1-1 By: Rosson S.B. No. 1388 1-2 (In the Senate - Filed March 13, 1995; March 20, 1995, read 1-3 first time and referred to Committee on Intergovernmental 1-4 Relations; April 19, 1995, reported favorably by the following 1-5 vote: Yeas 8, Nays 0; April 19, 1995, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to the creation of a county mass transit authority. 1-9 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-10 SECTION 1. Chapter 10, Title 28, Revised Statutes, is 1-11 amended by adding Article 1118z-1 to read as follows: 1-12 Art. 1118z-1. COUNTY MASS TRANSIT AUTHORITY 1-13 Sec. 1. DEFINITIONS. In this article: 1-14 (1) "Authority" means a mass transit authority created 1-15 under this article. 1-16 (2) "Bond" includes a note. 1-17 (3) "Board" means the governing body of an authority. 1-18 (4) "Mass transit" means the transportation of 1-19 passengers and hand-carried packages or baggage of a passenger by 1-20 any means of surface, overhead, or underground transportation, 1-21 other than an aircraft or taxicab. 1-22 (5) "Principal municipality" means the municipality of 1-23 greatest population in a county to which this article applies. 1-24 (6) "Transit authority system" means: 1-25 (A) property owned or held by an authority for 1-26 mass transit purposes; and 1-27 (B) facilities necessary or convenient for: 1-28 (i) the use of or access to mass transit 1-29 by persons or vehicles; or 1-30 (ii) the protection or environmental 1-31 enhancement of mass transit. 1-32 (7) "Unit of election" means a municipality, including 1-33 the principal municipality, or the unincorporated area of a county. 1-34 Sec. 2. APPLICATION. This article applies only to a county 1-35 containing a municipality with a population of 500,000 or greater 1-36 that has created a mass transit department under Article 1118z, 1-37 Revised Statutes. 1-38 Sec. 3. CREATION OF AUTHORITY. (a) An authority is created 1-39 under this article if a resolution finding that the creation of an 1-40 authority would be in the public interest and a benefit to persons 1-41 residing in the county is adopted by: 1-42 (1) the county commissioners court; 1-43 (2) the governing body of the principal municipality; 1-44 and 1-45 (3) the governing body of at least one municipality 1-46 other than the principal municipality. 1-47 (b) An authority may not be created if the rate of the sales 1-48 and use tax charged by the city transit department of the principal 1-49 municipality, when added to an existing sales and use tax collected 1-50 in the county other than by the principal municipality, would 1-51 exceed the limit imposed by Section 38 of this article. 1-52 Sec. 4. BOARD OF AUTHORITY. (a) The board of an authority 1-53 consists of seven members. A member of the board serves without 1-54 compensation but is entitled to reimbursement for expenses incurred 1-55 in board service. The board shall elect one of its members as 1-56 presiding officer. The members are appointed as follows: 1-57 (1) two members by the county commissioners court; 1-58 (2) four members by the governing body of the 1-59 principal municipality; and 1-60 (3) one member by the governing bodies of all 1-61 municipalities that adopt the resolution described by Section 3 of 1-62 this article. 1-63 (b) A member of the board serves at the pleasure of the 1-64 appointing entity. 1-65 (c) The board shall administer and operate the authority. 1-66 (d) The board shall hold at least one regular meeting each 1-67 month for the purpose of transacting business of the authority. 1-68 (e) The presiding officer may call a special meeting of the 2-1 board. 2-2 Sec. 5. CONFIRMATION ELECTION. (a) If an authority is 2-3 created under Section 3 of this article, the board shall propose a 2-4 service plan and an initial tax rate for the authority. The 2-5 initial tax rate must be the same rate as that collected by the 2-6 city transit department created by the principal municipality. 2-7 (b) After proposing a service plan and an initial tax rate, 2-8 the board shall call an election in the county to approve the 2-9 creation of the authority and the tax rate. The election must be 2-10 held on a uniform election date but may not be held on the same day 2-11 as an election held by the county under Section 323.101, Tax Code. 2-12 The election is not held in the territory of the principal 2-13 municipality. 2-14 (c) Notice of the election must include a description of the 2-15 nature and rate of the proposed tax. The board shall send a copy 2-16 of the notice to the Texas Department of Transportation and the 2-17 comptroller. 2-18 (d) At the election the ballots shall be printed to permit 2-19 voting for or against the following proposition: "The creation of 2-20 the (name of county) Transit Authority and the imposition of a 2-21 (rate of tax) percent sales and use tax in (name of county) 2-22 County." 