By:  Rosson                                           S.B. No. 1388
                                 A BILL TO BE ENTITLED
                                        AN ACT
    1-1  relating to the creation of a county mass transit authority.
    1-2        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-3        SECTION 1.  Chapter 10, Title 28, Revised Statutes, is
    1-4  amended by adding Article 1118z-1 to read as follows:
    1-5        Art. 1118z-1.  COUNTY MASS TRANSIT AUTHORITY
    1-6        Sec. 1.  DEFINITIONS.  In this article:
    1-7              (1)  "Authority" means a mass transit authority created
    1-8  under this article.
    1-9              (2)  "Bond" includes a note.
   1-10              (3)  "Board" means the governing body of an authority.
   1-11              (4)  "Mass transit" means the transportation of
   1-12  passengers and hand-carried packages or baggage of a passenger by
   1-13  any means of surface, overhead, or underground transportation,
   1-14  other than an aircraft or taxicab.
   1-15              (5)  "Principal municipality" means the municipality of
   1-16  greatest population in a county to which this article applies.
   1-17              (6)  "Transit authority system" means:
   1-18                    (A)  property owned or held by an authority for
   1-19  mass transit purposes; and
   1-20                    (B)  facilities necessary or convenient for:
   1-21                          (i)  the use of or access to mass transit
   1-22  by persons or vehicles; or
   1-23                          (ii)  the protection or environmental
   1-24  enhancement of mass transit.
    2-1              (7)  "Unit of election" means a municipality, including
    2-2  the principal municipality, or the unincorporated area of a county.
    2-3        Sec. 2.  APPLICATION.  This article applies only to a county
    2-4  containing a municipality with a population of 500,000 or greater
    2-5  that has created a mass transit department under Article 1118z,
    2-6  Revised Statutes.
    2-7        Sec. 3.  CREATION OF AUTHORITY.  (a)  An authority is created
    2-8  under this article if a resolution finding that the creation of an
    2-9  authority would be in the public interest and a benefit to persons
   2-10  residing in the county is adopted by:
   2-11              (1)  the county commissioners court;
   2-12              (2)  the governing body of the principal municipality;
   2-13  and
   2-14              (3)  the governing body of at least one municipality
   2-15  other than the principal municipality.
   2-16        (b)  An authority may not be created if the rate of the sales
   2-17  and use tax charged by the city transit department of the principal
   2-18  municipality, when added to an existing sales and use tax collected
   2-19  in the county other than by the principal municipality, would
   2-20  exceed the limit imposed by Section 38 of this article.
   2-21        Sec. 4.  BOARD OF AUTHORITY.  (a)  The board of an authority
   2-22  consists of seven members.  A member of the board serves without
   2-23  compensation but is entitled to reimbursement for expenses incurred
   2-24  in board service.  The board shall elect one of its members as
   2-25  presiding officer.  The members are appointed as follows:
   2-26              (1)  two members by the county commissioners court;
   2-27              (2)  four members by the governing body of the
    3-1  principal municipality; and
    3-2              (3)  one member by the governing bodies of all
    3-3  municipalities that adopt the resolution described by Section 3 of
    3-4  this article.
    3-5        (b)  A member of the board serves at the pleasure of the
    3-6  appointing entity.
    3-7        (c)  The board shall administer and operate the authority.
    3-8        (d)  The board shall hold at least one regular meeting each
    3-9  month for the purpose of transacting business of the authority.
   3-10        (e)  The presiding officer may call a special meeting of the
   3-11  board.
   3-12        Sec. 5.  CONFIRMATION ELECTION.  (a)  If an authority is
   3-13  created under Section 3 of this article, the board shall propose a
   3-14  service plan and an initial tax rate for the authority.  The
   3-15  initial tax rate must be the same rate as that collected by the
   3-16  city transit department created by the principal municipality.
   3-17        (b)  After proposing a service plan and an initial tax rate,
   3-18  the board shall call an election in the county to approve the
   3-19  creation of the authority and the tax rate.  The election must be
   3-20  held on a uniform election date but may not be held on the same day
   3-21  as an election held by the county under Section 323.101, Tax Code.
   3-22  The election is not held in the territory of the principal
   3-23  municipality.
   3-24        (c)  Notice of the election must include a description of the
   3-25  nature and rate of the proposed tax.  The board shall send a copy
   3-26  of the notice to the Texas Department of Transportation and the
   3-27  comptroller.
    4-1        (d)  At the election the ballots shall be printed to permit
    4-2  voting for or against the following proposition:  "The creation of
    4-3  the (name of county) Transit Authority and the imposition of a
    4-4  (rate of tax) percent sales and use tax in (name of county)
    4-5  County."
    4-6        (e)  If a majority of the votes cast at the election approve
    4-7  the proposition:
    4-8              (1)  the board shall record the result in its minutes
    4-9  and adopt an order implementing the service plan; and
   4-10              (2)  on the day the sales and use tax takes effect in
   4-11  the authority, the city transit department created by the principal
   4-12  municipality under Article 1118z, Revised Statutes, is dissolved,
   4-13  and its assets, personnel, and obligations are transferred to the
   4-14  authority.
