1-1 By: Solomons, Denny, Crownover H.B. No. 3323 1-2 (Senate Sponsor - Nelson) 1-3 (In the Senate - Received from the House May 7, 2001; 1-4 May 7, 2001, read first time and referred to Committee on State 1-5 Affairs; May 11, 2001, reported adversely, with favorable Committee 1-6 Substitute by the following vote: Yeas 8, Nays 0; May 11, 2001, 1-7 sent to printer.) 1-8 COMMITTEE SUBSTITUTE FOR H.B. No. 3323 By: Gallegos 1-9 A BILL TO BE ENTITLED 1-10 AN ACT 1-11 relating to the creation, organization, and powers of a coordinated 1-12 county transportation authority; authorizing the imposition of a 1-13 tax, the issuance of bonds and notes, and the exercise of the power 1-14 of eminent domain. 1-15 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-16 SECTION 1. Subtitle K, Title 6, Transportation Code, is 1-17 amended by adding Chapter 460 to read as follows: 1-18 CHAPTER 460. COORDINATED COUNTY TRANSPORTATION AUTHORITIES 1-19 SUBCHAPTER A. GENERAL PROVISIONS 1-20 Sec. 460.001. DEFINITIONS. In this chapter: 1-21 (1) "Authority" means a coordinated county 1-22 transportation authority created under this chapter. 1-23 (2) "Balance of the county" means that part of the 1-24 county that is outside the boundaries of a municipality with a 1-25 population of 12,000 or more. 1-26 (3) "Executive committee" means the governing body of 1-27 the authority. 1-28 (4) "Service plan" means an outline of the service 1-29 that would be provided by an authority. 1-30 Sec. 460.002. APPLICABILITY. This chapter applies only to a 1-31 county that is adjacent to a county with a population of more than 1-32 one million. 1-33 Sec. 460.003. INELIGIBILITY OF CERTAIN MUNICIPALITIES. 1-34 (a) A municipality that is a member of a subregion of a 1-35 transportation authority governed by a board described in 1-36 Subchapter O, Chapter 452, is not eligible to join or become a 1-37 member of an authority created under this chapter unless: 1-38 (1) the municipality holds a withdrawal election in 1-39 accordance with the requirements of Section 452.655 and a majority 1-40 of the voters at the election approve the withdrawal; 1-41 (2) the municipality has paid in full all amounts that 1-42 it is required to pay under Sections 452.659 and 452.660; and 1-43 (3) the comptroller has ceased under Section 452.658 1-44 to collect sales and use taxes within the municipality that were 1-45 levied and collected in the municipality for purposes of the 1-46 authority from which the municipality has withdrawn. 1-47 (b) A municipality that is not eligible under this section 1-48 for membership in an authority created under this chapter may not 1-49 be added to or join an authority under Section 460.302 or 460.303 1-50 until the municipality meets the requirements of this section. 1-51 (Sections 460.004-460.050 reserved for expansion 1-52 SUBCHAPTER B. CREATION OF AUTHORITY 1-53 Sec. 460.051. CREATION OF AUTHORITY. (a) The commissioners 1-54 court of a county may initiate the process to create an authority 1-55 to provide public transportation and transportation-related 1-56 services: 1-57 (1) on adoption of a resolution or order initiating 1-58 the process to create an authority; or 1-59 (2) on receipt of a petition requesting creation of an 1-60 authority signed by a number of registered voters of the county 1-61 equal to or greater than five percent of the votes cast in the 1-62 county in the most recent gubernatorial election. 1-63 (b) If a petition described by Subsection (a)(2) is received 1-64 by the commissioners court, the petition shall be verified by the 2-1 county clerk, consistent with Chapter 277, Election Code, and 2-2 returned to the commissioners court with a finding of verification. 2-3 Sec. 460.052. HEARING. (a) The commissioners court shall 2-4 hold a public hearing on creation of an authority not later than 2-5 the 60th day after the date the commissioners court: 2-6 (1) receives a petition described by Section 2-7 460.051(a)(2); or 2-8 (2) adopts a resolution or order to initiate the 2-9 process to create an authority. 2-10 (b) Notice of the time and place of the public hearing on 2-11 the creation of the authority shall be published, beginning at 2-12 least 30 days before the date of the hearing, once a week for two 2-13 consecutive weeks in a newspaper of general circulation in the 2-14 county. 2-15 (c) Each municipality in the county with a population of 2-16 12,000 or more shall be notified of the public hearing by notice 2-17 mailed to the governing body of the municipality. 2-18 (d) Any person may appear at a hearing and offer evidence 2-19 on: 2-20 (1) the creation of the authority; 2-21 (2) operation of the county transportation system; 2-22 (3) public interest served in the creation of the 2-23 authority; or 2-24 (4) other facts relating to the creation of the 2-25 authority. 2-26 (e) A hearing may be continued until completed. 