By Marchant                                           H.B. No. 3335

         Line and page numbers may not match official copy.

         Bill not drafted by TLC or Senate E&E.

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the continuation of the Texas Turnpike Authority, a

 1-3     state agency; the authorization of the establishment of regional

 1-4     tollway authorities; and the transfer of certain assets and

 1-5     liabilities of the Texas Turnpike Authority to the North Texas

 1-6     Tollway Authority, a regional tollway authority.

 1-7           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-8           SECTION 1.01.  Section 361.003, Transportation Code, is

 1-9     amended to read as follows:

1-10           Sec. 361.003.  Sunset Provision.  The Texas Turnpike

1-11     Authority is subject to Chapter 325, Government Code (Texas Sunset

1-12     Act).  Unless continued in existence as provided by that chapter,

1-13     the authority is abolished and this chapter expires September 1,

1-14     [1997] 2009.

1-15           SECTION 1.02.  Section 361.001, Transportation Code, is

1-16     amended by adding the following new subdivisions (5), (6), and (7):

1-17                 (5)  "Commission" means the Texas Transportation

1-18     Commission.

1-19                 (6)  "Department" means the Texas Department of

1-20     Transportation.

1-21                 (7)  "Regional tollway authority" means a regional

1-22     tollway authority created under Chapter 366, Transportation Code.

 2-1           SECTION 1.03.  Section 361.055, Transportation Code, is

 2-2     amended to read as follows:

 2-3           Sec. 361.055.  Successor Agency to Authority.  The following

 2-4     are considered successor agencies to the Texas Turnpike Authority

 2-5     for purposes of Article III, Section 52-b, Texas Constitution:

 2-6                 (1)  a county, local government corporation, or

 2-7     municipality that leases, buys, operates, or otherwise receives a

 2-8     [Turnpike Project] turnpike project under [Section 12c of this Act]

 2-9     Subchapter H; [and]

2-10                 (2)  a county, a local government corporation serving a

2-11     county, or an adjacent county in a joint turnpike authority with a

2-12     county whose population is more than 1.5 million that constructs a

2-13     toll road, toll bridge, or [Turnpike Project.] turnpike project;

2-14                 (3)  a regional tollway authority;

2-15                 (4)  a public or private entity authorized by the

2-16     commission to receive funds from the department for the

2-17     construction, maintenance, or operation of toll projects.

2-18           SECTION 1.04.  The title of Subchapter H of Chapter 361 is

2-19     amended to read as follows:

2-20               SUBCHAPTER H.  TRANSFER OF TURNPIKE PROJECT TO

2-21                 COUNTY [OR], LOCAL GOVERNMENT CORPORATION,

2-22                 MUNICIPALITY, OR REGIONAL TOLLWAY AUTHORITY

2-23           SECTION 1.05.  Section 361.281, Transportation Code, is

2-24     amended to read as follows:

2-25           Sec. 361.281.  Applicability of Subchapter.  (a)  This

2-26     section applies only to:

2-27                 (1)  a county, or a local government corporation

 3-1     serving a county, or an adjacent county in a joint turnpike

 3-2     authority with a county whose population is more than 1.5 million,

 3-3     or a regional tollway authority as to which the [Authority]

 3-4     authority, the [Texas Transportation Commission] commission, and

 3-5     the governor approve the transfer of a [Turnpike Project] turnpike

 3-6     project as being in the best interests of the state and the

 3-7     affected county or counties; and

 3-8                 (2)  a municipality with a population of more than

 3-9     120,000 that is adjacent to the United Mexican States if the

3-10     [Authority] authority, the [Texas Transportation Commission]

3-11     commission, and the governor approve the transfer of a [Turnpike

3-12     Project] turnpike project as being in the best interests of the

3-13     state and the municipality.

3-14           (b)  The [Authority] authority may lease, sell, or otherwise

3-15     convey a [Turnpike Project] turnpike project to a county, local

3-16     government corporation created under the [Texas Transportation

3-17     Corporation Act (Article 1528l, Vernon's Texas Civil Statutes)]

3-18     Chapter 431, [or] municipality, or regional tollway authority.  A

3-19     county, local government corporation, [or] municipality, or

3-20     regional tollway authority may lease, buy, or otherwise receive a

3-21     [Turnpike Project] turnpike project.

3-22           SECTION 1.06.  Section 362.055, Transportation Code, is

3-23     amended to read as follows:

3-24           Sec. 362.055.  EXCEPTION.  This subchapter does not apply to:

3-25                 (1)  a county that has a population of more than 1.5

3-26     million;

3-27                 (2)  a local government corporation created under

 4-1     Chapter 431 by a county that has a population of more than 1.5

 4-2     million; or

 4-3                 (3)  a regional tollway authority created under Chapter

 4-4     366.

 4-5           SECTION 2.01.  The following provisions are added to the

 4-6     Texas Transportation Code as Chapter 366:

 4-7                 CHAPTER 366.  REGIONAL TOLLWAY AUTHORITIES

 4-8      SUBCHAPTER A.  GENERAL PROVISIONS, APPLICABILITY, AND DEFINITIONS

 4-9           Sec. 366.001.  SHORT TITLE.  This chapter may be cited as the

4-10     Regional Tollway Authority Act.

4-11           Sec. 366.002.  PURPOSES; LIBERAL CONSTRUCTION.  (a)  The

4-12     purposes of this chapter are:

4-13                 (1)  the expansion and improvement of transportation

4-14     facilities and systems in this state;

4-15                 (2)  the creation of regional tollway authorities to

4-16     secure and acquire rights-of-way for urgently needed transportation

4-17     systems and to plan, design, construct, operate, expand, extend,

4-18     and modify those systems; and

4-19                 (3)  the reduction of burdens and demands on the

4-20     limited funds available to the commission and an increase in the

4-21     effectiveness and efficiency of the commission.

4-22           (b)  This chapter shall be liberally construed to effect its

4-23     purposes.

4-24           Sec. 366.003.  DEFINITIONS.  In this chapter:

4-25           (a)  "Authority" means a regional tollway authority organized

4-26     under this chapter.

4-27           (b)  "Board" means the board of directors of an authority

 5-1     organized under this chapter.

 5-2           (c)  "Bond" means and includes all bonds, certificates,

 5-3     notes, and other obligations of an authority authorized by this

 5-4     chapter or any other statute or the Texas Constitution.

 5-5           (d)  "Bond indenture" means an indenture of trust or trust

 5-6     agreement entered into between an authority and a corporate trustee

 5-7     securing the payment of bonds.

 5-8           (e)  "Bond proceedings" means a bond resolution and any bond

 5-9     indenture authorized by the bond resolution, any credit agreement

5-10     entered into in connection with such bonds or the payments to be

5-11     made thereunder, and any other agreement between an authority and

5-12     another person providing security for the payment of such bonds.

5-13           (f)  "Bond resolution" means an order or resolution of an

5-14     authority's board authorizing the issuance of bonds.

5-15           (g)  "Bondholder" means the owner of bonds and includes the

5-16     trustee acting on behalf of a bondholder pursuant to the terms of a

5-17     bond indenture.

5-18           (h)  "Commission" means the Texas Transportation Commission.

5-19           (i)  "Constituent county" means, with respect to an

5-20     authority, a county whose territory is included within that

5-21     authority's jurisdiction under Section 366.031;

5-22           (j)  "Cost" means those costs included under Section 366.004.

5-23           (k)  "Credit agreement" means a credit agreement, as defined

5-24     by and authorized by Article 717q, Vernon's Texas Civil Statutes,

5-25     entered into by an authority in connection with the issuance or

5-26     payment of bonds.

5-27           (l)  "Department" means the Texas Department of

 6-1     Transportation.

 6-2           (m)  "Highway" means a road, highway, farm-to-market road, or

 6-3     street under the supervision of the state or a political

 6-4     subdivision of the state.

 6-5           (n)  "Interim bond" means a temporary bond, with or without

 6-6     coupons, that may be converted to a definitive bond.

 6-7           (o)  "Local governmental entity" means a political

 6-8     subdivision of the state, including a municipality or a county, a

 6-9     political subdivision of a county, a group of adjoining counties, a

6-10     district organized or operating under Section 52, Article III or

6-11     Section 59, Article XVI of the Texas Constitution, a nonprofit

6-12     corporation, including a transportation corporation created under

6-13     Chapter 431 of the Texas Transportation Code.

6-14           (p)  "Revenues" means the tolls, rents, and other funds

6-15     received by an authority from the ownership or operation of a

6-16     turnpike project.

6-17           (q)  "System" means a turnpike project or any combination of

6-18     turnpike projects designated as a system by the board pursuant to

6-19     Section 366.034.

6-20           (r)  "Turnpike project" means a highway of any number of

6-21     lanes, with or without grade separations, owned or operated by an

6-22     authority under this chapter and any improvement, extension, or

6-23     expansion to that highway, and includes:

6-24                 (1)  an improvement to relieve traffic congestion and

6-25     promote safety;

6-26                 (2)  a bridge, tunnel, overpass, underpass,

6-27     interchange, service road, ramp, entrance plaza, approach, or toll

 7-1     house;

 7-2                 (3)  an administration, storage, or other building the

 7-3     authority considers necessary to operate the turnpike project;

 7-4                 (4)  a service station, hotel, motel, restaurant,

 7-5     parking area or structure, rest stop, park, and other improvement

 7-6     or amenity an authority considers necessary, useful, or beneficial

 7-7     for the operation of a turnpike project; and

 7-8                 (5)  property rights, easements, and interests an

 7-9     authority acquires to construct or operate the turnpike project.

7-10           Sec. 366.004.  CONSTRUCTION COSTS DEFINED.  (a)  The cost of

7-11     acquisition, construction, improvement, extension, or expansion of

7-12     a turnpike project or system under this chapter includes the cost

7-13     of:

7-14                 (1)  the actual acquisition, construction, improvement,

7-15     extension, or expansion of the turnpike project or system;

7-16                 (2)  the acquisition of real property, rights-of-way,

7-17     property rights, easements, and other interests in real property;

7-18                 (3)  machinery and equipment;

7-19                 (4)  interest payable before, during, and after

7-20     acquisition, construction, improvement, extension, or expansion as

7-21     provided in the bond proceedings;

7-22                 (5)  traffic estimates, revenue estimates, engineering

7-23     and legal services, plans, specifications, surveys, appraisals,

7-24     construction cost estimates, and other expenses necessary or

7-25     incident to determining the feasibility of the construction,

7-26     improvement, extension, or expansion;

7-27                 (6)  necessary or incidental administrative, legal, and

 8-1     other expenses;

 8-2                 (7)  compliance with laws, regulations, and

 8-3     administrative rulings;

 8-4                 (8)  financing; and

 8-5                 (9)  expenses related to the initial operation of the

 8-6     turnpike project or system.

 8-7           (b)  Costs attributable to a turnpike project or system and

 8-8     incurred prior to the issuance of bonds to finance the turnpike

 8-9     project or system may be reimbursed from the proceeds of sale of

8-10     the bonds.

8-11            (Sections 366.005 to 366.030 reserved for expansion

8-12     SUBCHAPTER B.  CREATION AND POWERS OF REGIONAL TOLLWAY AUTHORITIES

8-13           Sec. 366.031.  CREATION AND EXPANSION OF A REGIONAL TOLLWAY

8-14     AUTHORITY.  (a)  Two or more counties, acting through their

8-15     respective commissioners courts and without state approval,

8-16     supervision, or regulation, may by orders passed by each

8-17     commissioners court create a regional tollway authority authorized

8-18     under this chapter, provided that:

8-19                 (1)  one of the counties must have a population of not

8-20     less than 1,500,000; and

8-21                 (2)  each of such counties must be adjacent to at least

8-22     one other constituent county of the authority being created.