   4-15        (f)  If less than a majority of the votes cast at the
   4-16  election approve the proposition, the board shall adopt an order
   4-17  dissolving  the authority, and the city transit department of the
   4-18  principal municipality is not affected.
   4-19        (g)  The jurisdiction of an authority is coextensive with the
   4-20  territory of the county.
   4-21        (h)  The board shall file a certified copy of an order
   4-22  adopted under Subsection (e)(1) or (f) of this section with the
   4-23  Texas Department of Transportation, with the comptroller, and in
   4-24  the deed records of the county.
   4-25        Sec. 6.  CONFLICTS OF INTEREST:  AUTHORITY EMPLOYEES.  An
   4-26  employee of an authority may not have a pecuniary interest in, or
   4-27  receive a benefit from, an agreement to which the authority is a
    5-1  party.
    5-2        Sec. 7.  TRANSFER OF RESOURCES BETWEEN MUNICIPALITY AND
    5-3  AUTHORITY.  (a)  The governing body of a municipality may transfer
    5-4  to an authority created under this article:
    5-5              (1)  property and employees of a division of the
    5-6  municipality that before the creation of the authority was
    5-7  responsible for municipal public transportation; and
    5-8              (2)  municipal funds that may be used for mass transit.
    5-9        (b)  The governing body may abolish or change the functions
   5-10  of the municipal division formerly responsible for municipal public
   5-11  transportation.
   5-12        (c)  If an authority is required to be dissolved under this
   5-13  article, the board, on dissolution of the authority, shall transfer
   5-14  to a municipality the funds, property, and employees that were
   5-15  transferred to the authority under this section.  The governing
   5-16  body of the municipality may then re-create or change the duties of
   5-17  any municipal division abolished or changed as a result of
   5-18  transfers made under this section.
   5-19        Sec. 8.  INVESTMENTS.  (a)  A board may invest authority
   5-20  funds in any obligation, security, or evidence of indebtedness in
   5-21  which the principal municipality may invest municipal funds.
   5-22        (b)  In making an investment of authority funds, a board
   5-23  shall exercise the judgment and care, under the circumstances
   5-24  prevailing at the time of making the investment, that persons of
   5-25  ordinary prudence, discretion, and intelligence exercise in the
   5-26  management of their own affairs in making a permanent and
   5-27  nonspeculative disposition of their funds, considering the probable
    6-1  income from the disposition and the probable safety of their
    6-2  capital.
    6-3        Sec. 9.  DEPOSIT OF MONEY.  (a)  The board shall designate
    6-4  one or more banks as depositories for authority funds.  All
    6-5  authority money, other than money invested as provided by Section 8
    6-6  of this article, shall be deposited in one or more of the
    6-7  authority's depository banks.
    6-8        (b)  Funds in a depository, to the extent that those funds
    6-9  are not insured by the Federal Deposit Insurance Corporation, shall
   6-10  be secured in the manner provided by law for the security of county
   6-11  funds.
   6-12        Sec. 10.  LIABILITY OF CREATING ENTITIES.  The political
   6-13  subdivisions that adopt a resolution under Subsection (a) of
   6-14  Section 3 of this article are liable for an expense the authority
   6-15  incurs before the date a sales and use tax is approved for the
   6-16  authority under this article, including the costs of holding the
   6-17  election.
   6-18        Sec. 11.  ACQUIRING AND DISPOSING OF PROPERTY.  (a)  An
   6-19  authority may acquire, hold, use, sell, lease, or dispose of
   6-20  property, including licenses, patents, rights, and other interests,
   6-21  necessary, convenient, or useful for the full exercise of any of
   6-22  its powers under this article.
   6-23        (b)  The authority may acquire property described in
   6-24  Subsection (a) in any manner, including by gift or devise.
   6-25        (c)  An authority may dispose of, by sale, lease, or other
   6-26  conveyance:
   6-27              (1)  any property of the authority not needed for the
    7-1  efficient operation and maintenance of the authority system; and
    7-2              (2)  any surplus property not needed for its
    7-3  requirements or for the purpose of carrying out its powers under
    7-4  this article.
    7-5        (d)  The lease of unneeded property under Subsection (c) must
    7-6  be consistent with the efficient operation and maintenance of the
    7-7  transit authority system.
    7-8        Sec. 12.  TRANSIT AUTHORITY SYSTEM.  (a)  An authority may:
    7-9              (1)  acquire, construct, own, operate, and maintain a
   7-10  transit authority system;
   7-11              (2)  use any public way; and
   7-12              (3)  construct, repair, and maintain a municipal
   7-13  street, as authorized by the governing body of a municipality in
   7-14  the authority.
