By Solomons, Denny, Crownover                         H.B. No. 3323
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the creation, organization, and powers of a coordinated
 1-3     county transportation authority; authorizing the imposition of a
 1-4     tax, the issuance of bonds and notes, and the exercise of the power
 1-5     of eminent domain.
 1-6           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-7           SECTION 1. Subtitle K, Title 6, Transportation Code, is
 1-8     amended by adding Chapter 460 to read as follows:
 1-9         CHAPTER 460.  COORDINATED COUNTY TRANSPORTATION AUTHORITIES
1-10                      SUBCHAPTER A.  GENERAL PROVISIONS
1-11           Sec. 460.001.  DEFINITIONS. In this chapter:
1-12                 (1)  "Authority" means a coordinated county
1-13     transportation authority created under this chapter.
1-14                 (2)  "Balance of the county" means that part of the
1-15     county that is outside the boundaries of a municipality with a
1-16     population of 12,000 or more.
1-17                 (3)  "Executive committee" means the governing body of
1-18     the authority.
1-19                 (4)  "Service plan" means an outline of the service
1-20     that would be provided by an authority.
1-21           Sec. 460.002.  APPLICABILITY. This chapter applies only to a
1-22     county that:
1-23                 (1)  is adjacent to a county with a population of more
1-24     than one million; and
 2-1                 (2)  does not contain a municipality that:
 2-2                       (A)  has a population of one million or more; and
 2-3                       (B)  is a member of a subregion of a
 2-4     transportation authority governed by a board described in
 2-5     Subchapter O, Chapter 452.
 2-6           Sec. 460.003.  INELIGIBILITY OF CERTAIN MUNICIPALITIES. (a)
 2-7     A municipality that is a member of a subregion of a transportation
 2-8     authority governed by a board described in Subchapter O, Chapter
 2-9     452, is not eligible to join or become a member of an authority
2-10     created under this chapter unless:
2-11                 (1)  the municipality holds a withdrawal election in
2-12     accordance with the requirements of Section 452.655 and a majority
2-13     of the voters at the election approve the withdrawal;
2-14                 (2)  the municipality has paid in full all amounts that
2-15     it is required to pay under Sections 452.659 and 452.660; and
2-16                 (3)  the comptroller has ceased under Section 452.658
2-17     to collect sales and use taxes within the municipality that were
2-18     levied and collected in the municipality for purposes of the
2-19     authority from which the municipality has withdrawn.
2-20           (b)  A municipality that is not eligible under this section
2-21     for membership in an authority created under this chapter may not
2-22     be added to or join an authority under Section 460.302 or 460.303
2-23     until the municipality meets the requirements of this section.
2-24              (Sections 460.004-460.050 reserved for expansion
2-25                     SUBCHAPTER B. CREATION OF AUTHORITY
2-26           Sec. 460.051.  CREATION OF AUTHORITY. (a)  The commissioners
2-27     court of a county may initiate the process to create an authority
 3-1     to provide public transportation and transportation-related
 3-2     services:
 3-3                 (1)  on adoption of a resolution or order initiating
 3-4     the process to create an authority; or
 3-5                 (2)  on receipt of a petition requesting creation of an
 3-6     authority signed by a number of registered voters of the county
 3-7     equal to or greater than five percent of the votes cast in the
 3-8     county in the most recent gubernatorial election.
 3-9           (b)  If a petition described by Subsection (a)(2) is received
3-10     by the commissioners court, the petition shall be verified by the
3-11     county clerk, consistent with Chapter 277, Election Code, and
3-12     returned to the commissioners court with a finding of verification.
3-13           Sec. 460.052.  HEARING. (a)  The commissioners court shall
3-14     hold a public hearing on creation of an authority not later than
3-15     the 60th day after the date the commissioners court:
3-16                 (1)  receives a petition described by Section
3-17     460.051(a)(2); or
3-18                 (2)  adopts a resolution or order to initiate the
3-19     process to create an authority.
3-20           (b)  Notice of the time and place of the public hearing on
3-21     the creation of the authority shall be published, beginning at
3-22     least 30 days before the date of the hearing, once a week for two
3-23     consecutive weeks in a newspaper of general circulation in the
3-24     county.
3-25           (c)  Each municipality in the county with a population of
3-26     12,000 or more shall be notified of the public hearing by notice
3-27     mailed to the governing body of the municipality.
 4-1           (d)  Any person may appear at a hearing and offer evidence
 4-2     on:
 4-3                 (1)  the creation of the authority;
 4-4                 (2)  operation of the county transportation system;
 4-5                 (3)  public interest served in the creation of the
 4-6     authority; or
 4-7                 (4)  other facts relating to the creation of the
 4-8     authority.
 4-9           (e)  A hearing may be continued until completed.