2-23 (e) If a majority of the votes cast at the election approve 2-24 the proposition: 2-25 (1) the board shall record the result in its minutes 2-26 and adopt an order implementing the service plan; and 2-27 (2) on the day the sales and use tax takes effect in 2-28 the authority, the city transit department created by the principal 2-29 municipality under Article 1118z, Revised Statutes, is dissolved, 2-30 and its assets, personnel, and obligations are transferred to the 2-31 authority. 2-32 (f) If less than a majority of the votes cast at the 2-33 election approve the proposition, the board shall adopt an order 2-34 dissolving the authority, and the city transit department of the 2-35 principal municipality is not affected. 2-36 (g) The jurisdiction of an authority is coextensive with the 2-37 territory of the county. 2-38 (h) The board shall file a certified copy of an order 2-39 adopted under Subsection (e)(1) or (f) of this section with the 2-40 Texas Department of Transportation, with the comptroller, and in 2-41 the deed records of the county. 2-42 Sec. 6. CONFLICTS OF INTEREST: AUTHORITY EMPLOYEES. An 2-43 employee of an authority may not have a pecuniary interest in, or 2-44 receive a benefit from, an agreement to which the authority is a 2-45 party. 2-46 Sec. 7. TRANSFER OF RESOURCES BETWEEN MUNICIPALITY AND 2-47 AUTHORITY. (a) The governing body of a municipality may transfer 2-48 to an authority created under this article: 2-49 (1) property and employees of a division of the 2-50 municipality that before the creation of the authority was 2-51 responsible for municipal public transportation; and 2-52 (2) municipal funds that may be used for mass transit. 2-53 (b) The governing body may abolish or change the functions 2-54 of the municipal division formerly responsible for municipal public 2-55 transportation. 2-56 (c) If an authority is required to be dissolved under this 2-57 article, the board, on dissolution of the authority, shall transfer 2-58 to a municipality the funds, property, and employees that were 2-59 transferred to the authority under this section. The governing 2-60 body of the municipality may then re-create or change the duties of 2-61 any municipal division abolished or changed as a result of 2-62 transfers made under this section. 2-63 Sec. 8. INVESTMENTS. (a) A board may invest authority 2-64 funds in any obligation, security, or evidence of indebtedness in 2-65 which the principal municipality may invest municipal funds. 2-66 (b) In making an investment of authority funds, a board 2-67 shall exercise the judgment and care, under the circumstances 2-68 prevailing at the time of making the investment, that persons of 2-69 ordinary prudence, discretion, and intelligence exercise in the 2-70 management of their own affairs in making a permanent and 3-1 nonspeculative disposition of their funds, considering the probable 3-2 income from the disposition and the probable safety of their 3-3 capital. 3-4 Sec. 9. DEPOSIT OF MONEY. (a) The board shall designate 3-5 one or more banks as depositories for authority funds. All 3-6 authority money, other than money invested as provided by Section 8 3-7 of this article, shall be deposited in one or more of the 3-8 authority's depository banks. 3-9 (b) Funds in a depository, to the extent that those funds 3-10 are not insured by the Federal Deposit Insurance Corporation, shall 3-11 be secured in the manner provided by law for the security of county 3-12 funds. 3-13 Sec. 10. LIABILITY OF CREATING ENTITIES. The political 3-14 subdivisions that adopt a resolution under Subsection (a) of 3-15 Section 3 of this article are liable for an expense the authority 3-16 incurs before the date a sales and use tax is approved for the 3-17 authority under this article, including the costs of holding the 3-18 election. 3-19 Sec. 11. ACQUIRING AND DISPOSING OF PROPERTY. (a) An 3-20 authority may acquire, hold, use, sell, lease, or dispose of 3-21 property, including licenses, patents, rights, and other interests, 3-22 necessary, convenient, or useful for the full exercise of any of 3-23 its powers under this article. 3-24 (b) The authority may acquire property described in 3-25 Subsection (a) in any manner, including by gift or devise. 3-26 (c) An authority may dispose of, by sale, lease, or other 3-27 conveyance: 3-28 (1) any property of the authority not needed for the 3-29 efficient operation and maintenance of the authority system; and 3-30 (2) any surplus property not needed for its 3-31 requirements or for the purpose of carrying out its powers under 3-32 this article. 3-33 (d) The lease of unneeded property under Subsection (c) must 3-34 be consistent with the efficient operation and maintenance of the 3-35 transit authority system. 3-36 Sec. 12. TRANSIT AUTHORITY SYSTEM. (a) An authority may: 3-37 (1) acquire, construct, own, operate, and maintain a 3-38 transit authority system; 3-39 (2) use any public way; and 3-40 (3) construct, repair, and maintain a municipal 3-41 street, as authorized by the governing body of a municipality in 3-42 the authority. 