2-27 Sec. 460.053. RESOLUTION OR ORDER. After the hearing, the 2-28 commissioners court may adopt a resolution or order: 2-29 (1) designating the name of the authority; 2-30 (2) stating that all land within the county shall be 2-31 part of the authority; and 2-32 (3) stating that the territory described in 2-33 Subdivision (2) is subject to the authority based on the results of 2-34 the confirmation election. 2-35 Sec. 460.054. MEMBERSHIP OF INTERIM EXECUTIVE COMMITTEE. 2-36 (a) After adopting a resolution or order under Section 460.053, 2-37 the commissioners court and certain municipalities, as provided by 2-38 this section, shall appoint an interim executive committee for the 2-39 authority. 2-40 (b) The interim executive committee is composed of: 2-41 (1) one member appointed by the governing body of each 2-42 municipality with a population of 12,000 or more that is located in 2-43 the county; 2-44 (2) three members appointed by the commissioners 2-45 court, two of whom must reside in the unincorporated area of the 2-46 county; and 2-47 (3) three members to be designated by the remaining 2-48 municipalities with a population of more than 500 but less than 2-49 12,000 located in the county. 2-50 (c) The members described by Subsection (b)(3) shall be 2-51 designated as follows: 2-52 (1) each municipality with a population of more than 2-53 500 but less than 12,000 located in the county shall nominate one 2-54 person using a nomination form sent to the governing body of the 2-55 municipality by mail; 2-56 (2) the county judge shall add the names on the 2-57 nomination forms that are received before the 31st day after the 2-58 date of the mailing of the nomination forms; 2-59 (3) each municipality with a population of more than 2-60 500 but less than 12,000 located in the county is entitled to cast 2-61 one vote; 2-62 (4) only ballots returned to the county judge on or 2-63 before a predetermined date shall be counted; 2-64 (5) the county judge shall designate the three persons 2-65 with the highest plurality vote as members of the executive 2-66 committee; and 2-67 (6) if three members are not designated by this 2-68 process, the county judge shall name the balance of the members of 2-69 the interim executive committee described by Subsection (b)(3). 3-1 Sec. 460.055. DUTIES OF INTERIM EXECUTIVE COMMITTEE. 3-2 (a) The interim executive committee shall elect three of its 3-3 members to serve as the chair, vice chair, and secretary. 3-4 (b) The interim executive committee shall develop a service 3-5 plan and determine a proposed tax not later than the 180th day 3-6 after the date of the interim executive committee's first meeting. 3-7 (c) The interim executive committee shall hold at least one 3-8 regular meeting a month for the purpose of developing a service 3-9 plan and determining a proposed tax rate. 3-10 (d) The interim executive committee shall consider the 3-11 following in developing the service plan: 3-12 (1) the regional transportation plan for the county 3-13 and major thoroughfare plan; 3-14 (2) actual and projected traffic counts of private 3-15 passenger vehicles and projected destinations of the vehicles; 3-16 (3) feasible alternative modes of public 3-17 transportation, including: 3-18 (A) a fixed guideway system; 3-19 (B) passenger commercial carriers; 3-20 (C) dedicated thoroughfare lanes; 3-21 (D) fixed skyway rail; 3-22 (E) high occupancy toll lanes; 3-23 (F) traffic management systems; and 3-24 (G) bus transit and associated lanes; 3-25 (4) the most efficient location of collection points 3-26 and transfer points; 3-27 (5) alternative routes linking access and discharge 3-28 points; 3-29 (6) alternative alignments using least populous areas 3-30 if right-of-way acquisition will be required for a transit route; 3-31 (7) estimates of capital expenditures for a functional 3-32 public transportation system; 3-33 (8) various forms of public transportation consistent 3-34 with use of transit routes, including for each form a determination 3-35 of: 3-36 (A) cost per passenger per mile; 3-37 (B) the capital expense of acquisition of the 3-38 public transportation system; 3-39 (C) costs associated with the acquisition, 3-40 improvement, or modification of the transit way; and 3-41 (D) maintenance and operating costs; 3-42 (9) administrative overhead costs separately from 3-43 other costs; 3-44 (10) load factors based on surveys, interviews, and 3-45 other reasonable quantification for the modes of transportation; 3-46 (11) a fare structure for the ridership of the public 3-47 transportation system by mode; 3-48 (12) a comparison of revenue from all sources, 3-49 including fares, fees, grants, and debt issuance, with estimated 3-50 costs and expenses; 3-51 (13) revenue minus expenses expressed numerically and 3-52 a per rider factor for each trip or segment of a trip; 3-53 (14) if the service plan contemplates joint use of 3-54 other transit systems or transfer to them, estimated dates of 3-55 access; and 3-56 (15) segments of the service plan separately if: 3-57 (A) some segments are more profitable than 3-58 others; or 3-59 (B) some segments show a smaller deficit than 3-60 others. 