances and
the actual property values at the time the territory
is annexed].  The district shall apply compensation
received from a municipality under this subsection
exclusively to the payment of the annexed territory's
pro rata share of the district's bonded and other indebtedness.


	(e)  The amount of compensation under Subsection
(c) shall be determined by multiplying the district's
total indebtedness at the time of the annexation by
a fraction the numerator of which is the assessed value
of the property to be annexed based on the most recent
certified county property tax rolls at the time of
annexation and the denominator of which is the total
assessed value of the property of the district based
on the most recent certified county property tax rolls
at the time of annexation.


	(f)  For purposes of this section, total indebtedness
includes loans and lease-purchase agreements but does
not include:


		(1)  a loan or lease-purchase agreement the district
enters into after the district receives notice of the
municipality's intent to annex district territory;
or


		(2)  any indebtedness attributed to any real or personal
property that the district requires a municipality
to purchase under Subsection (d).


	SECTION 3.  Subchapter B, Chapter 775, Health and Safety
Code, is amended by adding Section 775.0221 to read
as follows:


	Sec. 775.0221.  ARBITRATION REGARDING REMOVED TERRITORY.
 (a)  The municipality and the district shall negotiate
an agreement on the amount of compensation required
under Section 775.022.  If the municipality and the
district cannot reach an agreement, the municipality
and the district shall resolve the dispute using binding
arbitration.


	(b)  A request for binding arbitration must be in
writing and may not be made before the 60th day after
the date the municipality receives notice from the
district regarding the amount of compensation required
under Section 775.022.


	(c)  The municipality and the district must agree
on the arbitrator.  If the parties cannot agree on
the appointment of an arbitrator before the 11th business
day after the date arbitration is requested, the mayor
of the municipality shall immediately request a list
of seven neutral arbitrators from the American Arbitration
Association or the Federal Mediation and Conciliation
Service or their successors in function.  An arbitrator
included in the list must be a resident of this state
and may not be a resident of a county in which any
part of the municipality or any part of the district
is located.  The municipality and the district must
agree on the appointment of an arbitrator included
in the list.  If the municipality and the district
cannot agree on the arbitrator before the 11th business
day after the date the list is provided to the parties,
each party or the party's designee may alternately
strike a name from the list.  The remaining person
on the list shall be appointed as the arbitrator. 
In this subsection, "business day" means a day other
than a Saturday, Sunday, or state or national holiday.


	(d)  The arbitrator shall:


		(1)  set a hearing to be held not later than the
10th day after the date the arbitrator is appointed;
and


		(2)  notify the parties to the arbitration in writing
of the time and place of the hearing not later than
the eighth day before the date of the hearing.


	(e)  The arbitrator may:


		(1)  receive in evidence any documentary evidence
or other information the arbitrator considers relevant;


		(2)  administer oaths; and


		(3)  issue subpoenas to require:


			(A)  the attendance and testimony of witnesses; and


			(B)  the production of books, records, and other
evidence relevant to an issue presented to the arbitrator
for determination.


	(f)  Unless the parties to the dispute agree otherwise,
the arbitrator shall complete the hearing within two
consecutive days.  The arbitrator shall permit each
party one day to present evidence and other information.
 The arbitrator, for good cause shown, may schedule
an additional hearing to be held not later than the
seventh day after the date of the first hearing.  Unless
otherwise agreed to by the parties, the arbitrator
must issue a decision in writing and deliver a copy
of the decision to the parties not later than the 14th
day after the date of the final hearing.


	(g)  The municipality and the district shall share
the cost of arbitration.


	SECTION 4.  Subsection (c), Section 775.031, Health
and Safety Code, is amended to read as follows:


	(c)  A district may contract with the state or a political
subdivision for law enforcement services or for
enforcement of the district's fire code.  A
[Except as provided by Subchapter F, a]
district may [not] commission a peace
officer or employ a person who holds a permanent
peace officer license issued under Section 1701.307,
Occupations Code, as a peace officer.