8-23           (b)  A county, acting through its commissioners court and

8-24     without state approval, supervision, or regulation may by

8-25     resolution propose to an established authority that said county's

8-26     territory be included within the jurisdiction of that authority;

8-27     provided, that such county must either (1) be adjacent to at least

 9-1     one constituent county of the authority receiving such a proposal,

 9-2     or (2) have a turnpike project of that authority situated in or

 9-3     planned for such county.  Upon approval by the board of an

 9-4     authority receiving such a proposal, the proposing county shall be

 9-5     deemed to be within the jurisdiction of that authority.

 9-6           Sec. 366.032.  NATURE OF A REGIONAL TOLLWAY AUTHORITY.  (a)

 9-7     An authority created under this chapter is a body politic and

 9-8     corporate and a political subdivision of the State of Texas.

 9-9           (b)  An authority is a governmental unit as that term is used

9-10     in Chapter 101, Civil Practice and Remedies Code.

9-11           (c)  The exercise by an authority of the powers conferred by

9-12     this chapter in the acquisition, design, financing, construction,

9-13     operation, and maintenance of a turnpike project or system is:

9-14                 (1)  in all respects for the benefit of the people of

9-15     the counties in which an authority operates and of the people of

9-16     this state, for the increase of their commerce and prosperity, and

9-17     for the improvement of their health and living conditions and

9-18     public safety; and

9-19                 (2)  an essential governmental function of the state.

9-20           (d)  The operations of an authority are governmental, not

9-21     proprietary, functions.

9-22           Sec. 366.033.  GENERAL POWERS.  (a)  To promote the purposes

9-23     of this chapter, an authority, acting through its board, without

9-24     state approval, supervision, or regulation, may:

9-25                 (1)  adopt by-laws for the regulation of its affairs

9-26     and the conduct of its business;

9-27                 (2)  adopt an official seal;

 10-1                (3)  study, evaluate, design, acquire, construct,

 10-2    maintain, repair, and operate turnpike projects, individually or as

 10-3    one or more systems;

 10-4                (4)  acquire, hold, and dispose of property in the

 10-5    exercise of its powers and the performance of its duties under this

 10-6    chapter, provided that no property comprising a part of a turnpike

 10-7    project or a system shall be subject to condemnation or eminent

 10-8    domain by any person or governmental entity;

 10-9                (5)  enter into contracts or operating agreements with

10-10    similar authorities or agencies of the United States, a state of

10-11    the United States, the United Mexican States, or a state of the

10-12    United Mexican States;

10-13                (6)  enter into contracts or agreements necessary or

10-14    incidental to its duties and powers under this chapter;

10-15                (7)  cooperate and work directly with property owners,

10-16    governmental agencies and officials to support an activity required

10-17    to promote and/or develop a turnpike project or system;

10-18                (8)  employ and set the compensation of administrators,

10-19    consulting engineers, attorneys, accountants, construction and

10-20    financial experts, superintendents, managers, full-time and

10-21    part-time employees, agents, consultants, and such other persons as

10-22    the authority considers necessary or useful;

10-23                (9)  receive loans, gifts, grants, and other

10-24    contributions for the construction of a turnpike project or system

10-25    and receive contributions of money, property, labor, or other

10-26    things of value from any source (including, without limitation, the

10-27    United States, a state of the United States, the United Mexican

 11-1    States, a state of the United Mexican States, the commission, the

 11-2    department, the Texas Turnpike Authority, any subdivision of the

 11-3    state, or any other local governmental entity or any private party)

 11-4    to be used for the purposes for which the grants or contributions

 11-5    are made, and enter into any agreement necessary therefor;

 11-6                (10)  install, construct, maintain, repair, renew,

 11-7    relocate, and remove public utility facilities in, on, along, over,

 11-8    or under a turnpike project;

 11-9                (11)  organize a corporation under Chapter 431,

11-10    Transportation Code, for the promotion and development of turnpike

11-11    projects and systems;

11-12                (12)  adopt and enforce rules not inconsistent with

11-13    this chapter for the use of any turnpike project or system,

11-14    including traffic and other public safety rules;

11-15                (13)  enter into leases, operating agreements, service

11-16    agreements, licenses, franchises, and similar agreements with

11-17    public or private parties governing such parties' use of all or any

11-18    portion of a turnpike project and the rights and obligations of the

11-19    authority with respect thereto; and

11-20                (14)  do all things necessary or appropriate to carry

11-21    out the powers expressly granted by this chapter.

11-22          (b)  An authority may, if requested by the commission or the

11-23    Texas Turnpike Authority, perform any function not specified by

11-24    this chapter to promote and/or develop turnpike projects and

11-25    systems in this state.

11-26          (c)  An authority may sue and be sued and plead and be

11-27    impleaded in its own name.

 12-1          (d)  An authority may rent, lease, franchise, license, or

 12-2    otherwise make portions of its properties available for use by

 12-3    others in furtherance of its powers under this chapter by

 12-4    increasing the feasibility or the revenues of a turnpike project or

 12-5    system.

 12-6          (e)  An authority and any local governmental entity may enter

 12-7    into a contract pursuant to which the authority will operate a

 12-8    turnpike project or system on behalf of the local governmental

 12-9    entity.  The payments to be made to an authority under such a

12-10    contract shall constitute operating expenses of the facility or

12-11    system that is to be operated under such contract, and any such

12-12    contract may extend for the number of years the parties specify

12-13    therein.

12-14          Sec. 366.034.  ESTABLISHMENT OF TURNPIKE SYSTEMS.  (a)  If an

12-15    authority determines that the traffic needs of the counties in

12-16    which it operates and the traffic needs of the surrounding region

12-17    could be most efficiently and economically met by jointly operating

12-18    two or more turnpike projects as one operational and financial

12-19    enterprise, it may create a system comprised of those turnpike

12-20    projects.  An authority may create more than one system and may

12-21    combine two or more systems into one system.  An authority may

12-22    thereafter finance, acquire, construct, and operate additional

12-23    turnpike projects as additions to and expansions of a system if the

12-24    authority determines that the turnpike project could most

12-25    efficiently and economically be acquired and constructed if it was

12-26    a part of the system and that the addition will benefit the system.

12-27          (b)  The revenues of a system shall be accounted for

 13-1    separately and shall not be commingled with the revenue of a

 13-2    turnpike project which is not a part of the system or with the

 13-3    revenue or another system.

 13-4          Sec. 366.035.  CONVERSION OF STATE HIGHWAY SYSTEM PROJECTS.

 13-5    (a)  If the commission finds that the most feasible and economic

 13-6    means to accomplish necessary expansion, improvements, or

 13-7    extensions to the state highway system is the conversion to a

 13-8    turnpike project of a segment of the free state highway system,

 13-9    then any segment located in any constituent county of an authority

13-10    or in county in which an authority operates a turnpike project or

13-11    in any county adjacent to any such counties may, upon approval of

13-12    the governor and the affected authority, be transferred by order of

13-13    the commission to that authority.  An authority may receive such

13-14    segment of highway, thereafter to be owned, operated, and

13-15    maintained as a turnpike project or system or a part of a turnpike

13-16    project or system under this chapter.

13-17          (b)  The authority shall reimburse the commission for the

13-18    cost of the transferred highway, unless the commission finds that

13-19    the transfer will result in substantial net benefits to the state,

13-20    the department, and the traveling public that exceed that cost.

13-21    The cost shall include the total dollar amount expended by the

13-22    department for the original construction of the highway, including

13-23    all costs associated with the preliminary engineering and design

13-24    engineering for plans, specifications, and estimates, the

13-25    acquisition of necessary right-of-way, and actual construction of

13-26    the highway and all necessary appurtenant facilities.  Costs

13-27    anticipated to be expended to expand, improve, or extend the

 14-1    highway shall be deducted from the costs to be reimbursed to the

 14-2    commission.

 14-3          (c)  The commission shall, coincident with the transfer,

 14-4    remove the segment of highway from the designated state highway

 14-5    system and shall subsequently have no liability, responsibility, or

 14-6    duty for the maintenance or operation of the highway.

 14-7          (d)  Before transferring a segment of the state highway

 14-8    system under this section, the commission shall conduct a public

 14-9    hearing for the purpose of receiving comments from interested

14-10    persons concerning the proposed transfer.  Notice of the hearing

14-11    shall be published in the Texas Register, one or more newspapers of

14-12    general circulation, and a newspaper, if any, published in the

14-13    constituent counties of the applicable authority.

14-14          (e)  The commission shall adopt rules implementing this

14-15    section, such rules to include criteria and guidelines for the

14-16    approval of a transfer of a highway.

14-17          (f)  An authority shall adopt rules providing criteria and

14-18    guidelines for approving the acceptance of a highway under this

14-19    section.

14-20           (Sections 366.036 to 366.070 reserved for expansion

14-21         SUBCHAPTER C.  FEASIBILITY OF REGIONAL TURNPIKE PROJECTS

14-22          Sec. 366.071.  EXPENDITURES FOR FEASIBILITY STUDIES.  (a)

14-23    Notwithstanding any other provision of this chapter, an authority

14-24    may pay the expenses of studying the cost and feasibility and any

14-25    other expenses relating to the preparation and issuance of bonds

14-26    for a proposed turnpike project or system by:

14-27                (1)  using lawfully available revenue derived from an

 15-1    existing turnpike project or system;

 15-2                (2)  borrowing money and issuing bonds or entering into

 15-3    a loan agreement payable out of lawfully available revenue

 15-4    anticipated to be derived from the operation of an existing

 15-5    turnpike project or system; and

 15-6                (3)  pledging to the payment of such bonds or loan

 15-7    agreements lawfully available revenue anticipated to be derived

 15-8    from the operation of an existing turnpike project or system or

 15-9    revenue lawfully available to the authority from another source.

15-10          (b)  Money spent under this section for the proposed turnpike

15-11    project or system shall be reimbursed to the turnpike project or

15-12    system from which the money was spent from the proceeds of bonds

15-13    issued for the acquisition and construction of the proposed

15-14    turnpike project or system.

15-15          (c)  The use of any funds of a turnpike project or system to

15-16    study the feasibility of another turnpike project or system or used

15-17    to repay any funds used for that purpose shall not constitute an

15-18    operating expense of the turnpike project or system producing the

15-19    revenues and shall only be paid from the surplus funds of such

15-20    turnpike project or system.

15-21          Sec. 366.072.  FEASIBILITY STUDY FUND.  (a)  An authority may

15-22    maintain a feasibility study fund.  The fund is a revolving fund

15-23    held in trust by a banking institution chosen by the authority and

15-24    shall be kept separate from the money for any turnpike project or

15-25    system.

15-26          (b)  An authority may transfer an amount from a surplus fund

15-27    established for a turnpike project or system to the authority's

 16-1    feasibility study fund if the remainder of the surplus fund is not

 16-2    less than any minimum amount required by the bond proceedings to be

 16-3    retained for that turnpike project or system.

 16-4          (c)  Money in the feasibility study fund shall be used to pay

 16-5    the expenses of studying the cost and feasibility and any other

 16-6    expenses relating to:

 16-7                (1)  the preparation and issuance of bonds for the

 16-8    acquisition and construction of a proposed turnpike project or

 16-9    system;

16-10                (2)  the financing of the improvement, extension, or

16-11    expansion of an existing turnpike project or system; and

16-12                (3)  private participation, as authorized by applicable

16-13    law, in the financing of a proposed turnpike project or system, the

16-14    refinancing of an existing turnpike project or system, or the

16-15    improvement, extension, or expansion of a turnpike project or

16-16    system.