   7-15        (b)  In the exercise of a power under Subsection (a) of this
   7-16  section, an authority may relocate or reroute, or alter the
   7-17  construction of, any public or private property, including:
   7-18              (1)  an alley, road, street, or railroad;
   7-19              (2)  an electric line and facility;
   7-20              (3)  a telegraph and telephone property and facility;
   7-21              (4)  a pipeline and facility; and
   7-22              (5)  a conduit and facility.
   7-23        Sec. 13.  FARES AND OTHER CHARGES.  The board shall, after a
   7-24  public hearing, impose reasonable and nondiscriminatory fares,
   7-25  tolls, charges, rents, or other compensation for the use of the
   7-26  transit authority system sufficient to produce revenue, together
   7-27  with receipts from taxes imposed by the authority, in an amount
    8-1  adequate to:
    8-2              (1)  pay all the expenses necessary to operate and
    8-3  maintain the transit authority system;
    8-4              (2)  pay when due the principal of and interest on, and
    8-5  sinking fund and reserve fund payments agreed to be made with
    8-6  respect to, all bonds that are issued by the board and payable in
    8-7  whole or part from the revenue; and
    8-8              (3)  fulfill the terms of any other agreement with the
    8-9  holders of bonds described by Subdivision (2) of this section or
   8-10  with a person acting on behalf of the bondholders.
   8-11        Sec. 14.  AGREEMENT WITH UTILITIES, CARRIERS.  An authority
   8-12  may agree with a public or private utility, communication system,
   8-13  common carrier, or transportation system for:
   8-14              (1)  the joint use of the property of the agreeing
   8-15  entities in the authority; or
   8-16              (2)  the establishment of through routes, joint fares,
   8-17  or transfers of passengers.
   8-18        Sec. 15.  CONTRACTS; ACQUISITION OF PROPERTY BY AGREEMENT.
   8-19  (a)  An authority may contract with any person and may accept a
   8-20  grant or loan from any person.
   8-21        (b)  An authority may acquire rolling stock or other property
   8-22  under a contract or trust agreement, including a conditional sales
   8-23  contract, lease, and equipment trust certificate.
   8-24        Sec. 16.  USE AND ACQUISITION OF PROPERTY OF OTHERS.  (a)  An
   8-25  authority may not alter or damage any property of this state or a
   8-26  political subdivision of this state or owned by a person rendering
   8-27  public services and may not disrupt services being provided by
    9-1  others or inconvenience in any other manner an owner of property,
    9-2  without first having obtained:
    9-3              (1)  the written consent of the owner; or
    9-4              (2)  the right from the governing body of the
    9-5  municipality to take the action under the municipality's power of
    9-6  eminent domain.
    9-7        (b)  An authority may agree with an owner of property to
    9-8  provide for:
    9-9              (1)  a necessary relocation or alteration of property
   9-10  by the owner or a contractor chosen by the owner; and
   9-11              (2)  the reimbursement by the authority to the owner of
   9-12  the costs incurred by the owner in making the relocation or
   9-13  alteration.
   9-14        (c)  The authority shall pay the cost of any relocation,
   9-15  rerouting, or other alteration in the construction made under this
   9-16  chapter and is liable for any damage to property occurring because
   9-17  of the change.
   9-18        Sec. 17.  ROUTES.  An authority shall determine each route,
   9-19  including route changes, as the board considers advisable.
   9-20        Sec. 18.  TORT LIABILITY AND GOVERNMENTAL IMMUNITY.  (a)  An
   9-21  authority is a separate governmental unit for purposes of Chapter
   9-22  101, Civil Practice and Remedies Code, and operations of an
   9-23  authority are essential governmental functions and not proprietary
   9-24  functions for all purposes, including the purposes of that chapter.
   9-25        (b)  This chapter does not create or confer any governmental
   9-26  immunity or limitation of liability on any entity that is not a
   9-27  governmental unit, governmental entity or authority, or public
   10-1  agency or a subdivision of one of those persons.  In this
   10-2  subsection, "governmental unit" has the meaning assigned by Section
   10-3  101.001, Civil Practice and Remedies Code.
   10-4        Sec. 19.  TAX EXEMPTION.  The assets of an authority are
   10-5  exempt from any tax of the state or a state taxing authority.
   10-6        Sec. 20.  TRANSPORTATION FOR JOBS PROGRAM PARTICIPANTS.
   10-7  (a)  An authority shall contract with the Texas Department of Human
   10-8  Services to provide, in accordance with federal law, transportation
   10-9  services to a person who:
  10-10              (1)  resides in the area served by the authority;
  10-11              (2)  is receiving financial assistance under Chapter
  10-12  31, Human Resources Code; and
  10-13              (3)  is registered in the jobs opportunities and basic
  10-14  skills training program under Part F, Subchapter IV, Social
  10-15  Security Act, as amended (42 U.S.C. Section 682).