3-61 Sec. 460.056. APPROVAL OF SERVICE PLAN AND TAX RATE. 3-62 (a) On approval by the interim executive committee of the service 3-63 plan and tax rate, a copy of the plan and tax rate shall be 3-64 provided to the commissioners court and the governing body of each 3-65 municipality with a population of 12,000 or more located in the 3-66 county. 3-67 (b) Notice of the interim executive committee's approval of 3-68 the service plan and tax rate shall be published in a newspaper of 3-69 general circulation in the county and mailed to all governing 4-1 bodies of municipalities with a population of more than 500 located 4-2 in the county. 4-3 (c) Not later than the 60th day after the date the interim 4-4 executive committee approves the service plan and tax rate, the 4-5 governing body of a municipality with a population of 12,000 or 4-6 more may approve by resolution or order the service plan and tax 4-7 rate. 4-8 (d) A municipality with a population of 12,000 or more 4-9 located in the county that does not give its approval under 4-10 Subsection (c) may not participate in the service plan or the 4-11 confirmation election for the authority. 4-12 (e) The commissioners court may not order a confirmation 4-13 election in a municipality with a population of 12,000 or more in 4-14 which the governing body of the municipality does not approve the 4-15 service plan and tax rate. 4-16 Sec. 460.057. CONFIRMATION ELECTION. (a) The interim 4-17 executive committee shall notify the commissioners court of the 4-18 need to call a confirmation election. 4-19 (b) The commissioners court in ordering the confirmation 4-20 election shall submit to the qualified voters in the county the 4-21 following proposition: 4-22 "Shall the creation of (name of authority) be confirmed?" 4-23 (c) In addition to other information required by law, the 4-24 notice of the election must include: 4-25 (1) a brief description of the service plan; and 4-26 (2) a statement that an imposition of a tax to pay for 4-27 the service plan must be approved by the voters at a subsequent 4-28 election. 4-29 (d) The election must be held on a uniform election date. 4-30 Sec. 460.058. CONDUCT OF ELECTION. (a) A confirmation 4-31 election shall be conducted so that the votes are separately 4-32 tabulated and canvassed in order to show the results for: 4-33 (1) each municipality located in the county that 4-34 passed a resolution or order approving the service plan and tax 4-35 rate; and 4-36 (2) the qualified voters in the balance of the county. 4-37 (b) The interim executive committee shall canvass the 4-38 returns and declare the results of the election. 4-39 Sec. 460.059. RESULTS OF ELECTION. (a) If a majority of 4-40 votes received in the county favor the proposition, the authority 4-41 is confirmed, except that the authority does not include a 4-42 municipality with a population of 12,000 or more located in the 4-43 county in which a majority of the votes did not favor the 4-44 proposition. 4-45 (b) The authority ceases if: 4-46 (1) a majority of the total votes cast in no 4-47 municipality with a population of 12,000 or more favors the 4-48 proposition; and 4-49 (2) a majority of the votes of the qualified voters in 4-50 the balance of the county do not favor the proposition. 4-51 (c) If the authority is confirmed, the interim executive 4-52 committee shall record the results in its minutes and adopt an 4-53 order: 4-54 (1) declaring that the creation of the authority is 4-55 confirmed; 4-56 (2) stating the date of the election; and 4-57 (3) showing the number of votes cast for or against 4-58 the proposition in each municipality that passed a resolution or 4-59 order approving the service plan and tax rate and in the 4-60 unincorporated area of the county. 4-61 (d) On adoption of the order confirming the authority, the 4-62 interim executive committee becomes the executive committee of the 4-63 authority. 4-64 (e) A certified copy of the order shall be filed with the 4-65 Texas Department of Transportation and the comptroller of public 4-66 accounts. 4-67 Sec. 460.060. FAILURE TO CONFIRM AUTHORITY. (a) If the 4-68 authority ceases, the interim executive committee shall record the 4-69 results of the election in its minutes and adopt an order declaring 5-1 that the authority is dissolved. 5-2 (b) The county and each municipality that passed a 5-3 resolution or order approving the service plan and tax rate shall 5-4 share the expenses of the election proportionately based on the 5-5 population of the areas in which the election was conducted. 