SRC-JFA C.S.S.B. 657 75(R)BILL ANALYSIS


Senate Research CenterC.S.S.B. 657
By: Barrientos
State Affairs
4-3-97
Committee Report (Substituted)


DIGEST 

Currently, Texas law does not provide for the creation of intermunicipal
commuter rail districts to provide commuter rail services between certain
municipalities that are located no farther than 100 miles apart.  Local
officials from San Antonio and Austin have concluded that the overcrowding
of IH-35 due to population growth, increased truck traffic due to NAFTA,
and the lack of air transportation between the two cities make commuter
rail a viable option.  The officials recommended, and the San Antonio and
Austin metropolitan planning organizations requested, the Texas Department
of Transportation (TxDOT) to conduct an Origin-Destination Study of the
corridor and the feasibility of commuter rail between the two locations.
TxDOT is conducting both studies with financial participation from local
governments, transit authorities, and the metropolitan planning
organizations.  The metropolitan planning organizations have also
requested legislation to create a single governmental entity that could
coordinate commuter rail service between the two cities.  This bill would
set forth the guidelines for the development and regulation of
intermunicipal commuter rail districts to provide commuter rail services
between certain municipalities that are located no farther than 100 miles
apart.    

PURPOSE

As proposed, C.S.S.B. 657 sets forth the guidelines for the development
and regulation of intermunicipal commuter rail districts to provide
commuter rail services between certain municipalities.  

RULEMAKING AUTHORITY

Rulemaking authority is granted to a board of an intermunicipal commuter
rail district in SECTION 1 (Sections 3(g), 4(f) and (r), and 6, Article
6550c-1, V.T.C.S.) and to an intermunicipal commuter rail district in
SECTION 1 (Sections 4(h) and (l), Article 6550c-1, V.T.C.S.) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 13, Title 112, V.T.C.S., by adding Article
6550c-1, as follows: 

Art. 6550c-1.  INTERMUNICIPAL COMMUTER RAIL DISTRICTS

Sec. 1.  DEFINITIONS.  Defines "commission," "commuter rail facility,"
"creating municipality," "department," "district," and "system."   

Sec. 2.  CREATION OF DISTRICT.  Authorizes an intermunicipial commuter
rail district to be created to provide commuter rail service between two
municipalities, each of which has a population of more than 450,000 and
are located no farther than 100 miles apart.  Provides that a district is
created on passage of a resolution favoring the creation of the district
by the governing body of each creating municipality and the governing body
of each county in which a creating municipality is located.  Authorizes
certain political subdivisions to become a part of a district created
under this section with the approval of the governing body of the
political subdivision.  Provides that, for purposes of this article, a
municipality is located in a county only if 90 percent or more of the
population of the municipality resides in that county according to the
most recent federal census.   

 Sec. 3.  BOARD.  Provides that a district is governed by a board of
directors (board), which is responsible for the management, operation, and
control of the district.  Provides that the board is composed of two
public members appointed by the Texas Transportation Commission
(commission); one member appointed by each political subdivision that has
become a part of the district under Section 2 of this article; one member
appointed by each creating municipality to represent the regional planning
organization of which the municipality is a part; one member appointed by
each creating municipality to represent the business community of the
municipality; one member appointed by each authority created under Chapter
451, Transportation Code, that serves a creating municipality; one member
appointed by each county in which a creating municipality is located to
represent transportation providers that provide service to rural areas in
the county; and one member appointed by all other board members to
represent all municipalities in the district that do not otherwise have
represented on the board.  Provides that a vacancy on the board is filled
in the same manner as the original appointment and that each member serves
a term of two years.  Requires the members of the board to elect one
member as a presiding officer, who is authorized to select another member
to preside in the absence of the presiding officer. Requires the presiding
officer to call at least one meeting of the board a year and authorizes
such officer to hold other meetings.  Provides that a member of the board
is not entitled to compensation for serving as a member, but is entitled
to reimbursement for reasonable expenses incurred while serving as a
member.  Requires the board to adopt rules for its proceedings and appoint
an executive committee and authorizes the board to employ and compensate
persons to carry out the powers and duties of the district.  Provides that
Chapter 171, Local Government Code, applies to a board member. 

Sec. 4. POWERS AND DUTIES OF DISTRICT.  (a) Provides that a district
created under this article is a public body and a political subdivision of
the state exercising public and essential government functions and has all
the powers necessary or convenient to carry out the purposes of this
article.  Provides that a district is performing only governmental
functions and is a governmental unit within the meaning of Chapter 101,
Civil Practice and Remedies Code.  

