BILL ANALYSIS
S.B. 1388
By: Rosson
Intergovernmental Relations
4-20-95
Committee Report (Unamended)
BACKGROUND
El Paso is one of two cities that have created a city transit
agency under Article 1118z, V.T.C.S. A countywide transit
authority may provide advantages to the people of El Paso due to El
Paso's rapid growth and need for a public transportation system
that serves the needs of residents and workers throughout El Paso
County.
PURPOSE
As proposed, S.B. 1388 provides for the creation, administration,
and dissolution of a county mass transit authority; sets forth
provisions relating to bond issuance and the imposition of a sales
and use tax.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Chapter 10, Title 28, V.T.C.S., by adding Article
1118z-1, as follows:
Art. 1118z-1. COUNTY MASS TRANSIT AUTHORITY
Sec. 1. DEFINITIONS. Defines "authority," "bond," "board,"
"mass transit," "principal municipality," "transit authority
system," and "unit of election."
Sec. 2. APPLICATION. Provides that this article applies only
to a county containing a municipality with a population of
500,000 or greater that has created a mass transit department
under Article 1118z, V.T.C.S.
Sec. 3. CREATION OF AUTHORITY. (a) Provides that a mass
transit authority (authority) is created under this article if
a resolution finding that the creation of an authority would
be in the public interest and a benefit to persons residing in
the county is adopted by the county commissioners court, the
governing body of the principal municipality, and the
governing body of at least one municipality other than the
principal municipality.
(b) Prohibits an authority from being created if the rate
of the sales and use tax charged by the city transit
department of the principal municipality when added to an
existing sales and use tax collected in the county other
than by the principal municipality would exceed the limit
imposed by Section 38 of this article.
Sec. 4. BOARD OF AUTHORITY. (a) Provides that the board of
an authority (board) consists of seven members who serve
without compensation but are entitled to reimbursement for
expenses incurred in board service. Requires the board to
elect one of its members as presiding officer. Sets forth the
composition of the members.
(b) Provides that a member of the board serves at the
pleasure of the appointing entity.
(c) Requires the board to administer and operate the
authority.
(d) Requires the board to hold at least one regular meeting
each month for the purpose of transacting business of the
authority.
(e) Authorizes the presiding officer to call a special
meeting of the board.
Sec. 5. CONFIRMATION ELECTION. (a) Requires the board to
propose a service plan and an initial tax rate for the
authority if an authority is created under Section 3 of this
article. Requires the initial tax rate to be the same rate
collected by the city transit department created by the
principal municipality.
(b) Requires the board to call an election in the county to
approve the creation of the authority and the tax rate after
proposing a service plan and an initial tax rate. Requires
the election to be held on a uniform election date but may
not be held on the same day as an election held by the
county under Section 323.101, Tax Code. Provides that the
election is not held in the territory of the principal
municipality.
(c) Requires notice of the election to include a
description of the nature and rate of the proposed tax.
Requires the board to send a copy of the notice to the Texas
Department of Transportation (TXDOT) and the controller.
(d) Sets forth required language for a ballot.
(e) Provides that, if a majority of the votes cast at the
election approve the proposition, the board shall record the
result in its minutes and adopt an order implementing the
service plan and the city department created by the
principal municipality is dissolved, and its assets,
personnel, and obligations are transferred to an authority
on the day the sales and use tax takes effect.
(f) Requires the board to adopt an order dissolving the
authority, and the city transit department of the principal
municipality is not affected if less than a majority of the
votes cast at the election approve the proposition.
(g) Provides that the jurisdiction of an authority is
coextensive with the territory of the county.
(h) Requires the board to file a certified copy of an order
adopted under Subsection (e)(1) or (f) of this section with
the department, with the comptroller, and in the deed
records of the county.
Sec. 6. CONFLICTS OF INTEREST: AUTHORITY EMPLOYEES.
Prohibits an employee of an authority from having a pecuniary
interest in, or receive a benefit from, an agreement to which
the authority is a party.
Sec. 7. TRANSFER OF RESOURCES BETWEEN MUNICIPALITY AND
AUTHORITY. (a) Authorizes the governing body of a
municipality to transfer to an authority created under this
article property and employees of a public transportation
division of the municipality and municipal funds that may be
used for mass transit.
(b) Authorizes the governing body to abolish or change the
functions of the municipal division formerly responsible for
municipal public transportation.
(c) Requires the board, on dissolution of the authority, to
transfer to a municipality the funds, property, and
employees that were transferred to the authority under this
section. Authorizes the governing body of the municipality
to then re-create or change the duties of any municipal
division abolished or changed as a result of transfers made
under this section.