5-6 (c) An authority that has not been confirmed expires on the 5-7 third anniversary of the effective date of the resolution or order 5-8 initiating the process to create the authority. 5-9 (Sections 460.061-460.100 reserved for expansion 5-10 SUBCHAPTER C. POWERS OF AUTHORITY 5-11 Sec. 460.101. POWERS APPLICABLE TO CONFIRMED AUTHORITY. 5-12 This subchapter applies only to an authority that has been 5-13 confirmed. 5-14 Sec. 460.102. NATURE OF AUTHORITY. (a) An authority: 5-15 (1) is a governmental body and a corporate body; 5-16 (2) has perpetual succession; and 5-17 (3) exercises public and essential governmental 5-18 functions. 5-19 (b) An authority is a governmental unit under Chapter 101, 5-20 Civil Practice and Remedies Code, and the operations of the 5-21 authority are not proprietary functions for any purpose including 5-22 the application of Chapter 101, Civil Practice and Remedies Code. 5-23 Sec. 460.103. GENERAL POWERS OF AUTHORITY. (a) The 5-24 authority has any power necessary or convenient to carry out this 5-25 chapter or effect the purpose of this chapter. 5-26 (b) An authority may sue and be sued. An authority may not 5-27 be required to give security for costs in a suit brought or 5-28 prosecuted by the authority and may not be required to post a 5-29 supersedeas or cost bond in an appeal of a judgment. 5-30 (c) An authority may hold, use, sell, lease, dispose of, and 5-31 acquire, by any means, property and licenses, patents, rights and 5-32 other interests necessary, convenient, or useful to the exercise of 5-33 any power under this chapter. 5-34 (d) An authority may sell, lease, or dispose of in another 5-35 manner: 5-36 (1) any right, interest, or property of the authority 5-37 that is not necessary for the efficient operation and maintenance 5-38 of public transportation; or 5-39 (2) at any time, surplus materials or other property 5-40 that is not needed by the authority to carry out a power under this 5-41 chapter. 5-42 Sec. 460.104. POWER TO CONTRACT; GRANTS AND LOANS. (a) An 5-43 authority may contract with any person. 5-44 (b) An authority may accept a gift, grant, donation, or loan 5-45 from any person. 5-46 (c) An authority may enter into an agreement, including an 5-47 interlocal agreement, with a transportation or transit entity, 5-48 including a municipality, that is consistent with and beneficial to 5-49 the service plan approved by the authority. 5-50 Sec. 460.105. OPERATION OF PUBLIC TRANSPORTATION SYSTEM. 5-51 (a) An authority may: 5-52 (1) acquire, construct, develop, plan, own, operate, 5-53 and maintain a public transportation system in the territory of the 5-54 authority, including the territory of a political subdivision or 5-55 municipality partially located in the territory of the authority; 5-56 (2) contract with a municipality, county, or other 5-57 political subdivision for the authority to provide public 5-58 transportation services outside the authority; 5-59 (3) lease all or part of the public transportation to, 5-60 or contract for the operation of all or a part of the public 5-61 transportation system by, an operator; and 5-62 (4) contract with a political subdivision or 5-63 governmental entity to provide public transportation services 5-64 inside the authority consistent with rules and regulations 5-65 established by the authority, including capital, maintenance, 5-66 operation, and other costs specifically approved and audited by the 5-67 authority. 5-68 (b) An authority shall determine routes of the public 5-69 transportation system or approve routes submitted to the authority. 6-1 Sec. 460.106. AUTHORIZATION OF TAX LEVY. (a) An authority 6-2 may call an authorization election for a tax levy associated with 6-3 the service plan developed by the interim executive committee or a 6-4 tax rate that has been modified by action of the executive 6-5 committee at any time after the confirmation election that creates 6-6 the authority. 6-7 (b) The executive committee in ordering the authorization 6-8 election shall submit to the qualified voters in the county located 6-9 in an area participating in the authority the following 6-10 proposition: 6-11 "Shall the (name of authority) levy of a proposed tax, not to 6-12 exceed (rate), be authorized?" 6-13 (c) An election authorizing a tax levy shall be conducted in 6-14 the same manner as a confirmation election under Subchapter B. 6-15 (d) A service plan may be implemented in an area of the 6-16 county participating in the authority only if a majority of votes 6-17 received favor the authorization of a tax levy by the authority. 6-18 (e) An authority that does not authorize an initial tax levy 6-19 at an authorization election expires on the second anniversary of 6-20 the date the executive committee adopts an order declaring that the 6-21 creation of the authority is confirmed. 