	SECTION 5.  Section 775.034, Health and Safety Code,
is amended by adding Subsections (f) and (g) to read
as follows:


	(f)  A member of the board who, because of municipal
annexation,  is no longer a qualified voter of an area
served by the district or no longer owns land subject
to taxation by the district may continue to serve until
the expiration of the member's term.


	(g)  The commissioners court shall consider relevant
factors in determining the individuals to appoint as
emergency services commissioners, including whether
the individuals have knowledge that relates to fire
prevention or emergency medical services and that is
relevant to the common policies and practices of the
board.


	SECTION 6.  Section 775.036, Health and Safety Code,
is amended by amending Subsection (b) and adding Subsections
(b-1) and (g) to read as follows:


	(b)  The board may adopt and enforce a fire code, including
fines for any violations, that does not conflict with
a fire code adopted by any county that also contains
within its boundaries any portion of the land contained
in the district and may require inspections in the
district relating to the causes and prevention of fires
and medical emergencies, except as provided by Section
775.031(b).  The fire code must be similar to standards
adopted by a nationally recognized standards-making
association.  The board may not enforce the district's
fire code within the boundaries of a municipality that
has adopted a fire code, except for an area that
has been annexed only for limited purposes in which
the municipality does not enforce a fire code.
 The board of a district located wholly within a county
with a population of three million or more may not
adopt a fire code or a fine for a violation of the
district's fire code unless the commissioners court
of the county consents to the adoption of the code
or fine.


	(b-1)  If a county that contains within its boundaries
any portion of the land contained in the district adopts
a fire code after the district adopts a code under
Subsection (b), the board may continue to enforce its
fire code in the area subject to the county fire code.
 To the extent of any conflict between the county's
code and the district's code, the more stringent provision
prevails.


	(g)  The board may commission a peace officer or
employ a person who holds a permanent peace officer
license issued under Section 1701.307, Occupations
Code, to inspect for fire hazards any structure, appurtenance,
fixture, or other real property located in the district.
 The board may adopt procedures to order the owner
or occupant of the property that fails an inspection
to correct the hazardous situation.


	SECTION 7.  Subsection (a), Section 775.0751, Health
and Safety Code, is amended to read as follows:


	(a)  A district may adopt a sales and use tax, change
the rate of its sales and use tax, or abolish its sales
and use tax at an election held as provided by Section
775.0752.  The district may impose the tax at a rate
from one-eighth of one percent to [of
one-half percent, one percent, one and one-half percent,
or] two percent in increments of one-eighth
of one percent.  Revenue from the tax may be used
for any purpose for which ad valorem tax revenue of
the district may be used.


	SECTION 8.  Subsection (a), Section 775.076, Health
and Safety Code, is amended to read as follows:


	(a)  The board may issue bonds and notes as prescribed
by this chapter to perform any of its powers.  Before
the board may issue bonds or notes authorized by
this section, the commissioners court of each county
in which the district is located must approve the issuance
of the bonds or notes by a majority vote.


	SECTION 9.  Section 775.083, Health and Safety Code,
is amended to read as follows:


	Sec. 775.083.  ANNUAL REPORT.  (a)  On or before January
1 of each year, a district shall file with the Office
of Rural Community Affairs [secretary of
state] an annual report that includes the
following:


		(1)  the district's name;


		(2)  the name of each county in which the district is
located;


		(3)  the district's business address;


		(4)  the name, mailing address, and term of office of
each commissioner;


		(5)  the name, mailing address, and term of office of
the district's general manager, executive director,
and fire chief;


		(6)  the name of each legal counsel or other consultant
for the district; and


		(7)  the district's annual budget and tax rate for the
preceding fiscal year.


	(b)  The Office of Rural Community Affairs [secretary
of state] may not charge a fee for filing
the report.


	(c)  The Office of Rural Community Affairs shall
develop and maintain an Internet-based system that
enables:


		(1)  a district to securely file the report and update
the district's information; and


		(2)  the public to view, in a searchable format,
the reports filed by districts under this section.


	(d)  If the information included in a district's
annual report changes, the district shall update the
district's information using the Internet-based system
before the end of the calendar quarter in which the
district's information changes.