4-10           Sec. 460.053.  RESOLUTION OR ORDER. After the hearing, the
4-11     commissioners court may adopt a resolution or order:
4-12                 (1)  designating the name of the authority;
4-13                 (2)  stating that all land within the county shall be
4-14     part of the authority; and
4-15                 (3)  stating that the territory described in
4-16     Subdivision (2) is subject to the authority based on the results of
4-17     the confirmation election.
4-18           Sec. 460.054.  MEMBERSHIP OF INTERIM EXECUTIVE COMMITTEE. (a)
4-19     After adopting a resolution or order under Section 460.053, the
4-20     commissioners court and certain municipalities, as provided by this
4-21     section, shall appoint an interim executive committee for the
4-22     authority.
4-23           (b)  The interim executive committee is composed of:
4-24                 (1)  one member appointed by the governing body of each
4-25     municipality with a population of 12,000 or more that is located in
4-26     the county;
4-27                 (2)  three members appointed by the commissioners
 5-1     court, two of whom must reside in the unincorporated area of the
 5-2     county; and
 5-3                 (3)  three members to be designated by the remaining
 5-4     municipalities with a population of more than 500 but less than
 5-5     12,000 located in the county.
 5-6           (c)  The members described by Subsection (b)(3) shall be
 5-7     designated as follows:
 5-8                 (1)  each municipality with a population of more than
 5-9     500 but less than 12,000 located in the county shall nominate one
5-10     person using a nomination form sent to the governing body of the
5-11     municipality by mail;
5-12                 (2)  the county judge shall add the names on the
5-13     nomination forms that are received before the 31st day after the
5-14     date of the mailing of the nomination forms;
5-15                 (3)  each municipality with a population of more than
5-16     500 but less than 12,000 located in the county is entitled to cast
5-17     one vote;
5-18                 (4)  only ballots returned to the county judge on or
5-19     before a predetermined date shall be counted;
5-20                 (5)  the county judge shall designate the three persons
5-21     with the highest plurality vote as members of the executive
5-22     committee; and
5-23                 (6)  if three members are not designated by this
5-24     process, the county judge shall name the balance of the members of
5-25     the interim executive committee described by Subsection (b)(3).
5-26           Sec. 460.055.  DUTIES OF INTERIM EXECUTIVE COMMITTEE. (a) The
5-27     interim executive committee shall elect three of its members to
 6-1     serve as the chair, vice chair, and secretary.
 6-2           (b)  The interim executive committee shall develop a service
 6-3     plan and determine a proposed tax not later than the 180th day
 6-4     after the date of the interim executive committee's first meeting.
 6-5           (c)  The interim executive committee shall hold at least one
 6-6     regular meeting a month for the purpose of developing a service
 6-7     plan and determining a proposed tax rate.
 6-8           (d)  The interim executive committee shall consider the
 6-9     following in developing the service plan:
6-10                 (1)  the regional transportation plan for the county
6-11     and major thoroughfare plan;
6-12                 (2)  actual and projected traffic counts of private
6-13     passenger vehicles and projected destinations of the vehicles;
6-14                 (3)  feasible alternative modes of public
6-15     transportation, including:
6-16                       (A)  a fixed guideway system;
6-17                       (B)  passenger commercial carriers;
6-18                       (C)  dedicated thoroughfare lanes;
6-19                       (D)  fixed skyway rail;
6-20                       (E)  high occupancy toll lanes;
6-21                       (F)  traffic management systems; and
6-22                       (G)  bus transit and associated lanes;
6-23                 (4)  the most efficient location of collection points
6-24     and transfer points;
6-25                 (5)  alternative routes linking access and discharge
6-26     points;
6-27                 (6)  alternative alignments using least populous areas
 7-1     if right-of-way acquisition will be required for a transit route;
 7-2                 (7)  estimates of capital expenditures for a functional
 7-3     public transportation system;
 7-4                 (8)  various forms of public transportation consistent
 7-5     with use of transit routes, including for each form a determination
 7-6     of:
 7-7                       (A)  cost per passenger per mile;
 7-8                       (B)  the capital expense of acquisition of the
 7-9     public transportation system;
7-10                       (C)  costs associated with the acquisition,
7-11     improvement, or modification of the transit way; and
7-12                       (D)  maintenance and operating costs;
7-13                 (9)  administrative overhead costs separately from
7-14     other costs;
7-15                 (10)  load factors based on surveys, interviews, and
7-16     other reasonable quantification for the modes of transportation;
7-17                 (11)  a fare structure for the ridership of the public
7-18     transportation system by mode;
7-19                 (12)  a comparison of revenue from all sources,
7-20     including fares, fees, grants, and debt issuance, with estimated
7-21     costs and expenses;
7-22                 (13)  revenue minus expenses expressed numerically and
7-23     a per rider factor for each trip or segment of a trip;
7-24                 (14)  if the service plan contemplates joint use of
7-25     other transit systems or transfer to them, estimated dates of
7-26     access; and
7-27                 (15)  segments of the service plan separately if:
 8-1                       (A)  some segments are more profitable than
 8-2     others; or
 8-3                       (B)  some segments show a smaller deficit than
 8-4     others.