3-43 (b) In the exercise of a power under Subsection (a) of this 3-44 section, an authority may relocate or reroute, or alter the 3-45 construction of, any public or private property, including: 3-46 (1) an alley, road, street, or railroad; 3-47 (2) an electric line and facility; 3-48 (3) a telegraph and telephone property and facility; 3-49 (4) a pipeline and facility; and 3-50 (5) a conduit and facility. 3-51 Sec. 13. FARES AND OTHER CHARGES. The board shall, after a 3-52 public hearing, impose reasonable and nondiscriminatory fares, 3-53 tolls, charges, rents, or other compensation for the use of the 3-54 transit authority system sufficient to produce revenue, together 3-55 with receipts from taxes imposed by the authority, in an amount 3-56 adequate to: 3-57 (1) pay all the expenses necessary to operate and 3-58 maintain the transit authority system; 3-59 (2) pay when due the principal of and interest on, and 3-60 sinking fund and reserve fund payments agreed to be made with 3-61 respect to, all bonds that are issued by the board and payable in 3-62 whole or part from the revenue; and 3-63 (3) fulfill the terms of any other agreement with the 3-64 holders of bonds described by Subdivision (2) of this section or 3-65 with a person acting on behalf of the bondholders. 3-66 Sec. 14. AGREEMENT WITH UTILITIES, CARRIERS. An authority 3-67 may agree with a public or private utility, communication system, 3-68 common carrier, or transportation system for: 3-69 (1) the joint use of the property of the agreeing 3-70 entities in the authority; or 4-1 (2) the establishment of through routes, joint fares, 4-2 or transfers of passengers. 4-3 Sec. 15. CONTRACTS; ACQUISITION OF PROPERTY BY AGREEMENT. 4-4 (a) An authority may contract with any person and may accept a 4-5 grant or loan from any person. 4-6 (b) An authority may acquire rolling stock or other property 4-7 under a contract or trust agreement, including a conditional sales 4-8 contract, lease, and equipment trust certificate. 4-9 Sec. 16. USE AND ACQUISITION OF PROPERTY OF OTHERS. (a) An 4-10 authority may not alter or damage any property of this state or a 4-11 political subdivision of this state or owned by a person rendering 4-12 public services and may not disrupt services being provided by 4-13 others or inconvenience in any other manner an owner of property, 4-14 without first having obtained: 4-15 (1) the written consent of the owner; or 4-16 (2) the right from the governing body of the 4-17 municipality to take the action under the municipality's power of 4-18 eminent domain. 4-19 (b) An authority may agree with an owner of property to 4-20 provide for: 4-21 (1) a necessary relocation or alteration of property 4-22 by the owner or a contractor chosen by the owner; and 4-23 (2) the reimbursement by the authority to the owner of 4-24 the costs incurred by the owner in making the relocation or 4-25 alteration. 4-26 (c) The authority shall pay the cost of any relocation, 4-27 rerouting, or other alteration in the construction made under this 4-28 chapter and is liable for any damage to property occurring because 4-29 of the change. 4-30 Sec. 17. ROUTES. An authority shall determine each route, 4-31 including route changes, as the board considers advisable. 4-32 Sec. 18. TORT LIABILITY AND GOVERNMENTAL IMMUNITY. (a) An 4-33 authority is a separate governmental unit for purposes of Chapter 4-34 101, Civil Practice and Remedies Code, and operations of an 4-35 authority are essential governmental functions and not proprietary 4-36 functions for all purposes, including the purposes of that chapter. 4-37 (b) This chapter does not create or confer any governmental 4-38 immunity or limitation of liability on any entity that is not a 4-39 governmental unit, governmental entity or authority, or public 4-40 agency or a subdivision of one of those persons. In this 4-41 subsection, "governmental unit" has the meaning assigned by Section 4-42 101.001, Civil Practice and Remedies Code. 4-43 Sec. 19. TAX EXEMPTION. The assets of an authority are 4-44 exempt from any tax of the state or a state taxing authority. 4-45 Sec. 20. TRANSPORTATION FOR JOBS PROGRAM PARTICIPANTS. 4-46 (a) An authority shall contract with the Texas Department of Human 4-47 Services to provide, in accordance with federal law, transportation 4-48 services to a person who: 4-49 (1) resides in the area served by the authority; 4-50 (2) is receiving financial assistance under Chapter 4-51 31, Human Resources Code; and 4-52 (3) is registered in the jobs opportunities and basic 4-53 skills training program under Part F, Subchapter IV, Social 4-54 Security Act, as amended (42 U.S.C. Section 682). 