6-22 Sec. 460.107. ACQUISITION OF PROPERTY. (a) As necessary or 6-23 useful in the construction, repair, maintenance, or operation of a 6-24 public transportation system, an authority may use a public way, 6-25 including an alley. 6-26 (b) An authority may acquire by eminent domain any interest 6-27 in real property, including a fee simple interest and the use of 6-28 air or subsurface space, except the right of eminent domain may not 6-29 be exercised: 6-30 (1) in a municipality without the approval of the 6-31 proposed acquisition by the governing body of the municipality; or 6-32 (2) in an unincorporated area without the approval of 6-33 the proposed acquisition by the commissioners court of the county 6-34 in which the property to be condemned is located. 6-35 (c) If an authority, through the exercise of eminent domain, 6-36 makes any relocation necessary, the relocation costs shall be paid 6-37 by the authority. 6-38 (d) An eminent domain proceeding by an authority is 6-39 initiated by the adoption by the executive committee of a 6-40 resolution authorizing the exercise that: 6-41 (1) describes the property to be condemned; 6-42 (2) declares the public necessity for the acquisition; 6-43 and 6-44 (3) declares that the acquisition is necessary for the 6-45 construction, extension, improvement, or development of the public 6-46 transportation system. 6-47 (e) A resolution adopted under this section and approved by 6-48 the appropriate municipal governing body or commissioners court is 6-49 conclusive evidence of the public necessity for the acquisition 6-50 described in the resolution. 6-51 (f) Chapter 21, Property Code, applies to an eminent domain 6-52 proceeding by an authority. 6-53 Sec. 460.108. AGREEMENT WITH UTILITIES, CARRIERS. (a) An 6-54 authority may agree with any other public or private utility, 6-55 communication system, common carrier, or transportation system for: 6-56 (1) the joint use of the property or fixtures of the 6-57 agreeing entities; and 6-58 (2) the establishment of through routes, joint fares, 6-59 or transfers of passengers between the agreeing entities. 6-60 (b) If the exercise of a power granted to an authority under 6-61 this subchapter requires a public utility facility to be relocated, 6-62 adjusted, raised, lowered, rerouted, or changed as to grade or 6-63 construction, the authority shall take the required action at the 6-64 authority's expense. 6-65 (c) An authority may not impose an impact fee or assessment 6-66 on the property, equipment, or facilities of a utility. 6-67 Sec. 460.109. FARES AND USE FEES. (a) An authority shall 6-68 impose reasonable and nondiscriminatory fares, tolls, charges, 6-69 rents, and other forms of compensation for the use of the public 7-1 transportation system. The fares and other forms of compensation 7-2 shall be sufficient to produce revenue, together with tax revenue 7-3 and grants received by the authority, in an amount adequate to: 7-4 (1) pay annually the expenses necessary to operate and 7-5 maintain the public transportation system; 7-6 (2) pay as due the principal of and interest on, and 7-7 sinking fund or reserve fund payments agreed to be made with 7-8 respect to, all bonds that are issued by the authority and payable 7-9 in whole or part from the revenue; and 7-10 (3) fulfill the terms of any other agreement with the 7-11 holders of bonds issued by the authority. 7-12 (b) Fares for passenger transportation may be set according 7-13 to a zone system or by any other classification system that the 7-14 authority determines to be reasonable. 7-15 (c) This section does not limit the state's power to 7-16 regulate taxes imposed by an authority. The state agrees not to 7-17 alter the power granted to an authority under this section to 7-18 impose taxes, fares, tolls, charges, rents, and other compensation 7-19 sufficient to pay obligations incurred by the authority. 7-20 (d) The state agrees not to impair the rights and remedies 7-21 of an authority bondholder, or a person acting on behalf of a 7-22 bondholder, until the principal and interest on the bonds, the 7-23 interest on unpaid installments of interest, costs, and expenses in 7-24 connection with an action or proceeding by or on behalf of a 7-25 bondholder are discharged. 7-26 Sec. 460.110. INSURANCE. (a) An authority may insure, 7-27 through purchased insurance policies, self-insurance programs, or 7-28 both, the legal liability of the authority and of its contractors 7-29 and subcontractors arising from the acquisition, construction, or 7-30 operation of the programs and facilities of the authority for: 7-31 (1) personal or property damage; and 7-32 (2) officers' and employees' liability. 7-33 (b) An authority may use contracts, rating plans, and risk 7-34 management programs designed to encourage accident prevention. 