1-1     By:  Barrientos, et al.                                S.B. No. 657

 1-2           (In the Senate - Filed February 18, 1997; February 24, 1997,

 1-3     read first time and referred to Committee on State Affairs;

 1-4     April 4, 1997, reported adversely, with favorable Committee

 1-5     Substitute by the following vote:  Yeas 13, Nays 0; April 4, 1997,

 1-6     sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 657                 By:  Gallegos

 1-8                            A BILL TO BE ENTITLED

 1-9                                   AN ACT

1-10     relating to the creation of intermunicipal commuter rail districts;

1-11     granting authority to issue bonds and power of eminent domain.

1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-13           SECTION 1.  Chapter 13, Title 112, Revised Statutes, is

1-14     amended by adding Article 6550c-1 to read as follows:

1-15           Art. 6550c-1.  INTERMUNICIPAL COMMUTER RAIL DISTRICTS

1-16           Sec. 1.  DEFINITIONS.  In this article:

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

1-18     Commission.

1-19                 (2)  "Commuter rail facility" means any property

1-20     necessary for the transportation of passengers and baggage between

1-21     points in a district.  The term includes rolling stock,

1-22     locomotives, stations, parking areas, and rail lines.

1-23                 (3)  "Creating municipality" means a municipality

1-24     described by Section 2(a) of this article.

1-25                 (4)  "Department" means the Texas Department of

1-26     Transportation.

1-27                 (5)  "District" means an intermunicipal commuter rail

1-28     district created under this article.

1-29                 (6)  "System" means all of the commuter rail and

1-30     intermodal facilities leased or owned by or operated on behalf of a

1-31     district created under this article.

1-32           Sec. 2.  CREATION OF DISTRICT.  (a)  A district may be

1-33     created to provide commuter rail service between two

1-34     municipalities:

1-35                 (1)  each of which has a population of more than

1-36     450,000; and

1-37                 (2)  that are located not farther than 100 miles apart

1-38     as determined by the department.

1-39           (b)  A district is created on passage of a resolution

1-40     favoring the creation of the district by the governing body of each

1-41     creating municipality and the governing body of each county in

1-42     which a creating municipality is located.

1-43           (c)  The following political subdivisions may become a part

1-44     of a district created under Subsection (b) of this section with the

1-45     approval of the governing body of the political subdivision:

1-46                 (1)  a county located adjacent to a county in which a

1-47     creating municipality is located; and

1-48                 (2)  a municipality with a population of more than

1-49     18,000 located in a county described by Subdivision (1) of this

1-50     subsection.

1-51           (d)  For purposes of this article, a municipality is located

1-52     in a county only if 90 percent or more of the population of the

1-53     municipality resides in that county according to the most recent

1-54     federal census.

1-55           Sec. 3.  BOARD.  (a)  A district is governed by a board of

1-56     directors.  The board is responsible for the management, operation,

1-57     and control of the district.

1-58           (b)  The board is composed of the following members:

1-59                 (1)  two public members appointed by the commission;

1-60                 (2)  one member appointed by each political subdivision

1-61     that has become a part of the district under Section 2 of this

1-62     article;

1-63                 (3)  one member appointed by each creating municipality

1-64     to represent the regional planning organization of which the

 2-1     municipality is a part;

 2-2                 (4)  one member appointed by each creating municipality

 2-3     to represent the business community of the municipality;

 2-4                 (5)  one member appointed by each authority created

 2-5     under Chapter 451, Transportation Code, that serves a creating

 2-6     municipality;

 2-7                 (6)  one member appointed by each county in which a

 2-8     creating municipality is located to represent transportation

 2-9     providers that provide service to rural areas in the county; and

2-10                 (7)  one member appointed by all other board members to

2-11     represent all municipalities in the district that do not otherwise

2-12     have representation on the board.

2-13           (c)  A vacancy on the board is filled in the same manner as

2-14     the original appointment.  Each member serves a term of two years.

2-15           (d)  The members of the board shall elect one member as

2-16     presiding officer.  The presiding officer may select another member

2-17     to preside in the absence of the presiding officer.

2-18           (e)  The presiding officer shall call at least one meeting of

2-19     the board a year and may hold other meetings as the presiding

2-20     officer determines are appropriate.