4-55 (b) The contract must include provisions to ensure that: 4-56 (1) the authority is required to provide 4-57 transportation services only to a location: 4-58 (A) to which the person travels in connection 4-59 with participation in the jobs opportunities and basic skills 4-60 training program; and 4-61 (B) that the authority serves under the 4-62 authority's authorized rate structure and existing services; 4-63 (2) the authority is to provide directly to the Texas 4-64 Department of Human Services trip vouchers for distribution by the 4-65 Texas Department of Human Services to a person who is eligible 4-66 under this section to receive transportation services; 4-67 (3) the Texas Department of Human Services reimburses 4-68 the authority for allowable costs, at the applicable federal 4-69 matching rate; and 4-70 (4) the Texas Department of Human Services may return 5-1 undistributed trip vouchers to the authority. 5-2 (c) An authority shall certify the amount of public funds 5-3 spent by the authority under this section for the purpose of 5-4 obtaining federal funds under the jobs opportunities and basic 5-5 skills training program. 5-6 Sec. 21. WAIVER OF FEDERAL REQUIREMENTS. If, before 5-7 implementing Section 20 of this article, the Texas Department of 5-8 Human Services determines that a waiver or authorization from a 5-9 federal agency is necessary for implementation, the Texas 5-10 Department of Human Services shall request the waiver or 5-11 authorization, and the Texas Department of Human Services and an 5-12 authority may delay implementing Section 20 until the waiver or 5-13 authorization is granted. 5-14 Sec. 22. PURCHASE AND PERCENT OF VEHICLES USING ALTERNATIVE 5-15 FUELS. (a) An authority may not purchase or lease a motor vehicle 5-16 that is not capable of using compressed natural gas or another 5-17 alternative fuel the use of which results in comparably lower 5-18 emissions of oxides of nitrogen, volatile organic compounds, carbon 5-19 monoxide, or particulates or combinations of those materials. 5-20 (b) After August 31, 1996, at least 50 percent of the fleet 5-21 vehicles operated by an authority must be capable of using 5-22 compressed natural gas or another alternative fuel. 5-23 (b-1) At least 30 percent of the fleet vehicles operated by 5-24 an authority must be capable of using compressed natural gas or 5-25 another alternative fuel. This subsection expires September 1, 5-26 1996. 5-27 (c) The Texas Natural Resource Conservation Commission, 5-28 before 1997, shall review the alternative fuels use program under 5-29 this section. If the commission determines that the program has 5-30 been effective in reducing total annual emissions from motor 5-31 vehicles in the area, the authority shall achieve a percentage of 5-32 fleet vehicles capable of using compressed natural gas or other 5-33 alternative fuels of at least 90 percent of the number of fleet 5-34 vehicles operated after August 31, 1998. 5-35 Sec. 23. ALTERNATIVE FUELS USE PROGRAM: EXCEPTIONS. 5-36 (a) An authority may make exceptions to the requirements of 5-37 Section 22 of this article if the authority certifies the facts 5-38 described by Subsection (b) of this section. 5-39 (b) A certification under this section must state that: 5-40 (1) the authority's vehicles will be operating 5-41 primarily in an area in which neither the authority nor a supplier 5-42 has or can reasonably be expected to establish a central refueling 5-43 station for compressed natural gas or other alternative fuels; or 5-44 (2) the authority is unable to acquire or be provided 5-45 equipment or refueling facilities necessary to operate vehicles 5-46 using compressed natural gas or other alternative fuels at a 5-47 project cost that is reasonably expected to result in no greater 5-48 net cost than the continued use of traditional gasoline or diesel 5-49 fuel measured over the expected useful life of the equipment or 5-50 facilities supplied. 5-51 Sec. 24. ALTERNATIVE FUELS EQUIPMENT AND FACILITIES. 5-52 (a) In addition to other methods authorized by law, an authority 5-53 may acquire or be provided equipment or refueling facilities by an 5-54 arrangement, including a gift or a loan, under a service contract 5-55 for the supply of compressed natural gas or other alternative 5-56 fuels. 5-57 (b) If an authority acquires or is provided equipment or 5-58 facilities as authorized by Subsection (a) of this section, the 5-59 supplier is entitled, under the supply contract, to recover the 5-60 cost of giving, loaning, or providing the equipment or facilities 5-61 through the fuel charges. 5-62 Sec. 25. ALTERNATIVE FUELS USE PROGRAM: VEHICLES COVERED 5-63 AND SAFETY. (a) In developing a compressed natural gas or other 5-64 alternative fuels use program, an authority should work with 5-65 vehicle manufacturers and converters, fuel distributors, and others 5-66 to specify the vehicles to be covered considering relevant factors, 5-67 including vehicle range, specialty vehicle uses, fuel availability, 5-68 vehicle manufacturing and conversion capability, safety, and resale 5-69 value. 