16-17          (d)  Money spent under Subsection (c) for a proposed turnpike

16-18    project or system shall be reimbursed from the proceeds of turnpike

16-19    revenue bonds issued for, or other proceeds that may be used for,

16-20    the acquisition, construction, improvement, extension, expansion,

16-21    or operation of said turnpike project or system.

16-22          (e)  For a purpose described by Subsection (c), an authority

16-23    may borrow money and issue promissory notes or other

16-24    interest-bearing evidences of indebtedness payable out of its

16-25    feasibility study fund, pledging money in the fund or to be placed

16-26    in the fund.

16-27          Sec. 366.073.  FEASIBILITY STUDY BY MUNICIPALITY, COUNTY,

 17-1    OTHER LOCAL GOVERNMENTAL ENTITY, OR PRIVATE GROUP.  (a)  One or

 17-2    more municipalities, counties, or local governmental entities, or a

 17-3    combination of municipalities, counties, and local governmental

 17-4    entities, or a private group or combination of individuals in this

 17-5    state may pay all or part of the expenses of studying the cost and

 17-6    feasibility and any other expenses relating to:

 17-7                (1)  the preparation and issuance of bonds for the

 17-8    acquisition and construction of a proposed turnpike project or

 17-9    system by an authority;

17-10                (2)  the improvement, extension, or expansion of an

17-11    authority's existing turnpike project or system; or

17-12                (3)  the use of private participation under applicable

17-13    law in connection with the acquisition, construction, improvement,

17-14    expansion, extension, maintenance, repair, and/or operation of a

17-15    turnpike project or system by an authority.

17-16          (b)  Money spent under Subsection (a) for an authority's

17-17    proposed turnpike project or system is reimbursable without

17-18    interest and with the consent of the authority to the person paying

17-19    the expenses described in Subsection (a) out of the proceeds from

17-20    turnpike revenue bonds issued for or other proceeds that may be

17-21    used for the acquisition, construction, improvement, extension,

17-22    expansion, or operation of the turnpike project or system.

17-23           (Sections 366.074 to 366.110 reserved for expansion

17-24                     SUBCHAPTER D.  TURNPIKE FINANCING

17-25          Sec. 366.111.  TURNPIKE REVENUE BONDS.  (a)  An authority, by

17-26    adoption of a bond resolution, may authorize the issuance of bonds

17-27    to pay all or part of the cost of a turnpike project or a system or

 18-1    to refund any bonds previously issued for such turnpike project or

 18-2    system or for a turnpike project or system which will become a part

 18-3    of another system.

 18-4          (b)  The bonds of each issue shall have the following terms

 18-5    or characteristics as determined in the bond resolution:

 18-6                (1)  be dated;

 18-7                (2)  bear interest at the rate or rates and from the

 18-8    dates, as authorized by law, or bear no interest;

 18-9                (3)  mature at the time or times, not exceeding 40

18-10    years from their date or dates; and

18-11                (4)  be made redeemable before maturity, at the price

18-12    or prices and under the terms set forth in the bond resolution.

18-13          (c)  An authority may sell the bonds at public or private

18-14    sale, in the manner, and for the price, it determines to be in the

18-15    best interest of the authority.

18-16          (d)  The proceeds of each bond issue shall be disbursed in

18-17    the manner and under the restrictions, if any, the authority

18-18    provides in the bond resolution.

18-19          (e)  Additional bonds may in like manner be issued to pay the

18-20    costs of a turnpike project or system.  Unless otherwise provided

18-21    in the bond resolution, the additional bonds shall be on a parity,

18-22    without preference or priority, with bonds previously issued and

18-23    payable from the revenues of such turnpike project or system.  In

18-24    addition, an authority may issue bonds for a turnpike project or

18-25    system secured by a lien on the revenues of the turnpike project or

18-26    system subordinate to the lien on such revenues securing other

18-27    bonds issued for such turnpike project or system.

 19-1          (f)  If the proceeds of a bond issue exceed the cost of the

 19-2    turnpike project or system for which the bonds were issued, the

 19-3    surplus shall be segregated from the other funds of the authority

 19-4    and used only for the purposes specified in the bond resolution.

 19-5          (g)  Bonds issued and delivered under this chapter and

 19-6    interest coupons on the bonds are a security under Chapter 8,

 19-7    Business & Commerce Code.

 19-8          (h)  Bonds issued under this chapter and income from the

 19-9    bonds, including any profit made on the sale or transfer of the

19-10    bonds, are exempt from taxation in this state.

19-11          Sec. 366.112.  INTERIM BONDS.  (a)  An authority may, before

19-12    issuing definitive bonds, issue interim bonds, with or without

19-13    coupons, exchangeable for definitive bonds.

19-14          (b)  The interim bonds may be authorized and issued in

19-15    accordance with this chapter, without regard to the requirements,

19-16    restrictions, or procedural provisions contained in any other law.

19-17          (c)  A bond resolution authorizing interim bonds may provide

19-18    that the interim bonds shall recite that the bonds are issued under

19-19    this chapter.  The recital is conclusive evidence of the validity

19-20    and the regularity of the bonds' issuance.

19-21          Sec. 366.113.  PAYMENT OF BONDS; STATE AND COUNTY CREDIT NOT

19-22    PLEDGED.  (a)  The principal of, interest on, and any redemption

19-23    premium on bonds issued by an authority are payable solely from:

19-24                (1)  the revenue of the turnpike project or system for

19-25    which the bonds were issued, including tolls pledged to pay the

19-26    bonds;

19-27                (2)  payments made under an agreement with the

 20-1    commission or a local governmental entity as provided by Subchapter

 20-2    G of this chapter;

 20-3                (3)  money derived from any other source available to

 20-4    the authority, other than money derived from a turnpike project

 20-5    that is not part of the same system or money derived from a

 20-6    different system, except to the extent that the surplus revenues of

 20-7    a turnpike project or system have been pledged for such purpose;

 20-8                (4)  amounts received under a credit agreement relating

 20-9    to the turnpike project or system for which the bonds were issued.

20-10          (b)  Bonds issued under this chapter do not constitute a debt

20-11    of the state or any of the constituent counties of an authority or

20-12    a pledge of the faith and credit of the state or any of such

20-13    counties.  Each bond must contain on its face a statement to the

20-14    effect that the state, the authority, and the constituent counties

20-15    of the authority, are not obligated to pay the bond or the interest

20-16    on the bond from a source other than the amount pledged to pay the

20-17    bond and the interest on the bond, and neither the faith and credit

20-18    and taxing power of the state nor the faith and credit and taxing

20-19    power of the constituent counties of the authority are pledged to

20-20    the payment of the principal of or interest on the bond.

20-21          (c)  An authority may not incur financial obligations that

20-22    cannot be paid from revenue derived from owning or operating the

20-23    authority's turnpike projects and systems or from other revenue

20-24    provided by law.

20-25          Sec. 366.114.  EFFECT OF LIEN.  (a)  A lien on or a pledge of

20-26    revenue from a turnpike project or system under this chapter or on

20-27    a reserve, replacement, or other fund established in connection

 21-1    with a bond issued under this chapter:

 21-2                (1)  is enforceable at the time of payment for and

 21-3    delivery of the bond;

 21-4                (2)  applies to an item on hand or subsequently

 21-5    received;

 21-6                (3)  applies without physical delivery of an item or

 21-7    other act; and

 21-8                (4)  is enforceable against any person having any

 21-9    claim, in tort, contract, or other remedy, against the applicable

21-10    authority without regard to whether the person has notice of the

21-11    lien or pledge.

21-12          (b)  A bond resolution is not required to be recorded except

21-13    in the regular records of the authority.

21-14          Sec. 366.115.  BOND INDENTURE.  (a)  Bonds issued under this

21-15    chapter may be secured by a bond indenture between the authority

21-16    and a corporate trustee that is a trust company or a bank that has

21-17    the powers of a trust company.

21-18          (b)  A bond indenture may pledge or assign the tolls and

21-19    other revenue to be received but may not convey or mortgage any

21-20    part of a turnpike project or system.

21-21          (c)  A bond indenture may:

21-22                (1)  set forth the rights and remedies of the

21-23    bondholders and the trustee;

21-24                (2)  restrict the individual right of action by

21-25    bondholders as is customary in trust agreements or indentures of

21-26    trust securing corporate bonds and debentures; and

21-27                (3)  contain provisions the authority determines

 22-1    reasonable and proper for the security of the bondholders,

 22-2    including covenants:

 22-3                      (A)  establishing the authority's duties relating

 22-4    to:

 22-5                            (i)  the acquisition of property;

 22-6                            (ii)  the construction, maintenance,

 22-7    operation, and repair of, and insurance for, a turnpike project or

 22-8    system; and

 22-9                            (iii)  custody, safeguarding, and

22-10    application of money;

22-11                      (B)  prescribing events that constitute default;

22-12                      (C)  prescribing terms on which any or all of the

22-13    bonds become or may be declared due before maturity; and

22-14                      (D)  relating to the rights, powers, liabilities,

22-15    or duties that arise on the breach of an authority's duty.

22-16          (d)  The expenses incurred in carrying out a trust agreement

22-17    may be treated as part of the cost of operating the turnpike

22-18    project.

22-19          (e)  In addition to all other rights by mandamus or other

22-20    court proceeding, an owner or trustee of a bond issued under this

22-21    chapter may enforce the owner's rights against an issuing

22-22    authority, that authority's employees, its board, or an agent or

22-23    employee of its board and is entitled to:

22-24                (1)  require the authority and the board to impose and

22-25    collect tolls, charges, and other revenues sufficient to carry out

22-26    any agreement contained in the bond proceedings; and

22-27                (2)  apply for and obtain the appointment of a receiver

 23-1    for the turnpike project or system.

 23-2          Sec. 366.116.  APPROVAL OF BONDS BY ATTORNEY GENERAL.  (a)

 23-3    An authority shall submit to the attorney general for examination a

 23-4    transcript of proceedings relating to bonds authorized under this

 23-5    chapter.  The transcript shall include the bond proceedings and any

 23-6    contract securing or providing revenues for the payment of the

 23-7    bonds.

 23-8          (b)  If the attorney general finds that the bonds, including

 23-9    the bond proceedings and any supporting contract, are authorized by

23-10    law, the attorney general shall approve them and deliver to the

23-11    comptroller a copy of the legal opinion of the attorney general

23-12    stating that approval and the record of proceedings relating to the

23-13    authorization of the bonds.

23-14          (c)  On receipt of the legal opinion of the attorney general

23-15    and the record of proceedings relating to the authorization of the

23-16    bonds, the comptroller shall register the record of proceedings.

23-17          (d)  After approval by the attorney general, the bonds, the

23-18    bond proceedings, and any supporting contract are valid,

23-19    enforceable, and incontestable in any court or other forum for any

23-20    reason and are binding obligations according to their terms for all

23-21    purposes.

23-22          Sec. 366.117.  FURNISHING OF INDEMNIFYING BONDS OR PLEDGE OF

23-23    SECURITIES.

23-24                (1)  A bank or trust company incorporated under the

23-25    laws of this state that acts as depository of the proceeds of bonds

23-26    or of revenue may furnish indemnifying bonds or pledge securities

23-27    that an authority requires.

 24-1                (2)  Bonds of an authority may secure the deposit of

 24-2    public funds of the state or a political subdivision of the state

 24-3    to the extent of the lesser of the face value of the bonds or their

 24-4    market value.