7-35 (c) In developing an insurance or self-insurance program, an 7-36 authority may consider the peculiar hazards, indemnity standards, 7-37 and past and prospective loss and expense experience of the 7-38 authority and similar authorities and of its contractors and 7-39 subcontractors. 7-40 Sec. 460.111. TAX EXEMPTION. The property, revenue, and 7-41 income of an authority are exempt from state and local taxes. 7-42 Sec. 460.112. MASS TRANSIT RAIL SYSTEM; EXEMPTION. (a) An 7-43 authority that constructs or operates or contracts with another 7-44 entity to construct or operate a mass transit rail system is not 7-45 subject to any state law regulating or governing the design, 7-46 construction, or operation of a railroad, railway, street railway, 7-47 streetcar, or interurban railway. 7-48 (b) For purposes of ownership or transfer of ownership of an 7-49 interest in real property, a light rail mass transit system line 7-50 operating on property previously used by a railroad, railway, 7-51 street railway, or interurban railway is a continuation of existing 7-52 rail use. 7-53 (Sections 460.113-460.200 reserved for expansion 7-54 SUBCHAPTER D. PROVISIONS APPLICABLE TO EXECUTIVE COMMITTEE 7-55 Sec. 460.201. TERMS; VACANCY. (a) Each member of the 7-56 executive committee serves a term of two years. 7-57 (b) A member of the executive committee may not serve more 7-58 than three terms. 7-59 (c) A vacancy on the executive committee is filled in the 7-60 same manner as the original appointment to the interim executive 7-61 committee. 7-62 Sec. 460.202. ELIGIBILITY. To be eligible for appointment 7-63 to the executive committee, a person must have professional 7-64 experience in the field of transportation, business, government, 7-65 engineering, or law. 7-66 Sec. 460.203. CONFLICTS OF INTEREST. Members of the 7-67 executive committee and officers and employees of the authority are 7-68 subject to Chapter 171, Local Government Code. 7-69 Sec. 460.204. MEETINGS. (a) The executive committee shall 8-1 meet at least monthly to transact the business of an authority. 8-2 (b) The chair may call special meetings as necessary. 8-3 (c) The executive committee by resolution shall: 8-4 (1) set the time, place, and date of regular meetings; 8-5 and 8-6 (2) adopt rules and bylaws as necessary to conduct 8-7 meetings. 8-8 Sec. 460.205. QUORUM; VOTING REQUIREMENTS. (a) Five 8-9 members constitute a quorum of the executive committee. 8-10 (b) An action of the executive committee requires a vote of 8-11 a majority of the members present unless the bylaws require a 8-12 larger number for a specific action. 8-13 (Sections 460.206-460.300 reserved for expansion 8-14 SUBCHAPTER E. ADDITION OF TERRITORY 8-15 Sec. 460.301. ADDITION OF TERRITORY BY MUNICIPAL ANNEXATION. 8-16 When a municipality that is part of an authority annexes territory 8-17 that before the annexation is not part of the authority, the 8-18 annexed territory becomes part of the authority. 8-19 Sec. 460.302. ADDITION OF MUNICIPALITY BY ELECTION. 8-20 (a) The territory of a municipality that is not initially part of 8-21 an authority may be added to an authority if: 8-22 (1) any part of the municipality is located in the 8-23 territory of the authority; 8-24 (2) the governing body of the municipality orders an 8-25 election under this section on whether the territory of the 8-26 municipality should be added to the authority; and 8-27 (3) a majority of the votes received in the election 8-28 favor the measure. 8-29 (b) The governing body of the municipality shall certify to 8-30 the executive committee the result of an election in which the 8-31 addition is approved. 8-32 Sec. 460.303. JOINING AUTHORITY; CERTAIN AUTHORITIES. 8-33 (a) A municipality that has a population of more than 500,000 and 8-34 that is located in a county with a population of more than one 8-35 million may join a separate authority. 8-36 (b) If a municipality described by Subsection (a) joins an 8-37 authority created under this chapter and another separate authority 8-38 is subsequently established in the county in which the municipality 8-39 is located, the municipality may: 8-40 (1) remain in the authority that was created first; 8-41 (2) join the new authority in the county in which the 8-42 municipality is located; or 8-43 (3) participate with both authorities. 8-44 (c) A municipality that has requested, participated in, or 8-45 received a benefit of capital improvements made by an authority 8-46 shall on its transfer to a different authority or participation 8-47 with more than one authority continue to honor reimbursement 8-48 obligations resulting from the improvements. 8-49 Sec. 460.304. TAX IMPOSED IN ADDED TERRITORY. (a) A sales 8-50 and use tax imposed by an authority takes effect in territory added 8-51 to the authority under this subchapter on the first day of the 8-52 first calendar quarter that begins after the addition of the 8-53 territory. 