5-70 (b) The authority may meet the percentage requirements of 6-1 Section 22 of this article by: 6-2 (1) purchasing new vehicles; or 6-3 (2) converting existing vehicles, in conformity with 6-4 federal and state requirements and applicable safety laws, to 6-5 alternative fuels use. 6-6 (c) In purchasing, leasing, maintaining, or converting a 6-7 vehicle for alternative fuels use, the authority shall comply with 6-8 all applicable safety standards adopted by the United States 6-9 Department of Transportation or the Railroad Commission of Texas or 6-10 their successor agencies. 6-11 Sec. 26. ALTERNATIVE FUELS USE PROGRAM: REPORTS. (a) Not 6-12 later than December 31 of each year, an authority shall file an 6-13 annual report with the Texas Natural Resource Conservation 6-14 Commission showing: 6-15 (1) purchases, leases, and conversions of motor 6-16 vehicles; 6-17 (2) the amount of compressed natural gas and other 6-18 alternative fuels used; and 6-19 (3) any other information required by the commission 6-20 relevant to the alternative fuels use program. 6-21 (b) The commission may require reporting from an authority 6-22 to document air quality benefits from an alternative fuels use 6-23 program. 6-24 Sec. 27. POWER TO ISSUE BONDS. (a) An authority may issue 6-25 revenue bonds at any time and for any amounts it considers 6-26 necessary or appropriate for: 6-27 (1) the acquisition, construction, repair, equipping, 6-28 improvement, or extension of its transit system; or 6-29 (2) the construction or general maintenance of streets 6-30 of the creating municipality. 6-31 (b) Bonds payable solely from revenues may be issued by 6-32 resolution of the board. 6-33 (c) Bonds, other than refunding bonds, any portion of which 6-34 is payable from tax revenue may not be issued until authorized by a 6-35 majority vote of the voters of the authority voting in an election. 6-36 Sec. 28. BOND TERMS. (a) An authority's bonds are fully 6-37 negotiable. 6-38 (b) The authority may make the bonds redeemable before 6-39 maturity at the price and subject to the terms and conditions that 6-40 are provided in the resolution authorizing the bonds. 6-41 (c) A revenue bond indenture may limit a power of the 6-42 authority provided by this article as long as the bond containing 6-43 the indenture is outstanding and unpaid. 6-44 Sec. 29. SALE. Bonds may be sold at a public or private 6-45 sale as determined by the board. 6-46 Sec. 30. APPROVAL; REGISTRATION. (a) An authority's bonds 6-47 and the records relating to their issuance shall be submitted to 6-48 the attorney general for examination before the bonds may be 6-49 delivered. 6-50 (b) If the attorney general finds that the bonds have been 6-51 issued in conformity with the constitution and this article and 6-52 that the bonds will be a binding obligation of the issuing 6-53 authority, the attorney general shall approve the bonds. 6-54 (c) After the bonds are approved by the attorney general, 6-55 the comptroller shall register the bonds. 6-56 Sec. 31. INCONTESTABILITY. Bonds are incontestable after 6-57 they are: 6-58 (1) approved by the attorney general; 6-59 (2) registered by the comptroller; and 6-60 (3) sold and delivered to the purchaser. 6-61 Sec. 32. SECURITY PLEDGED. (a) To secure the payment of an 6-62 authority's bonds, the authority may: 6-63 (1) pledge all or part of revenue received from any 6-64 tax that the authority may impose; 6-65 (2) pledge all or part of the revenue of the transit 6-66 authority system; and 6-67 (3) mortgage all or part of the transit authority 6-68 system, including any part of the system subsequently acquired. 6-69 (b) Under Subsection (a)(3) of this section, the authority 6-70 may, subject to the terms of the bond indenture or resolution 7-1 authorizing the issuance of the bonds, encumber a separate item of 7-2 the transit authority system and acquire, use, hold, or contract 7-3 for any property by lease, chattel mortgage, or other conditional 7-4 sale, including an equipment trust transaction. 7-5 Sec. 33. PLEDGE OF REVENUE LIMITED. The expenses of 7-6 operation and maintenance of a transit authority system, including 7-7 salaries, labor, materials, and repairs necessary to provide 7-8 efficient service and every other proper item of expense, are a 7-9 first lien and charge against any revenue of an authority that is 7-10 encumbered under this article. 7-11 Sec. 34. REFUNDING BONDS. An authority may issue refunding 7-12 bonds for the purposes and in the manner authorized by Chapter 503, 7-13 Acts of the 54th Legislature, 1955 (Article 717k, Vernon's Texas 7-14 Civil Statutes), Chapter 784, Acts of the 61st Legislature, Regular 7-15 Session, 1969 (Article 717k-3, Vernon's Texas Civil Statutes), or 7-16 other law. 7-17 Sec. 35. BONDS AS AUTHORIZED INVESTMENTS. (a) An 7-18 authority's bonds are authorized investments for: 7-19 (1) a bank; 7-20 (2) a trust company; 7-21 (3) a savings and loan association; and 7-22 (4) an insurance company. 