(b) Provides that district has perpetual succession and is subject every
12th year to review under Chapter 326, Government Code (Texas Sunset Act).

(c) Authorizes a district to sue and be sued in all courts of competent
jurisdiction, to institute and prosecute suits without giving security for
costs, and to appeal from a judgment without giving supersedeas or cost
bond.  Sets forth the venue for an action at law or in equity against the
district and for eminent domain proceedings.   

(d) Authorizes a district to acquire by grant, purchase, gift, devise,
lease, or otherwise and to hold, use, sell, lease, or dispose of real and
personal property, licenses, patents, rights, and interests necessary,
convenient, or useful for the full exercise of any of its powers under
this article.  

(e) Authorizes a district to acquire, construct, develop, own, operate,
and maintain intermodal and commuter rail facilities inside, or connect
political subdivisions in, the district.  Sets forth the parameters for
achieving these purposes. 

(f)  Provides that a district has the right of eminent domain to acquire
lands in fee simple and any interest less than fee simple in, on, under,
or above lands.  Provides that the power of eminent domain under this
section does not apply to land under the jurisdiction of the department or
a rail line owned by a common carrier or municipality.  Requires the
district  to use existing rail or intermodal transportation corridors for
the alignment of its railroad.  Provides that the proceedings for the
exercise of the power of eminent domain are begun by the adoption of a
resolution by the board.  Provides that the resolution of the district is
conclusive evidence of the public necessity of the proposed acquisition
and that the real or personal property or interest in property is
necessary for public use.  

(g) Authorizes a district to make agreements with any other public
utility, private utility,  communication system, common carrier, state
agency, or transportation system for the joint use of facilities,
installations, or properties within and for the establishment of through
routes, joint fares, and divisions of tariffs.  

(h) Authorizes a district to adopt rules to govern the operation of the
district, its employees, the system, service provided by the district, and
any other necessary matter concerning its purposes, in order to protect
the health, safety, and general welfare of residents of the district.
 
(i) Authorizes a district to make joint ownership agreements with any
person.  

(j) Requires a district to establish and maintain rates or other
compensation for the use of the facilities of the system acquired,
constructed, operated, regulated, or maintained by the district that is
reasonable and nondiscriminatory and, together with grants received by the
district, is sufficient to produce revenues adequate to cover certain
expenses.   

(k) Authorizes a district to make contracts, leases, and agreements with,
and accept grants and loans from, the U.S., the state, and public or
private corporations and persons and to perform all acts necessary for the
full exercise of vested powers.  Authorizes the commission to enter an
interlocal agreement with a district under which a district may exercise a
power or duty of the commission for the development and efficient
operation of intermodal corridors in the district.  Authorizes a district
to acquire certain property under conditional sales contracts, leases,
equipment trust certificates, or any other form of contract or trust
agreement.  Provides that any revenue bond indenture may provide
limitations on the exercise of the powers granted by this section, and the
limitations apply so long as any of the revenue bonds issued pursuant to
the indenture are outstanding and unpaid.  

(l) Authorizes a district to adopt rules, by resolution, governing the
use, operation, and maintenance of the system.  Requires the district to
determine all routings and change them when the board considers it
advisable.  

(m) Authorizes a district to lease the commuter rail facilities or
contract for the use or operation of the commuter rail facilities by any
operator.  Requires a district to encourage the participation of private
enterprise in the operation of commuter rail facilities. Prohibits the
term of an operating contract from exceeding 20 years.   

(n) Authorizes a district to contract with any county or other political
subdivision of the state for the district to provide commuter rail
transportation services to any area outside the boundaries of the district
on such terms and conditions as the parties agree to.  

(o)  Authorizes a district to purchase an additional insured provision to
any liability insurance contract.   

(p) Requires, before beginning the operation of commuter rail facilities,
the board of a district to adopt an annual operating budget.  Requires the
district to adopt an operating budget for each succeeding fiscal year.
Provides that the fiscal year of the district ends September 30.  Requires
the board to hold a public hearing before adopting each budget except
after the initial budget.  Sets forth the notice requirements for such
hearings. Authorizes a budget to be amended at any time if notice of the
proposed amendment is given in the notice of meeting.  Prohibits an
expenditure that is not budgeted form being made. 

(q)  Provides that a district is eligible to participate in the Texas
County and District Retirement System.   
  
