HBA-TBM C.S.H.B. 2744 77(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2744 By: Carter County Affairs 4/1/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE During the most recent interim, the House Committee on Urban Affairs (committee) researched whether emergency services districts (ESD) and rural fire prevention districts (RFPD) are able to provide the highest quality services under current statutory requirements. Testimony indicated that ESDs and RFPDs need greater flexibility in structuring districts to provide fire protection and emergency services. After studying the procedural, geographical, and economic problems faced by ESDs and RFPDs, the committee recommended authorizing ESDs and RFPDs to exchange territory and expanding their power to borrow money. C.S.H.B. 2744 enacts these recommendations. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS C.S.H.B. 2744 amends the Health and Safety Code to provide that the tax rate of an emergency services district (ESD) or a rural fire prevention district (RFPD) is any rate allowed by the Texas Constitution (Secs. 775.018, 775.024, 776.019, and 794.018). The bill authorizes the board of commissioners (board) of an ESD or RFPD to order an election to increase the maximum tax rate of the ESD or RFPD to any rate at or below the rate allowed by the Texas Constitution and sets forth provisions regarding ballots, notice of the election, election date, and majority favor (Secs. 775.0745, 776.0755, and 794.0181). The bill authorizes a district to make a mutually agreeable change in boundaries with another district if the maximum tax rate for the annexed territory is not lower than that of the annexing district. The bill sets forth provisions regarding the effective date of change, provisions of services, the rights of the holders of any outstanding district obligations, and compensation by the annexing district (Secs. 775.056, 776.058, and 794.061). The bill provides that the limitation on the amount of debt an ESD or RFPD is allowed to undertake in a year does not apply to the issuance of bond anticipation notes or the borrowing of money to purchase real property or emergency services equipment (Secs. 775.071, 776.071, and 794.071). The bill modifies the authority of the board of an ESD or RFPD and authorizes the board of an ESD in a county with a population of 125,000 or less to make financial arrangements to purchase real property or emergency services equipment. The bill provides that the board may pledge unattached tax revenues or funds on hand or the property acquired with the borrowed money to secure a loan. If tax revenues are pledged to pay a loan, the loan must mature not later than the 10th or 20th anniversary of the date the loan is made for equipment or real property respectively (Secs. 775.085, 776.082, and 794.083). The bill provides that competitive bidding requirements are authorized but not required of the board of an RFPD when contracting for fire extinguishment and suppression service, emergency rescue service, or ambulance service (Sec. 794.074). The bill repeals provisions relating to an election to increase the tax rate of an ESD and certain provisions relating to bonds and notes issued by an ESD or RFPD (SECTION 23). EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 2744 differs from the original by adding provisions relating to maximum tax rates (Secs. 775.018, 775.024, 775.0745, 776.019, 776.0755, 794.018, and 794.0181). The substitute provides that a district is authorized to make a mutually agreeable change in boundaries with another district if the maximum tax rate for the annexed territory is not lower than that of the annexing district and requires the districts to determine an effective date of change. The bill removes provisions regarding the disannexation of territory and the purchase by the annexing district of property used by the other district to supply services (Secs. 775.056, 776.058, and 794.061). The substitute authorizes rather than requires competitive bidding practices for an RFPD contracting for emergency services (Sec. 794.074). The substitute repeals and replaces the provision authorizing the board of an ESD to call an election to raise the district tax rate (Sec. 775.0745 and SECTION 23). The substitute changes the effective date from September 1, 2001, to on passage if the Act receives the necessary vote (SECTION 26).