7-23 (b) The bonds, when accompanied by all appurtenant, 7-24 unmatured coupons and to the extent of the lesser of their face 7-25 value or market value, are eligible to secure the deposit of public 7-26 funds of this state, a political subdivision of this state, and any 7-27 other political corporation of this state. 7-28 Sec. 36. INTEREST EXEMPTION. Interest on bonds issued by an 7-29 authority is exempt from any tax of the state or a state taxing 7-30 authority. 7-31 Sec. 37. SALES AND USE TAX. (a) The board may impose for 7-32 the authority a sales and use tax at a permissible rate that does 7-33 not exceed the rate approved by the voters at an election under 7-34 this article. 7-35 (b) The board by order may: 7-36 (1) decrease the rate of the sales and use tax for the 7-37 authority to a permissible rate; or 7-38 (2) call an election for the increase or decrease of 7-39 the sales and use tax to a permissible rate. 7-40 (c) The permissible rates for a sales and use tax imposed 7-41 under this article are: 7-42 (1) one-quarter of one percent; and 7-43 (2) one-half of one percent. 7-44 (d) Chapter 322, Tax Code, applies to an authority's sales 7-45 and use tax. 7-46 Sec. 38. MAXIMUM TAX RATE. (a) A board may not adopt a 7-47 sales and use tax rate, including a rate increase, that when 7-48 combined with the rates of all sales and use taxes imposed by all 7-49 political subdivisions of this state having territory in the county 7-50 exceeds two percent in any location in the county. 7-51 (b) An election by an authority to approve a sales and use 7-52 tax or increase the rate of the authority's sales and use tax has 7-53 no effect if: 7-54 (1) the voters of the authority approve the 7-55 authority's sales and use tax rate or rate increase at an election 7-56 held on the same day on which the municipality or county having 7-57 territory in the jurisdiction of the authority adopts a sales and 7-58 use tax or an additional sales and use tax; and 7-59 (2) the combined rates of all sales and use taxes 7-60 imposed by the authority and all political subdivisions of this 7-61 state would exceed two percent in any part of the territory in the 7-62 jurisdiction of the authority. 7-63 Sec. 39. ELECTION TO CHANGE TAX RATE. (a) At an election 7-64 ordered under Subsection (b)(2) of Section 37 of this article, the 7-65 ballots shall be printed to permit voting for or against the 7-66 proposition: "The increase (decrease) of the local sales and use 7-67 tax rate of (name of authority) to (percentage)." 7-68 (b) The increase or decrease in the tax rate becomes 7-69 effective only if it is approved by a majority of the votes cast. 7-70 (c) A notice of the election and a certified copy of the 8-1 order canvassing the election results shall be: 8-2 (1) sent to the Texas Department of Transportation and 8-3 the comptroller; and 8-4 (2) filed in the deed records of the county. 8-5 Sec. 40. SALES TAX: EFFECTIVE DATES. (a) An authority's 8-6 sales and use tax takes effect on the first day of the second 8-7 calendar quarter that begins after the date the comptroller 8-8 receives a copy of the order required to be sent under Subsection 8-9 (h) of Section 5 of this article. 8-10 (b) An increase or decrease in the rate of an authority's 8-11 sales and use tax takes effect on: 8-12 (1) the first day of the first calendar quarter that 8-13 begins after the date the comptroller receives the notice provided 8-14 under Subsection (c) of Section 39 of this article; or 8-15 (2) the first day of the second calendar quarter that 8-16 begins after the date the comptroller receives the notice, if 8-17 within 10 days after the date of receipt of the notice the 8-18 comptroller gives written notice to the presiding officer of the 8-19 board that the comptroller requires more time to implement tax 8-20 collection and reporting procedures. 8-21 Sec. 41. ELECTION TO DISSOLVE AUTHORITY. (a) A board may 8-22 order an election on the question of dissolving the authority. 8-23 (b) The board shall dissolve the authority if the 8-24 dissolution is approved by a majority of the votes cast. 8-25 (c) The provisions of Section 5 of this article that relate 8-26 to the notice and conduct of an election under that section apply 8-27 to an election to dissolve an authority unless a different 8-28 requirement is specified in this section. 8-29 (d) The board shall send a notice of the election to the 8-30 Texas Department of Transportation and the comptroller. 8-31 (e) At the election, the ballots shall be printed to permit 8-32 voting for or against the proposition: "Dissolution of (name of 8-33 authority)." 8-34 (f) The board shall send a certified copy of the order 8-35 canvassing the election results to the Texas Department of 8-36 Transportation and the comptroller and file a copy in the deed 8-37 records of the county. 