	SECTION 10.  Subsection (k), Section 775.084, Health
and Safety Code, is amended to read as follows:


	(k)  A contract for a public works project must be administered
in the manner provided by [accordance
with] Subchapter B or H, Chapter 271,
Local Government Code, except as provided by this section.


	SECTION 11.  Subsections (a) and (b), Section 775.085,
Health and Safety Code, are amended to read as follows:


	(a)  The board, on the behalf of the district, may borrow
money and make other financial arrangements to purchase
real property or emergency services equipment or
construct emergency services facilities in the
amount and subject to a rate of interest or other conditions
the board considers advisable.


	(b)  To secure a loan under this section, the board
may pledge:


		(1)  tax revenues or funds on hand that are not otherwise
pledged to pay a debt of the district; or


		(2)  the real property acquired or improved or
equipment acquired with the borrowed money.


	SECTION 12.  Section 776.033, Health and Safety Code,
is amended by adding Subsection (e) to read as follows:


	(e)  The commissioners court shall consider relevant
factors in determining the individuals to appoint as
emergency services commissioners, including whether
the individuals have knowledge that relates to fire
prevention or emergency medical services and that is
relevant to the common policies and practices of the
board.


	SECTION 13.  Section 776.052, Health and Safety Code,
is amended by amending Subsection (c) and adding Subsections
(d) through (g) to read as follows:


	(c)  If a municipality that is not in the district completes
all other procedures necessary to annex [annexes]
territory that is included in a district and if
the municipality intends to provide emergency services
to the territory by the use of municipal personnel
or by some method other than by use of the district,
the governing body of the municipality shall send
written notice of that fact to the board.  The municipality
must send the notice to [notify]
the secretary of the board by certified mail, return
receipt requested.  The territory remains part of the
district and does not become part of the municipality
until the secretary of the board receives the notice.
 On receipt of the notice, the board shall immediately
change its records to show that the territory has been
disannexed from the district and shall cease to provide
further services to the residents of that [in
writing that the annexed territory is excluded from
the district's] territory.


	(d)  If a municipality removes territory from a district
under Subsection (a) or (c), the municipality shall
compensate the district in an amount equal to the removed
territory's pro rata share of the district's bonded
and other indebtedness as computed according to the
formula in Subsection (e).  The district shall apply
compensation received from a municipality under this
subsection exclusively to the payment of the removed
territory's pro rata share of the district's bonded
and other indebtedness.


	(e)  The amount of compensation under Subsection
(d) shall be determined by multiplying the district's
total indebtedness at the time the territory is removed
by a fraction the numerator of which is the assessed
value of the property to be removed based on the most
recent certified county property tax rolls at the time
of removal and the denominator of which is the total
assessed value of the property of the district based
on the most recent certified county property tax rolls
at the time of removal.


	(f)  On the district's request, a municipality shall
purchase from the district at fair market value any
real or personal property used to provide emergency
services in territory disannexed under this section.
 If any part of the indebtedness for which the district
receives compensation under Subsection (d) was for
the purchase of the real or personal property that
the municipality purchases under this subsection, the
fair market value of that property for the purpose
of this subsection is reduced by a percentage equal
to the disannexed territory's pro rata share under
Subsection (d).


	(g)  For purposes of this section, total indebtedness
includes loans and lease-purchase agreements but does
not include:


		(1)  a loan or lease-purchase agreement the district
enters into after the district receives notice about
the municipality's intent to remove district territory;
or


		(2)  any indebtedness attributed to any real or personal
property that the district requires a municipality
to purchase under Subsection (f).


	SECTION 14.  Subchapter D, Chapter 776, Health and Safety
Code, is amended by adding Section 776.0521 to read
as follows:


	Sec. 776.0521.  ARBITRATION REGARDING REMOVED TERRITORY.
 (a)  The municipality and the district shall negotiate
an agreement on the amount of compensation required
under Section 776.052.  If the municipality and the
district cannot reach an agreement, the municipality
and the district shall resolve the dispute using binding
arbitration.


	(b)  A request for binding arbitration must be in
writing and may not be made before the 60th day after
the date the municipality receives notice from the
district regarding the amount of compensation required
under Section 776.052.


