Amend CSHB 2702 by adding the following appropriately 
numbered ARTICLE and renumbering subsequent ARTICLES of the bill 
	SECTION __.  Chapter 13, Title 112, Revised Statutes, is 
amended by adding Article 6550c-4 to read as follows:
	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 
		(5)  "Department" means the Texas Department of 
		(6)  "High-speed rail" means the rail technology that 
permits the operation of rolling stock between scheduled stops at 
speeds greater than 70 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 
		(8)  "System" means all of the high-speed rail and 
intermodal facilities leased or owned by or operated on behalf of an 
	Sec. 2.  CREATION OF AUTHORITIES.  The commission by order 
may authorize the creation of an authority in each border region for 
the purposes of financing, acquiring property for, constructing, 
maintaining, operating, and improving 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 
	(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 
	(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, maintain, and improve 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, operation, and improvement 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, operation, or improvement 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, operation, or improvement of the 
	(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)  With the consent of the property owner, instead of 
paying for real property with a single fixed payment, an authority 
may pay the owner in the form of:
		(1)  an intangible legal right to receive a percentage 
of identified fees related to the applicable segment of the system; 
		(2)  an exclusive or nonexclusive right to use or 
operate a part of the system.
	(h)  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.
	(i)  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.
	(j)  An authority may enter into a joint ownership agreement 
with any person.
	(k)  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 
		(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.
	(l)  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 or another 
state of the United States, the United Mexican States, or a state of 
the United Mexican States, 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 
	(m)  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.
	(n)  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.
	(o)  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.
	(p)  An authority may purchase an additional insured 
provision to any liability insurance contract.
	(q)  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.
	(r)  An authority is eligible to participate in the Texas 
County and District Retirement System.
	(s)  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.
	(t)  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 
	(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 
	(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 
	(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.