77R13082 E By Solomons H.B. No. 3323 Substitute the following for H.B. No. 3323: By Alexander C.S.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) "Executive committee" means the governing body of 1-15 the authority. 1-16 (3) "Service plan" means an outline of the service 1-17 that would be provided by an authority. 1-18 Sec. 460.002. APPLICABILITY. This chapter applies only to a 1-19 county that: 1-20 (1) is adjacent to a county with a population of more 1-21 than one million; and 1-22 (2) does not contain a municipality that: 1-23 (A) has a population of one million or more; and 1-24 (B) is a member of a subregion of a 2-1 transportation authority governed by a board described in 2-2 Subchapter O, Chapter 452. 2-3 Sec. 460.003. INELIGIBILITY OF CERTAIN MUNICIPALITIES. (a) 2-4 A municipality that is a member of a subregion of a transportation 2-5 authority governed by a board described in Subchapter O, Chapter 2-6 452, is not eligible to join or become a member of an authority 2-7 created under this chapter unless: 2-8 (1) the municipality holds a withdrawal election in 2-9 accordance with the requirements of Section 452.655 and a majority 2-10 of the voters at the election approve the withdrawal; 2-11 (2) the municipality has paid in full all amounts that 2-12 it is required to pay under Sections 452.659 and 452.660; and 2-13 (3) the comptroller has ceased under Section 452.658 2-14 to collect sales and use taxes within the municipality that were 2-15 levied and collected in the municipality for purposes of the 2-16 authority from which the municipality has withdrawn. 2-17 (b) A municipality that is not eligible under this section 2-18 for membership in an authority created under this chapter may not 2-19 be added to or join an authority under Section 460.302 or 460.303 2-20 until the municipality meets the requirements of this section. 2-21 (Sections 460.004-460.050 reserved for expansion 2-22 SUBCHAPTER B. CREATION OF AUTHORITY 2-23 Sec. 460.051. CREATION OF AUTHORITY. (a) The commissioners 2-24 court of a county may initiate the process to create an authority 2-25 to provide public transportation and transportation-related 2-26 services: 2-27 (1) on adoption of a resolution or order initiating 3-1 the process to create an authority; or 3-2 (2) on receipt of a petition requesting creation of an 3-3 authority signed by a number of registered voters of the county 3-4 equal to or greater than five percent of the votes cast in the 3-5 county in the most recent gubernatorial election. 3-6 (b) If a petition described by Subsection (a)(2) is received 3-7 by the commissioners court, the petition shall be verified by the 3-8 county clerk, consistent with Chapter 277, Election Code, and 3-9 returned to the commissioners court with a finding of verification. 3-10 Sec. 460.052. HEARING. (a) The commissioners court shall 3-11 hold a public hearing on creation of an authority not later than 3-12 the 60th day after the date the commissioners court: 3-13 (1) receives a petition described by Section 3-14 460.051(a)(2); or 3-15 (2) adopts a resolution or order to initiate the 3-16 process to create an authority. 3-17 (b) Notice of the time and place of the public hearing on 3-18 the creation of the authority shall be published, beginning at 3-19 least 30 days before the date of the hearing, once a week for two 3-20 consecutive weeks in a newspaper of general circulation in the 3-21 county. 3-22 (c) Each municipality in the county with a population of 3-23 12,000 or more shall be notified of the public hearing by notice 3-24 mailed to the governing body of the municipality. 3-25 (d) Any person may appear at a hearing and offer evidence 3-26 on: 3-27 (1) the creation of the authority; 4-1 (2) operation of the county transportation system; 4-2 (3) public interest served in the creation of the 4-3 authority; or 4-4 (4) other facts relating to the creation of the 4-5 authority. 4-6 (e) A hearing may be continued until completed. 4-7 Sec. 460.053. RESOLUTION OR ORDER. After the hearing, the 4-8 commissioners court may adopt a resolution or order: 4-9 (1) designating the name of the authority; 4-10 (2) stating that all land within the county shall be 4-11 part of the authority; and 4-12 (3) stating that the territory described in 4-13 Subdivision (2) is subject to the authority based on the results of 4-14 the confirmation election. 4-15 Sec. 460.054. MEMBERSHIP OF INTERIM EXECUTIVE COMMITTEE. (a) 4-16 After adopting a resolution or order under Section 460.053, the 4-17 commissioners court and certain municipalities, as provided by this 4-18 section, shall appoint an interim executive committee for the 4-19 authority. 