8-54 (b) An authority shall send to the comptroller of public 8-55 accounts: 8-56 (1) a certified copy of an order adding the territory 8-57 or of an order canvassing the returns and declaring the results of 8-58 the election; and 8-59 (2) a map showing the territory added to the 8-60 authority. 8-61 (c) The order must include the effective date of the tax. 8-62 (Sections 460.305-460.400 reserved for expansion 8-63 SUBCHAPTER F. MANAGEMENT OF AUTHORITY 8-64 Sec. 460.401. MANAGEMENT OF AUTHORITY. The executive 8-65 committee is responsible for the management, operation, and control 8-66 of the authority and its properties. 8-67 Sec. 460.402. FINANCIAL AUDIT. (a) The executive committee 8-68 of an authority shall have an annual audit of the affairs of the 8-69 authority prepared by an independent certified public accountant. 9-1 (b) The audit is a public record as defined by Chapter 552, 9-2 Government Code. 9-3 (c) On receipt of the audit prescribed by Subsection (a), 9-4 the executive committee shall address on the record any 9-5 deficiencies noted in the report at a regular meeting of the 9-6 executive committee. 9-7 Sec. 460.403. BUDGET. The executive committee shall prepare 9-8 an annual budget. 9-9 Sec. 460.404. FUNDING. (a) An authority may request funds 9-10 for its operation from a municipality, the commissioners court, or 9-11 both a municipality and the commissioners court. The request shall 9-12 be accompanied by a budget. 9-13 (b) Funds appropriated to an authority are subject to audit. 9-14 (c) Federal funds or grants may be used to offset the 9-15 authority's annual cost of debt service. 9-16 Sec. 460.405. PROHIBITIONS. (a) An employee, agent, or 9-17 person receiving compensation from or on behalf of an authority may 9-18 not attempt to affect the outcome of proposed legislation. 9-19 (b) This section does not apply to: 9-20 (1) a contested administrative matter; or 9-21 (2) pending or reasonably anticipated litigation. 9-22 Sec. 460.406. PURCHASES: COMPETITIVE BIDDING. (a) Except 9-23 as provided by Subsection (c), an authority may not award a 9-24 contract for construction, services, or property, other than real 9-25 property, except through the solicitation of competitive sealed 9-26 bids or proposals ensuring full and open competition. 9-27 (b) The authority shall describe in a solicitation each 9-28 factor to be used to evaluate a bid or proposal and give the 9-29 factor's relative importance. 9-30 (c) The executive committee may authorize the negotiation of 9-31 a contract without competitive sealed bids or proposals if: 9-32 (1) the aggregate amount involved in the contract is 9-33 $25,000 or less; 9-34 (2) the contract is for construction for which not 9-35 more than one bid or proposal is received; 9-36 (3) the contract is for services or property for which 9-37 there is only one source or for which it is otherwise impracticable 9-38 to obtain competition; 9-39 (4) the contract is to respond to an emergency for 9-40 which the public exigency does not permit the delay incident to the 9-41 competitive process; 9-42 (5) the contract is for personal or professional 9-43 services or services for which competitive bidding is precluded by 9-44 law; or 9-45 (6) the contract, without regard to form and which may 9-46 include bonds, notes, loan agreements, or other obligations, is for 9-47 the purpose of borrowing money or is a part of a transaction 9-48 relating to the borrowing of money, including: 9-49 (A) a credit support agreement, such as a line 9-50 or letter of credit or other debt guaranty; 9-51 (B) a bond, note, debt sale or purchase, 9-52 trustee, paying agent, remarketing agent, indexing agent, or 9-53 similar agreement; 9-54 (C) an agreement with a securities dealer, 9-55 broker, or underwriter; and 9-56 (D) any other contract or agreement considered 9-57 by the executive committee to be appropriate or necessary in 9-58 support of the authority's financing activities. 9-59 (Sections 460.407-460.500 reserved for expansion 9-60 SUBCHAPTER G. BONDS AND NOTES 9-61 Sec. 460.501. DEFINITION. In this subchapter, "bond" 9-62 includes a note. 9-63 Sec. 460.502. POWER TO ISSUE BONDS. (a) An authority may 9-64 issue bonds at any time and for amounts the executive committee 9-65 determines are appropriate. 9-66 (b) The bonds may be issued as necessary for: 9-67 (1) the acquisition, construction, repair, 9-68 improvement, or extension of an authority's public transportation 9-69 system; or 10-1 (2) the creation or funding of self-insurance or 10-2 retirement or pension fund reserves. 10-3 (c) A bond issued by the authority must have 20-year even 10-4 principal and interest payback. 