 24-5          Sec. 366.118.  APPLICABILITY OF OTHER LAW; CONFLICTS.  All

 24-6    laws affecting the issuance of bonds by local governmental

 24-7    entities, including Chapter 656, Acts of the 68th Legislature,

 24-8    Regular Session, 1983, as amended (Article 717q, Vernon's Texas

 24-9    Civil Statutes), Chapter 3, Acts of the 61st Legislature, Regular

24-10    Session, 1969, as amended (Article 717k-2, Vernon's Texas Civil

24-11    Statutes), Chapter 845, Acts of the 67th Legislature, Regular

24-12    Session, 1981, as amended (Article 717k-6, Vernon's Texas Civil

24-13    Statutes), and Chapter 53, Acts of the 70th Legislature, 2nd Called

24-14    Session, 1987, as amended (Article 717k-8, Vernon's Texas Civil

24-15    Statutes) are applicable to and apply to all bonds issued pursuant

24-16    to this chapter; provided, however, in the event of any conflict

24-17    between such laws and this chapter, the provisions of this chapter

24-18    prevail.

24-19           (Sections 366.119 to 366.160 reserved for expansion

24-20        SUBCHAPTER E.  ACQUISITION, CONSTRUCTION, AND OPERATION OF

24-21                             TURNPIKE PROJECTS

24-22          Sec. 366.161.  TURNPIKE PROJECTS EXTENDING INTO OTHER

24-23    COUNTIES.  An authority may acquire, construct, operate, maintain,

24-24    expand or extend a turnpike project in:

24-25                (1)  a constituent county;

24-26                (2)  a county in which the authority operates or is

24-27    constructing a turnpike project, provided the turnpike project in

 25-1    the affected county is a continuation of the authority's turnpike

 25-2    project or system extending from an adjacent county; or

 25-3                (3)  a county in which the authority operates or is

 25-4    constructing a turnpike project that is not a continuation of the

 25-5    authority's turnpike project or system, provided the commissioners

 25-6    court of such county and the commission have approved the project.

 25-7          Sec. 366.162.  POWERS AND PROCEDURES OF AUTHORITY IN

 25-8    ACQUIRING PROPERTY.  (a)  An authority may construct or improve a

 25-9    turnpike project on real property, including a right-of-way

25-10    acquired by the authority or provided to the authority for that

25-11    purpose by the commission, the Texas Turnpike Authority, a

25-12    political subdivision of this state, or any other local

25-13    governmental entity.

25-14          (b)  Except as otherwise provided by this chapter, an

25-15    authority has the same powers and may use the same procedures as

25-16    the commission in acquiring property.

25-17          Sec. 366.163.  ACQUISITION OF PROPERTY.  (a)  An authority

25-18    may acquire in the name of the authority public or private real and

25-19    other property it determines necessary or convenient for the

25-20    design, financing, construction, operation, maintenance, expansion,

25-21    or extension of a turnpike project or for otherwise carrying out

25-22    this chapter.

25-23          (b)  The property an authority may acquire under this

25-24    subchapter includes all or any portion of, and rights in and to,

25-25    the following:

25-26                (1)  public or private land, streets, alleys,

25-27    rights-of-way, parks, playgrounds, and reservations;

 26-1                (2)  franchises;

 26-2                (3)  easements;

 26-3                (4)  licenses; and

 26-4                (5)  other interests in real and other property.

 26-5          (c)  An authority may acquire the real property by any

 26-6    method, including purchase and condemnation.  An authority may

 26-7    purchase public or private real property on the terms and at the

 26-8    price the authority and the property owner consider reasonable.

 26-9          (d)  Property acquired in any manner by an authority shall be

26-10    acquired free and clear of all covenants, conditions, restrictions,

26-11    and limitations, and the beneficiaries thereof shall not be

26-12    entitled to enforce such covenants, conditions, restrictions, and

26-13    limitations against the authority.

26-14          Sec. 366.164.  RIGHT OF ENTRY.  (a)  To acquire property

26-15    useful in connection with a turnpike project, an authority may

26-16    enter on any real property, water, or premises to make a survey,

26-17    geotechnical evaluation, sounding, or examination.

26-18          (b)  An entry under Subdivision (1) is not:

26-19                (1)  a trespass; or

26-20                (2)  an entry under a pending condemnation proceeding.

26-21          Sec. 366.165.  CONDEMNATION OF REAL PROPERTY.  (a)  Subject

26-22    to Subsection (c), an authority may acquire public or private real

26-23    property in the name of the authority by the exercise of the power

26-24    of condemnation under the laws applicable to the exercise of that

26-25    power on property for public use if:

26-26                (1)  the authority and the property owner cannot agree

26-27    on a reasonable price for the property; or

 27-1                (2)  the property owner is legally incapacitated,

 27-2    absent, unknown, or unable to convey title.

 27-3          (b)  An authority may condemn real property that the

 27-4    authority determines is:

 27-5                (1)  necessary or appropriate to construct or to

 27-6    efficiently operate a turnpike project;

 27-7                (2)  necessary to restore public or private property

 27-8    damaged or destroyed;

 27-9                (3)  necessary for access, approach, and interchange

27-10    roads;

27-11                (4)  necessary for supplemental facilities of the

27-12    authority;

27-13                (5)  necessary to provide proper drainage and ground

27-14    slope for a turnpike project; or

27-15                (6)  necessary otherwise to carry out this chapter.

27-16          (c)  An authority's acquisition of any real or other property

27-17    of the commission under this section or any other section of this

27-18    chapter, or an authority's relocation, rerouting, disruption, or

27-19    alteration of any facility of the commission shall be deemed a

27-20    conversion of a state highway under Section 366.035 and shall be

27-21    subject to all requirements and approvals required with respect to

27-22    a conversion under that section.

27-23          Sec. 366.166.  DECLARATION OF TAKING.  (a)  An authority may

27-24    file a declaration of taking with the clerk of the court:

27-25                (1)  in which the authority files a condemnation

27-26    petition under Chapter 21, Property Code; or

27-27                (2)  to which the case is assigned.

 28-1          (b)  An authority may file the declaration of taking

 28-2    concurrently with or subsequent to the petition, but may not file

 28-3    the declaration after the special commissioners have made an award

 28-4    in the condemnation proceeding.

 28-5          (c)  The declaration of taking must include:

 28-6                (1)  a specific reference to the legislative authority

 28-7    for the condemnation;

 28-8                (2)  a description and plot plan of the real property

 28-9    to be condemned, including the following information if applicable:

28-10                      (A)  the municipality in which the property is

28-11    located;

28-12                      (B)  the street address of the property; and

28-13                      (C)  the lot and block number of the property;

28-14                (3)  a statement of the property interest to be

28-15    condemned;

28-16                (4)  the name and address of each property owner that

28-17    the authority can obtain after reasonable investigation and a

28-18    description of the owner's interest in the property; and

28-19                (5)  a statement that immediate possession of all or

28-20    part of the property to be condemned is necessary for the timely

28-21    construction of a turnpike project.

28-22          (d)  A deposit to the registry of the court of an amount

28-23    equal to the appraised fair market value, as determined by the

28-24    authority, of the property to be condemned and any damages to the

28-25    remainder thereof must accompany the declaration of taking.

28-26          (e)  In lieu of the deposit under (d), at its option, the

28-27    authority may, concurrently with the declaration of a taking,

 29-1    tender in favor of the owner of the subject property a bond or

 29-2    other security in an amount sufficient to secure the owner for the

 29-3    value of the property taken and damages to remaining property,

 29-4    provided the authority obtains the court's approval.

 29-5          (f)  The date on which the declaration is filed is the date

 29-6    of taking for the purpose of assessing the value of the property

 29-7    taken and damages to any remaining property to which an owner is

 29-8    entitled.

 29-9          (g)  An owner may draw upon the deposit held by the court

29-10    under (d) above on the same terms and conditions as are applicable

29-11    under state law to a property owner's withdrawal of a

29-12    commissioners' award deposited under Section 21.021(a)(1), Property

29-13    Code.

29-14          (h)  A property owner that is a defendant in an eminent

29-15    domain action filed by an authority under this chapter shall have

29-16    twenty (20) days from the date of service of process of both a

29-17    condemnation petition and a notice of declaration of taking to give

29-18    notice to the court in which such action is pending of the

29-19    defendant's desire to have the condemnation petition placed on the

29-20    court's docket in the same manner as other cases pending in such

29-21    court.  Upon receipt of timely notice from the defendant, the court

29-22    in which the eminent domain action is pending shall place the case

29-23    on its docket in the same manner as other cases pending in such

29-24    court.

29-25          Sec. 366.167.  POSSESSION OF PROPERTY.  (a)  Immediately on

29-26    the filing of a declaration of taking, an authority shall serve a

29-27    copy of the declaration on each person possessing an interest in

 30-1    the condemned property by a method prescribed by Section 21.016(d),

 30-2    Property Code.  The authority shall file evidence of the service

 30-3    with the clerk of the court.  On filing of that evidence, the

 30-4    authority may take possession of the property on the same terms as

 30-5    if a commissioners hearing had been conducted, pending the

 30-6    litigation.

 30-7          (b)  If the condemned property is a homestead or a portion of

 30-8    a homestead as defined by Section 41.002, Property Code, an

 30-9    authority may not take possession sooner than the 31st day after

30-10    the date of service under Subsection (a).

30-11          (c)  A property owner or tenant who refuses to vacate the

30-12    property or yield possession is subject to forcible entry and

30-13    detainer under Chapter 24, Property Code.

30-14          Sec. 366.168.  SEVERANCE OF REAL PROPERTY.  (a)  If an

30-15    authority's turnpike project severs a property owner's real

30-16    property, the authority shall pay:

30-17                (1)  the value of the property acquired; and

30-18                (2)  the damages, if any, to the remainder of the

30-19    owner's property caused by the severance, including damages caused

30-20    by the inaccessibility of one tract from the other.

30-21          (b)  At its option, an authority may negotiate for and

30-22    purchase the severed real property or any part of the severed real

30-23    property if the authority and the property owner agree on terms for

30-24    the purchase.  An authority may sell and dispose of severed real

30-25    property that it determines is not necessary or useful to the

30-26    authority.  Severed property shall be appraised before being

30-27    offered for sale by an authority.

 31-1          Sec. 366.169.  ACQUISITION OF RIGHTS IN PUBLIC REAL PROPERTY.

 31-2    (a)  An authority may use real property, including submerged land,

 31-3    streets, alleys, and easements, owned by the state or a local

 31-4    governmental entity that the authority considers necessary for the

 31-5    construction or operation of a turnpike project.

 31-6          (b)  The state or a local governmental entity having charge

 31-7    of public real property may consent to the use of the property for

 31-8    a turnpike project.

 31-9          (c)  Except as provided in Section 366.035 respect to

31-10    conversion of a segment of the state highway system to a toll

31-11    facility, the state or a local governmental entity may without

31-12    advertising, court order, or other action or formality other than

31-13    the regular and formal action of the state authority or local

31-14    governmental entity concerned, convey, grant, lend, or lease to an

31-15    authority real property, including highways and other real property

31-16    already devoted to public use, and also including rights or

31-17    easements in real property, that may be necessary, convenient, or

31-18    appropriate to accomplish the authority's purposes, including,

31-19    without limitation, the construction or operation of a turnpike

31-20    project.