Sec. 8. INVESTMENTS. (a) Authorizes a board to invest
authority funds in any obligation, security, or evidence of
indebtedness in which the principal municipality may invest
municipal funds.
(b) Requires a board to exercise the judgment and care,
under the circumstances prevailing at the time of making the
investment, that persons of ordinary prudence, discretion,
and intelligence exercise in the management of their own
affairs in making a permanent and nonspeculative disposition
of their funds, considering the probable income from the
disposition and the probable safety of their capital.
Sec. 9. DEPOSIT OF MONEY. (a) Requires the board to
designate one or more banks as depositories for authority
funds. Requires all authority money, other than money
invested as provided by Section 8, to be deposited in one or
more of the authority's depository banks.
(b) Requires funds in a depository to be secured in the
manner provided by law for the security of county funds.
Sec. 10. LIABILITY OF CREATING ENTITIES. Provides that the
political subdivisions that adopt a resolution under Section
3(a) of this article are liable for an expense the authority
incurs before the date a sales and use tax is approved for the
authority under this article, including the costs of holding
the election.
Sec. 11. ACQUIRING AND DISPOSING OF PROPERTY. (a)
Authorizes an authority to acquire, hold, use, sell, lease, or
dispose of property, including licenses, patents, rights, and
other interest, necessary, convenient, or useful for the full
exercise of any of its powers under this article.
(b) Authorizes the authority to acquire property described
in Subsection (a) in any manner, including by gift or
devise.
(c) Authorizes an authority to dispose of, by sale, lease,
or other conveyance certain property.
(d) Requires the lease of unneeded property under
Subsection (c) to be consistent with the efficient operation
and maintenance of the transit authority system.
Sec. 12. TRANSIT AUTHORITY SYSTEM. (a) Authorizes an
authority to acquire, construct, own, operate, and maintain a
transit authority system (system), use any public way, and
construct, repair, and maintain a municipal street.
(b) Authorizes an authority to relocate or reroute, or
alter the construction of, any public or private property,
including certain infrastructures and facilities, in the
exercise of a power under Subsection (a) of this section.
Sec. 13. FARES AND OTHER CHARGES. Requires the board to
impose reasonable and nondiscriminatory fares and other
charges for the use of the system sufficient to produce
revenue, together with receipts from taxes imposed by the
authority, in an amount adequate to pay certain expenses and
fulfill certain bond obligations.
Sec. 14. AGREEMENT WITH UTILITIES, CARRIERS. Authorizes an
authority to agree with a public or private utility,
communication system, common carrier, or transportation system
for the joint use of the property of the agreeing entities in
the authority or the establishment of through routes, joint
fares, or transfers of passengers.
Sec. 15. CONTRACTS; ACQUISITION OF PROPERTY BY AGREEMENT.
(a) Authorizes an authority to contract with any person and
to accept a grant or loan from any person.
(b) Authorizes an authority to acquire rolling stock or
other property under a contract or trust agreement,
including a conditional sales contract, lease, and equipment
trust certificate.
Sec. 16. USE AND ACQUISITION OF PROPERTY OF OTHERS. (a)
Prohibits an authority from altering or damaging any property
of this state or a political subdivision of this state or
owned by a person rendering public services and from
disrupting services being provided by others or inconvenience
in any other manner an owner of property, without first having
obtained written consent of the owner or the right from the
governing body of the municipality to take action under the
municipality's power of eminent domain.
(b) Authorizes an authority to agree with an owner of
property to provide for a necessary relocation or alteration
or property by the owner or a contractor chosen by the owner
and the reimbursement by the authority to the owner of the
costs incurred by the owner in making the relocation or
alteration.
(c) Requires the authority to pay the cost of any
relocation, rerouting, or other alteration in the
construction made under this chapter and is liable for any
damage to property occurring because of the change.
Sec. 17. ROUTES. Requires an authority to determine each
route, including route changes, as the board considers
advisable.
Sec. 18. TORT LIABILITY AND GOVERNMENTAL IMMUNITY. (a)
Provides that an authority is a separate governmental unit for
purposes of Chapter 101, Civil Practice and Remedies Code, and
operations of an authority are essential governmental
functions and not proprietary functions for all purposes,
including the purposes of the chapter.
(b) Provides that this chapter does not create or confer
any governmental immunity or limitation of liability on any
entity that is not a governmental unit, entity, or
authority, or public agency or a subdivision of one of those
persons. Defines "governmental unit."