  10-16        (b)  The contract must include provisions to ensure that:
  10-17              (1)  the authority is required to provide
  10-18  transportation services only to a location:
  10-19                    (A)  to which the person travels in connection
  10-20  with participation in the jobs opportunities and basic skills
  10-21  training program; and
  10-22                    (B)  that the authority serves under the
  10-23  authority's authorized rate structure and existing services;
  10-24              (2)  the authority is to provide directly to the Texas
  10-25  Department of Human Services trip vouchers for distribution by the
  10-26  Texas Department of Human Services to a person who is eligible
  10-27  under this section to receive transportation services;
   11-1              (3)  the Texas Department of Human Services reimburses
   11-2  the authority for allowable costs, at the applicable federal
   11-3  matching rate; and
   11-4              (4)  the Texas Department of Human Services may return
   11-5  undistributed trip vouchers to the authority.
   11-6        (c)  An authority shall certify the amount of public funds
   11-7  spent by the authority under this section for the purpose of
   11-8  obtaining federal funds under the jobs opportunities and basic
   11-9  skills training program.
  11-10        Sec. 21.  WAIVER OF FEDERAL REQUIREMENTS.  If, before
  11-11  implementing Section 20 of this article, the Texas Department of
  11-12  Human Services determines that a waiver or authorization from a
  11-13  federal agency is necessary for implementation, the Texas
  11-14  Department of Human Services shall request the waiver or
  11-15  authorization, and the Texas Department of Human Services and an
  11-16  authority may delay implementing Section 20 until the waiver or
  11-17  authorization is granted.
  11-18        Sec. 22.  PURCHASE AND PERCENT OF VEHICLES USING ALTERNATIVE
  11-19  FUELS.  (a)  An authority may not purchase or lease a motor vehicle
  11-20  that is not capable of using compressed natural gas or another
  11-21  alternative fuel the use of which results in comparably lower
  11-22  emissions of oxides of nitrogen, volatile organic compounds, carbon
  11-23  monoxide, or particulates or combinations of those materials.
  11-24        (b)  After August 31, 1996, at least 50 percent of the fleet
  11-25  vehicles operated by an authority must be capable of using
  11-26  compressed natural gas or another alternative fuel.
  11-27        (b-1)  At least 30 percent of the fleet vehicles operated by
   12-1  an authority must be capable of using compressed natural gas or
   12-2  another alternative fuel.  This subsection expires September 1,
   12-3  1996.
   12-4        (c)  The Texas Natural Resource Conservation Commission,
   12-5  before 1997, shall review the alternative fuels use program under
   12-6  this section.  If the commission determines that the program has
   12-7  been effective in reducing total annual emissions from motor
   12-8  vehicles in the area, the authority shall achieve a percentage of
   12-9  fleet vehicles capable of using compressed natural gas or other
  12-10  alternative fuels of at least 90 percent of the number of fleet
  12-11  vehicles operated after August 31, 1998.
  12-12        Sec. 23.  ALTERNATIVE FUELS USE PROGRAM:  EXCEPTIONS.
  12-13  (a)  An authority may make exceptions to the requirements of
  12-14  Section 22 of this article if the authority certifies the facts
  12-15  described by Subsection (b) of this section.
  12-16        (b)  A certification under this section must state that:
  12-17              (1)  the authority's vehicles will be operating
  12-18  primarily in an area in which neither the authority nor a supplier
  12-19  has or can reasonably be expected to establish a central refueling
  12-20  station for compressed natural gas or other alternative fuels; or
  12-21              (2)  the authority is unable to acquire or be provided
  12-22  equipment or refueling facilities necessary to operate vehicles
  12-23  using compressed natural gas or other alternative fuels at a
  12-24  project cost that is reasonably expected to result in no greater
  12-25  net cost than the continued use of traditional gasoline or diesel
  12-26  fuel measured over the expected useful life of the equipment or
  12-27  facilities supplied.
   13-1        Sec. 24.  ALTERNATIVE FUELS EQUIPMENT AND FACILITIES.
   13-2  (a)  In addition to other methods authorized by law, an authority
   13-3  may acquire or be provided equipment or refueling facilities by an
   13-4  arrangement, including a gift or a loan, under a service contract
   13-5  for the supply of compressed natural gas or other alternative
   13-6  fuels.
   13-7        (b)  If an authority acquires or is provided equipment or
   13-8  facilities as authorized by Subsection (a) of this section, the
   13-9  supplier is entitled, under the supply contract, to recover the
  13-10  cost of giving, loaning, or providing the equipment or facilities
  13-11  through the fuel charges.
  13-12        Sec. 25.  ALTERNATIVE FUELS USE PROGRAM:  VEHICLES COVERED
  13-13  AND SAFETY.  (a)  In developing a compressed natural gas or other
  13-14  alternative fuels use program, an authority should work with
  13-15  vehicle manufacturers and converters, fuel distributors, and others
  13-16  to specify the vehicles to be covered considering relevant factors,
  13-17  including vehicle range, specialty vehicle uses, fuel availability,
  13-18  vehicle manufacturing and conversion capability, safety, and resale
  13-19  value.