 8-5           Sec. 460.056.  APPROVAL OF SERVICE PLAN AND TAX RATE. (a)  On
 8-6     approval by the interim executive committee of the service plan and
 8-7     tax rate, a copy of the plan and tax rate shall be provided to the
 8-8     commissioners court and the governing body of each municipality
 8-9     with a population of 12,000 or more located in the county.
8-10           (b)  Notice of the interim executive committee's approval of
8-11     the service plan and tax rate shall be published in a newspaper of
8-12     general circulation in the county and mailed to all governing
8-13     bodies of municipalities with a population of more than 500 located
8-14     in the county.
8-15           (c)  Not later than the 60th day after the date the interim
8-16     executive committee approves the service plan and tax rate, the
8-17     governing body of a municipality with a population of 12,000 or
8-18     more may approve by resolution or order the service plan and tax
8-19     rate.
8-20           (d)  A municipality with a population of 12,000 or more
8-21     located in the county that does not give its approval under
8-22     Subsection (c) may not participate in the service plan or the
8-23     confirmation election for the authority.
8-24           (e)  The commissioners court may not order a confirmation
8-25     election in a municipality with a population of 12,000 or more in
8-26     which the governing body of the municipality does not approve the
8-27     service plan and tax rate.
 9-1           Sec. 460.057.  CONFIRMATION ELECTION. (a)  The interim
 9-2     executive committee shall notify the commissioners court of the
 9-3     need to call a confirmation election.
 9-4           (b)  The commissioners court in ordering the confirmation
 9-5     election shall submit to the qualified voters in the county the
 9-6     following proposition:
 9-7           "Shall the creation of (name of authority) be confirmed?"
 9-8           (c)  In addition to other information required by law, the
 9-9     notice of the election must include:
9-10                 (1)  a brief description of the service plan; and
9-11                 (2)  a statement that an imposition of a tax to pay for
9-12     the service plan must be approved by the voters at a subsequent
9-13     election.
9-14           (d)  The election must be held on a uniform election date.
9-15           Sec. 460.058.  CONDUCT OF ELECTION. (a)  A confirmation
9-16     election shall be conducted so that the votes are separately
9-17     tabulated and canvassed in order to show the results for:
9-18                 (1)  each municipality located in the county that
9-19     passed a resolution or order approving the service plan and tax
9-20     rate; and
9-21                 (2)  the qualified voters in the balance of the county.
9-22           (b)  The interim executive committee shall canvass the
9-23     returns and declare the results of the election.
9-24           Sec. 460.059.  RESULTS OF ELECTION. (a)  If a majority of
9-25     votes received in the county favor the proposition, the authority
9-26     is confirmed, except that the authority does not include a
9-27     municipality with a population of 12,000 or more located in the
 10-1    county in which a majority of the votes did not favor the
 10-2    proposition.
 10-3          (b)  The authority ceases if:
 10-4                (1)  a majority of the total votes cast in no
 10-5    municipality with a population of 12,000 or more favors the
 10-6    proposition; and
 10-7                (2)  a majority of the votes of the qualified voters in
 10-8    the balance of the county do not favor the proposition.
 10-9          (c)  If the authority is confirmed, the interim executive
10-10    committee shall record the results in its minutes and adopt an
10-11    order:
10-12                (1)  declaring that the creation of the authority is
10-13    confirmed;
10-14                (2)  stating the date of the election; and
10-15                (3)  showing the number of votes cast for or against
10-16    the proposition in each municipality that passed a resolution or
10-17    order approving the service plan and tax rate and in the
10-18    unincorporated area of the county.
10-19          (d)  On adoption of the order confirming the authority, the
10-20    interim executive committee becomes the executive committee of the
10-21    authority.
10-22          (e)  A certified copy of the order shall be filed with the
10-23    Texas Department of Transportation and the comptroller of public
10-24    accounts.
10-25          Sec. 460.060.  FAILURE TO CONFIRM AUTHORITY. (a)  If the
10-26    authority ceases, the interim executive committee shall record the
10-27    results of the election in its minutes and adopt an order declaring
 11-1    that the authority is dissolved.
 11-2          (b)  The county and each municipality that passed a
 11-3    resolution or order approving the service plan and tax rate shall
 11-4    share the expenses of the election proportionately based on the
 11-5    population of the areas in which the election was conducted.