Sec. 19. TAX EXEMPTION. Provides that the assets of an
authority are exempt from any tax of the state or a state
taxing authority.
Sec. 20. TRANSPORTATION FOR JOBS PROGRAM PARTICIPANTS. (a)
Requires an authority to contract with the Texas Department of
Human Services (TDHS) to provide transportation services to a
person who resides in the areas served by the authority, is
receiving financial assistance under Chapter 31, Human
Resources Code, and is registered in the jobs opportunities
and basic skills training program under Part F, Subchapter IV,
Social Security Act.
(b) Requires the contract to include provisions to ensure
that:
(1) the authority is required to provide transportation
services only to certain locations;
(2) the authority is to provide directly to TDHS trip
vouchers for distribution by TDHS to a person who is
eligible under this section to receive transportation
services;
(3) TDHS reimburses the authority for allowable costs, at
the applicable federal matching rate; and
(4) TDHS may return undistributed trip vouchers to the
authority.
(c) Requires an authority to certify the amount of public
funds spent by the authority for the purpose of obtaining
federal funds under the jobs opportunities and basic skills
training program.
Sec. 21. WAIVER OF FEDERAL REQUIREMENTS. Requires TDHS to
request the waiver or authorization, and authorizes TDHS and
an authority to delay implementing Section 20 until a federal
agency grants a waiver or authorization that is necessary for
implementation.
Sec. 22. PURCHASE AND PERCENT OF VEHICLES USING ALTERNATIVE
FUELS. (a) Prohibits an authority from purchasing or leasing
a motor vehicle that is not capable of using compressed
natural gas or another alternative fuel.
(b) Requires at least 50 percent of the fleet vehicles
operated by an authority to be capable of using compressed
natural gas or another alternative, after August 31, 1996.
(b-1) Requires at least 30 percent of the fleet vehicles
operated by an authority to be capable of using compressed
natural gas or another alternative fuel. Provides that this
subsection expires September 1, 1996.
(c) Requires the Texas Natural Resource Conservation
Commission (commission) to review the alternative fuels use
program under this section. Authorizes the authority to
achieve a percentage of fleet vehicles capable of using
compressed natural gas or other alternative fuels of at
least 90 percent of the number of fleet vehicles operated
after August 31, 1998. if the commission determines that the
program has been effective in reducing total annual
emissions from motor vehicles in the area.
Sec. 23. ALTERNATIVE FUELS USE PROGRAM: EXCEPTIONS. (a)
Authorizes an authority to make exceptions to the requirements
of Section 22 of this article if the authority certifies the
facts described by Subsection (b) of this section.
(b) Requires a certification to state that the authority's
vehicle will be operating primarily in an area in which
neither the authority nor a supplier has or can be expected
to establish a central refueling station for compressed
natural gas or other alternative fuels; or the authority is
unable to acquire or be provided equipment or refueling
facilities necessary to operate vehicles using compressed
natural gas or other alternative fuels at a project cost
that is reasonably expected to result in no greater net cost
than the continued use of traditional gasoline or diesel
fuel measured over the expected useful life of the equipment
or facilities supplied.
Sec. 24. ALTERNATIVE FUELS EQUIPMENT AND FACILITIES. (a)
Authorizes an authority, in addition to other methods
authorized by law, to acquire or be provided equipment or
refueling facilities by an arrangement, including a gift or a
loan, under a service contract for the supply of compressed
natural gas or other alternative fuels.
(b) Provides that a supplier is entitled, under the supply
contract, to recover the cost of giving, loaning, or
providing the equipment or facilities through the fuel
charges, if an authority acquires or is provided equipment
or facilities.
Sec. 25. ALTERNATIVE FUELS USE PROGRAM: VEHICLES COVERED AND
SAFETY. (a) Provides that an authority should work with
vehicle manufacturers, convertors, fuel distributors, and
others to specify the vehicles to be covered considering
certain relevant factors in developing a compressed natural
gas or other alternative fuels use program.
(b) Authorizes the authority to meet the percentage
requirements of Section 22 of this article by purchasing new
vehicles or converting existing vehicles to alternative
fuels use.
(c) Requires the authority to comply with all applicable
safety standards adopted by the U.S. Department of
Transportation or the Railroad Commission of Texas or their
successor agencies in purchasing, leasing, maintaining, or
converting a vehicle for alternative fuels use.
