78R9281 JTS-D
By: Merritt, Chavez, Guillen, Hughes H.B. No. 3381
Substitute the following for H.B. No. 3381:
By: Chavez C.S.H.B. No. 3381
A BILL TO BE ENTITLED
AN ACT
relating to the creation, administration, powers, duties,
operations, and financing of a border region high-speed rail
authority for the Texas-Louisiana and the Texas-Mexico border
regions; granting the power to issue bonds; imposing a tax;
granting the power of eminent domain.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 13, Title 112, Revised Statutes, is
amended by adding Article 6550c-4 to read as follows:
Art. 6550c-4. BORDER REGION HIGH-SPEED RAIL AUTHORITIES
Sec. 1. DEFINITIONS. In this article:
(1) "Authority" means a border region high-speed rail
authority created under this article.
(2) "Authority property" means all property an
authority owns or leases under a long-term lease.
(3) "Border region" means the Texas-Louisiana border
region or the Texas-Mexico border region, as defined by Section
2056.002, Government Code.
(4) "Commission" means the Texas Transportation
Commission.
(5) "Department" means the Texas Department of
Transportation.
(6) "High-speed rail" means the rail technology that
permits the operation of rolling stock between scheduled stops at
speeds greater than 150 miles per hour.
(7) "High-speed rail facility" means any property
necessary for the transportation of passengers and baggage between
points in a border region by high-speed rail. The term includes
rolling stock, locomotives, stations, parking areas, and rail
lines.
(8) "System" means all of the high-speed rail and
intermodal facilities leased or owned by or operated on behalf of an
authority.
Sec. 2. CREATION OF AUTHORITIES. The commission by order
shall authorize the creation of an authority in each border region
for the purposes of financing, acquiring property for,
constructing, maintaining, and operating a high-speed rail system
in each border region.
Sec. 3. GOVERNING BODY. (a) The governing body of an
authority is a board of directors consisting of representatives of
each county in the border region for which the authority is created.
The board is composed of 11 members appointed by the governor.
(b) The members of the board shall elect one member as
presiding officer. The presiding officer may select another member
to preside in the absence of the presiding officer.
(c) The presiding officer shall call at least one meeting of
the board each year and may call other meetings as the presiding
officer determines are appropriate.
(d) A member of the board is not entitled to compensation
for serving as a member but is entitled to reimbursement for
reasonable expenses incurred while serving as a member.
(e) The board shall adopt rules for its proceedings and
appoint an executive committee. The board may employ and
compensate persons to carry out the powers and duties of the
authority.
(f) Chapter 171, Local Government Code, applies to a member
of the board.
Sec. 4. POWERS AND DUTIES OF AUTHORITY. (a) An authority
is a public body and a political subdivision of the state exercising
public and essential governmental functions and has all the powers
necessary or convenient to carry out the purposes of this article.
An authority, in the exercise of powers under this article, is
performing only governmental functions and is a governmental unit
within the meaning of Chapter 101, Civil Practice and Remedies
Code.
(b) An authority is subject every 12th year to review under
Chapter 325, Government Code (Texas Sunset Act).
(c) An authority may sue and be sued in all courts, may
institute and prosecute suits without giving security for costs,
and may appeal from a judgment without giving a supersedeas or cost
bond. An action at law or in equity against an authority must be
brought in the county in which a principal office of the authority
is located, except that in an eminent domain proceeding involving
an interest in land, suit must be brought in the county in which the
land is located.
(d) An authority may acquire by grant, purchase, gift,
devise, lease, or otherwise and may hold, use, sell, lease, or
dispose of real and personal property, licenses, patents, rights,
and interests necessary, convenient, or useful for the full
exercise of its powers.
(e) An authority may acquire, construct, develop, own,
operate, and maintain intermodal and high-speed rail facilities to
connect political subdivisions in the applicable border region.