4-20 (b) The interim executive committee is composed of: 4-21 (1) one member appointed by the governing body of each 4-22 municipality with a population of 12,000 or more that is located in 4-23 the county; 4-24 (2) three members appointed by the commissioners 4-25 court, two of whom must reside in the unincorporated area of the 4-26 county; and 4-27 (3) three members to be designated by the remaining 5-1 municipalities with a population of more than 500 but less than 5-2 12,000 located in the county. 5-3 (c) The members described by Subsection (b)(3) shall be 5-4 designated as follows: 5-5 (1) each municipality with a population of more than 5-6 500 but less than 12,000 located in the county shall nominate one 5-7 person using a nomination form sent to the governing body of the 5-8 municipality by mail; 5-9 (2) the county judge shall add the names on the 5-10 nomination forms that are received before the 31st day after the 5-11 date of the mailing of the nomination forms; 5-12 (3) each municipality located in the county is 5-13 entitled to cast one vote; 5-14 (4) only ballots returned to the county judge on or 5-15 before a predetermined date shall be counted; 5-16 (5) the county judge shall designate the three persons 5-17 with the highest plurality vote as members of the executive 5-18 committee; and 5-19 (6) if three members are not designated by this 5-20 process, the county judge shall name the balance of the members of 5-21 the interim executive committee described by Subsection (b)(3). 5-22 Sec. 460.055. DUTIES OF INTERIM EXECUTIVE COMMITTEE. (a) The 5-23 interim executive committee shall elect three of its members to 5-24 serve as the chair, vice chair, and secretary. 5-25 (b) The interim executive committee shall develop a service 5-26 plan and determine a proposed tax not later than the 180th day 5-27 after the date of the interim executive committee's first meeting. 6-1 (c) The interim executive committee shall hold at least one 6-2 regular meeting a month for the purpose of developing a service 6-3 plan and determining a proposed tax rate. 6-4 (d) The interim executive committee shall consider the 6-5 following in developing the service plan: 6-6 (1) the regional transportation plan for the county; 6-7 (2) actual and projected traffic counts of private 6-8 passenger vehicles and projected destinations of the vehicles; 6-9 (3) feasible alternative modes of public 6-10 transportation, including: 6-11 (A) a fixed guideway system; 6-12 (B) passenger commercial carriers; 6-13 (C) dedicated thoroughfare lanes; 6-14 (D) fixed skyway rail; 6-15 (E) high occupancy toll lanes; 6-16 (F) traffic management systems; and 6-17 (G) bus transit and associated lanes; 6-18 (4) the most efficient location of collection points 6-19 and transfer points; 6-20 (5) alternative routes linking access and discharge 6-21 points; 6-22 (6) alternative alignments using least populous areas 6-23 if right-of-way acquisition will be required for a transit route; 6-24 (7) estimates of capital expenditures for a functional 6-25 public transportation system; 6-26 (8) various forms of public transportation consistent 6-27 with use of transit routes, including for each form a determination 7-1 of: 7-2 (A) cost per passenger per mile; 7-3 (B) the capital expense of acquisition of the 7-4 public transportation system; 7-5 (C) costs associated with the acquisition, 7-6 improvement, or modification of the transit way; and 7-7 (D) maintenance and operating costs; 7-8 (9) administrative overhead costs separately from 7-9 other costs; 7-10 (10) load factors based on surveys, interviews, and 7-11 other reasonable quantification for the modes of transportation; 7-12 (11) a fare structure for the ridership of the public 7-13 transportation system by mode; 7-14 (12) a comparison of revenue from all sources, 7-15 including fares, fees, grants, and debt issuance, with estimated 7-16 costs and expenses; 7-17 (13) revenue minus expenses expressed numerically and 7-18 a per rider factor for each trip or segment of a trip; 7-19 (14) if the service plan contemplates joint use of 7-20 other transit systems or transfer to them, estimated dates of 7-21 access; and 7-22 (15) segments of the service plan separately if: 7-23 (A) some segments are more profitable than 7-24 others; or 7-25 (B) some segments show a smaller deficit than 7-26 others. 7-27 Sec. 460.056. APPROVAL OF SERVICE PLAN AND TAX RATE. (a) On 8-1 approval by the interim executive committee of the service plan and 8-2 tax rate, a copy of the plan and tax rate shall be provided to the 8-3 commissioners court and the governing body of each municipality 8-4 with a population of 12,000 or more located in the county. 