  13-20        (b)  The authority may meet the percentage requirements of
  13-21  Section 22 of this article by:
  13-22              (1)  purchasing new vehicles; or
  13-23              (2)  converting existing vehicles, in conformity with
  13-24  federal and state requirements and applicable safety laws, to
  13-25  alternative fuels use.
  13-26        (c)  In purchasing, leasing, maintaining, or converting a
  13-27  vehicle for alternative fuels use, the authority shall comply with
   14-1  all applicable safety standards adopted by the United States
   14-2  Department of Transportation or the Railroad Commission of Texas or
   14-3  their successor agencies.
   14-4        Sec. 26.  ALTERNATIVE FUELS USE PROGRAM:  REPORTS.  (a)  Not
   14-5  later than December 31 of each year, an authority shall file an
   14-6  annual report with the Texas Natural Resource Conservation
   14-7  Commission showing:
   14-8              (1)  purchases, leases, and conversions of motor
   14-9  vehicles;
  14-10              (2)  the amount of compressed natural gas and other
  14-11  alternative fuels used; and
  14-12              (3)  any other information required by the commission
  14-13  relevant to the alternative fuels use program.
  14-14        (b)  The commission may require reporting from an authority
  14-15  to document air quality benefits from an alternative fuels use
  14-16  program.
  14-17        Sec. 27.  POWER TO ISSUE BONDS.  (a)  An authority may issue
  14-18  revenue bonds at any time and for any amounts it considers
  14-19  necessary or appropriate for:
  14-20              (1)  the acquisition, construction, repair, equipping,
  14-21  improvement, or extension of its transit system; or
  14-22              (2)  the construction or general maintenance of streets
  14-23  of the creating municipality.
  14-24        (b)  Bonds payable solely from revenues may be issued by
  14-25  resolution of the board.
  14-26        (c)  Bonds, other than refunding bonds, any portion of which
  14-27  is payable from tax revenue may not be issued until authorized by a
   15-1  majority vote of the voters of the authority voting in an election.
   15-2        Sec. 28.  BOND TERMS.  (a)  An authority's bonds are fully
   15-3  negotiable.
   15-4        (b)  The authority may make the bonds redeemable before
   15-5  maturity at the price and subject to the terms and conditions that
   15-6  are provided in the resolution authorizing the bonds.
   15-7        (c)  A revenue bond indenture may limit a power of the
   15-8  authority provided by this article as long as the bond containing
   15-9  the indenture is outstanding and unpaid.
  15-10        Sec. 29.  SALE.  Bonds may be sold at a public or private
  15-11  sale as determined by the board.
  15-12        Sec. 30.  APPROVAL; REGISTRATION.  (a)  An authority's bonds
  15-13  and the records relating to their issuance shall be submitted to
  15-14  the attorney general for examination before the bonds may be
  15-15  delivered.
  15-16        (b)  If the attorney general finds that the bonds have been
  15-17  issued in conformity with the constitution and this article and
  15-18  that the bonds will be a binding obligation of the issuing
  15-19  authority, the attorney general shall approve the bonds.
  15-20        (c)  After the bonds are approved by the attorney general,
  15-21  the comptroller shall register the bonds.
  15-22        Sec. 31.  INCONTESTABILITY.  Bonds are incontestable after
  15-23  they are:
  15-24              (1)  approved by the attorney general;
  15-25              (2)  registered by the comptroller; and
  15-26              (3)  sold and delivered to the purchaser.
  15-27        Sec. 32.  SECURITY PLEDGED.  (a)  To secure the payment of an
   16-1  authority's bonds, the authority may:
   16-2              (1)  pledge all or part of revenue received from any
   16-3  tax that the authority may impose;
   16-4              (2)  pledge all or part of the revenue of the transit
   16-5  authority system; and
   16-6              (3)  mortgage all or part of the transit authority
   16-7  system, including any part of the system subsequently acquired.
   16-8        (b)  Under Subsection (a)(3) of this section, the authority
   16-9  may, subject to the terms of the bond indenture or resolution
  16-10  authorizing the issuance of the bonds, encumber a separate item of
  16-11  the transit authority system and acquire, use, hold, or contract
  16-12  for any property by lease, chattel mortgage, or other conditional
  16-13  sale, including an equipment trust transaction.
  16-14        Sec. 33.  PLEDGE OF REVENUE LIMITED.  The expenses of
  16-15  operation and maintenance of a transit authority system, including
  16-16  salaries, labor, materials, and repairs necessary to provide
  16-17  efficient service and every other proper item of expense, are a
  16-18  first lien and charge against any revenue of an authority that is
  16-19  encumbered under this article.
  16-20        Sec. 34.  REFUNDING BONDS.  An authority may issue refunding
  16-21  bonds for the purposes and in the manner authorized by Chapter 503,
  16-22  Acts of the 54th Legislature, 1955 (Article 717k, Vernon's Texas
  16-23  Civil Statutes), Chapter 784, Acts of the 61st Legislature, Regular
  16-24  Session, 1969 (Article 717k-3, Vernon's Texas Civil Statutes), or
  16-25  other law.