For this purpose and with the consent of a municipality, county, or
other political subdivision, an authority may use streets, alleys,
roads, highways, and other public ways of the municipality, county,
or other political subdivision and may relocate, raise, reroute,
change the grade of, or alter, at the expense of the authority, the
construction of any street, alley, highway, road, railroad,
electric lines and facilities, telegraph and telephone properties
and facilities, pipelines and facilities, conduits and facilities,
and other properties, whether publicly or privately owned, as
necessary or useful in the construction, reconstruction, repair,
maintenance, and operation of the system. An authority may not use
or alter a road or highway that is part of the state highway system
without the permission of the commission or a railroad without
permission of the railroad. An authority may acquire by purchase
any interest in real property for the acquisition, construction, or
operation of a high-speed rail facility on terms and at a price as
agreed to between the authority and the owner. The governing body
of a municipality, county, other political subdivision, or public
agency may convey title or rights and easements to any property
needed by an authority to effect its purposes in connection with the
acquisition, construction, or operation of the system.
(f) An authority has the right of eminent domain to acquire
real property in fee simple or an interest in real property less
than fee simple in, on, under, or above land, including an easement,
right-of-way, or right of use of airspace or subsurface space. The
power of eminent domain under this section does not apply to land
under the jurisdiction of the department or a rail line owned by a
common carrier or municipality. An authority shall, to the extent
possible, use existing rail or intermodal transportation corridors
for the alignment of its system. A proceeding for the exercise of
the power of eminent domain is begun by the adoption by the board of
a resolution declaring the public necessity for the acquisition by
an authority of the property or interest described in the
resolution and that the acquisition is necessary and proper for the
construction, extension, improvement, or development of high-speed
rail facilities and is in the public interest. The resolution of an
authority is conclusive evidence of the public necessity of the
proposed acquisition and that the real or personal property or
interest in property is necessary for public use.
(g) An authority may make agreements with a public utility,
private utility, communication system, common carrier, state
agency, or transportation system for the joint use of facilities,
installations, or properties inside or outside the border region
and establish through routes and joint fares.
(h) An authority may adopt rules to govern the operation of
the authority, its employees, the system, service provided by the
authority, and any other necessary matter concerning its purposes,
including rules relating to health, safety, alcohol or beverage
service, food service, and telephone and utility services, to
protect the health, safety, and general welfare of residents of the
border region and people who use the authority's services.
(i) An authority may enter into a joint ownership agreement
with any person.
(j) An authority shall establish and maintain rates or other
compensation for the use of the facilities of the system acquired,
constructed, operated, regulated, or maintained by the authority
that is reasonable and nondiscriminatory and, together with grants
received by the authority, is sufficient to produce revenues
adequate:
(1) to pay all expenses necessary for the operation
and maintenance of the properties and facilities of the authority;
(2) to pay the interest on and principal of bonds
issued by the authority and payable in whole or in part from the
revenues, as they become due and payable; and
(3) to comply with the terms of an agreement made with
the holders of bonds or with any person in their behalf.
(k) An authority may make contracts, leases, and agreements
with, and accept grants and loans from, the United States, this
state, agencies and political subdivisions of this state, and other
persons and entities and may perform any act necessary for the full
exercise of the powers vested in it. The commission may enter into
an interlocal agreement with an authority under which the authority
may exercise a power or duty of the commission for the development
and efficient operation of an intermodal corridor in the border
region. An authority may acquire rolling stock or other property
under conditional sales contracts, leases, equipment trust
certificates, or any other form of contract or trust agreement. A
revenue bond indenture may limit the exercise of the powers granted
by this section, and a limit applies as long as the revenue bonds
issued under the indenture are outstanding and unpaid.
(l) An authority by resolution may adopt rules governing the
use, operation, and maintenance of the system and may determine or
change a routing as the board considers advisable.