8-5 (b) Notice of the interim executive committee's approval of 8-6 the service plan and tax rate shall be published in a newspaper of 8-7 general circulation in the county and mailed to all governing 8-8 bodies of municipalities with a population of more than 500 located 8-9 in the county. 8-10 (c) Not later than the 60th day after the date the interim 8-11 executive committee approves the service plan and tax rate, the 8-12 governing body of a municipality may approve by resolution or order 8-13 the service plan and tax rate. 8-14 (d) A municipality located in the county that does not give 8-15 its approval under Subsection (c) may not participate in the 8-16 service plan or the confirmation election for the authority. 8-17 (e) The commissioners court may not order a confirmation 8-18 election in a municipality in which the governing body of the 8-19 municipality does not approve the service plan and tax rate. 8-20 Sec. 460.057. CONFIRMATION ELECTION. (a) The interim 8-21 executive committee shall notify the commissioners court of the 8-22 need to call a confirmation election. 8-23 (b) The commissioners court in ordering the confirmation 8-24 election shall submit to the qualified voters in the county the 8-25 following proposition: 8-26 "Shall the creation of (name of authority) be confirmed?" 8-27 (c) In addition to other information required by law, the 9-1 notice of the election must include: 9-2 (1) a brief description of the service plan; and 9-3 (2) a statement that an imposition of a tax to pay for 9-4 the service plan must be approved by the voters at a subsequent 9-5 election. 9-6 (d) The election must be held on a uniform election date. 9-7 Sec. 460.058. CONDUCT OF ELECTION. (a) A confirmation 9-8 election shall be conducted so that the votes are separately 9-9 tabulated and canvassed in order to show the results for: 9-10 (1) each municipality located in the county that 9-11 passed a resolution or order approving the service plan and tax 9-12 rate; and 9-13 (2) the balance of the qualified voters in the county. 9-14 (b) The interim executive committee shall canvass the 9-15 returns and declare the results of the election. 9-16 Sec. 460.059. RESULTS OF ELECTION. (a) If a majority of 9-17 votes received in the county favor the proposition, the authority 9-18 is confirmed, except that the authority does not include a 9-19 municipality with a population of 12,000 or more located in the 9-20 county in which a majority of the votes did not favor the 9-21 proposition. 9-22 (b) The authority ceases if: 9-23 (1) a majority of the total votes cast in all 9-24 municipalities participating in the election do not favor the 9-25 proposition; or 9-26 (2) a majority of the votes in the unincorporated area 9-27 of the county do not favor the proposition. 10-1 (c) If the authority is confirmed, the interim executive 10-2 committee shall record the results in its minutes and adopt an 10-3 order: 10-4 (1) declaring that the creation of the authority is 10-5 confirmed; 10-6 (2) stating the date of the election; and 10-7 (3) showing the number of votes cast for or against 10-8 the proposition in each municipality that passed a resolution or 10-9 order approving the service plan and tax rate and in the 10-10 unincorporated area of the county. 10-11 (d) On adoption of the order confirming the authority, the 10-12 interim executive committee becomes the executive committee of the 10-13 authority. 10-14 (e) A certified copy of the order shall be filed with the 10-15 Texas Department of Transportation and the comptroller of public 10-16 accounts. 10-17 Sec. 460.060. FAILURE TO CONFIRM AUTHORITY. (a) If the 10-18 authority ceases, the interim executive committee shall record the 10-19 results of the election in its minutes and adopt an order declaring 10-20 that the authority is dissolved. 10-21 (b) The county and each municipality that passed a 10-22 resolution or order approving the service plan and tax rate shall 10-23 share the expenses of the election proportionately based on the 10-24 population of the areas in which the election was conducted. 10-25 (c) An authority that has not been confirmed expires on the 10-26 third anniversary of the effective date of the resolution or order 10-27 initiating the process to create the authority. 11-1 (Sections 460.061-460.100 reserved for expansion 11-2 SUBCHAPTER C. POWERS OF AUTHORITY 11-3 Sec. 460.101. POWERS APPLICABLE TO CONFIRMED AUTHORITY. This 11-4 subchapter applies only to an authority that has been confirmed. 