 11-6          (c)  An authority that has not been confirmed expires on the
 11-7    third anniversary of the effective date of the resolution or order
 11-8    initiating the process to create the authority.
 11-9             (Sections 460.061-460.100 reserved for expansion
11-10                    SUBCHAPTER C.  POWERS OF AUTHORITY
11-11          Sec. 460.101.  POWERS APPLICABLE TO CONFIRMED AUTHORITY. This
11-12    subchapter applies only to an authority that has been confirmed.
11-13          Sec. 460.102.  NATURE OF AUTHORITY. (a)  An authority:
11-14                (1)  is a governmental body and a corporate body;
11-15                (2)  has perpetual succession; and
11-16                (3)  exercises public and essential governmental
11-17    functions.
11-18          (b)  An authority is a governmental unit under Chapter 101,
11-19    Civil Practice and Remedies Code, and the operations of the
11-20    authority are  not proprietary functions for any purpose including
11-21    the application of Chapter 101, Civil Practice and Remedies Code.
11-22          Sec. 460.103.  GENERAL POWERS OF AUTHORITY. (a)  The
11-23    authority has any power necessary or convenient to carry out this
11-24    chapter or effect the purpose of this chapter.
11-25          (b)  An authority may sue and be sued. An authority may not
11-26    be required to give security for costs in a suit brought or
11-27    prosecuted by the authority and may not be required to post a
 12-1    supersedeas or cost bond in an appeal of a judgment.
 12-2          (c)  An authority may hold, use, sell, lease, dispose of, and
 12-3    acquire, by any means, property and licenses, patents, rights and
 12-4    other interests necessary, convenient, or useful to the exercise of
 12-5    any power under this chapter.
 12-6          (d)  An authority may sell, lease, or dispose of in another
 12-7    manner:
 12-8                (1)  any right, interest, or property of the authority
 12-9    that is not necessary for the efficient operation and maintenance
12-10    of public transportation; or
12-11                (2)  at any time, surplus materials or other property
12-12    that is not needed by the authority to carry out a power under this
12-13    chapter.
12-14          Sec. 460.104.  POWER TO CONTRACT; GRANTS AND LOANS. (a)  An
12-15    authority may contract with any person.
12-16          (b)  An authority may accept a gift, grant, donation, or loan
12-17    from any person.
12-18          (c)  An authority may enter into an agreement, including an
12-19    interlocal agreement, with a transportation or transit entity,
12-20    including a municipality, that is consistent with and beneficial to
12-21    the service plan approved by the authority.
12-22          Sec. 460.105.  OPERATION OF PUBLIC TRANSPORTATION SYSTEM. (a)
12-23    An authority may:
12-24                (1)  acquire, construct, develop, plan, own, operate,
12-25    and maintain a public transportation system in the territory of the
12-26    authority, including the territory of a political subdivision or
12-27    municipality partially located in the territory of the authority;
 13-1                (2)  contract with a municipality, county, or other
 13-2    political subdivision for the authority to provide public
 13-3    transportation services outside the authority;
 13-4                (3)  lease all or part of the public transportation to,
 13-5    or contract for the operation of all or a part of the public
 13-6    transportation system by, an operator; and
 13-7                (4)  contract with a political subdivision or
 13-8    governmental entity to provide public transportation services
 13-9    inside the authority consistent with rules and regulations
13-10    established by the authority, including capital, maintenance,
13-11    operation, and other costs specifically approved and audited by the
13-12    authority.
13-13          (b)  An authority shall determine routes of the public
13-14    transportation system or approve routes submitted to the authority.
13-15          Sec. 460.106.  AUTHORIZATION OF TAX LEVY. (a)  An authority
13-16    may call an authorization election for a tax levy associated with
13-17    the service plan developed by the interim executive committee or a
13-18    tax rate that has been modified by action of the executive
13-19    committee at any time after the confirmation election that creates
13-20    the authority.
13-21          (b)  The executive committee in ordering the authorization
13-22    election shall submit to the qualified voters in the county located
13-23    in an area participating in the authority the following
13-24    proposition:
13-25          "Shall the (name of authority) levy of a proposed tax, not to
13-26    exceed (rate), be authorized?"
13-27          (c)  An election authorizing a tax levy shall be conducted in
 14-1    the same manner as a confirmation election under Subchapter B.
 14-2          (d)  A service plan may be implemented in an area of the
 14-3    county participating in the authority only if a majority of votes
 14-4    received favor the authorization of a tax levy by the authority.
 14-5          (e)  An authority that does not authorize an initial tax levy
 14-6    at an authorization election expires on the second anniversary of
 14-7    the date the executive committee adopts an order declaring that the
 14-8    creation of the authority is confirmed.