Sec. 26. ALTERNATIVE FUELS USE PROGRAM: REPORTS. (a)
Requires an authority to file an annual report with the
commission showing certain relevant information to the
alternative fuels use program no later than December 31 of
each year.
(b) Authorizes the commission to require reporting from an
authority to document air quality benefits from an
alternative fuels use program.
Sec. 27. POWER TO ISSUE BONDS. (a) Authorizes an authority
to issue revenue bonds at any time and for any amounts it
considers necessary or appropriate for the improvement of its
transit system or streets of the creating municipality.
(b) Authorizes bonds payable solely from revenues to be
issued by resolution of the board.
(c) Prohibits bonds, other than refunding bonds, any
portion of which is payable from tax revenue, from being
issued until authorized by a majority vote of the voters of
the authority voting in an election.
Sec. 28. BOND TERMS. (a) Provides that an authority's bonds
are fully negotiable.
(b) Authorizes the authority to make the bonds redeemable
before maturity at the price and subject to the terms and
conditions that are provided in the resolution authorizing
the bonds.
(c) Authorizes a revenue bond indenture to limit a power of
the authority as long as the bond containing the indenture
is outstanding and unpaid.
Sec. 29. SALE. Authorizes bonds to be sold at a public or
private sale as determined by the board.
Sec. 30. APPROVAL; REGISTRATION. (a) Requires an
authority's bonds and all relating issuance records to be
submitted to the attorney general for examination before the
bonds may be delivered.
(b) Requires the attorney general to approve the bonds if
the attorney general finds that the bonds are constitutional
and binding.
(c) Requires the comptroller to register the bonds after
the bonds are approved by the attorney general.
Sec. 31. INCONTESTABILITY. Provides that bonds are
incontestable after they are approved by the attorney general,
registered by the comptroller, and sold and delivered to the
purchaser.
Sec. 32. SECURITY PLEDGED. (a) Authorizes the authority, to
secure the payment of an authority's bonds, to pledge certain
taxes and revenue, or mortgage all or part of the system.
(b) Authorizes the authority to encumber a separate item of
the system and acquire, use, hold, or contract for any
property by lease, chattel mortgage, or other conditional
sale, subject to the terms of the bond indenture or
resolution authorizing the issuance of the bonds.
Sec. 33. PLEDGE OF REVENUE LIMITED. Provides that the
expenses of operation and maintenance of a system are a first
lien and charge against any revenue of an authority that is
encumbered under this article.
Sec. 34. REFUNDING BONDS. Authorizes an authority to issue
refunding bonds for the purposes and in the manner authorized
by certain statutes.
Sec. 35. BONDS AS AUTHORIZED INVESTMENTS. (a) Provides that
an authority's bonds are authorized investments for a bank,
trust company, savings and loan association, and an insurance
company.
(b) Provides that bonds are eligible to secure the deposit
of public funds of the state and a political subdivision and
any other political corporation of the state.
Sec. 36. INTEREST EXEMPTION. Provides that interest on bonds
issued by an authority is exempt from any tax of the state or
a state taxing authority.
Sec. 37. SALES AND USE TAX. (a) Authorizes the board to
impose for the authority a sales and use tax at a permissible
rate that does not exceed the rate approved by the voters at
an election under this article.
(b) Authorizes the board, by order, to decrease the rate of
the sales and use tax for the authority to a permissible
rate or call an election for the increase or decrease of the
sales and use tax to a permissible rate.
(c) Sets forth the permissible rates for a sales and use
tax imposed under this article.
(d) Provides that Chapter 322, Tax Code, applies to an
authority's sales and use tax.
Sec. 38. MAXIMUM TAX RATE. (a) Prohibits a board from
adopting a sales and use tax rate that when combined with the
rates of all sales and use taxes imposed by all political
subdivisions in the county exceeds two percent in any location
in the county.
(b) Provides that an election by an authority to approve or
increase the rates of a sales and use tax has no effect
under certain conditions.
Sec. 39. ELECTION TO CHANGE TAX RATE. (a) Sets forth the
required language for the ballot for an election ordered under
this article.
(b) Provides that an increase or decrease in the tax rate
becomes effective only if it is approved by a majority of
the votes cast.
(c) Requires a notice of the election and a certified copy
of the order canvassing the election results to be sent to
the TXDOT and the comptroller and filed in the deed records
of the county.
Sec. 40. SALES TAX: EFFECTIVE DATES. (a) Sets forth the
effective date of an authority's sales and use tax.
(b) Sets forth the effective dates of an increase or
decrease in the rate of an authority's sales and use tax.