11-5 Sec. 460.102. NATURE OF AUTHORITY. (a) An authority: 11-6 (1) is a governmental body and a corporate body; 11-7 (2) has perpetual succession; and 11-8 (3) exercises public and essential governmental 11-9 functions. 11-10 (b) An authority is a governmental unit under Chapter 101, 11-11 Civil Practice and Remedies Code, and the operations of the 11-12 authority are not proprietary functions for any purpose including 11-13 the application of Chapter 101, Civil Practice and Remedies Code. 11-14 Sec. 460.103. GENERAL POWERS OF AUTHORITY. (a) The 11-15 authority has any power necessary or convenient to carry out this 11-16 chapter or effect the purpose of this chapter. 11-17 (b) An authority may sue and be sued. An authority may not 11-18 be required to give security for costs in a suit brought or 11-19 prosecuted by the authority and may not be required to post a 11-20 supersedeas or cost bond in an appeal of a judgment. 11-21 (c) An authority may hold, use, sell, lease, dispose of, and 11-22 acquire, by any means, property and licenses, patents, rights and 11-23 other interests necessary, convenient, or useful to the exercise of 11-24 any power under this chapter. 11-25 (d) An authority may sell, lease, or dispose of in another 11-26 manner: 11-27 (1) any right, interest, or property of the authority 12-1 that is not necessary for the efficient operation and maintenance 12-2 of public transportation; or 12-3 (2) at any time, surplus materials or other property 12-4 that is not needed by the authority to carry out a power under this 12-5 chapter. 12-6 Sec. 460.104. POWER TO CONTRACT; GRANTS AND LOANS. (a) An 12-7 authority may contract with any person. 12-8 (b) An authority may accept a gift, grant, donation, or loan 12-9 from any person. 12-10 (c) An authority may enter into an agreement, including an 12-11 interlocal agreement, with a transportation or transit entity, 12-12 including a municipality, that is consistent with and beneficial to 12-13 the service plan approved by the authority. 12-14 Sec. 460.105. OPERATION OF PUBLIC TRANSPORTATION SYSTEM. (a) 12-15 An authority may: 12-16 (1) acquire, construct, develop, plan, own, operate, 12-17 and maintain a public transportation system in the territory of the 12-18 authority, including the territory of a political subdivision or 12-19 municipality partially located in the territory of the authority; 12-20 (2) contract with a municipality, county, or other 12-21 political subdivision for the authority to provide public 12-22 transportation services outside the authority; 12-23 (3) lease all or part of the public transportation to, 12-24 or contract for the operation of all or a part of the public 12-25 transportation system by, an operator; and 12-26 (4) contract with a political subdivision or 12-27 governmental entity to provide public transportation services 13-1 inside the authority consistent with rules and regulations 13-2 established by the authority, including capital, maintenance, 13-3 operation, and other costs specifically approved and audited by the 13-4 authority. 13-5 (b) An authority shall determine routes of the public 13-6 transportation system or approve routes submitted to the authority. 13-7 Sec. 460.106. AUTHORIZATION OF TAX LEVY. (a) An authority 13-8 may call an authorization election for a tax levy associated with 13-9 the service plan developed by the interim executive committee or a 13-10 tax rate that has been modified by action of the executive 13-11 committee at any time after the confirmation election that creates 13-12 the authority. 13-13 (b) The executive committee in ordering the authorization 13-14 election shall submit to the qualified voters in the county located 13-15 in an area participating in the authority the following 13-16 proposition: 13-17 "Shall the (name of authority) levy of a proposed tax, not to 13-18 exceed (rate), be authorized?" 13-19 (c) An election authorizing a tax levy shall be conducted in 13-20 the same manner as a confirmation election under Subchapter B. 13-21 (d) A service plan may be implemented in an area of the 13-22 county participating in the authority only if a majority of votes 13-23 received favor the authorization of a tax levy by the authority. 13-24 (e) An authority that does not authorize an initial tax levy 13-25 at an authorization election expires on the second anniversary of 13-26 the date the executive committee adopts an order declaring that the 13-27 creation of the authority is confirmed. 14-1 Sec. 460.107. ACQUISITION OF PROPERTY. (a) As necessary or 14-2 useful in the construction, repair, maintenance, or operation of a 14-3 public transportation system, an authority may use a public way, 14-4 including an alley. 