 14-9          Sec. 460.107.  ACQUISITION OF PROPERTY. (a)  As necessary or
14-10    useful in the construction, repair, maintenance, or operation of a
14-11    public transportation system, an authority may use a public way,
14-12    including an alley.
14-13          (b)  An authority may acquire by eminent domain any interest
14-14    in real property, including a fee simple interest and the use of
14-15    air or subsurface space, except the right of eminent domain may not
14-16    be exercised:
14-17                (1)  in a municipality without the approval of the
14-18    proposed acquisition by the governing body of the municipality; or
14-19                (2)  in an unincorporated area without the approval of
14-20    the proposed acquisition by the commissioners court of the county
14-21    in which the property to be condemned is located.
14-22          (c)  If an authority, through the exercise of eminent domain,
14-23    makes any relocation necessary, the relocation costs shall be paid
14-24    by the authority.
14-25          (d)  An eminent domain proceeding by an authority is
14-26    initiated by the adoption by the executive committee of a
14-27    resolution authorizing the exercise that:
 15-1                (1)  describes the property to be condemned;
 15-2                (2)  declares the public necessity for the acquisition;
 15-3    and
 15-4                (3)  declares that the acquisition is necessary for the
 15-5    construction, extension, improvement, or development of the public
 15-6    transportation system.
 15-7          (e)  A resolution adopted under this section and approved by
 15-8    the appropriate municipal governing body or commissioners court is
 15-9    conclusive evidence of the public necessity for the acquisition
15-10    described in the resolution.
15-11          (f)  Chapter 21, Property Code, applies to an eminent domain
15-12    proceeding by an authority.
15-13          Sec. 460.108.  AGREEMENT WITH UTILITIES, CARRIERS. An
15-14    authority may agree with any other public or private utility,
15-15    communication system, common carrier, or transportation system for:
15-16                (1)  the joint use of the property or fixtures of the
15-17    agreeing entities; and
15-18                (2)  the establishment of through routes, joint fares,
15-19    or transfers of passengers between the agreeing entities.
15-20          Sec. 460.109.  FARES AND USE FEES. (a)  An authority shall
15-21    impose reasonable and nondiscriminatory fares, tolls, charges,
15-22    rents, and other forms of compensation for the use of the public
15-23    transportation system.  The fares and other forms of compensation
15-24    shall be sufficient to produce revenue, together with tax revenue
15-25    and grants received by the authority, in an amount adequate to:
15-26                (1)  pay annually the expenses necessary to operate and
15-27    maintain the public transportation system;
 16-1                (2)  pay as due the principal of and interest on, and
 16-2    sinking fund or reserve fund payments agreed to be made with
 16-3    respect to, all bonds that are issued by the authority and payable
 16-4    in whole or part from the revenue; and
 16-5                (3)  fulfill the terms of any other agreement with the
 16-6    holders of bonds issued by the authority.
 16-7          (b)  Fares for passenger transportation may be set according
 16-8    to a zone system or by any other classification system that the
 16-9    authority determines to be reasonable.
16-10          (c)  This section does not limit the state's power to
16-11    regulate taxes imposed by an authority. The state agrees not to
16-12    alter the power granted to an authority under this section to
16-13    impose taxes, fares, tolls, charges, rents, and other compensation
16-14    sufficient to pay obligations incurred by the authority.
16-15          (d)  The state agrees not to impair the rights and remedies
16-16    of an authority bondholder, or a person acting on behalf of a
16-17    bondholder, until the principal and interest on the bonds, the
16-18    interest on unpaid installments of interest, costs, and expenses in
16-19    connection with an action or proceeding by or on behalf of a
16-20    bondholder are discharged.
16-21          Sec. 460.110.  INSURANCE. (a)  An authority may insure,
16-22    through purchased insurance policies, self-insurance programs, or
16-23    both, the legal liability of the authority and of its contractors
16-24    and subcontractors arising from the acquisition, construction, or
16-25    operation of the programs and facilities of the authority for:
16-26                (1)  personal or property damage; and
16-27                (2)  officers' and employees' liability.
 17-1          (b)  An authority may use contracts, rating plans, and risk
 17-2    management programs designed to encourage accident prevention.
 17-3          (c)  In developing an insurance or self-insurance program, an
 17-4    authority may consider the peculiar hazards, indemnity standards,
 17-5    and past and prospective loss and expense experience of the
 17-6    authority and similar authorities and of its contractors and
 17-7    subcontractors.
 17-8          Sec. 460.111.  TAX EXEMPTION. The property, revenue, and
 17-9    income of an authority are exempt from state and local taxes.