8-38 (g) The repeal of an authority's sales and use tax under 8-39 this subchapter takes effect on: 8-40 (1) the first day of the first calendar quarter that 8-41 begins after the date the comptroller receives the notice of the 8-42 dissolution of the authority; or 8-43 (2) the first day of the second calendar quarter that 8-44 begins after the date the comptroller receives the notice, if 8-45 within 10 days after the date of receipt of the notice the 8-46 comptroller gives written notice to the presiding officer of the 8-47 board that the comptroller requires more time to implement the 8-48 repeal of the tax. 8-49 Sec. 42. WITHDRAWAL FROM AUTHORITY. (a) The governing body 8-50 of a unit of election may order an election to withdraw the unit 8-51 from an authority. 8-52 (b) On the determination by a governing body of a unit of 8-53 election that a petition for withdrawal under this chapter is 8-54 valid, the governing body shall order an election to withdraw the 8-55 unit of election from the authority. 8-56 (c) An election to withdraw may not be ordered, and a 8-57 petition for an election to withdraw may not be accepted for 8-58 filing, more frequently than once during each period of 12 months 8-59 preceding the anniversary of the date of the election confirming 8-60 the authority. 8-61 Sec. 43. PETITION FOR WITHDRAWAL. (a) At the request of a 8-62 qualified voter of a unit of election in an authority, the 8-63 municipal secretary or other clerk or administrator of the unit of 8-64 election shall deliver to the voter, in the number requested, 8-65 petition signature sheets for a petition to withdraw from the 8-66 authority prepared, numbered, and authenticated by the municipal 8-67 secretary or other official. During the period that signatures on 8-68 the petition may be obtained, the official shall authenticate and 8-69 deliver additional petition signature sheets as requested by the 8-70 voter. Only one petition for withdrawal may be in circulation at a 9-1 time. 9-2 (b) Each sheet of a petition must have a heading in capital 9-3 letters as follows: 9-4 "THIS PETITION IS TO REQUIRE AN ELECTION TO BE HELD IN (name of the 9-5 unit of election) TO DISSOLVE (name of authority) IN (name of the 9-6 unit of election) SUBJECT TO THE CONTINUED COLLECTION OF SALES 9-7 TAXES FOR THE PERIOD REQUIRED BY LAW." 9-8 (c) In addition to the requirements of Section 277.002, 9-9 Election Code, to be valid a petition must: 9-10 (1) be signed on authenticated petition sheets by not 9-11 less than 10 percent of the number of registered voters of the unit 9-12 of election as shown on the voter registration list of the county; 9-13 (2) be filed with the secretary, clerk, or 9-14 administrator of the unit of election not later than the 60th day 9-15 after the date that the first sheet of the petition was received 9-16 under Subsection (a) of this section; 9-17 (3) contain signatures that are signed in ink or 9-18 indelible pencil by the voter; and 9-19 (4) have affixed or printed on each sheet an affidavit 9-20 that is executed before a notary public by the person who 9-21 circulated the sheet and that is in the following form and 9-22 substance: 9-23 "STATE OF TEXAS 9-24 "COUNTY OF _______________ 9-25 "I, ____________________, affirm that I personally witnessed 9-26 each signer affix his or her signature to this page of this 9-27 petition for the dissolution of (name of authority) in (name of 9-28 unit of election). I affirm to the best of my knowledge and belief 9-29 that each signature is the genuine signature of the person whose 9-30 name is signed and that the date entered next to each signature is 9-31 the date the signature was affixed to this page. 9-32 ______________________ 9-33 "Sworn to and subscribed before me this the ____ day of ___, 9-34 ____. 9-35 (SEAL) ______________________________ 9-36 Notary Public, State of Texas" 9-37 (d) Each sheet of the petition must be filed under 9-38 Subsection (c)(2) of this section at the same time as a single 9-39 filing. 9-40 (e) The secretary, clerk, or administrator of a unit of 9-41 election in which a petition for withdrawal from an authority is 9-42 filed shall examine the petition and file with the governing body 9-43 of the unit a report stating whether the petition, in the opinion 9-44 of the secretary, clerk, or administrator, is valid. 9-45 (f) On receipt of a petition and a report under Subsection 9-46 (e) of this section, the governing body shall examine the petition 9-47 to determine whether the petition is valid. The governing body may 9-48 hold public hearings and conduct or order investigations as 9-49 appropriate to make the determination. The governing body's 9-50 determination is conclusive of the issues. 9-51 (g) The governing body of a unit of election that receives 9-52 an invalid petition shall reject the petition. 9-53 (h) A petition that is rejected is void, and the petition 9-54 and each sheet of the rejected petition may not be used in 9-55 connection with a subsequent petition. 