14-5 (b) An authority may acquire by eminent domain any interest 14-6 in real property, including a fee simple interest and the use of 14-7 air or subsurface space, except the right of eminent domain may not 14-8 be exercised: 14-9 (1) in a municipality without the approval of the 14-10 proposed acquisition by the governing body of the municipality; or 14-11 (2) in an unincorporated area without the approval of 14-12 the proposed acquisition by the commissioners court of the county 14-13 in which the property to be condemned is located. 14-14 (c) If an authority, through the exercise of eminent domain, 14-15 makes any relocation necessary, the relocation costs shall be paid 14-16 by the authority. 14-17 (d) An eminent domain proceeding by an authority is 14-18 initiated by the adoption by the executive committee of a 14-19 resolution authorizing the exercise that: 14-20 (1) describes the property to be condemned; 14-21 (2) declares the public necessity for the acquisition; 14-22 and 14-23 (3) declares that the acquisition is necessary for the 14-24 construction, extension, improvement, or development of the public 14-25 transportation system. 14-26 (e) A resolution adopted under this section and approved by 14-27 the appropriate municipal governing body or commissioners court is 15-1 conclusive evidence of the public necessity for the acquisition 15-2 described in the resolution. 15-3 (f) Chapter 21, Property Code, applies to an eminent domain 15-4 proceeding by an authority. 15-5 Sec. 460.108. AGREEMENT WITH UTILITIES, CARRIERS. An 15-6 authority may agree with any other public or private utility, 15-7 communication system, common carrier, or transportation system for: 15-8 (1) the joint use of the property or fixtures of the 15-9 agreeing entities; and 15-10 (2) the establishment of through routes, joint fares, 15-11 or transfers of passengers between the agreeing entities. 15-12 Sec. 460.109. FARES AND USE FEES. (a) An authority shall 15-13 impose reasonable and nondiscriminatory fares, tolls, charges, 15-14 rents, and other forms of compensation for the use of the public 15-15 transportation system. The fares and other forms of compensation 15-16 shall be sufficient to produce revenue, together with tax revenue 15-17 and grants received by the authority, in an amount adequate to: 15-18 (1) pay annually the expenses necessary to operate and 15-19 maintain the public transportation system; 15-20 (2) pay as due the principal of and interest on, and 15-21 sinking fund or reserve fund payments agreed to be made with 15-22 respect to, all bonds that are issued by the authority and payable 15-23 in whole or part from the revenue; and 15-24 (3) fulfill the terms of any other agreement with the 15-25 holders of bonds issued by the authority. 15-26 (b) Fares for passenger transportation may be set according 15-27 to a zone system or by any other classification system that the 16-1 authority determines to be reasonable. 16-2 (c) This section does not limit the state's power to 16-3 regulate taxes imposed by an authority. The state agrees not to 16-4 alter the power granted to an authority under this section to 16-5 impose taxes, fares, tolls, charges, rents, and other compensation 16-6 sufficient to pay obligations incurred by the authority. 16-7 (d) The state agrees not to impair the rights and remedies 16-8 of an authority bondholder, or a person acting on behalf of a 16-9 bondholder, until the principal and interest on the bonds, the 16-10 interest on unpaid installments of interest, costs, and expenses in 16-11 connection with an action or proceeding by or on behalf of a 16-12 bondholder are discharged. 16-13 Sec. 460.110. INSURANCE. (a) An authority may insure, 16-14 through purchased insurance policies, self-insurance programs, or 16-15 both, the legal liability of the authority and of its contractors 16-16 and subcontractors arising from the acquisition, construction, or 16-17 operation of the programs and facilities of the authority for: 16-18 (1) personal or property damage; and 16-19 (2) officers' and employees' liability. 16-20 (b) An authority may use contracts, rating plans, and risk 16-21 management programs designed to encourage accident prevention. 16-22 (c) In developing an insurance or self-insurance program, an 16-23 authority may consider the peculiar hazards, indemnity standards, 16-24 and past and prospective loss and expense experience of the 16-25 authority and similar authorities and of its contractors and 16-26 subcontractors. 