31-21          (d)  This section does not deprive the School Land Board of

31-22    the authority to execute leases for the development of oil, gas,

31-23    and other minerals on state-owned real property adjoining a

31-24    turnpike project or in tidewater limits.  The leases may provide

31-25    for directional drilling from the adjoining property or tidewater

31-26    area.

31-27          Sec. 366.170.  COMPENSATION FOR AND RESTORATION OF PUBLIC

 32-1    PROPERTY.  (a)  Except as provided in Section 366.035 and Section

 32-2    366.165(c) with respect to a conversion of a segment of the state

 32-3    highway system, an authority shall not pay compensation for public

 32-4    real property, parkways, streets, highways, alleys, or reservations

 32-5    it takes, except for parks and playgrounds, or as otherwise

 32-6    provided in this chapter.

 32-7          (b)  Public property damaged in the carrying out of powers

 32-8    granted by this chapter shall be restored or repaired and placed in

 32-9    its original condition as nearly as practicable.

32-10          (c)  An authority has full easements and rights-of-way

32-11    through, across, under, and over any property owned by the state or

32-12    any local governmental that are necessary or convenient to

32-13    construct, acquire, or efficiently operate a turnpike project or

32-14    system under this chapter.

32-15          Sec. 366.171.  PUBLIC UTILITY FACILITIES.  (a)  An authority

32-16    may adopt rules for the installation, construction, operation,

32-17    maintenance, repair, renewal, relocation, and removal of a public

32-18    utility facility in, on, along, over, or under a turnpike project.

32-19          (b)  If an authority determines it is necessary that a public

32-20    utility facility located in, on, along, over, or under a turnpike

32-21    project be relocated in the turnpike project, removed from the

32-22    turnpike project, or carried along or across the turnpike project

32-23    by grade separation, the owner or operator of the utility facility

32-24    shall relocate or remove the facility in accordance with the

32-25    requirements of the authority and in a manner that does not impede

32-26    the design, financing, construction, operation, or maintenance of

32-27    the turnpike project.  The authority, as a part of the cost of the

 33-1    turnpike project or the cost of operating the turnpike project,

 33-2    shall pay the cost of the relocation, removal, or grade separation,

 33-3    including the cost of:

 33-4                (1)  installing the facility in a new location or

 33-5    locations;

 33-6                (2)  interests in real property, and other rights

 33-7    acquired to accomplish the relocation or removal; and

 33-8                (3)  maintenance of grade separation structures.

 33-9          (c)  The authority may reduce the total costs to be paid by

33-10    the authority under this Subsection (b) by 10 percent for each

33-11    30-day period or portion of a 30-day period by which the relocation

33-12    exceeds the limit specified by the authority.  If an owner or

33-13    operator of a public utility facility cannot or will not timely

33-14    remove or relocate same as required under Subsection (b), the

33-15    authority may do so at the expense of the public utility.  If the

33-16    authority determines that a delay in relocation is the result of

33-17    circumstances beyond the control of the utility, full costs shall

33-18    be paid by the authority.

33-19          (d)  Notwithstanding anything in this chapter to the

33-20    contrary, Chapter 228, Acts of the 51st Legislature, Regular

33-21    Session, 1949 (Article 1436a, Vernon's Texas Civil Statutes),

33-22    applies to the erection, construction, maintenance, and operation

33-23    of lines and poles owned by a corporation described by Section 1 of

33-24    that Act over, under, across, on, and along a turnpike project or

33-25    system constructed by an authority.  An authority has the powers

33-26    and duties delegated to the commissioners court by Chapter 228,

33-27    Acts of the 51st Legislature, Regular Session, 1949 (Article 1436a,

 34-1    Vernon's Texas Civil Statutes) and an authority shall have

 34-2    exclusive jurisdiction and control of utilities located in its

 34-3    rights-of-way.

 34-4          (e)  Notwithstanding anything in this chapter to the

 34-5    contrary, the laws of this state applicable to the use of public

 34-6    roads, streets, and waters of this state by a telephone and

 34-7    telegraph corporation apply to the erection, construction,

 34-8    maintenance, location, and operation of a line, pole, or other

 34-9    fixture by a telephone and telegraph corporation over, under,

34-10    across, on, and along a turnpike project or system constructed by

34-11    an authority under this chapter.

34-12          (f)  In this section "public utility facility" means a track,

34-13    pipe, main, conduit, cable, wire, tower, pole, or other item of

34-14    plant, equipment or an appliance of a public utility or other

34-15    person.

34-16          Sec. 366.172.  AWARDING OF CONTRACTS.  All contracts proposed

34-17    to be made by an authority that require the expenditure of public

34-18    monies for the construction or maintenance of a turnpike project

34-19    shall be let by competitive bid, wherein the contract is awarded to

34-20    the lowest responsible bidder that complies with the authority's

34-21    criteria regarding the work, materials, and other matters covered

34-22    by the contract.  The authority shall promulgate rules governing

34-23    procedures for the bidding, proposing, and/or awarding of such

34-24    contracts and other contracts let by the authority.

34-25          Sec. 366.173.  LEASE, SALE, OR CONVEYANCE OF TURNPIKE

34-26    PROJECT.  (a)  An authority may lease, sell, or convey in another

34-27    manner a turnpike project to the department, the Texas Turnpike

 35-1    Authority, a county or a local government corporation created under

 35-2    Chapter 431.

 35-3          (b)  An agreement to lease, sell, or convey a turnpike

 35-4    project under this section must provide for the discharge and final

 35-5    payment or redemption of the authority's outstanding bonded

 35-6    indebtedness for the turnpike project and must not be prohibited

 35-7    under the bond proceedings applicable to the system, if any, of

 35-8    which the turnpike project is a part.

 35-9          Sec. 366.174.  REVENUE.  (a)  An authority may:

35-10                (1)  impose tolls for the use of each of its turnpike

35-11    projects and systems and the different parts or sections of each of

35-12    its turnpike projects and systems; and

35-13                (2)  contract with a person for the use of part of a

35-14    turnpike project or system or lease or sell part of a turnpike

35-15    project or system, including the right-of-way adjoining the paved

35-16    portion, for any purpose, including placing on the adjoining

35-17    right-of-way a gas station, garage, store, hotel, restaurant,

35-18    parking facility, railroad track, billboard, livestock pasturage,

35-19    telephone line or facility, telecommunication line or facility,

35-20    data transmission line or facility, and electric line or facility,

35-21    under terms set by and agreeable to the authority.

35-22          (b)  Tolls shall be set so that the aggregate of tolls from

35-23    an authority's turnpike project or system, together with other

35-24    revenues of the turnpike project or system:

35-25                (1)  provides a fund sufficient to pay:

35-26                      (A)  the cost of maintaining, repairing, and

35-27    operating the turnpike project or system; and

 36-1                      (B)  the principal of and interest on the bonds

 36-2    issued for the turnpike project or system as those bonds become due

 36-3    and payable; and

 36-4                (2)  creates reserves for the purposes listed under

 36-5    Subsection (b)(1) above.

 36-6          (c)  Tolls are not subject to supervision or regulation by

 36-7    any state agency or other local governmental entity.

 36-8          (d)  Tolls and other revenue derived from the turnpike

 36-9    project or system for which bonds were issued, except the part

36-10    necessary to pay the cost of maintenance, repair, and operation and

36-11    to provide reserves for those costs as may be provided in the bond

36-12    proceedings, shall be set aside at regular intervals as may be

36-13    provided in the bond resolution or trust agreement in a sinking

36-14    fund that is pledged to and charged with the payment of:

36-15                (1)  interest on the bonds as it becomes due;

36-16                (2)  principal of the bonds as it becomes due;

36-17                (3)  necessary charges of paying agents for paying

36-18    principal and interest; and

36-19                (4)  the redemption price or the purchase price of

36-20    bonds retired by call or purchase as provided by the bond

36-21    proceedings.

36-22          (e)  Use and disposition of money to the credit of the

36-23    sinking fund are subject to the bond proceedings.

36-24          (f)  To the extent permitted under the applicable bond

36-25    proceedings, revenues from one turnpike project of an authority may

36-26    be used to pay the cost of other turnpike projects of the

36-27    authority.

 37-1          (g)  An authority may not utilize revenues from its turnpike

 37-2    projects in any manner not permitted under this chapter, and no

 37-3    revenues shall be applied to any purpose or to pay any cost that is

 37-4    unrelated to, or not reasonably anticipated to be for the benefit

 37-5    of, an authority's turnpike projects.

 37-6          Sec. 366.175.  AUTHORITY REVOLVING FUND.  (a)  An authority

 37-7    may maintain a revolving fund to be held in trust by a banking

 37-8    institution chosen by the authority separate from any other funds

 37-9    and administered by the authority's board.

37-10          (b)  An authority may transfer into its revolving fund money

37-11    from any permissible source, including:

37-12                (1)  money from a turnpike project so long as the

37-13    transfer from that turnpike project does not diminish the funds

37-14    available for such project or the system, if any, of which it is a

37-15    part, to an amount less than any minimum required to be retained by

37-16    the bond proceedings pertaining to such project or system;

37-17                (2)  money received by the authority from any source

37-18    and not otherwise committed, including funds from the transfer of a

37-19    turnpike project or sale of authority assets;

37-20                (3)  advances authorized under Section 52-b, Article

37-21    III, Texas Constitution; and

37-22                (4)  contributions, loans, grants, or assistance from

37-23    the United States, another state, a political subdivision of this

37-24    state, a foreign governmental entity, including, without

37-25    limitation, the United Mexican States or a state of the United

37-26    Mexican States, a local governmental entity, any private

37-27    enterprise, or any person.

 38-1          (c)  The authority may use money in the revolving fund to:

 38-2                (1)  finance the acquisition, construction,

 38-3    maintenance, or operation of a turnpike project or system,

 38-4    including the extension, expansion, or improvement thereof;

 38-5                (2)  provide matching funds required in connection with

 38-6    any federal, state, local, or private aid, grant, or other funding,

 38-7    including aid or funding by or with public-private partnerships;

 38-8                (3)  provide credit enhancement either directly or

 38-9    indirectly for bonds issued to acquire, construct, extend, expand,

38-10    or improve a turnpike project or system;

38-11                (4)  provide security for or payment of future or

38-12    existing debt for the design, acquisition, construction, operation,

38-13    maintenance, extension, expansion, or improvement of a turnpike

38-14    project or system;

38-15                (5)  borrow money and issue promissory notes or other

38-16    indebtedness payable out of the revolving fund for any purpose

38-17    authorized by this chapter; and

38-18                (6)  provide for any other reasonable purpose that

38-19    assists in the financings of an authority as authorized by this

38-20    chapter.

38-21          (d)  Money spent or advanced from the revolving fund for a

38-22    turnpike project or system shall be reimbursed from the funds of

38-23    that turnpike project or system and there shall be a reasonable

38-24    expectation of such repayment at the time of authorization.

38-25          Sec. 366.176.  USE OF SURPLUS REVENUE.  The board of an

38-26    authority may by resolution authorize the use of surplus revenue of

38-27    a turnpike project or system to pay the costs of another turnpike

 39-1    project or system other than a project financed under Subchapter G.

 39-2    The board may in the resolution prescribe terms for the use of the

 39-3    revenue, including the pledge of the revenue, but may not take an

 39-4    action under this section that violates, impairs, or is

 39-5    inconsistent with a bond resolution, trust agreement, or indenture

 39-6    governing the use of the surplus revenue.

 39-7          Sec. 366.177.  EXEMPTION FROM TAXATION OR ASSESSMENT.  (a)

 39-8    An authority is exempt from taxation of or assessments on:

 39-9                (1)  a turnpike project or system;

39-10                (2)  property the authority acquires or uses under this

39-11    chapter; or

39-12                (3)  income from property described by Subsection

39-13    (a)(1) or (b)(2).