	(c)  The municipality and the district must agree
on the arbitrator.  If the parties cannot agree on
the appointment of an arbitrator before the 11th business
day after the date arbitration is requested, the mayor
of the municipality shall immediately request a list
of seven neutral arbitrators from the American Arbitration
Association or the Federal Mediation and Conciliation
Service or their successors in function.  An arbitrator
included in the list must be a resident of this state
and may not be a resident of a county in which any
part of the municipality or any part of the district
is located.  The municipality and the district must
agree on the appointment of an arbitrator included
in the list.  If the municipality and the district
cannot agree on the arbitrator before the 11th business
day after the date the list is provided to the parties,
each party or the party's designee may alternately
strike a name from the list.  The remaining person
on the list shall be appointed as the arbitrator. 
In this subsection, "business day" means a day other
than a Saturday, Sunday, or state or national holiday.


	(d)  The arbitrator shall:


		(1)  set a hearing to be held not later than the
10th day after the date the arbitrator is appointed;
and


		(2)  notify the parties to the arbitration in writing
of the time and place of the hearing not later than
the eighth day before the date of the hearing.


	(e)  The arbitrator may:


		(1)  receive in evidence any documentary evidence
or other information the arbitrator considers relevant;


		(2)  administer oaths; and


		(3)  issue subpoenas to require:


			(A)  the attendance and testimony of witnesses; and


			(B)  the production of books, records, and other
evidence relevant to an issue presented to the arbitrator
for determination.


	(f)  Unless the parties to the dispute agree otherwise,
the arbitrator shall complete the hearing within two
consecutive days.  The arbitrator shall permit each
party one day to present evidence and other information.
 The arbitrator, for good cause shown, may schedule
an additional hearing to be held not later than the
seventh day after the date of the first hearing.  Unless
otherwise agreed to by the parties, the arbitrator
must issue a decision in writing and deliver a copy
of the decision to the parties not later than the 14th
day after the date of the final hearing.


	(g)  The municipality and the district shall share
the cost of arbitration.


	SECTION 15.  Subchapter E, Chapter 776, Health and Safety
Code, is amended by adding Section 776.083 to read
as follows:


	Sec. 776.083.  ANNUAL REPORT.  (a)  On or before
January 1 of each year, a district shall file with
the Office of Rural Community Affairs an annual report
that includes the following:


		(1)  the district's name;


		(2)  the name of each county in which the district
is located;


		(3)  the district's business address;


		(4)  the name, mailing address, and term of office
of each commissioner;


		(5)  the name, mailing address, and term of office
of the district's general manager, executive director,
and fire chief;


		(6)  the name of each legal counsel or other consultant
for the district; and


		(7)  the district's annual budget and tax rate for
the preceding fiscal year.


	(b)  The Office of Rural Community Affairs may not
charge a fee for filing the report.


	(c)  The Office of Rural Community Affairs shall
develop and maintain an Internet-based system that
enables:


		(1)  a district to securely file the report and update
the district's information; and


		(2)  the public to view, in a searchable format,
the reports filed by districts under this section.


	(d)  If the information included in a district's
annual report changes, the district shall update the
district's information using the Internet-based system
before the end of the calendar quarter in which the
district's information changes.


	SECTION 16.  Article 2.12, Code of Criminal Procedure,
is amended to read as follows:


	Art. 2.12.  WHO ARE PEACE OFFICERS.  The following are
peace officers:


		(1)  sheriffs, their deputies, and those reserve deputies
who hold a permanent peace officer license issued under
Chapter 1701, Occupations Code;


		(2)  constables, deputy constables, and those reserve
deputy constables who hold a permanent peace officer
license issued under Chapter 1701, Occupations Code;


		(3)  marshals or police officers of an incorporated
city, town, or village, and those reserve municipal
police officers who hold a permanent peace officer
license issued under Chapter 1701, Occupations Code;


		(4)  rangers and officers commissioned by the Public
Safety Commission and the Director of the Department
of Public Safety;


		(5)  investigators of the district attorneys', criminal
district attorneys', and county attorneys' offices;