  16-26        Sec. 35.  BONDS AS AUTHORIZED INVESTMENTS.  (a)  An
  16-27  authority's bonds are authorized investments for:
   17-1              (1)  a bank;
   17-2              (2)  a trust company;
   17-3              (3)  a savings and loan association; and
   17-4              (4)  an insurance company.
   17-5        (b)  The bonds, when accompanied by all appurtenant,
   17-6  unmatured coupons and to the extent of the lesser of their face
   17-7  value or market value, are eligible to secure the deposit of public
   17-8  funds of this state, a political subdivision of this state, and any
   17-9  other political corporation of this state.
  17-10        Sec. 36.  INTEREST EXEMPTION.  Interest on bonds issued by an
  17-11  authority is exempt from any tax of the state or a state taxing
  17-12  authority.
  17-13        Sec. 37.  SALES AND USE TAX.  (a)  The board may impose for
  17-14  the authority a sales and use tax at a permissible rate that does
  17-15  not exceed the rate approved by the voters at an election under
  17-16  this article.
  17-17        (b)  The board by order may:
  17-18              (1)  decrease the rate of the sales and use tax for the
  17-19  authority to a permissible rate; or
  17-20              (2)  call an election for the increase or decrease of
  17-21  the sales and use tax to a permissible rate.
  17-22        (c)  The permissible rates for a sales and use tax imposed
  17-23  under this article are:
  17-24              (1)  one-quarter of one percent; and
  17-25              (2)  one-half of one percent.
  17-26        (d)  Chapter 322, Tax Code, applies to an authority's sales
  17-27  and use tax.
   18-1        Sec. 38.  MAXIMUM TAX RATE.  (a)  A board may not adopt a
   18-2  sales and use tax rate, including a rate increase, that when
   18-3  combined with the rates of all sales and use taxes imposed by all
   18-4  political subdivisions of this state having territory in the county
   18-5  exceeds two percent in any location in the county.
   18-6        (b)  An election by an authority to approve a sales and use
   18-7  tax or increase the rate of the authority's sales and use tax has
   18-8  no effect if:
   18-9              (1)  the voters of the authority approve the
  18-10  authority's sales and use tax rate or rate increase at an election
  18-11  held on the same day on which the municipality or county having
  18-12  territory in the jurisdiction of the authority adopts a sales and
  18-13  use tax or an additional sales and use tax; and
  18-14              (2)  the combined rates of all sales and use taxes
  18-15  imposed by the authority and all political subdivisions of this
  18-16  state would exceed two percent in any part of the territory in the
  18-17  jurisdiction of the authority.
  18-18        Sec. 39.  ELECTION TO CHANGE TAX RATE.  (a)  At an election
  18-19  ordered under Subsection (b)(2) of Section 37 of this article, the
  18-20  ballots shall be printed to permit voting for or against the
  18-21  proposition:  "The increase (decrease) of the local sales and use
  18-22  tax rate of (name of authority) to (percentage)."
  18-23        (b)  The increase or decrease in the tax rate becomes
  18-24  effective only if it is approved by a majority of the votes cast.
  18-25        (c)  A notice of the election and a certified copy of the
  18-26  order canvassing the election results shall be:
  18-27              (1)  sent to the Texas Department of Transportation and
   19-1  the comptroller; and
   19-2              (2)  filed in the deed records of the county.
   19-3        Sec. 40.  SALES TAX:  EFFECTIVE DATES.  (a)  An authority's
   19-4  sales and use tax takes effect on the first day of the second
   19-5  calendar quarter that begins after the date the comptroller
   19-6  receives a copy of the order required to be sent under Subsection
   19-7  (h) of Section 5 of this article.
   19-8        (b)  An increase or decrease in the rate of an authority's
   19-9  sales and use tax takes effect on:
  19-10              (1)  the first day of the first calendar quarter that
  19-11  begins after the date the comptroller receives the notice provided
  19-12  under Subsection (c) of Section 39 of this article; or
  19-13              (2)  the first day of the second calendar quarter that
  19-14  begins after the date the comptroller receives the notice, if
  19-15  within 10 days after the date of receipt of the notice the
  19-16  comptroller gives written notice to the presiding officer of the
  19-17  board that the comptroller requires more time to implement tax
  19-18  collection and reporting procedures.
  19-19        Sec. 41.  ELECTION TO DISSOLVE AUTHORITY.  (a)  A board may
  19-20  order an election on the question of dissolving the authority.
  19-21        (b)  The board shall dissolve the authority if the
  19-22  dissolution is approved by a majority of the votes cast.
  19-23        (c)  The provisions of Section 5 of this article that relate
  19-24  to the notice and conduct of an election under that section apply
  19-25  to an election to dissolve an authority unless a different
  19-26  requirement is specified in this section.
  19-27        (d)  The board shall send a notice of the election to the
   20-1  Texas Department of Transportation and the comptroller.