39-14          (b)  An authority is exempt from payment of development fees,

39-15    utility connection fees, assessments, and service fees imposed or

39-16    assessed by a county, municipality, road and utility district,

39-17    river authority, any other state or local governmental entity, or

39-18    any property owners' or homeowners' association.

39-19          Sec. 366.178.  ACTIONS AFFECTING EXISTING ROADS.  (a)  An

39-20    authority may impose a toll for transit over an existing free road,

39-21    street, or public highway transferred to the authority under this

39-22    chapter.

39-23          (b)  An authority may construct a grade separation at an

39-24    intersection of a turnpike project with a railroad or highway and

39-25    change the line or grade of a highway to accommodate it to the

39-26    design of a grade separation.  Such action affecting a segment of

39-27    the state highway system may only be accomplished by agreement with

 40-1    the department.  The authority shall pay the cost of a grade

 40-2    separation and any damage incurred in changing a line or grade of a

 40-3    railroad or highway as part of the cost of the turnpike project.

 40-4          (c)  If feasible, an authority shall provide access to

 40-5    properties previously abutting a county or other public road that

 40-6    is taken for a turnpike project and shall pay abutting property

 40-7    owners the expenses or any resulting damages for a denial of access

 40-8    to a county or other public road.

 40-9          Sec. 366.179.  FAILURE OR REFUSAL TO PAY TOLL.  (a)  Any

40-10    motor vehicle that is not a police or emergency vehicle, either

40-11    driven or towed through a toll collection facility, shall pay the

40-12    proper toll.

40-13          (b)  A person who uses a turnpike project and fails or

40-14    refuses to pay a toll provided for using the project is liable for

40-15    a fine not to exceed $250, plus administrative fees incurred in

40-16    connection with such violation.

40-17          (c)  In the event of nonpayment of the proper toll:

40-18                (1)  on issuance of a notice of nonpayment, the

40-19    registered owner of the nonpaying vehicle is legally bound to pay

40-20    both the proper toll and an administrative fee;

40-21                (2)  an authority may fix, revise, charge, and collect

40-22    an administrative fee, so as to recover the cost of collecting the

40-23    unpaid toll, not to exceed $100.  The notice of nonpayment to the

40-24    registered owner shall be sent by first class mail and may require

40-25    payment of the proper toll as well as the administrative fee not

40-26    sooner than 30 days from the date the notice was mailed.  The

40-27    registered owner shall pay a separate toll and administrative fee

 41-1    for each event of nonpayment.

 41-2                (3)  an authority has a lien on the vehicle driven by

 41-3    the person for the amount of the toll and may take and retain the

 41-4    vehicle until the proper toll and applicable administrative fee

 41-5    have been paid.

 41-6          (d)  If the registered owner of the vehicle fails to pay the

 41-7    proper toll and administrative fee within the time specified by the

 41-8    notice of nonpayment issued under this section, the registered

 41-9    owner shall be cited as for other traffic violations for the

41-10    nonpayment by a peace officer of the authority or as otherwise

41-11    provided by law, and the owner is legally bound to pay a fine, not

41-12    to exceed $250, for each event of nonpayment.  Neither the legal

41-13    obligation to pay nor the actual payment of the fine shall affect

41-14    the legal duty of the owner for any other fine or penalty

41-15    prescribed by law.

41-16          (e)  In the prosecution of a violation hereunder:

41-17                (1)  proof that the vehicle passed through the toll

41-18    collection facility without payment of the proper toll, which proof

41-19    may be by testimony of a peace officer or authority employee, video

41-20    surveillance, or any other reasonable evidence, together with proof

41-21    that the defendant was the registered owner or the driver of the

41-22    vehicle when the failure to pay occurred, establishes the

41-23    nonpayment of the registered owner.

41-24                (2)  The court of the local jurisdiction in which the

41-25    violation occurred may assess and collect the fine, in addition to

41-26    any court costs.  The court shall also collect the proper toll and

41-27    administrative fee and forward the toll and fee to the authority.

 42-1                (3)  It is a defense to nonpayment under this section

 42-2    that the motor vehicle in question was stolen before the failure to

 42-3    pay the proper toll occurred and was not recovered by the time of

 42-4    the failure to pay, but only if the theft was reported to the

 42-5    appropriate law enforcement authority before the earlier of:

 42-6                      (A)  the occurrence of the failure to pay; or

 42-7                      (B)  eight hours after the discovery of the

 42-8    theft.

 42-9          (f)  A registered owner who is a lessor of a vehicle

42-10    concerning which a notice of nonpayment has been issued is not

42-11    liable in connection with that notice of nonpayment if, not later

42-12    than 30 days after the date the notice of nonpayment is mailed, the

42-13    registered owner provides to the authority a copy of the rental,

42-14    lease, or other contract document covering the vehicle on the date

42-15    of the nonpayment, with the correct name and proper address of the

42-16    lessee clearly legible.  Failure to provide this information within

42-17    the period prescribed renders the lessor liable as the registered

42-18    owner.  If the lessor provides the required information within the

42-19    period prescribed, the lessee of the vehicle on the date of the

42-20    violation is considered to be the owner of the vehicle for purposes

42-21    of this section and is subject to prosecution for failure to pay

42-22    the proper toll as if the lessee were the registered owner, if the

42-23    authority sends a notice of nonpayment to the lessee by first class

42-24    mail within 30 days after the date of receipt of the required

42-25    information from the lessor.

42-26          Sec. 366.180.  USE AND RETURN OF TRANSPONDERS.  (a)  For

42-27    purposes of this section, a "transponder" means a device, placed on

 43-1    or within an automobile, that is capable of transmitting or

 43-2    receiving information used to assess or to collect tolls.  A

 43-3    transponder is "insufficiently funded" when there are no remaining

 43-4    funds in the account in connection with which the transponder was

 43-5    issued.

 43-6          (b)  Any law enforcement or peace officer of the Department

 43-7    of Public Safety of the State of Texas or any peace officer of an

 43-8    authority has the authority to seize a stolen or insufficiently

 43-9    funded transponder and to return it to the authority that issued

43-10    the transponder, except that an insufficiently funded transponder

43-11    may not be seized sooner than 30 days after the date that authority

43-12    has sent a notice of delinquency to the holder of the account.

43-13          Sec. 366.181.  CONTROLLED ACCESS TO TURNPIKE PROJECTS.  (a)

43-14    Subject to Subsection (c), an authority may designate any of its

43-15    turnpike projects or any portions thereof as controlled-access toll

43-16    roads.

43-17          (b)  An authority by order may:

43-18                (1)  prohibit use of or access to or from its turnpike

43-19    projects by a motor vehicle, bicycle, or other vehicle or by

43-20    pedestrians;

43-21                (2)  subject to Subsection (c), deny access to or from:

43-22                      (A)  its turnpike projects;

43-23                      (B)  real property adjacent to its turnpike

43-24    projects; or

43-25                      (C)  a street, road, alley, highway, or other

43-26    public or private way intersecting its turnpike projects;

43-27                (3)  designate locations on its turnpike projects at

 44-1    which access to or from the toll road is permitted;

 44-2                (4)  control, restrict, and determine the type and

 44-3    extent of access permitted at a designated location of access to

 44-4    the turnpike projects; or

 44-5                (5)  erect appropriate protective devices to preserve

 44-6    the utility, integrity, and use of its turnpike projects.

 44-7          (c)  Denial of access to or from a segment of the state

 44-8    highway system is subject to prior approval by the commission.

 44-9          Sec. 366.182.  PROMOTION OF TOLL ROADS.  An authority may

44-10    promote the use of its turnpike projects by appropriate means,

44-11    including advertising or marketing as the authority finds

44-12    appropriate.

44-13          Sec. 366.183.  OPERATION OF TURNPIKE PROJECT; PEACE OFFICERS.

44-14    (a)  An authority shall police and operate its turnpike projects

44-15    through a force of police, peace officers, toll-takers, and other

44-16    employees of the authority or through services contracted for under

44-17    Subsections (b) or (c).

44-18          (b)  An authority may enter into agreements with one or more

44-19    governmental entities or private persons or entities under which

44-20    such entities or persons shall provide, on terms and conditions

44-21    approved by the authority, personnel and services to design,

44-22    construct, operate, maintain, expand, enlarge, or extend the

44-23    authority's turnpike projects.

44-24          (c)  An authority may arrange with the Department of Public

44-25    Safety or any other state or local government entity for the

44-26    services of peace officers of that agency.

44-27          (d)  An authority may employ and commission a force of peace

 45-1    officers of the authority.  A peace officer commissioned by the

 45-2    authority under this subsection holds office at the will of the

 45-3    authority.  A person may not be commissioned as a peace officer

 45-4    under this subsection unless the person meets all standards for

 45-5    licensing as a peace officer by the Commission on Law Enforcement

 45-6    Officer Standards and Education.

 45-7          Sec. 366.184.  AUDIT.  An authority shall have a certified

 45-8    public accountant audit the authority's books and accounts at least

 45-9    annually.  The cost of the audit may be treated as part of the cost

45-10    of construction or operation of a turnpike project.

45-11          Sec. 366.185.  DISADVANTAGED BUSINESSES.  (a)  Consistent

45-12    with general law, an authority shall:

45-13                (1)  set goals for the awarding of contracts to

45-14    disadvantaged businesses and attempt to meet the goals;

45-15                (2)  attempt to identify disadvantaged businesses that

45-16    provide or have the potential to provide supplies, materials,

45-17    equipment, or services to the authority; and

45-18                (3)  give disadvantaged businesses full access to the

45-19    authority's contract bidding process, inform the businesses about

45-20    the process, offer the businesses assistance concerning the

45-21    process, and identify barriers to the businesses' participation in

45-22    the process.

45-23          (b)  This section does not exempt an authority from

45-24    competitive bidding requirements provided by other law.

45-25           (Sections 366.186 to 366.250 reserved for expansion

45-26                         SUBCHAPTER F.  GOVERNANCE

45-27          Sec. 366.251.  BOARD OF AUTHORITY.  (a)  An authority shall

 46-1    be governed by a board of directors.

 46-2          (b)  The commissioners court of each constituent county of

 46-3    the authority shall appoint one director to serve on the board of

 46-4    an authority, and the governor shall appoint three directors to the

 46-5    board of an authority.

 46-6          (c)  Directors shall be divided into three groups or classes;

 46-7    to the greatest degree possible, each class shall contain an equal

 46-8    number of directors.  Directors shall serve terms of six years,

 46-9    except that one class of directors of the initial board of an

46-10    authority shall serve for a term of two years, and another class of

46-11    directors of the initial board of an authority shall serve a term

46-12    of four years.  Thereafter, the successors to the directors of all

46-13    classes shall serve for a term of six years.

46-14          (d)  Two directors appointed by the governor must have

46-15    resided in the authority's constituent counties for at least one

46-16    year before appointment to the board.  The third director appointed

46-17    by the governor must have resided in a county adjacent to a

46-18    constituent county for at least one year before that person's

46-19    appointment to the board.  Each director appointed by a

46-20    commissioners court shall have resided in the county from which the

46-21    person is appointed for at least one year before the person's

46-22    appointment.

46-23          (e)  All appointments to the board shall be made without

46-24    regard to race, color, disability, sex, religion, age, or national

46-25    origin.

46-26          (f)  No elected official shall be eligible to serve as a

46-27    director while such official holds office.