9-56 Sec. 44. WITHDRAWAL ELECTION. (a) An election to withdraw 9-57 from an authority must be held on the first applicable uniform 9-58 election date occurring after the expiration of 12 calendar months 9-59 after the date on which the governing body orders the election. 9-60 (b) The governing body shall give notice of the election to 9-61 the board, the Texas Department of Transportation, and the 9-62 comptroller immediately on calling the election. 9-63 (c) At the election the ballot shall be printed to permit 9-64 voting for or against the proposition: "Shall the (name of 9-65 authority) be continued in (name of unit of election)?" 9-66 (d) If a majority of the votes received on the measure in an 9-67 election favor the proposition, the authority continues in the unit 9-68 of election. 9-69 (e) If less than a majority of the votes received on the 9-70 measure in the election favor the proposition, the authority ceases 10-1 in the unit of election on the day after the date of the canvass of 10-2 the election. 10-3 (f) On the effective date of a withdrawal from an authority: 10-4 (1) the authority shall cease providing transportation 10-5 services in the withdrawn unit of election; and 10-6 (2) the financial obligations of the authority 10-7 attributable to the withdrawn unit of election cease to accrue. 10-8 (g) Withdrawal from an authority does not affect the right 10-9 of the authority to travel through the territory of the unit of 10-10 election to provide service to a unit of election that is a part of 10-11 the authority. 10-12 Sec. 45. PROCEDURE AFTER WITHDRAWAL ELECTION. (a) Until 10-13 the amount of revenue from an authority's sales and use tax 10-14 collected in a withdrawn unit of election after the effective date 10-15 of withdrawal and paid to the authority equals the total financial 10-16 obligation of the unit, the sales and use tax continues to be 10-17 collected in the territory of the election unit. 10-18 (b) After the amount described by Subsection (a) of this 10-19 section has been collected, the comptroller shall discontinue 10-20 collecting the tax in the territory of the unit of election. 10-21 (c) The total financial obligation of a withdrawn unit of 10-22 election to the authority is an amount equal to: 10-23 (1) the unit's apportioned share of the authority's 10-24 outstanding obligations; and 10-25 (2) the amount, not computed under Subdivision (1) of 10-26 this subsection, that is necessary and appropriate to allocate to 10-27 the unit because of financial obligations of the authority that 10-28 specifically relate to the unit. 10-29 (d) An authority's outstanding obligations under Subsection 10-30 (c)(1) of this section is the sum of: 10-31 (1) the obligations of the authority authorized in the 10-32 budget of, and contracted for by, the authority; 10-33 (2) outstanding contractual obligations for capital or 10-34 other expenditures, including expenditures for a subsequent year, 10-35 the payment of which is not made or provided for from the proceeds 10-36 of notes, bonds, or other obligations; 10-37 (3) payments due or to become due in a subsequent year 10-38 on notes, bonds, or other securities or obligations for debt issued 10-39 by the authority; 10-40 (4) the amount required by the authority to be 10-41 reserved for all years to comply with financial covenants made with 10-42 lenders, note or bond holders, or other creditors or contractors; 10-43 and 10-44 (5) the amount necessary for the full and timely 10-45 payment of the obligations of the authority, to avoid a default or 10-46 impairment of those obligations, including contingent liabilities. 10-47 (e) The apportioned share of a unit's obligation is the 10-48 amount of the obligation times a fraction, the numerator of which 10-49 is the number of inhabitants of the withdrawing unit of election 10-50 and the denominator of which is the number of inhabitants of the 10-51 authority, including the number of inhabitants of the unit. 10-52 (f) The board shall determine the amount of each component 10-53 of the computations required under this section, including the 10-54 components of the unit's apportioned share, as of the effective 10-55 date of withdrawal. The number of inhabitants shall be determined 10-56 according to the most recent and available applicable data of an 10-57 agency of the United States. 10-58 (g) The board shall certify to a withdrawn unit of election 10-59 and to the comptroller the total financial obligation of the unit 10-60 to the authority as determined under this section. 10-61 SECTION 2. This Act takes effect September 1, 1995. 10-62 SECTION 3. The importance of this legislation and the 10-63 crowded condition of the calendars in both houses create an 10-64 emergency and an imperative public necessity that the 10-65 constitutional rule requiring bills to be read on three several 10-66 days in each house be suspended, and this rule is hereby suspended. 10-67 * * * * *