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 * * * * *