   20-2        (e)  At the election, the ballots shall be printed to permit
   20-3  voting for or against the proposition:  "Dissolution of (name of
   20-4  authority)."
   20-5        (f)  The board shall send a certified copy of the order
   20-6  canvassing the election results to the Texas Department of
   20-7  Transportation and the comptroller and file a copy in the deed
   20-8  records of the county.
   20-9        (g)  The repeal of an authority's sales and use tax under
  20-10  this subchapter takes effect on:
  20-11              (1)  the first day of the first calendar quarter that
  20-12  begins after the date the comptroller receives the notice of the
  20-13  dissolution of the authority; or
  20-14              (2)  the first day of the second calendar quarter that
  20-15  begins after the date the comptroller receives the notice, if
  20-16  within 10 days after the date of receipt of the notice the
  20-17  comptroller gives written notice to the presiding officer of the
  20-18  board that the comptroller requires more time to implement the
  20-19  repeal of the tax.
  20-20        Sec. 42.  WITHDRAWAL FROM AUTHORITY.  (a)  The governing body
  20-21  of a unit of election may order an election to withdraw the unit
  20-22  from an authority.
  20-23        (b)  On the determination by a governing body of a unit of
  20-24  election that a petition for withdrawal under this chapter is
  20-25  valid, the governing body shall order an election to withdraw the
  20-26  unit of election from the authority.
  20-27        (c)  An election to withdraw may not be ordered, and a
   21-1  petition for an election to withdraw may not be accepted for
   21-2  filing, more frequently than once during each period of 12 months
   21-3  preceding the anniversary of the date of the election confirming
   21-4  the authority.
   21-5        Sec. 43. PETITION FOR WITHDRAWAL.  (a)  At the request of a
   21-6  qualified voter of a unit of election in an authority, the
   21-7  municipal secretary or other clerk or administrator of the unit of
   21-8  election shall deliver to the voter, in the number requested,
   21-9  petition signature sheets for a petition to withdraw from the
  21-10  authority prepared, numbered, and authenticated by the municipal
  21-11  secretary or other official.  During the period that signatures on
  21-12  the petition may be obtained, the official shall authenticate and
  21-13  deliver additional petition signature sheets as requested by the
  21-14  voter.  Only one petition for withdrawal may be in circulation at a
  21-15  time.
  21-16        (b)  Each sheet of a petition must have a heading in capital
  21-17  letters as follows:
  21-18        "THIS PETITION IS TO REQUIRE AN ELECTION TO BE HELD IN
  21-19        (name of the unit of election) TO DISSOLVE (name of
  21-20        authority) IN (name of the unit of election) SUBJECT TO
  21-21        THE CONTINUED COLLECTION OF SALES TAXES FOR THE PERIOD
  21-22        REQUIRED BY LAW."
  21-23        (c)  In addition to the requirements of Section 277.002,
  21-24  Election Code, to be valid a petition must:
  21-25              (1)  be signed on authenticated petition sheets by not
  21-26  less than 10 percent of the number of registered voters of the unit
  21-27  of election as shown on the voter registration list of the county;
   22-1              (2)  be filed with the secretary, clerk, or
   22-2  administrator of the unit of election not later than the 60th day
   22-3  after the date that the first sheet of the petition was received
   22-4  under Subsection (a) of this section;
   22-5              (3)  contain signatures that are signed in ink or
   22-6  indelible pencil by the voter; and
   22-7              (4)  have affixed or printed on each sheet an affidavit
   22-8  that is executed before a notary public by the person who
   22-9  circulated the sheet and that is in the following form and
  22-10  substance:
  22-11        "STATE OF TEXAS
  22-12        "COUNTY OF _______________
  22-13              "I, ____________________, affirm that I
  22-14        personally witnessed each signer affix his or her
  22-15        signature to this page of this petition for the
  22-16        dissolution of (name of authority) in (name of unit of
  22-17        election).  I affirm to the best of my knowledge and
  22-18        belief that each signature is the genuine signature of
  22-19        the person whose name is signed and that the date
  22-20        entered next to each signature is the date the
  22-21        signature was affixed to this page.
  22-22                                         ______________________
  22-23              "Sworn to and subscribed before me this the ____
  22-24        day of ___, ____.
  22-25        (SEAL)                   ______________________________
  22-26                                 Notary Public, State of Texas"
  22-27        (d)  Each sheet of the petition must be filed under
   23-1  Subsection (c)(2) of this section at the same time as a single
   23-2  filing.
   23-3        (e)  The secretary, clerk, or administrator of a unit of
   23-4  election in which a petition for withdrawal from an authority is
   23-5  filed shall examine the petition and file with the governing body
   23-6  of the unit a report stating whether the petition, in the opinion
   23-7  of the secretary, clerk, or administrator, is valid.
   23-8        (f)  On receipt of a petition and a report under Subsection
   23-9  (e) of this section, the governing body shall examine the petition
  23-10  to determine whether the petition is valid.  The governing body may
  23-11  hold public hearings and conduct or order investigations as
  23-12  appropriate to make the determination.  The governing body's
  23-13  determination is conclusive of the issues.