		(6)  law enforcement agents of the Texas Alcoholic Beverage
Commission;


		(7)  each member of an arson investigating unit commissioned
by a city, a county, or the state;


		(8)  officers commissioned under Section 37.081, Education
Code, or Subchapter E, Chapter 51, Education Code;


		(9)  officers commissioned by the General Services Commission;


		(10)  law enforcement officers commissioned by the Parks
and Wildlife Commission;


		(11)  airport police officers commissioned by a city
with a population of more than 1.18 million that operates
an airport that serves commercial air carriers;


		(12)  airport security personnel commissioned as peace
officers by the governing body of any political subdivision
of this state, other than a city described by Subdivision
(11), that operates an airport that serves commercial
air carriers;


		(13)  municipal park and recreational patrolmen and
security officers;


		(14)  security officers and investigators commissioned
as peace officers by the comptroller;


		(15)  officers commissioned by a water control and improvement
district under Section 49.216, Water Code;


		(16)  officers commissioned by a board of trustees under
Chapter 54, Transportation Code;


		(17)  investigators commissioned by the Texas State
Board of Medical Examiners;


		(18)  officers commissioned by the board of managers
of the Dallas County Hospital District, the Tarrant
County Hospital District, or the Bexar County Hospital
District under Section 281.057, Health and Safety Code;


		(19)  county park rangers commissioned under Subchapter
E, Chapter 351, Local Government Code;


		(20)  investigators employed by the Texas Racing Commission;


		(21)  officers commissioned under Chapter 554, Occupations
Code;


		(22)  officers commissioned by the governing body of
a metropolitan rapid transit authority under Section
451.108, Transportation Code, or by a regional transportation
authority under Section 452.110, Transportation Code;


		(23)  investigators commissioned by the attorney general
under Section 402.009, Government Code;


		(24)  security officers and investigators commissioned
as peace officers under Chapter 466, Government Code;


		(25)  an officer employed by the Texas Department of
Health under Section 431.2471, Health and Safety Code;


		(26)  officers appointed by an appellate court under
Subchapter F, Chapter 53, Government Code;


		(27)  officers commissioned by the state fire marshal
under Chapter 417, Government Code;


		(28)  an investigator commissioned by the commissioner
of insurance under Article 1.10D, Insurance Code;


		(29)  apprehension specialists commissioned by the Texas
Youth Commission as officers under Section 61.0931,
Human Resources Code;


		(30)  officers appointed by the executive director of
the Texas Department of Criminal Justice under Section
493.019, Government Code;


		(31)  investigators commissioned by the Commission on
Law Enforcement Officer Standards and Education under
Section 1701.160, Occupations Code;


		(32)  commission investigators commissioned by the Texas
Commission on Private Security under Section 1702.061(f),
Occupations Code; and


		(33)  the fire marshal and any officers, inspectors,
or [, and any] investigators commissioned
by an emergency services district [to assist
that fire marshal,] under [Subchapter
F,] Chapter 775, Health and Safety Code.


	SECTION 17.  (a)  This Act takes effect September 1,
2003.


	(b)  The Office of Rural Community Affairs shall develop
an Internet-based system as required by Subsection
(c), Section 775.083, and Subsection (c), Section 776.083,
Health and Safety Code, as added by this Act, before
January 1, 2004.


	(c)  Sections 2, 3, 13, and 14 of this Act apply only
to removal of territory of an emergency services district
on or after the effective date of this Act.
______________________________ ______________________________ 

   President of the Senate		Speaker of the House

I certify that H.B. No. 1108 was passed by the House on May 8, 2003, by the following vote: Yeas 140, Nays 0, 2 present, not voting; and that the House concurred in Senate amendments to H.B. No. 1108 on May 30, 2003, by the following vote: Yeas 143, Nays 0, 2 present, not voting.

______________________________

Chief Clerk of the House

I certify that H.B. No. 1108 was passed by the Senate, with amendments, on May 28, 2003, by the following vote: Yeas 31, Nays 0.

______________________________

Secretary of the Senate

APPROVED: __________________

Date

__________________

Governor