 47-1          (g)  At any time, the commissioners court of a constituent

 47-2    county may by resolution remove from the board the director

 47-3    appointed by that commissioners court.  Removal of a director under

 47-4    this subsection need not be based on grounds specified in another

 47-5    section of this chapter, including, but not limited to, Section

 47-6    366.254 of this chapter.

 47-7          (h)  The governor shall promptly fill any vacancy in an

 47-8    unexpired term of a director appointed by the governor, and the

 47-9    commissioners court of the county in question shall promptly fill

47-10    any vacancy in an unexpired term of the director from that county.

47-11          (i)  Each director has equal status and may vote.

47-12          (j)  The board of an authority shall select one director as

47-13    the presiding officer of the board to serve in that capacity until

47-14    such person's term as a director expires.  The board shall elect

47-15    one director as assistant presiding officer and shall elect a

47-16    secretary and treasurer who need not be a director.

47-17          (k)  A majority of board is a quorum, and the vote of a

47-18    majority shall be necessary for any action taken by the board.  If

47-19    there exists one or more vacancies on the board, the majority of

47-20    directors then serving on the board shall constitute a quorum.

47-21          (l)  One or more vacancies in the membership of the board

47-22    does not impair the right of a quorum to exercise a right or

47-23    perform a duty of the board.

47-24          (m)  The legislature may prescribe the qualifications and

47-25    terms of service of the board of an authority established directly

47-26    by an act of the legislature.

47-27          Sec. 366.252.  CONFLICT OF INTEREST.  (a)  A person is not

 48-1    eligible to serve on the board of an authority if the person or the

 48-2    person's spouse:

 48-3                (1)  is registered, certified, or licensed by an

 48-4    occupational regulatory agency in the field of toll road

 48-5    construction, maintenance, or operation;

 48-6                (2)  is employed by or participates in the management

 48-7    of a business entity or other organization regulated by the

 48-8    authority or receiving funds from the authority;

 48-9                (3)  owns or controls, directly or indirectly, more

48-10    than a 10 percent interest in a business entity or other

48-11    organization regulated by or receiving funds from the authority,

48-12    other than compensation for acquisition of turnpike right-of-way;

48-13                (4)  uses or receives a substantial amount of tangible

48-14    goods, services, or funds from the authority, other than

48-15    compensation or reimbursement authorized by law for board

48-16    membership, attendance, or expenses, or for compensation for

48-17    acquisition of turnpike right-of-way;

48-18                (5)  is an officer, employee, or paid consultant of a

48-19    Texas trade association in the field of road construction,

48-20    maintenance, or operation; or

48-21                (6)  is required to register as a lobbyist under

48-22    Chapter 305, Government Code, because of the person's activities

48-23    for compensation on behalf of a profession related to the operation

48-24    of the authority.

48-25          (b)  In this section, "Texas trade association" means a

48-26    nonprofit, cooperative, and voluntarily joined association of

48-27    business or professional competitors in this state designed to

 49-1    assist its members and its industry or profession in dealing with

 49-2    mutual business or professional problems and in promoting their

 49-3    common interests.

 49-4          (c)  A person may not act as the general counsel to an

 49-5    authority if the person is required to register as a lobbyist under

 49-6    Chapter 305, Government Code, because of the person's activities

 49-7    for compensation on behalf of a profession related to the operation

 49-8    of the authority.

 49-9          Sec. 366.253.  SURETY BONDS OF DIRECTORS AND SECRETARY AND

49-10    TREASURER.  (a)  Before beginning his or her term, each director

49-11    shall execute a surety bond in the amount of $25,000, and the

49-12    secretary and treasurer shall execute a surety bond in the amount

49-13    of $50,000.

49-14          (b)  Each surety bond must be:

49-15                (1)  conditioned on the faithful performance of the

49-16    duties of office;

49-17                (2)  executed by a surety company authorized to

49-18    transact business in this state; and

49-19                (3)  filed in the secretary of state's office.

49-20          (c)  The authority shall pay the expense of the bonds.

49-21          Sec. 366.254.  REMOVAL OF DIRECTOR.  (a)  It shall be grounds

49-22    for removal of a director from the board of an authority if the

49-23    director:

49-24                (1)  did not have at the time of appointment, or does

49-25    not maintain during service on the board, the qualifications

49-26    required by Section 366.251;

49-27                (2)  whether at the time of appointment or at any time

 50-1    during the director's term, is ineligible under Section 366.252 to

 50-2    serve as a director;

 50-3                (3)  cannot discharge the director's duties for a

 50-4    substantial part of the term for which the director is appointed

 50-5    because of illness or disability; or

 50-6                (4)  is absent from more than half of the regularly

 50-7    scheduled board meetings that the director is eligible to attend

 50-8    during a calendar year unless the absence is excused by majority

 50-9    vote of the board.

50-10          (b)  The validity of an action of the board is not affected

50-11    by the fact that it is taken when a ground for removal of a

50-12    director exists.

50-13          (c)  If the administrative head of the authority has

50-14    knowledge that a potential ground for removal exists, that person

50-15    shall notify the presiding officer of the board of the ground.  The

50-16    presiding officer shall then notify the governor, in the case of a

50-17    director appointed by the governor, or the commissioners court that

50-18    appointed such director, as applicable, that a potential ground for

50-19    removal exists.

50-20          Sec. 366.255.  COMPENSATION OF DIRECTOR.  Each director shall

50-21    be reimbursed for the director's actual expenses necessarily

50-22    incurred in the performance of the director's duties.  A director

50-23    is not entitled to any additional compensation for the director's

50-24    services.

50-25          Sec. 366.256.  EVIDENCE OF AUTHORITY ACTIONS.  Actions of an

50-26    authority shall be the actions of its board and may be evidenced in

50-27    any legal manner, including a board resolution.

 51-1          Sec. 366.257.  PUBLIC ACCESS.  An authority shall:

 51-2          (a)  make and implement policies that provide the public with

 51-3    a reasonable opportunity to appear before the board to speak on any

 51-4    issue under the jurisdiction of the authority; and

 51-5          (b)  prepare and maintain a written plan that describes how

 51-6    an individual who does not speak English or who has a physical,

 51-7    mental, or developmental disability may be provided reasonable

 51-8    access to the authority's programs.

 51-9          Sec. 366.258.  INDEMNIFICATION.  (a)  An authority may

51-10    indemnify one or more of its directors or officers for necessary

51-11    expenses and costs, including attorneys' fees, incurred by the

51-12    directors or officers in connection with any claim asserted against

51-13    the directors or officers in a court action or otherwise for

51-14    negligence or misconduct in their respective capacities as

51-15    directors or officers.

51-16          (b)  If an authority does not fully indemnify a director or

51-17    officer as provided by Subsection (a), the court in a proceeding in

51-18    which any claim against the director or officer is asserted or any

51-19    court with jurisdiction of an action instituted by the director or

51-20    officer on a claim for indemnity may assess indemnity against the

51-21    authority, its receiver, or trustee for the amount paid by the

51-22    director or officer, including attorneys' fees, to pay any judgment

51-23    or settlement of the claim necessarily incurred by the director or

51-24    officer in connection with the claim in an amount the court

51-25    considers reasonable and equitable only if the court finds that, in

51-26    connection with the claim, the director or officer is not guilty of

51-27    negligence or misconduct.

 52-1          (c)  A court may not assess indemnity under Subsection (b)

 52-2    for an amount paid by the director or officer to the authority.

 52-3          (d)  In this section, "director or officer" includes a former

 52-4    director or officer.

 52-5          Sec. 366.259.  PURCHASE OF LIABILITY INSURANCE.  (a)  An

 52-6    authority shall insure its officers and employees from liability

 52-7    arising from the use, operation, or maintenance of equipment that

 52-8    is used or may be used in connection with the laying out,

 52-9    construction, or maintenance of the authority's turnpike projects.

52-10          (b)  Insurance coverage under this section must be provided

52-11    by the purchase of a policy of liability insurance from a reliable

52-12    insurance company authorized to do business in this state.  The

52-13    form of the policy must be approved by the commissioner of

52-14    insurance.

52-15          (c)  This section is not a waiver of immunity of the

52-16    authority or its constituent counties from liability for the torts

52-17    or negligence of an officer or employee of an authority.

52-18          (d)  In this section, "equipment" includes an automobile,

52-19    motor truck, trailer, aircraft, motor grader, roller, tractor,

52-20    tractor power mower, and other power equipment.

52-21          Sec. 366.260.  CERTAIN CONTRACTS AND SALES PROHIBITED.  (a)

52-22    A director, agent, or employee of an authority may not:

52-23                (1)  contract with the authority; or

52-24                (2)  be directly or indirectly interested in:

52-25                      (A)  a contract with the authority; or

52-26                      (B)  the sale of property to the authority.

52-27          (b)  A person who violates Subsection (a) is liable for a

 53-1    fine not to exceed $1,000.

 53-2          (c)  Subsection (a) does not apply to the sale of turnpike

 53-3    right-of-way to an authority.

 53-4          Sec. 366.261.  ANNUAL REPORTS AND STRATEGIC PLANS.  (a)  Each

 53-5    authority shall make a strategic plan for its operations.  A

 53-6    majority of the commissioners courts of the constituent counties of

 53-7    the authority shall, by concurrent resolution, determine the types

 53-8    of information required to be included in each authority's

 53-9    strategic plan.  Each even-numbered year, each authority shall

53-10    issue a plan covering five fiscal years beginning with the next

53-11    odd-numbered fiscal year.

53-12          (b)  Not later than March 31 of each year, the authority

53-13    shall file with the commissioners court of each of the authority's

53-14    constituent counties an annual report on the authority's activities

53-15    describing all turnpike revenue bond issuances anticipated for the

53-16    coming year, the authority's financial condition, all project

53-17    schedules, and the status of the authority's performance under the

53-18    most recent strategic plan.  At the invitation of the commissioners

53-19    courts of the authority's constituent counties, members of the

53-20    board and the executive director of an authority shall appear

53-21    before the commissioners courts of the authority's constituent

53-22    counties to present the annual report and to report on the

53-23    strategic plan.

53-24          (c)  Any issuance or anticipated issuance of turnpike revenue

53-25    bonds by the authority shall be identified in the most recent

53-26    strategic plan or annual report filed in accordance with this

53-27    section and, if not, notice shall be given to the commissioners

 54-1    courts of each of the authority's constituent counties at least 90

 54-2    days prior to any turnpike revenue bond issuance not previously

 54-3    identified in said plan or report.

 54-4          Sec. 366.262.  MEETINGS BY TELEPHONE CONFERENCE CALL.  (a)

 54-5    Chapter 551, Government Code, does not prohibit any open or closed

 54-6    meeting of the board, a committee of the board, or the staff (or

 54-7    any combination of the foregoing) of an authority being held by

 54-8    telephone conference call.

 54-9          (b)  A telephone conference call meeting is subject to the

54-10    notice requirements applicable to other meetings.

54-11          (c)  Notice of a telephone conference call meeting that by

54-12    law must be open to the public must specify as the location of the

54-13    meeting the conference room of the authority or other facility

54-14    within a constituent county that is accessible to the public.

54-15          (d)  Each part of the telephone conference call meeting that

54-16    by law must be open to the public shall be audible to the public at

54-17    the location specified in the notice and shall be tape-recorded or

54-18    documented by written minutes.  On conclusion of the meeting, the

54-19    tape recording or the written minutes of the meeting shall be made

54-20    available to the public.

54-21           (Sections 366.263 to 366.300 reserved for expansion

54-22             SUBCHAPTER G.  AID FOR REGIONAL TURNPIKE PROJECTS

54-23          Sec. 366.301.  DEPARTMENT CONTRIBUTIONS TO TURNPIKE PROJECTS.