(m) An authority may lease all or part of the high-speed
rail facilities to, or contract for the use or operation of all or
part of the high-speed rail facilities by, an operator. An
authority shall encourage to the maximum extent practicable the
participation of private enterprise in the operation of high-speed
rail facilities. The term of an operating contract under this
subsection may not exceed 20 years.
(n) An authority may contract with a county or other
political subdivision of this state for the authority to provide
high-speed rail transportation services to an area outside the
border region on the terms and conditions agreed to by the parties.
(o) An authority may purchase an additional insured
provision to any liability insurance contract.
(p) Before beginning the operation of high-speed rail
facilities, the board shall adopt an annual operating budget
specifying the anticipated revenues and expenses of the authority
for the remainder of the fiscal year. Each year the board shall
adopt an operating budget for the authority. The fiscal year of an
authority ends September 30 unless changed by the board. The board
shall hold a public hearing before adopting a budget other than the
initial budget. Notice of each hearing must be published at least
seven days before the date of the hearing in a newspaper of general
circulation in each county in the applicable border region. A
budget may be amended at any time if notice of the proposed
amendment is given in the notice of the meeting at which the
amendment will be considered. An expenditure that is not budgeted
may not be made.
(q) An authority is eligible to participate in the Texas
County and District Retirement System.
(r) The board shall by resolution name one or more banks for
the deposit of authority funds. Authority funds are public funds
and may be invested in securities permitted by Chapter 2256,
Government Code. To the extent funds of an authority are not
insured by the Federal Deposit Insurance Corporation or its
successor, they shall be collateralized in the manner provided for
county funds.
(s) To provide tax benefits to another party that are
available with respect to property under the laws of a foreign
country or to encourage private investment with a transportation
authority in the United States, and notwithstanding any other
provision of this chapter, an authority may enter into and execute,
as it considers appropriate, contracts, agreements, notes,
security agreements, conveyances, bills of sale, deeds, leases as
lessee or lessor, and currency hedges, swap transactions, or
agreements relating to foreign and domestic currency. The
agreements or instruments may have the terms, maturities, duration,
provisions as to governing law, indemnities, and other provisions
that are approved by the board. In connection with any transaction
authorized by this subsection, the authority shall deposit in
trust, escrow, or similar arrangement cash or lawful investments or
securities, or shall enter into one or more payment agreements,
financial guarantees, or insurance contracts with counterparties
having either a corporate credit or debt rating in any form, a
claims-paying ability, or a rating for financial strength of "AA"
or better by Moody's Investors Service, Inc., or by Standard &
Poor's Corporation or "A-" or better by BEST's rating system that,
by their terms, including interest to be earned on any cash or
securities, are sufficient in amount to pay when due all amounts
required to be paid by the authority as rent over the full term of
the transaction plus any optional purchase price due under the
transaction. A certification in advance by an independent
financial expert, banker, or certified public accountant, who is
not an employee of the authority, certifying compliance with this
requirement constitutes conclusive evidence of compliance.
Property sold, acquired, or otherwise transferred under this
subsection is considered for all purposes to be property owned and
held by the authority and used for public purposes.
Sec. 5. BONDS AND NOTES. (a) An authority may issue
revenue bonds and notes in amounts the board considers necessary or
appropriate for the acquisition, purchase, construction,
reconstruction, repair, equipping, improvement, or extension of
the authority's high-speed rail facilities. A bond or note is fully
negotiable and may be made redeemable before maturity, at the
option of the authority and at the price and under the terms the
board determines in the resolution authorizing the bond or note and
may be sold at public or private sale, as the board determines.
(b) An authority shall submit all bonds and notes and the
record of proceedings relating to their issuance to the attorney
general for examination before delivery. If the attorney general
determines that they have been issued in accordance with the
constitution and this article and that they will be binding
obligations of the authority, the attorney general shall approve
them, and the comptroller shall register them. A bond or note
issued under this article is incontestable after approval,
registration, and sale and delivery of the bond or note to the
purchaser.