17-10          Sec. 460.112.  MASS TRANSIT RAIL SYSTEM; EXEMPTION. (a)  An
17-11    authority that constructs or operates or contracts with another
17-12    entity to construct or operate a mass transit rail system is not
17-13    subject to any state law regulating or governing the design,
17-14    construction, or operation of a railroad, railway, street railway,
17-15    streetcar, or interurban railway.
17-16          (b)  For purposes of ownership or transfer of ownership of an
17-17    interest in real property, a light rail mass transit system line
17-18    operating on property previously used by a railroad, railway,
17-19    street railway, or interurban railway is a continuation of existing
17-20    rail use.
17-21             (Sections 460.113-460.200 reserved for expansion
17-22        SUBCHAPTER D. PROVISIONS APPLICABLE TO EXECUTIVE COMMITTEE
17-23          Sec. 460.201.  TERMS; VACANCY. (a)  Each member of the
17-24    executive committee serves a term of two years.
17-25          (b)  A member of the executive committee may not serve more
17-26    than three terms.
17-27          (c)  A vacancy on the executive committee is filled in the
 18-1    same manner as the original appointment to the interim executive
 18-2    committee.
 18-3          Sec. 460.202.  ELIGIBILITY. To be eligible for appointment to
 18-4    the executive committee, a person must have professional experience
 18-5    in the field of transportation, business, government, engineering,
 18-6    or law.
 18-7          Sec. 460.203.  CONFLICTS OF INTEREST. Members of the
 18-8    executive committee and officers and employees of the authority are
 18-9    subject to Chapter 171, Local Government Code.
18-10          Sec. 460.204.  MEETINGS. (a)  The executive committee shall
18-11    meet at least monthly to transact the business of an authority.
18-12          (b)  The chair may call special meetings as necessary.
18-13          (c)  The executive committee by resolution shall:
18-14                (1)  set the time, place, and date of regular meetings;
18-15    and
18-16                (2)  adopt rules and bylaws as necessary to conduct
18-17    meetings.
18-18          Sec. 460.205.  QUORUM; VOTING REQUIREMENTS. (a)  Five members
18-19    constitute a quorum of the executive committee.
18-20          (b)  An action of the executive committee requires a vote of
18-21    a majority of the members present unless the bylaws require a
18-22    larger number for a specific action.
18-23             (Sections 460.206-460.300 reserved for expansion
18-24                   SUBCHAPTER E.  ADDITION OF TERRITORY
18-25          Sec. 460.301.  ADDITION OF TERRITORY BY MUNICIPAL ANNEXATION.
18-26    When a municipality that is part of an authority annexes territory
18-27    that before the annexation is not part of the authority, the
 19-1    annexed territory becomes part of the authority.
 19-2          Sec. 460.302.  ADDITION OF MUNICIPALITY BY ELECTION. (a)  The
 19-3    territory of a municipality that is not initially part of an
 19-4    authority may be added to an authority if:
 19-5                (1)  any part of the municipality is located in the
 19-6    territory of the authority;
 19-7                (2)  the governing body of the municipality orders an
 19-8    election under this section on whether the territory of the
 19-9    municipality should be added to the authority; and
19-10                (3)  a majority of the votes received in the election
19-11    favor the measure.
19-12          (b)  The governing body of the municipality shall certify to
19-13    the executive committee the result of an election in which the
19-14    addition is approved.
19-15          Sec. 460.303.  JOINING AUTHORITY; CERTAIN AUTHORITIES. (a)  A
19-16    municipality that has a population of more than 500,000 and that is
19-17    located in a county with a population of more than one million may
19-18    join a separate authority.
19-19          (b)  If a municipality described by Subsection (a) joins an
19-20    authority created under this chapter and another separate authority
19-21    is subsequently established in the county in which the municipality
19-22    is located, the municipality may:
19-23                (1)  remain in the authority that was created first;
19-24                (2)  join the new authority in the county in which the
19-25    municipality is located; or
19-26                (3)  participate with both authorities.
19-27          (c)  A municipality that has requested, participated in, or
 20-1    received a benefit of capital improvements made by an authority
 20-2    shall on its transfer to a different authority or participation
 20-3    with more than one authority continue to honor reimbursement
 20-4    obligations resulting from the improvements.
 20-5          Sec. 460.304.  TAX IMPOSED IN ADDED TERRITORY. (a)  A sales
 20-6    and use tax imposed by an authority takes effect in territory added
 20-7    to the authority under this subchapter on the first day of the
 20-8    first calendar quarter that begins after the addition of the
 20-9    territory.
20-10          (b)  An authority shall send to the comptroller of public
20-11    accounts:
20-12                (1)  a certified copy of an order adding the territory
20-13    or of an order canvassing the returns and declaring the results of
20-14    the election; and
20-15                (2)  a map showing the territory added to the
20-16    authority.
20-17          (c)  The order must include the effective date of the tax.