16-27 Sec. 460.111. TAX EXEMPTION. The property, revenue, and 17-1 income of an authority are exempt from state and local taxes. 17-2 Sec. 460.112. MASS TRANSIT RAIL SYSTEM; EXEMPTION. (a) An 17-3 authority that constructs or operates or contracts with another 17-4 entity to construct or operate a mass transit rail system is not 17-5 subject to any state law regulating or governing the design, 17-6 construction, or operation of a railroad, railway, street railway, 17-7 streetcar, or interurban railway. 17-8 (b) For purposes of ownership or transfer of ownership of an 17-9 interest in real property, a light rail mass transit system line 17-10 operating on property previously used by a railroad, railway, 17-11 street railway, or interurban railway is a continuation of existing 17-12 rail use. 17-13 (Sections 460.113-460.200 reserved for expansion 17-14 SUBCHAPTER D. PROVISIONS APPLICABLE TO EXECUTIVE COMMITTEE 17-15 Sec. 460.201. TERMS; VACANCY. (a) Each member of the 17-16 executive committee serves a term of two years. 17-17 (b) A member of the executive committee may not serve more 17-18 than three terms. 17-19 (c) A vacancy on the executive committee is filled in the 17-20 same manner as the original appointment to the interim executive 17-21 committee. 17-22 Sec. 460.202. ELIGIBILITY. To be eligible for appointment to 17-23 the executive committee, a person must have professional experience 17-24 in the field of transportation, business, government, engineering, 17-25 or law. 17-26 Sec. 460.203. CONFLICTS OF INTEREST. Members of the 17-27 executive committee and officers and employees of the authority are 18-1 subject to Chapter 171, Local Government Code. 18-2 Sec. 460.204. MEETINGS. (a) The executive committee shall 18-3 meet at least monthly to transact the business of an authority. 18-4 (b) The chair may call special meetings as necessary. 18-5 (c) The executive committee by resolution shall: 18-6 (1) set the time, place, and date of regular meetings; 18-7 and 18-8 (2) adopt rules and bylaws as necessary to conduct 18-9 meetings. 18-10 Sec. 460.205. QUORUM; VOTING REQUIREMENTS. (a) Five members 18-11 constitute a quorum of the executive committee. 18-12 (b) An action of the executive committee requires a vote of 18-13 a majority of the members present unless the bylaws require a 18-14 larger number for a specific action. 18-15 (Sections 460.206-460.300 reserved for expansion 18-16 SUBCHAPTER E. ADDITION OF TERRITORY 18-17 Sec. 460.301. ADDITION OF TERRITORY BY MUNICIPAL ANNEXATION. 18-18 When a municipality that is part of an authority annexes territory 18-19 that before the annexation is not part of the authority, the 18-20 annexed territory becomes part of the authority. 18-21 Sec. 460.302. ADDITION OF MUNICIPALITY BY ELECTION. (a) The 18-22 territory of a municipality that is not initially part of an 18-23 authority may be added to an authority if: 18-24 (1) any part of the municipality is located in the 18-25 territory of the authority; 18-26 (2) the governing body of the municipality orders an 18-27 election under this section on whether the territory of the 19-1 municipality should be added to the authority; and 19-2 (3) a majority of the votes received in the election 19-3 favor the measure. 19-4 (b) The governing body of the municipality shall certify to 19-5 the executive committee the result of an election in which the 19-6 addition is approved. 19-7 Sec. 460.303. JOINING AUTHORITY; CERTAIN AUTHORITIES. (a) A 19-8 municipality that has a population of more than 500,000 and that is 19-9 located in a county with a population of more than one million may 19-10 join a separate authority. 19-11 (b) If a municipality described by Subsection (a) joins an 19-12 authority created under this chapter and another separate authority 19-13 is subsequently established in the county in which the municipality 19-14 is located, the municipality may: 19-15 (1) remain in the authority that was created first; 19-16 (2) join the new authority in the county in which the 19-17 municipality is located; or 19-18 (3) participate with both authorities. 19-19 (c) A municipality that has requested, participated in, or 19-20 received a benefit of capital improvements made by an authority 19-21 shall on its transfer to a different authority or participation 19-22 with more than one authority continue to honor reimbursement 19-23 obligations resulting from the improvements. 19-24 Sec. 460.304. TAX IMPOSED IN ADDED TERRITORY. (a) A sales 19-25 and use tax imposed by an authority takes effect in territory added 19-26 to the authority under this subchapter on the first day of the 19-27 first calendar quarter that begins after the addition of the 20-1 territory. 