10-5 (d) A bond any portion of which is secured by a pledge of 10-6 sales and use tax revenues and that has a maturity of five years or 10-7 longer from the date of issuance may not be issued by an authority 10-8 until an election has been held and the proposition proposing the 10-9 issue has been approved by a majority of the votes received on the 10-10 issue in accordance with the provisions established for the 10-11 authorization of a tax levy under Subchapter C. 10-12 Sec. 460.503. BOND TERMS. The bonds of an authority are 10-13 fully negotiable. An authority may make the bonds redeemable 10-14 before maturity. 10-15 Sec. 460.504. SALE. An authority's bonds may be sold at a 10-16 public or private sale as determined by the executive committee to 10-17 be the more financially beneficial. 10-18 Sec. 460.505. INCONTESTABILITY. An authority's bonds are 10-19 incontestable after the bonds are: 10-20 (1) approved by the attorney general; 10-21 (2) registered by the comptroller of public accounts; 10-22 and 10-23 (3) sold to the purchaser. 10-24 Sec. 460.506. SECURITY PLEDGED. To secure the payment of an 10-25 authority's bonds, the authority may: 10-26 (1) pledge all or part of revenue realized from any 10-27 tax that is approved and levied; 10-28 (2) pledge any part of the revenue of the public 10-29 transportation system; or 10-30 (3) mortgage any part of the public transportation 10-31 system. 10-32 Sec. 460.507. REFUNDING BONDS. An authority may issue 10-33 refunding bonds at any time if the repayment savings from the 10-34 refunding bonds exceeds the cost of issuance. 10-35 Sec. 460.508. NOTES. (a) An authority may issue negotiable 10-36 notes payable from any of the authority's sources of revenue to pay 10-37 for any lawful expenditure, other than principal and interest on 10-38 the authority's debt. 10-39 (b) Notes issued by an authority shall be payable over a 10-40 period not to exceed five years from the date of issuance. 10-41 (c) The Texas Natural Resource Conservation Commission is 10-42 not required to approve notes issued under this section. 10-43 (d) An authority may not have outstanding notes in excess of 10-44 $1 million at any one time. 10-45 (Sections 460.509-460.550 reserved for expansion 10-46 SUBCHAPTER H. TAXATION 10-47 Sec. 460.551. SALES AND USE TAX. (a) The executive 10-48 committee may impose for an authority a sales and use tax at the 10-49 rate of: 10-50 (1) one-quarter of one percent; 10-51 (2) one-half of one percent; 10-52 (3) three-quarters of one percent; or 10-53 (4) one percent. 10-54 (b) The imposition of an authority's sales and use tax must 10-55 be approved at an election and may not be imposed in an area that 10-56 has not confirmed the authority. 10-57 (c) A sales and use tax may be imposed, as prescribed by 10-58 this section, by a municipality that participates in a 10-59 transportation or transit authority other than an authority created 10-60 under this chapter if: 10-61 (1) the combined rates of all sales and use taxes 10-62 imposed in the municipality does not exceed two percent; and 10-63 (2) the ballot of the authorization vote for the sales 10-64 and use tax reads: 10-65 "(Name of city) already imposes a sales and use tax for 10-66 participation in the transportation authority. The proposed sales 10-67 and use tax is solely for the benefit of, and will be dedicated to, 10-68 the county transportation authority." 10-69 (d) The authority shall impose a sales and use tax at a 11-1 minimum uniform rate as determined by the executive committee if 11-2 the tax is approved at an election in an area that has confirmed 11-3 the authority. 11-4 (e) A municipality with a population of 12,000 or more that 11-5 has confirmed the authority may impose a sales and use tax at a 11-6 rate higher than the minimum uniform rate established under 11-7 Subsection (d) on approval at an election if the authority will 11-8 provide the municipality a higher level of service. 11-9 Sec. 460.552. MAXIMUM TAX RATE IN AUTHORITY AREA. (a) An 11-10 authority may not adopt a sales and use tax rate, including a rate 11-11 increase, that when combined with the rates of all sales and use 11-12 taxes imposed by other political subdivisions having territory in 11-13 the authority exceeds two percent in any location in the authority. 11-14 (b) An increase in the tax rate to a higher rate must be 11-15 approved by a majority of the voters at a confirmation election. 11-16 Sec. 460.553. INITIAL SALES TAX: EFFECTIVE DATE. The 11-17 adoption of a sales and use tax takes effect on the first day of 11-18 the first calendar quarter after the confirmation election. 11-19 Sec. 460.554. RATE DECREASE. The executive committee by 11-20 order may direct the comptroller of public accounts to collect the 11-21 authority's sales and use tax at a rate that is lower than the rate 11-22 approved by the voters at the confirmation hearing if the executive 11-23 committee determines that it is in the best interest of the 11-24 authority. 11-25 SECTION 2. This Act takes effect September 1, 2001. 11-26 * * * * *