(r) Requires the board of a district, by resolution, to name one or more
banks for the deposit of district funds.  Provides that district funds are
public funds.  Authorizes the funds to be invested in securities permitted
by Chapter 2256, Government Code.  Requires the funds, to the extent the
funds are not insured by F.D.I.C. or its successor, to be collateralized
in the manner provided for county funds.  

Sec. 5.  BONDS AND NOTES.  (a) Authorizes a district to issue revenue
bonds and notes in such amounts as its board considers necessary or
appropriate for the general operation of its commuter rail facilities.
Provides that all bonds and notes are fully negotiable, may be made
redeemable before maturity, and may be sold at public or private sale.   

(b) Requires a district to submit all bonds and notes authorized to be
issued and the records relating to their issuance to the attorney general
for examination before delivery. Requires the attorney general to approve
the bonds and notes and the comptroller to register them upon the attorney
general's determination that they have been issued in accordance with the
constitution and this article and that they will be binding obligations of
the district issuing them.  Provides that bonds and notes issued under
this article are incontestable after approval, registration, and sale and
delivery of the bonds to the purchaser.   

(c) Authorizes the district to encumber and pledge all or any part of the
revenues of its commuter rail facilities, to mortgage and encumber all or
any part of the properties of the commuter rail facilities, and to
prescribe the terms and provisions of the bonds and notes in any manner
not inconsistent with this article, in order to secure the payment of the
bonds or notes.  Authorizes a district to encumber separately any item of
real estate or personalty if not prohibited by the resolution or indenture
relating to outstanding bonds or notes.   

(d) Provides that all bonds and notes are legal and authorized investments
for banks, trust companies, savings and loan associations, and insurance
companies.  Provides that the bonds and notes are eligible to secure the
deposit of public funds of the state, cities, towns, villages, counties,
school districts, or other political corporations or subdivisions of the
state.  Provides that the bonds and notes are lawful and sufficient
security for the deposits to the extent of the principal amount or market
value of the bonds or notes.   

Sec. 6.  COMPETITIVE BIDS.  Provides that a contract in the amount of more
than $15,000 for the construction of improvements or the purchase of
material, machinery, equipment, supplies, or any other property except
real property may be let only on competitive bids upon certain public
notification.  Authorizes a board to adopt rules governing the taking of
bids and the awarding of contacts.  Provides that this section does not
apply to personal or professional services; the acquisition of existing
rail transportation systems; or a contract with a common carrier to
construct lines and to operate commuter rail service on lines owned in
whole or in part by the carrier.   

Sec. 7.  EXEMPTION FROM TAXES.  Provides that the property, material
purchases, revenues, and income of a district and the interest on bonds
and notes issued by a district are exempt from all taxes levied by the
state or a political subdivision of the state. 

SECTION 2. Emergency clause.
  Effective date: upon passage.    

SUMMARY OF COMMITTEE CHANGES

Revises proposed relating clause.  

SECTION 1.

Amends Section 1, Article 6550c-1, V.T.C.S., to propose the definition of
"commission" and revise the proposed definition of "system."   

Amends Section 3, Article 6550c-1, V.T.C.S., to revise the proposed
composition of an intermunicipal commuter rail district board of directors
(board) in Subsection (b).  Requires  the board to appoint an executive
committee in Subsection (g). 

Amends Section 4, Article 6550c-1, V.T.C.S., to propose that an
intermunicipal commuter rail district (district) is authorized to acquire,
construct, develop, own, operate, and maintain intermodal and commuter
rail facilities, rather than just commuter rail facilities, in Subsection
(e).  Replaces the operation of commuter rail facilities with the
operation of the system throughout the section.  Proposes to prohibit a
district from using or altering a road or highway in the state highway
system without the permission of the commission in Subsection (e).
Proposes that the power of eminent domain under this section does not
apply to land under the jurisdiction of the department or a rail line
owned by a common carrier or municipality in Subsection (f).  Proposes to
authorize the district to make agreement with, among other entities, a
state agency in Subsection (h).  Proposes to authorize the commission to
enter an interlocal agreement with a district under which a district may
exercise a power of duty of the commission for the development and
efficient operation of intermodal corridors in the district in Subsection
(k).  Add proposed Subsections (o) and (q), and makes conforming changes
to previously designated Subsections (o) and (p).    

Amends Section 6, Article 6550c-1, V.T.C.S., to propose that this section
does not apply to a contract with a common carrier to construct lines and
to operate commuter rail service on lines owned in whole or in part by the
carrier, among other items.   

Amend Section 7, Article 6550c-1, V.T.C.S., to propose that material
purchases, among other items, of a district are exempt from all taxes
levied by the state or a political subdivision of the state.