Sec. 41. ELECTION TO DISSOLVE AUTHORITY. (a) Authorizes a
board to order an election on the question of dissolving the
authority.
(b) Requires the board to dissolve the authority if the
dissolution is approved by a majority of the votes cast.
(c) Provides that the provisions of Section 5 that relate
to the notice and conduct of an election apply to an
election to dissolve an authority unless a different
requirement is specified in this section.
(d) Requires the board to send a notice of the election to
TXDOT and the comptroller.
(e) Sets forth the required language for the ballot.
(f) Requires the board to send a certified copy of the
order canvassing the election results to TXDOT and the
comptroller and to file a copy in the deed records of the
county.
(g) Sets forth the effective date of a repeal of an
authority's sales and use tax under this subchapter.
Sec. 42. WITHDRAWAL FROM AUTHORITY. (a) Authorizes a
governing body of a unit of election (unit) to order an
election to withdraw the unit from an authority.
(b) Requires the governing body to order an election to
withdraw the unit from the authority on the determination by
a governing body of a unit that a petition for withdrawal
under this chapter is valid.
(c) Prohibits an election to withdraw from being ordered,
and a petition for an election to withdraw from being
accepted for filing, more frequently than once during
certain periods.
Sec. 43. PETITION FOR WITHDRAWAL. (a) Requires the
municipal secretary, clerk, or administrator of the unit to
deliver to the voter, in the number requested, petition
signature sheets for a petition to withdraw from the authority
prepared by, numbered, and authenticated by the municipal
secretary or other official, at the request of a qualified
voter of a unit in an authority.
(b) Sets forth required language for each sheet of a
petition.
(c) Requires a petition to meet certain requirements, in
addition to the requirements of Section 277.002, Election
Code, in order to be valid.
(d) Requires each sheet of the petition to be filed under
Subsection (c)(2) of this section at the same time as a
single filing.
(e) Requires the secretary, clerk, or administrator of a
unit in which a petition for withdrawal from an authority is
filed to examine the petition and file with the governing
body of the unit a report stating whether the petition is
valid.
(f) Requires the governing body to examine the petition to
determine whether the petition is valid on receipt of a
petition and a report. Authorizes the governing body to
hold public hearings and conduct or order investigations as
appropriate to make the determination. Provides that the
governing body's determination is conclusive of the issues.
(g) Requires the governing body of a unit that receives an
invalid petition to reject the petition.
(h) Provides that a petition that is rejected is void, and
prohibits the petition and each sheet of the rejected
petition from being used in connection with a subsequent
petition.
Sec. 44. WITHDRAWAL ELECTION. (a) Requires an election to
withdraw from an authority to be held on the first applicable
uniform election date after a certain date.
(b) Requires the governing body to give notice of the
election to the board, TXDOT and the comptroller immediately
on calling the election.
(c) Sets forth the required language for the ballot.
(d) Provides that an authority continues in the unit if a
majority of the votes received on the measure in an election
favor the proposition.
(e) Provides that an authority ceases in the unit on the
day after the date of the canvass of the election if less
than a majority of the votes received on the measure in the
election favor the proposition.
(f) Provides that on the effective date of a withdrawal
from an authority, the authority ceases to provide
transportation services in the withdrawn unit and the
financial obligations of the authority attributable to the
withdrawn unit cease to accrue.
(g) Provides that withdrawal from an authority does not
affect the right of the authority to travel through the
territory of the unit to provide service to a unit of
election that is a part of the authority.
Sec. 45. PROCEDURE AFTER WITHDRAWAL ELECTION. (a) Provides
that a sales and use tax continues to be collected in the
territory of the election unit until the amount of revenue
from an authority's sales and use tax collected in a withdrawn
unit equals the total financial obligation of the unit.
(b) Requires the comptroller to discontinue collecting the
tax in the territory of the unit after the amount described
by Subsection (a) has been collected.
(c) Sets forth the components of the total financial
obligation of a withdrawn unit to the authority.
(d) Sets forth the components of an authority's outstanding
obligations under Subsection (c)(1).
(e) Sets forth the method of calculating the apportioned
share of a unit's obligation.
(f) Requires the board to determine the amount of each
component of the computations required under this section.
Requires the number of inhabitants to be determined
according to the most recent and available applicable data
of a U.S. agency.
(g) Requires the board to certify to a withdrawn unit and
to the comptroller the total financial obligation of the
unit to the authority as determined under this section.
SECTION 2. Effective date: September 1, 1995.
SECTION 3. Emergency clause.