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.