2-21           (f)  A member of the board is not entitled to compensation

2-22     for serving as a member but is entitled to reimbursement for

2-23     reasonable expenses incurred while serving as a member.

2-24           (g)  The board shall adopt rules for its proceedings and

2-25     appoint an executive committee and may employ and compensate

2-26     persons to carry out the powers and duties of the district.

2-27           (h)  Chapter 171, Local Government Code, applies to a board

2-28     member of a district.

2-29           Sec. 4.  POWERS AND DUTIES OF DISTRICT.  (a)  A district

2-30     created under this article is a public body and a political

2-31     subdivision of the state exercising public and essential

2-32     governmental functions and has all the powers necessary or

2-33     convenient to carry out the purposes of this article.  A district,

2-34     in the exercise of powers under this article, is performing only

2-35     governmental functions and is a governmental unit within the

2-36     meaning of Chapter 101, Civil Practice and Remedies Code.

2-37           (b)  A district has perpetual succession.  A district is

2-38     subject every 12th year to review under Chapter 325, Government

2-39     Code (Texas Sunset Act), but is not abolished under that chapter.

2-40           (c)  A district may sue and be sued in all courts of

2-41     competent jurisdiction, may institute and prosecute suits without

2-42     giving security for costs, and may appeal from a judgment without

2-43     giving supersedeas or cost bond.  An action at law or in equity

2-44     against the district must be brought in the county in which the

2-45     principal office of the district is located, except that in eminent

2-46     domain proceedings, suit must be brought in the county in which the

2-47     land is located.

2-48           (d)  A district may acquire by grant, purchase, gift, devise,

2-49     lease, or otherwise and may hold, use, sell, lease, or dispose of

2-50     real and personal property, licenses, patents, rights, and

2-51     interests necessary, convenient, or useful for the full exercise of

2-52     any of its powers under this article.

2-53           (e)  A district may acquire, construct, develop, own,

2-54     operate, and maintain intermodal and commuter rail facilities

2-55     inside, or connect political subdivisions in, the district.  For

2-56     these purposes and with the consent of any municipality, county, or

2-57     other political subdivision, the district may use streets, alleys,

2-58     roads, highways, and other public ways of any municipality, county,

2-59     or other political subdivision and may relocate, raise, reroute,

2-60     change the grade of, or alter, at the expense of the district, the

2-61     construction of any street, alley, highway, road, railroad,

2-62     electric lines and facilities, telegraph and telephone properties

2-63     and facilities, pipelines and facilities, conduits and facilities,

2-64     and other properties, whether publicly or privately owned, as

2-65     necessary or useful in the construction, reconstruction, repair,

2-66     maintenance, and operation of the system.  A district may not use

2-67     or alter a road or highway in the state highway system without the

2-68     permission of the commission.  A district may at its discretion

2-69     acquire by purchase any interest in real property for the

 3-1     acquisition, construction, or operation of any commuter rail

 3-2     facility on terms and at a price as agreed to between the district

 3-3     and the owner.  The governing body of any municipality, county,

 3-4     other political subdivision, or public agency may make conveyance

 3-5     of title or rights and easements to any property needed by the

 3-6     district to effect its purposes in connection with the acquisition,

 3-7     construction, or operation of the system.

 3-8           (f)  A district has the right of eminent domain to acquire

 3-9     lands in fee simple and any interest less than fee simple in, on,

3-10     under, or above lands, including easements, rights-of-way, and

3-11     rights of use of airspace or subsurface space.  The power of

3-12     eminent domain under this section does not apply, however, to land

3-13     under the jurisdiction of the department or a rail line owned by a

3-14     common carrier or municipality.  The district shall, to the extent

3-15     possible, use existing rail or intermodal transportation corridors

3-16     for the alignment of its railroad.  Proceedings for the exercise of

3-17     the power of eminent domain are begun by the adoption by the board

3-18     of a resolution declaring the public necessity for the acquisition

3-19     by the district of the property or interest described in the

3-20     resolution and that the acquisition is necessary and proper for the

3-21     construction, extension, improvement, or development of commuter

3-22     rail facilities and is in the public interest.  The resolution of

3-23     the district is conclusive evidence of the public necessity of the

3-24     proposed acquisition and that the real or personal property or

3-25     interest in property is necessary for public use.