  23-14        (g)  The governing body of a unit of election that receives
  23-15  an invalid petition shall reject the petition.
  23-16        (h)  A petition that is rejected is void, and the petition
  23-17  and each sheet of the rejected petition may not be used in
  23-18  connection with a subsequent petition.
  23-19        Sec. 44.  WITHDRAWAL ELECTION.  (a)  An election to withdraw
  23-20  from an authority must be held on the first applicable uniform
  23-21  election date occurring after the expiration of 12 calendar months
  23-22  after the date on which the governing body orders the election.
  23-23        (b)  The governing body shall give notice of the election to
  23-24  the board, the Texas Department of Transportation, and the
  23-25  comptroller immediately on calling the election.
  23-26        (c)  At the election the ballot shall be printed to permit
  23-27  voting for or against the proposition:  "Shall the (name of
   24-1  authority) be continued in (name of unit of election)?"
   24-2        (d)  If a majority of the votes received on the measure in an
   24-3  election favor the proposition, the authority continues in the unit
   24-4  of election.
   24-5        (e)  If less than a majority of the votes received on the
   24-6  measure in the election favor the proposition, the authority ceases
   24-7  in the unit of election on the day after the date of the canvass of
   24-8  the election.
   24-9        (f)  On the effective date of a withdrawal from an authority:
  24-10              (1)  the authority shall cease providing transportation
  24-11  services in the withdrawn unit of election; and
  24-12              (2)  the financial obligations of the authority
  24-13  attributable to the withdrawn unit of election cease to accrue.
  24-14        (g)  Withdrawal from an authority does not affect the right
  24-15  of the authority to travel through the territory of the unit of
  24-16  election to provide service to a unit of election that is a part of
  24-17  the authority.
  24-18        Sec. 45.  PROCEDURE AFTER WITHDRAWAL ELECTION.  (a)  Until
  24-19  the amount of revenue from an authority's sales and use tax
  24-20  collected in a withdrawn unit of election after the effective date
  24-21  of withdrawal and paid to the authority equals the total financial
  24-22  obligation of the unit, the sales and use tax continues to be
  24-23  collected in the territory of the election unit.
  24-24        (b)  After the amount described by Subsection (a) of this
  24-25  section has been collected, the comptroller shall discontinue
  24-26  collecting the tax in the territory of the unit of election.
  24-27        (c)  The total financial obligation of a withdrawn unit of
   25-1  election to the authority is an amount equal to:
   25-2              (1)  the unit's apportioned share of the authority's
   25-3  outstanding obligations; and
   25-4              (2)  the amount, not computed under Subdivision (1) of
   25-5  this subsection, that is necessary and appropriate to allocate to
   25-6  the unit because of financial obligations of the authority that
   25-7  specifically relate to the unit.
   25-8        (d)  An authority's outstanding obligations under Subsection
   25-9  (c)(1) of this section is the sum of:
  25-10              (1)  the obligations of the authority authorized in the
  25-11  budget of, and contracted for by, the authority;
  25-12              (2)  outstanding contractual obligations for capital or
  25-13  other expenditures, including expenditures for a subsequent year,
  25-14  the payment of which is not made or provided for from the proceeds
  25-15  of notes, bonds, or other obligations;
  25-16              (3)  payments due or to become due in a subsequent year
  25-17  on notes, bonds, or other securities or obligations for debt issued
  25-18  by the authority;
  25-19              (4)  the amount required by the authority to be
  25-20  reserved for all years to comply with financial covenants made with
  25-21  lenders, note or bond holders, or other creditors or contractors;
  25-22  and
  25-23              (5)  the amount necessary for the full and timely
  25-24  payment of the obligations of the authority, to avoid a default or
  25-25  impairment of those obligations, including contingent liabilities.
  25-26        (e)  The apportioned share of a unit's obligation is the
  25-27  amount of the obligation times a fraction, the numerator of which
   26-1  is the number of inhabitants of the withdrawing unit of election
   26-2  and the denominator of which is the number of inhabitants of the
   26-3  authority, including the number of inhabitants of the unit.
   26-4        (f)  The board shall determine the amount of each component
   26-5  of the computations required under this section, including the
   26-6  components of the unit's apportioned share, as of the effective
   26-7  date of withdrawal.  The number of inhabitants shall be determined
   26-8  according to the most recent and available applicable data of an
   26-9  agency of the United States.
  26-10        (g)  The board shall certify to a withdrawn unit of election
  26-11  and to the comptroller the total financial obligation of the unit
  26-12  to the authority as determined under this section.
  26-13        SECTION 2.  This Act takes effect September 1, 1995.
  26-14        SECTION 3.  The importance of this legislation and the
  26-15  crowded condition of the calendars in both houses create an
  26-16  emergency and an imperative public necessity that the
  26-17  constitutional rule requiring bills to be read on three several
  26-18  days in each house be suspended, and this rule is hereby suspended.