20-2 (b) An authority shall send to the comptroller of public 20-3 accounts: 20-4 (1) a certified copy of an order adding the territory 20-5 or of an order canvassing the returns and declaring the results of 20-6 the election; and 20-7 (2) a map showing the territory added to the 20-8 authority. 20-9 (c) The order must include the effective date of the tax. 20-10 (Sections 460.305-460.400 reserved for expansion 20-11 SUBCHAPTER F. MANAGEMENT OF AUTHORITY 20-12 Sec. 460.401. MANAGEMENT OF AUTHORITY. The executive 20-13 committee is responsible for the management, operation, and control 20-14 of the authority and its properties. 20-15 Sec. 460.402. FINANCIAL AUDIT. (a) The executive committee 20-16 of an authority shall have an annual audit of the affairs of the 20-17 authority prepared by an independent certified public accountant. 20-18 (b) The audit is a public record as defined by Chapter 552, 20-19 Government Code. 20-20 (c) On receipt of the audit prescribed by Subsection (a), 20-21 the executive committee shall address on the record any 20-22 deficiencies noted in the report at a regular meeting of the 20-23 executive committee. 20-24 Sec. 460.403. BUDGET. The executive committee shall prepare 20-25 an annual budget. 20-26 Sec. 460.404. FUNDING. (a) An authority may request funds 20-27 for its operation from a municipality, the commissioners court, or 21-1 both a municipality and the commissioners court. The request shall 21-2 be accompanied by a budget. 21-3 (b) Funds appropriated to an authority are subject to audit. 21-4 (c) Federal funds or grants may be used to offset the 21-5 authority's annual cost of debt service. 21-6 Sec. 460.405. PROHIBITIONS. (a) An employee, agent, or 21-7 person receiving compensation from or on behalf of an authority may 21-8 not attempt to affect the outcome of proposed legislation. 21-9 (b) This section does not apply to: 21-10 (1) a contested administrative matter; or 21-11 (2) pending or reasonably anticipated litigation. 21-12 Sec. 460.406. PURCHASES: COMPETITIVE BIDDING. (a) Except as 21-13 provided by Subsection (c), an authority may not award a contract 21-14 for construction, services, or property, other than real property, 21-15 except through the solicitation of competitive sealed bids or 21-16 proposals ensuring full and open competition. 21-17 (b) The authority shall describe in a solicitation each 21-18 factor to be used to evaluate a bid or proposal and give the 21-19 factor's relative importance. 21-20 (c) The executive committee may authorize the negotiation of 21-21 a contract without competitive sealed bids or proposals if: 21-22 (1) the aggregate amount involved in the contract is 21-23 $25,000 or less; 21-24 (2) the contract is for construction for which not 21-25 more than one bid or proposal is received; 21-26 (3) the contract is for services or property for which 21-27 there is only one source or for which it is otherwise impracticable 22-1 to obtain competition; 22-2 (4) the contract is to respond to an emergency for 22-3 which the public exigency does not permit the delay incident to the 22-4 competitive process; 22-5 (5) the contract is for personal or professional 22-6 services or services for which competitive bidding is precluded by 22-7 law; or 22-8 (6) the contract, without regard to form and which may 22-9 include bonds, notes, loan agreements, or other obligations, is for 22-10 the purpose of borrowing money or is a part of a transaction 22-11 relating to the borrowing of money, including: 22-12 (A) a credit support agreement, such as a line 22-13 or letter of credit or other debt guaranty; 22-14 (B) a bond, note, debt sale or purchase, 22-15 trustee, paying agent, remarketing agent, indexing agent, or 22-16 similar agreement; 22-17 (C) an agreement with a securities dealer, 22-18 broker, or underwriter; and 22-19 (D) any other contract or agreement considered 22-20 by the executive committee to be appropriate or necessary in 22-21 support of the authority's financing activities. 22-22 (Sections 460.407-460.500 reserved for expansion 22-23 SUBCHAPTER G. BONDS AND NOTES 22-24 Sec. 460.501. DEFINITION. In this subchapter, "bond" 22-25 includes a note. 22-26 Sec. 460.502. POWER TO ISSUE BONDS. (a) An authority may 22-27 issue bonds at any time and for amounts the executive committee 23-1 determines are appropriate. 23-2 (b) The bonds may be issued as necessary for: 23-3 (1) the acquisition, construction, repair, 23-4 improvement, or extension of an authority's public transportation 23-5 system; or 23-6 (2) the creation or funding of self-insurance or 23-7 retirement or pension fund reserves. 