3-26           (g)  A district may make agreements with any other public

3-27     utility, private utility, communication system, common carrier,

3-28     state agency, or transportation system for the joint use of

3-29     facilities, installations, or properties within or outside the

3-30     district and establish through routes, joint fares, and, subject to

3-31     approval of any tariff-regulating body having jurisdiction,

3-32     divisions of tariffs.

3-33           (h)  A district may adopt rules to govern the operation of

3-34     the district, its employees, the system, service provided by the

3-35     district, and any other necessary matter concerning its purposes,

3-36     including rules regarding health, safety, alcohol or beverage

3-37     service, food service, and telephone and utility services, to

3-38     protect the health, safety, and general welfare of residents of the

3-39     district.

3-40           (i)  A district may make joint ownership agreements with any

3-41     person.

3-42           (j)  A district shall establish and maintain rates or other

3-43     compensation for the use of the facilities of the system acquired,

3-44     constructed, operated, regulated, or maintained by the district

3-45     that is reasonable and nondiscriminatory and, together with grants

3-46     received by the district, is sufficient to produce revenues

3-47     adequate:

3-48                 (1)  to pay all expenses necessary to the operation and

3-49     maintenance of the properties and facilities of the district;

3-50                 (2)  to pay the interest on and principal of all bonds

3-51     issued by the district under this article and payable in whole or

3-52     in part from the revenues, as they become due and payable; and

3-53                 (3)  to fulfill the terms of any agreements made with

3-54     the holders of bonds or with any person in their behalf.

3-55           (k)  A district may make contracts, leases, and agreements

3-56     with, and accept grants and loans from, the United States of

3-57     America, its departments and agencies, the state, its agencies and

3-58     political subdivisions, and public or private corporations and

3-59     persons and may generally perform all acts necessary for the full

3-60     exercise of the powers vested in it.  The commission may enter an

3-61     interlocal agreement with a district under which a district may

3-62     exercise a power or duty of the commission for the development and

3-63     efficient operation of intermodal corridors in the district.  A

3-64     district may acquire rolling stock or other property under

3-65     conditional sales contracts, leases, equipment trust certificates,

3-66     or any other form of contract or trust agreement.  Any revenue bond

3-67     indenture may provide limitations on the exercise of the powers

3-68     granted by this section, and the limitations apply so long as any

3-69     of the revenue bonds issued pursuant to the indenture are

 4-1     outstanding and unpaid.

 4-2           (l)  A district by resolution may adopt rules governing the

 4-3     use, operation, and maintenance of the system and shall determine

 4-4     all routings and change them when the board considers it advisable.

 4-5           (m)  A district may lease the commuter rail facilities or any

 4-6     part to, or contract for the use or operation of the commuter rail

 4-7     facilities or any part by, any operator.  A district shall

 4-8     encourage to the maximum extent practicable the participation of

 4-9     private enterprise in the operation of commuter rail facilities.

4-10     The term of an operating contract under this subsection may not

4-11     exceed 20 years.

4-12           (n)  A district may contract with any county or other

4-13     political subdivision of the state for the district to provide

4-14     commuter rail transportation services to any area outside the

4-15     boundaries of the district on such terms and conditions as the

4-16     parties agree to.

4-17           (o)  A district may purchase an additional insured provision

4-18     to any liability insurance contract.

4-19           (p)  Before beginning the operation of commuter rail

4-20     facilities, the board of a district shall adopt an annual operating

4-21     budget specifying the anticipated revenues and expenses of the

4-22     district for the remainder of the fiscal year, and the district

4-23     shall adopt an operating budget for each succeeding fiscal year.

4-24     The fiscal year of the district ends September 30 unless changed by

4-25     the board.  The board shall hold a public hearing before adopting

4-26     each budget except the initial budget.  Notice of each hearing must

4-27     be published at least seven days before the date of the hearing in

4-28     a newspaper of general circulation in the district.  A budget may

4-29     be amended at any time if notice of the proposed amendment is given

4-30     in the notice of meeting.  An expenditure that is not budgeted may

4-31     not be made.