54-24    (a)  To the extent permitted by the Texas Constitution, the

54-25    department may agree with an authority to provide for or contribute

54-26    to the payment of costs of financial, engineering and traffic

54-27    feasibility studies, design, financing, acquisition, construction,

 55-1    operation, or maintenance of a turnpike project or system on terms

 55-2    agreed upon by the commission or department, as applicable, and the

 55-3    authority, so long as the agreement is not inconsistent with the

 55-4    rights of the bondholders and/or persons operating the turnpike

 55-5    project under a lease or other contract.

 55-6          (b)  The department may use its engineering and other

 55-7    personnel, including consulting engineers and traffic engineers, to

 55-8    conduct feasibility studies under Subsection (a);

 55-9          (c)  An obligation or expense incurred by the commission or

55-10    department under this section is a part of the cost of the turnpike

55-11    project with respect to which such obligation or expense was

55-12    incurred.  If money from the state highway fund is spent under this

55-13    section, the fund shall be repaid from tolls or other revenue of

55-14    the turnpike project or system on which the state highway fund

55-15    moneys were expended.

55-16          (d)  The commission or department may use federal funds for

55-17    any purpose described by this chapter.

55-18          Sec. 366.302.  AGREEMENTS WITH PUBLIC OR PRIVATE ENTITIES TO

55-19    CONSTRUCT, MAINTAIN, REPAIR, AND OPERATE TURNPIKE PROJECTS.  (a)

55-20    An authority may enter into an agreement with a public or private

55-21    entity, including a toll road corporation, the United States, a

55-22    state of the United States, the United Mexican States, a state of

55-23    the United Mexican States, a local governmental entity, or another

55-24    political subdivision, to permit the entity, jointly with the

55-25    authority, to study the feasibility of a turnpike project or system

55-26    or to acquire, design, finance, construct, maintain, repair,

55-27    operate, extend, or expand a turnpike project or system.  An

 56-1    authority shall have broad discretion to negotiate provisions in a

 56-2    development agreement with a private entity, including, without

 56-3    limitation, provisions relating to the design, financing,

 56-4    construction, maintenance, and operation of a turnpike project or

 56-5    system in accordance with standards promulgated by the authority

 56-6    and provisions relating to professional and consulting services to

 56-7    be rendered in accordance with standards promulgated by the

 56-8    authority in connection with a turnpike project or system.

 56-9          (b)  An authority may not incur a financial obligation on

56-10    behalf of, or otherwise guarantee obligations of, a private entity

56-11    that constructs, maintains, or operates a turnpike project or

56-12    system.  Neither an authority nor an authority's constituent

56-13    counties shall be liable for any financial or other obligations of

56-14    a turnpike project solely because a private entity constructs,

56-15    finances, or operates any part of a turnpike project or system.

56-16          (c)  An authority may authorize the investment of public and

56-17    private money, including debt and equity participation, to finance

56-18    a function described by this section.

56-19          Sec. 366.303.  AGREEMENTS BETWEEN AUTHORITY AND LOCAL

56-20    GOVERNMENTAL ENTITIES.  (a)  Under authority of Section 52, Article

56-21    III, Texas Constitution, a local governmental entity other than a

56-22    nonprofit corporation may, upon the required vote of the qualified

56-23    voters, in addition to all other debts, issue bonds or enter into

56-24    and make payments under agreements with an authority, not to exceed

56-25    40 years in term, in any amount not to exceed one-fourth of the

56-26    assessed valuation of real property within the local governmental

56-27    entity, except that the total indebtedness of any municipality

 57-1    shall never exceed the limits imposed by other provisions of the

 57-2    Texas Constitution, and levy and collect taxes to pay the interest

 57-3    thereon and provide a sinking fund for the redemption thereof, for

 57-4    the purposes of acquisition, construction, maintenance, and

 57-5    operation of turnpike projects or systems of an authority, or in

 57-6    aid thereof.

 57-7          (b)  In addition to Subsection (a), a local governmental

 57-8    entity may, within any applicable constitutional limitations, agree

 57-9    with an authority to issue bonds or enter into and make payments

57-10    under an agreement to acquire, construct, maintain, or operate any

57-11    portion of a turnpike project or system of that authority.

57-12          (c)  To make payments under an agreement under Subsection (b)

57-13    or pay the interest on bonds issued under Subsection (b) and to

57-14    provide a sinking fund for the bonds or the contract, a local

57-15    governmental entity may:

57-16                (1)  pledge revenue from any available source,

57-17    including annual appropriations;

57-18                (2)  levy and collect taxes; or

57-19                (3)  provide for a combination of Subdivisions (1) and

57-20    (2).

57-21          (d)  The term of an agreement under this section may not

57-22    exceed 40 years.

57-23          (e)  Any election required to permit action under this

57-24    subchapter must be held in conformance with Chapter 1, Title 22,

57-25    Revised Statutes, or other law applicable to the local governmental

57-26    entity.

57-27          Sec. 366.304.  ADDITIONAL AGREEMENTS OF AUTHORITY.  An

 58-1    authority may enter into any agreement necessary or convenient to

 58-2    achieve the purposes of this subchapter.

 58-3          SECTION 2.02.  Article 2.12, Code of Criminal Procedure, is

 58-4    amended by adding the following as Subdivision 30:

 58-5                (30)  an officer commissioned as a peace officer by a

 58-6    regional tollway authority under Subchapter E of Chapter 366,

 58-7    Transportation Code.

 58-8          SECTION 3.01.  Upon the effective date of this act, the North

 58-9    Texas Tollway Authority (hereinafter referred to as the "NTTA") is

58-10    hereby established as a regional tollway authority under Chapter

58-11    366, Transportation Code.  The NTTA shall have as its jurisdiction

58-12    all territory within Collin, Dallas, Denton, and Tarrant Counties.

58-13    The operations of the NTTA may extend to other counties pursuant to

58-14    and in compliance with Section 366.161, Transportation Code, and

58-15    the jurisdiction of the NTTA may be expanded to include other

58-16    counties pursuant to and in compliance with Section 366.031,

58-17    Transportation Code.  As of the date of this act, the following

58-18    counties meet the geographical qualifications for inclusion within

58-19    the jurisdiction of the NTTA, subject to satisfaction of all other

58-20    requirements of Section 366.031:  Cooke, Ellis, Fannin, Grayson,

58-21    Hunt, Johnson, Kaufman, Parker, Rockwall, and Wise.

58-22          SECTION 3.02.  Upon the effective date of this act, (a) the

58-23    NTTA shall succeed to all assets, rights, and obligations of the

58-24    Texas Turnpike Authority, an agency of the State of Texas

58-25    (hereinafter referred to as the "TTA"), located in said counties,

58-26    including all assets, rights, and obligations that relate to the

58-27    Dallas North Tollway System (including the Dallas North Tollway,

 59-1    the Addison Airport Toll Tunnel, and the President George Bush

 59-2    Turnpike), the Mountain Creek Lake Bridge, all existing and

 59-3    proposed extensions to said projects, the TTA administration

 59-4    building, all other facilities, improvements, and leaseholds, all

 59-5    funds, accounts, and investments related to any of such assets and

 59-6    their operations, and all other assets, properties, and interests

 59-7    in property of the TTA located in said counties, and (b) the NTTA

 59-8    shall assume and become liable for all duties and obligations of

 59-9    the TTA related to the assets, rights, properties, and facilities

59-10    of the TTA located in those counties, including all contracts, all

59-11    bonds secured by the revenues of any of the assets in said

59-12    counties, and all other obligations of every nature related to the

59-13    properties and interests in property transferred to the NTTA

59-14    pursuant to this section.  The NTTA shall be obligated to comply

59-15    with all such assumed obligations to the same extent as the TTA.

59-16    All employees of the TTA may elect to become employees of the

59-17    either the TTA or NTTA on the effective date of this act, subject

59-18    to the employment openings and requirements of the TTA and the

59-19    NTTA, respectively.

59-20          SECTION 3.03.  As consideration for the transfer of the TTA's

59-21    rights and assets described in Section 3.02, the NTTA shall pay

59-22    $10,000,000 to the TTA, in accordance with a schedule acceptable to

59-23    those parties.  Provided, however, that if any scheduled payment

59-24    would cause the NTTA to fail to comply with any bond resolutions,

59-25    bond indenture, credit agreement, or any other agreement assumed by

59-26    the NTTA under Section 3.02, then such payment shall be postponed,

59-27    or paid in smaller and additional installments, as necessary to

 60-1    ensure the NTTA's compliance with all such agreements.

 60-2          SECTION 3.04.  The initial board of directors of the NTTA

 60-3    shall be composed of nine directors.   Three initial directors

 60-4    shall be appointed by the governor, four initial directors shall be

 60-5    appointed by the commissioners courts of the constituent counties

 60-6    of the NTTA, and the county judges of two of the constituent

 60-7    counties of the NTTA shall serve as initial directors.  All of the

 60-8    initial directors and all of their successors shall meet the

 60-9    residence and other qualifications required under Chapter 366,

60-10    Subchapter F, Transportation Code.  The terms of the initial

60-11    directors shall commence on September 1, 1997.  The county judges

60-12    serving as initial directors shall each serve a one-year term.  At

60-13    the expiration of their terms, the seats held by the county judges

60-14    shall not be refilled, and the number of directors composing the

60-15    board shall be reduced to seven.  One of the directors appointed to

60-16    the initial board by the governor shall serve a two-year term.

60-17    Each successor to that director shall be appointed by the governor

60-18    for a six-year term, in accordance with Section 366.251,

60-19    Transportation Code.  The two directors appointed to the initial

60-20    board by the commissioners courts of the counties whose county

60-21    judges serve as initial directors shall each serve a two-year term.

60-22    Each successor to those directors shall be appointed by their

60-23    respective commissioners courts for a six-year term, in accordance

60-24    with Section 366.251, Transportation Code.  Two other directors on

60-25    the initial board shall each serve a four-year term, and their

60-26    respective successors shall be appointed as provided in Section

60-27    366.251, Transportation Code, to six-year terms.  The remaining

 61-1    initial directors shall each be appointed for a six-year term in

 61-2    accordance with Section 366.251, Transportation Code.

 61-3          SECTION 3.05.  The NTTA is hereby declared to be a

 61-4    "successor" and a "successor agency" to the TTA for all purposes,

 61-5    including for the purposes of Article III, Section 52-b of the

 61-6    Texas Constitution, with respect to all assets, rights, and

 61-7    obligations of the TTA transferred to the NTTA and regarding its

 61-8    operations authorized under this act and by Chapter 366,

 61-9    Transportation Code.  Any existing agreement by and between the TTA

61-10    and the state, the Texas Highway Commission, the Texas Department

61-11    of Transportation, the Federal Highway Administration, the United

61-12    States Department of Transportation, any other federal or state

61-13    governmental entity, or any local governmental entity pertaining to

61-14    an asset, right, or obligation transferred to the NTTA under this

61-15    act, shall bind, benefit, and be fully enforceable by and against

61-16    the NTTA as successor to the TTA.

61-17          SECTION 4.  EFFECTIVE DATE.  This Act takes effect September

61-18    1, 1997.

61-19          SECTION 5.  EMERGENCY.  The importance of this legislation

61-20    and the crowded condition of the calendars in both houses create an

61-21    emergency and an imperative public necessity that the

61-22    constitutional rule requiring bills to be read on three several

61-23    days in each house be suspended, and this rule is hereby suspended.