23-8 (c) A bond issued by the authority must have 20-year even 23-9 principal and interest payback. 23-10 (d) A bond any portion of which is secured by a pledge of 23-11 sales and use tax revenues and that has a maturity of five years or 23-12 longer from the date of issuance may not be issued by an authority 23-13 until an election has been held and the proposition proposing the 23-14 issue has been approved by a majority of the votes received on the 23-15 issue in accordance with the provisions established for the 23-16 authorization of a tax levy under Subchapter C. 23-17 Sec. 460.503. BOND TERMS. The bonds of an authority are 23-18 fully negotiable. An authority may make the bonds redeemable before 23-19 maturity. 23-20 Sec. 460.504. SALE. An authority's bonds may be sold at a 23-21 public or private sale as determined by the executive committee to 23-22 be the more financially beneficial. 23-23 Sec. 460.505. INCONTESTABILITY. An authority's bonds are 23-24 incontestable after the bonds are: 23-25 (1) approved by the attorney general; 23-26 (2) registered by the comptroller of public accounts; 23-27 and 24-1 (3) sold to the purchaser. 24-2 Sec. 460.506. SECURITY PLEDGED. To secure the payment of an 24-3 authority's bonds, the authority may: 24-4 (1) pledge all or part of revenue realized from any 24-5 tax that is approved and levied; 24-6 (2) pledge any part of the revenue of the public 24-7 transportation system; or 24-8 (3) mortgage any part of the public transportation 24-9 system. 24-10 Sec. 460.507. REFUNDING BONDS. An authority may issue 24-11 refunding bonds at any time if the repayment savings from the 24-12 refunding bonds exceeds the cost of issuance. 24-13 Sec. 460.508. NOTES. (a) An authority may issue negotiable 24-14 notes payable from any of the authority's sources of revenue to pay 24-15 for any lawful expenditure, other than principal and interest on 24-16 the authority's debt. 24-17 (b) Notes issued by an authority shall be payable over a 24-18 period not to exceed five years from the date of issuance. 24-19 (c) The Texas Natural Resource Conservation Commission is 24-20 not required to approve notes issued under this section. 24-21 (d) An authority may not have outstanding notes in excess of 24-22 $1 million at any one time. 24-23 (Sections 460.509-460.550 reserved for expansion 24-24 SUBCHAPTER H. TAXATION 24-25 Sec. 460.551. SALES AND USE TAX. (a) The executive 24-26 committee may impose for an authority a sales and use tax at the 24-27 rate of: 25-1 (1) one-quarter of one percent; 25-2 (2) one-half of one percent; 25-3 (3) three-quarters of one percent; or 25-4 (4) one percent. 25-5 (b) The imposition of an authority's sales and use tax must 25-6 be approved at an election and may not be imposed in an area that 25-7 has not confirmed the authority. 25-8 (c) A sales and use tax may be imposed, as prescribed by 25-9 this section, by a municipality that participates in a 25-10 transportation or transit authority other than an authority created 25-11 under this chapter if: 25-12 (1) the combined rates of all sales and use taxes 25-13 imposed in the municipality does not exceed two percent; and 25-14 (2) the ballot of the authorization vote for the sales 25-15 and use tax reads: 25-16 "(Name of city) already imposes a sales and use tax for 25-17 participation in the transportation authority. The proposed sales 25-18 and use tax is solely for the benefit of, and will be dedicated to, 25-19 the county transportation authority." 25-20 Sec. 460.552. MAXIMUM TAX RATE IN AUTHORITY AREA. (a) An 25-21 authority may not adopt a sales and use tax rate, including a rate 25-22 increase, that when combined with the rates of all sales and use 25-23 taxes imposed by other political subdivisions having territory in 25-24 the authority exceeds two percent in any location in the authority. 25-25 (b) An increase in the tax rate to a higher rate must be 25-26 approved by a majority of the voters at a confirmation election. 25-27 Sec. 460.553. INITIAL SALES TAX: EFFECTIVE DATE. The 26-1 adoption of a sales and use tax takes effect on the first day of 26-2 the first calendar quarter after the confirmation election. 26-3 Sec. 460.554. RATE DECREASE. The executive committee by 26-4 order may direct the comptroller of public accounts to collect the 26-5 authority's sales and use tax at a rate that is lower than the rate 26-6 approved by the voters at the confirmation hearing if the executive 26-7 committee determines that it is in the best interest of the 26-8 authority. 26-9 SECTION 2. This Act takes effect September 1, 2001.