20-18             (Sections 460.305-460.400 reserved for expansion
20-19                   SUBCHAPTER F. MANAGEMENT OF AUTHORITY
20-20          Sec. 460.401.  MANAGEMENT OF AUTHORITY. The executive
20-21    committee is responsible for the management, operation, and control
20-22    of the authority and its properties.
20-23          Sec. 460.402.  FINANCIAL AUDIT. (a)  The executive committee
20-24    of an authority shall have an annual audit of the affairs of the
20-25    authority prepared by an independent certified public accountant.
20-26          (b)  The audit is a public record as defined by Chapter 552,
20-27    Government Code.
 21-1          (c)  On receipt of the audit prescribed by Subsection (a),
 21-2    the executive committee shall address on the record any
 21-3    deficiencies noted in the report at a regular meeting of the
 21-4    executive committee.
 21-5          Sec. 460.403.  BUDGET. The executive committee shall prepare
 21-6    an annual budget.
 21-7          Sec. 460.404.  FUNDING. (a)  An authority may request funds
 21-8    for its operation from a municipality, the commissioners court, or
 21-9    both a municipality and the commissioners court. The request shall
21-10    be accompanied by a budget.
21-11          (b)  Funds appropriated to an authority are subject to audit.
21-12          (c)  Federal funds or grants may be used to offset the
21-13    authority's annual cost of debt service.
21-14          Sec. 460.405.  PROHIBITIONS. (a)  An employee, agent, or
21-15    person receiving compensation from or on behalf of an authority may
21-16    not attempt to affect the outcome of proposed legislation.
21-17          (b)  This section does not apply to:
21-18                (1)  a contested administrative matter; or
21-19                (2)  pending or reasonably anticipated litigation.
21-20          Sec. 460.406.  PURCHASES: COMPETITIVE BIDDING. (a)  Except as
21-21    provided by Subsection (c), an authority may not award a contract
21-22    for construction, services, or property, other than real property,
21-23    except through the solicitation of competitive sealed bids or
21-24    proposals ensuring full and open competition.
21-25          (b)  The authority shall describe in a solicitation each
21-26    factor to be used to evaluate a bid or proposal and give the
21-27    factor's relative importance.
 22-1          (c)  The executive committee may authorize the negotiation of
 22-2    a contract without competitive sealed bids or proposals if:
 22-3                (1)  the aggregate amount involved in the contract is
 22-4    $25,000 or less;
 22-5                (2)  the contract is for construction for which not
 22-6    more than one bid or proposal is received;
 22-7                (3)  the contract is for services or property for which
 22-8    there is only one source or for which it is otherwise impracticable
 22-9    to obtain competition;
22-10                (4)  the contract is to respond to an emergency for
22-11    which the public exigency does not permit the delay incident to the
22-12    competitive process;
22-13                (5)  the contract is for personal or professional
22-14    services or services for which competitive bidding is precluded by
22-15    law; or
22-16                (6)  the contract, without regard to form and which may
22-17    include bonds, notes, loan agreements, or other obligations, is for
22-18    the purpose of borrowing money or is a part of a transaction
22-19    relating to the borrowing of money, including:
22-20                      (A)  a credit support agreement, such as a line
22-21    or letter of credit or other debt guaranty;
22-22                      (B)  a bond, note, debt sale or purchase,
22-23    trustee, paying agent, remarketing agent, indexing agent, or
22-24    similar agreement;
22-25                      (C)  an agreement with a securities dealer,
22-26    broker, or underwriter; and
22-27                      (D)  any other contract or agreement considered
 23-1    by the executive committee to be appropriate or necessary in
 23-2    support of the authority's financing activities.
 23-3             (Sections 460.407-460.500 reserved for expansion
 23-4                      SUBCHAPTER G.  BONDS AND NOTES
 23-5          Sec. 460.501.  DEFINITION. In this subchapter, "bond"
 23-6    includes a note.
 23-7          Sec. 460.502.  POWER TO ISSUE BONDS. (a)  An authority may
 23-8    issue bonds at any time and for amounts the executive committee
 23-9    determines are appropriate.
23-10          (b)  The bonds may be issued as necessary for:
23-11                (1)  the acquisition, construction, repair,
23-12    improvement, or extension of an authority's public transportation
23-13    system; or
23-14                (2)  the creation or funding of self-insurance or
23-15    retirement or pension fund reserves.
23-16          (c)  A bond issued by the authority must have 20-year even
23-17    principal and interest payback.
23-18          (d)  A bond any portion of which is secured by a pledge of
23-19    sales and use tax revenues and that has a maturity of five years or
23-20    longer from the date of issuance may not be issued by an authority
23-21    until an election has been held and the proposition proposing the
23-22    issue has been approved by a majority of the votes received on the
23-23    issue in accordance with the provisions established for the
23-24    authorization of a tax levy under Subchapter C.