(c) To secure the payment of the bond or note, an authority
may encumber and pledge all or any part of the revenues of its
high-speed rail facilities, may mortgage and encumber all or part
of the property of the high-speed rail facilities and any thing
pertaining to them that is acquired or to be acquired, and may
prescribe the terms and provisions of the bond or note in any manner
not inconsistent with this article. If not prohibited by the
resolution or indenture relating to outstanding bonds or notes, an
authority may encumber separately any item of real or personal
property.
(d) A bond or note is a legal and authorized investment for
banks, trust companies, savings and loan associations, and
insurance companies. The bond or note is eligible to secure the
deposit of public funds of this state or a municipality, county,
school district, or other political corporation or subdivision of
this state. The bond or note is lawful and sufficient security for
the deposits to the extent of the principal amount or market value
of the bond or note, whichever is less.
Sec. 6. COMPETITIVE BIDS. A contract in the amount of more
than $15,000 for the construction of improvements or the purchase
of material, machinery, equipment, supplies, or any other property
other than real property may be let only on competitive bids after
notice published, at least 15 days before the date set for receiving
bids, in a newspaper of general circulation in each county in the
applicable border region. The board may adopt rules governing the
taking of bids and the awarding of contracts. This section does not
apply to:
(1) personal or professional services;
(2) the acquisition of an existing rail transportation
system; or
(3) a contract with a common carrier to construct
lines or to operate high-speed rail service on lines owned in whole
or in part by the carrier.
Sec. 7. EXEMPTION FROM TAXES. The property, material
purchases, revenues, and income of an authority and the interest on
a bond or note issued by an authority are exempt from all taxes
imposed by this state or a political subdivision of this state.
Sec. 8. SALES AND USE TAX. (a) A sales and use tax is
imposed on items sold on authority property. The sales and use tax
shall be imposed at the rate of the highest combination of local
sales and use taxes imposed at the time of the authority's creation
in any local governmental jurisdiction in the applicable border
region. The comptroller shall remit to the authority the local
sales and use tax collected on the authority's property. All other
local sales and use taxes that would otherwise be imposed on
authority property are abolished by the imposition of this tax.
(b) The comptroller shall administer, collect, and enforce
a tax imposed under this article. Chapter 321, Tax Code, governs
the computation, administration, governance, and use of the tax
except as inconsistent with this article.
(c) An authority shall notify the comptroller in writing by
registered or certified mail of the authority's creation and of its
intent to impose the sales and use tax under this article. The
authority shall provide to the comptroller all information required
to implement the tax, including:
(1) an adequate map showing the property boundaries of
the authority; and
(2) a certified copy of the resolution of the
authority board adopting the tax.
(d) Not later than the 30th day after the date the
comptroller receives the notice, map, and other information, the
comptroller shall inform the authority of whether the comptroller
is prepared to administer the tax.
(e) At the same time an authority notifies the comptroller
under Subsection (c) of this section, the authority shall notify
each affected local governmental unit of the authority's creation
and provide each with an adequate map showing the property
boundaries of the authority.
(f) Not later than the 30th day after the date an authority
adds territory to the authority, the authority shall notify the
comptroller and each affected local governmental unit of the
addition. The authority must include with each notification an
adequate map showing the new boundaries of the authority and the
date the additional territory was added. Not later than the 30th
day after the date the comptroller receives the notice under this
subsection, the comptroller shall inform the authority of whether
the comptroller is prepared to administer the tax in the additional
territory.
(g) A tax imposed under this section or the abolition of a
tax under Subsection (a) of this section takes effect on the first
day of the first complete calendar quarter that occurs after the
expiration of the first complete calendar quarter that occurs after
the date the comptroller receives a notice of the action as required
by this section.
SECTION 2. (a) Not later than September 1, 2004, the Texas
Transportation Commission shall create the border region
high-speed rail authorities as required by this Act.
(b) This Act takes effect September 1, 2003.