4-32           (q)  A district is eligible to participate in the Texas

4-33     County and District Retirement System.

4-34           (r)  The board of a district shall by resolution name one or

4-35     more banks for the deposit of district funds.  District funds are

4-36     public funds and may be invested in securities permitted by Chapter

4-37     2256, Government Code.  To the extent funds of the district are not

4-38     insured by the Federal Deposit Insurance Corporation or its

4-39     successor, they shall be collateralized in the manner provided for

4-40     county funds.

4-41           Sec. 5.  BONDS AND NOTES.  (a)  A district may issue revenue

4-42     bonds and notes from time to time and in such amounts as its board

4-43     considers necessary or appropriate for the acquisition, purchase,

4-44     construction, reconstruction, repair, equipping, improvement, or

4-45     extension of its commuter rail facilities.  All bonds and notes are

4-46     fully negotiable and may be made redeemable before maturity, at the

4-47     option of the issuing district and at prices and under terms and

4-48     conditions the issuing district determines in the resolution

4-49     authorizing the bonds or notes, and may be sold at public or

4-50     private sale, as the board determines.

4-51           (b)  A district shall submit all bonds and notes authorized

4-52     to be issued, except notes issued to an agency of the federal or

4-53     state government, and the records relating to their issuance to the

4-54     attorney general for examination before delivery.  If the attorney

4-55     general determines that they have been issued in accordance with

4-56     the constitution and this article and that they will be binding

4-57     obligations of the district issuing them, the attorney general

4-58     shall approve them, and the comptroller shall register them.  Bonds

4-59     and notes issued under this article are incontestable after

4-60     approval, registration, and sale and delivery of the bonds to the

4-61     purchaser.

4-62           (c)  To secure the payment of the bonds or notes, the

4-63     district may encumber and pledge all or any part of the revenues of

4-64     its commuter rail facilities, may mortgage and encumber all or any

4-65     part of the properties of the commuter rail facilities and

4-66     everything pertaining to them acquired or to be acquired, and may

4-67     prescribe the terms and provisions of the bonds and notes in any

4-68     manner not inconsistent with this article.  If not prohibited by

4-69     the resolution or indenture relating to outstanding bonds or notes,

 5-1     a district may encumber separately any item of real estate or

 5-2     personalty.

 5-3           (d)  All bonds and notes are legal and authorized investments

 5-4     for banks, trust companies, savings and loan associations, and

 5-5     insurance companies.  The bonds and notes are eligible to secure

 5-6     the deposit of public funds of the state, cities, towns, villages,

 5-7     counties, school districts, or other political corporations or

 5-8     subdivisions of the state.  The bonds and notes are lawful and

 5-9     sufficient security for the deposits to the extent of the principal

5-10     amount or market value of the bonds or notes, whichever is less.

5-11           Sec. 6.  COMPETITIVE BIDS.  A contract in the amount of more

5-12     than $15,000 for the construction of improvements or the purchase

5-13     of material, machinery, equipment, supplies, or any other property

5-14     except real property may be let only on competitive bids after

5-15     notice published, at least 15 days before the date set for

5-16     receiving bids, in a newspaper of general circulation in the

5-17     district.  A board may adopt rules governing the taking of bids and

5-18     the awarding of contracts.  This section does not apply to:

5-19                 (1)  personal or professional services;

5-20                 (2)  the acquisition of existing rail transportation

5-21     systems; or

5-22                 (3)  a contract with a common carrier to construct

5-23     lines and to operate commuter rail service on lines owned in whole

5-24     or in part by the carrier.

5-25           Sec. 7.  EXEMPTION FROM TAXES.  The property, material

5-26     purchases, revenues, and income of a district and the interest on

5-27     bonds and notes issued by a district are exempt from all taxes

5-28     levied by the state or a political subdivision of the state.

5-29           SECTION 2.  The importance of this legislation and the

5-30     crowded condition of the calendars in both houses create an

5-31     emergency and an imperative public necessity that the

5-32     constitutional rule requiring bills to be read on three several

5-33     days in each house be suspended, and this rule is hereby suspended,

5-34     and that this Act take effect and be in force from and after its

5-35     passage, and it is so enacted.

5-36                                  * * * * *