23-25          Sec. 460.503.  BOND TERMS. The bonds of an authority are
23-26    fully negotiable. An authority may make the bonds redeemable before
23-27    maturity.
 24-1          Sec. 460.504.  SALE. An authority's bonds may be sold at a
 24-2    public or private sale as determined by the executive committee  to
 24-3    be the more financially beneficial.
 24-4          Sec. 460.505.  INCONTESTABILITY. An authority's bonds are
 24-5    incontestable after the bonds are:
 24-6                (1)  approved by the attorney general;
 24-7                (2)  registered by the comptroller of public accounts;
 24-8    and
 24-9                (3)  sold to the purchaser.
24-10          Sec. 460.506.  SECURITY PLEDGED. To secure the payment of an
24-11    authority's bonds, the authority may:
24-12                (1)  pledge all or part of revenue realized from any
24-13    tax that is approved and levied;
24-14                (2)  pledge any part of the revenue of the public
24-15    transportation system; or
24-16                (3)  mortgage any part of the public transportation
24-17    system.
24-18          Sec. 460.507.  REFUNDING BONDS. An authority may issue
24-19    refunding bonds at any time if the repayment savings from the
24-20    refunding bonds exceeds the cost of issuance.
24-21          Sec. 460.508.  NOTES. (a)  An authority may issue negotiable
24-22    notes payable from any of the authority's sources of revenue to pay
24-23    for any lawful expenditure, other than principal and interest on
24-24    the authority's debt.
24-25          (b)  Notes issued by an authority shall be payable over a
24-26    period not to exceed five years from the date of issuance.
24-27          (c)  The Texas Natural Resource Conservation Commission is
 25-1    not required to approve notes issued under this section.
 25-2          (d)  An authority may not have outstanding notes in excess of
 25-3    $1 million at any one time.
 25-4             (Sections 460.509-460.550 reserved for expansion
 25-5                          SUBCHAPTER H.  TAXATION
 25-6          Sec. 460.551.  SALES AND USE TAX. (a)  The executive
 25-7    committee may impose for an authority a sales and use tax at the
 25-8    rate of:
 25-9                (1)  one-quarter of one percent;
25-10                (2)  one-half of one percent;
25-11                (3)  three-quarters of one percent; or
25-12                (4)  one percent.
25-13          (b)  The imposition of an authority's sales and use tax must
25-14    be approved at an election and may not be imposed in an area that
25-15    has not confirmed the authority.
25-16          (c)  A sales and use tax may be imposed, as prescribed by
25-17    this section, by a municipality that participates in a
25-18    transportation or transit authority other than an authority created
25-19    under this chapter if:
25-20                (1)  the combined rates of all sales and use taxes
25-21    imposed in the municipality does not exceed two percent; and
25-22                (2)  the ballot of the authorization vote for the sales
25-23    and use tax reads:
25-24          "(Name of city) already imposes a sales and use tax for
25-25    participation in the transportation authority. The proposed sales
25-26    and use tax is solely for the benefit of, and will be dedicated to,
25-27    the  county transportation authority."
 26-1          (d)  The authority shall impose a sales and use tax at a
 26-2    minimum uniform rate as determined by the executive committee if
 26-3    the tax is approved at an election in an area that has confirmed
 26-4    the authority.
 26-5          (e)  A municipality with a population of 12,000 or more that
 26-6    has confirmed the authority may impose a sales and use tax at a
 26-7    rate higher than the minimum uniform rate established under
 26-8    Subsection (d) on approval at an election if the authority will
 26-9    provide the municipality a higher level of service.
26-10          Sec. 460.552.  MAXIMUM TAX RATE IN AUTHORITY AREA. (a)  An
26-11    authority may not adopt a sales and use tax rate, including a rate
26-12    increase, that when combined with the rates of all sales and use
26-13    taxes imposed by other political subdivisions having territory in
26-14    the authority exceeds two percent in any location in the authority.
26-15          (b)  An increase in the tax rate to a higher rate must be
26-16    approved by a majority of the voters at a confirmation election.
26-17          Sec. 460.553.  INITIAL SALES TAX:  EFFECTIVE DATE. The
26-18    adoption of a sales and use tax takes effect on the first day of
26-19    the first calendar quarter after the confirmation election.
26-20          Sec. 460.554.  RATE DECREASE. The executive committee by
26-21    order may direct the comptroller of public accounts to collect the
26-22    authority's sales and use tax at a rate that is lower than the rate
26-23    approved by the voters at the confirmation hearing if the executive
26-24    committee determines that it is in the best interest of the
26-25    authority.
26-26          SECTION 2. This Act takes effect September 1, 2001.