By: Wentworth  S.B. No. 1406
         (In the Senate - Filed March 8, 2007; March 20, 2007, read
  first time and referred to Committee on Transportation and Homeland
  Security; April 12, 2007, reported adversely, with favorable
  Committee Substitute by the following vote:  Yeas 9, Nays 0;
  April 12, 2007, sent to printer.)
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 1406 By:  Wentworth
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the authorization of airport authorities and the
  issuance of bonds and the exercise of eminent domain by the
  authorities.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  LEGISLATIVE DECLARATION; PURPOSE.  (a)  The
  economic well-being of the state and the general welfare of its
  residents require adequate, safe, secure, and efficient aviation
  facilities at a reasonable cost.
         (b)  The purpose of this Act is to authorize the creation by
  the state, counties, and municipalities, through their independent
  or joint action, airport authorities, corporate and politic,
  constituting political subdivisions of the state, for the purpose
  of:
               (1)  acquiring and improving airports, heliports, air
  navigation facilities, and related facilities;
               (2)  financing the cost of the activities listed under
  Subdivision (1) of this subsection by the issuance of bonds or other
  obligations of an authority payable from the income of the
  authority and otherwise secured to the extent permitted by law
  without the incurrence of debt by the state or by another political
  subdivision; and
               (3)  promoting and facilitating transportation by air
  from or to points located within the state, to the benefit and
  general welfare of the state, including its political subdivisions
  and inhabitants.
         SECTION 2.  AIRPORT AUTHORITIES.  Title 3, Transportation
  Code, is amended by adding Chapter 27 to read as follows:
  CHAPTER 27.  AIRPORT AUTHORITIES
  SUBCHAPTER A.  GENERAL PROVISIONS
         Sec. 27.001.  DEFINITIONS.  In this chapter:
               (1)  "Aircraft" means a contrivance invented, used, or
  designed for navigation of or flight in the air, except a parachute
  or other contrivance designed for use primarily as safety
  equipment.
               (2)  "Air navigation facility" means a facility used
  in, available for use in, or designed for use in aid of air
  navigation, including a structure, mechanism, light, beacon,
  marker, communicating system, or other instrumentality or device
  used or useful as an aid or constituting an advantage or convenience
  to the safe taking-off, navigation, and landing of aircraft, or the
  safe and efficient operation or maintenance of an airport,
  including any combination of facilities listed in this subdivision.
               (3)  "Airport" means an area of land or water that is
  used, or intended for use, for the landing, taking-off, storage,
  parking, or dispersal of aircraft, including:
                     (A)  any appurtenant areas that are used or
  intended for use for airport buildings, facilities, or
  rights-of-way; and
                     (B)  airport buildings, structures, and
  facilities located on the area of land or water.
               (4)  "Airport facility" means a building, structure,
  land, right-of-way, equipment, or instrumentality used or to be
  used in connection with the construction, enlargement,
  development, maintenance, or operation of an airport.
               (5)  "Authority" means a public corporation organized
  under this chapter.
               (6)  "Board" means the board of directors of an
  authority.
               (7)  "Indenture" means a mortgage, indenture of
  mortgage, deed of trust, trust agreement, or trust indenture
  executed by an authority as security for bonds.
         Sec. 27.002.  ASSISTANCE BY STATE OR LOCAL ENTITIES.  (a)  A
  county, municipality, or other political subdivision of the state,
  including a public corporation, may, with or without consideration:
               (1)  lend or donate money to an authority;
               (2)  provide that all or part of the taxes or funds
  available to the subdivision or required by law to be used by the
  subdivision for airport purposes shall be transferred or paid
  directly to an authority;
               (3)  cause water, sewer, or drainage facilities or any
  other facilities that the subdivision is empowered to provide to be
  furnished adjacent to or in connection with an airport or air
  navigation facility;
               (4)  donate, sell, convey, transfer, or lease to an
  authority any land, property, franchise, grant, easement, license,
  or lease that the subdivision owns;
               (5)  donate, sell, convey, or lease an airport, airport
  property, or any interest in an airport or airport property owned by
  the subdivision to an authority;
               (6)  donate, transfer, assign, sell, or convey to an
  authority any right, title, or interest that the subdivision has in
  a lease, contract, agreement, license, or property;
               (7)  furnish, dedicate, close, pave, repair, install,
  grade, regrade, plan, or replan streets, roads, roadways, and
  walks:
                     (A)  from established streets or roads to an
  airport or air navigation facility; or
                     (B)  abutting or adjacent to an airport or air
  navigation facility;
               (8)  take any other action that is necessary or
  convenient to aid and cooperate with an authority in the planning,
  undertaking, construction, or operation of an airport or air
  navigation facility; and
               (9)  furnish, at the request of an authority, fire and
  air crash equipment and personnel to properly operate the equipment
  at an airport or aircraft landing area owned, operated, or under the
  jurisdiction of an authority or train authority personnel in fire,
  crash, and rescue.
         (b)  All transfers of land, licenses, easements, or other
  property under this section are subject to the continuing right of a
  utility to maintain existing facilities in those locations and to
  be reimbursed for any required relocation, removal, or adjustment
  of those facilities.
         Sec. 27.003.  NATURE OF AUTHORITY. An airport authority
  created under this chapter is an airport authority under Section
  12, Article IX, Texas Constitution.
  [Sections 27.004-27.050 reserved for expansion]
  SUBCHAPTER B.  CREATION AND EXPANSION
         Sec. 27.051.  INCORPORATION.  (a)  An authority may be
  organized as a public corporation under this chapter.
         (b)  At least three natural persons shall file with the
  governing body of one or more counties or municipalities an
  application in writing for permission to incorporate a public
  corporation under this chapter and shall attach to the application
  a proposed form of articles of incorporation for the corporation.
         (c)  If each governing body with which the application is
  filed adopts a resolution approving the form of the articles of
  incorporation and authorizing the formation of a public
  corporation, the applicants under Subsection (b) become the
  incorporators of and shall incorporate the authority as a public
  corporation under this chapter using the form of the articles
  approved.
         Sec. 27.052.  ADDITIONAL COUNTIES OR MUNICIPALITIES.  An
  additional county or municipality may become part of an authority
  if each additional county or municipality and each county or
  municipality in the authority adopts a resolution consenting to the
  inclusion of the additional county or municipality in the
  authority.
         Sec. 27.053.  INCLUSION IN AUTHORITY.  On the inclusion of a
  county or municipality in an authority, either initially or as an
  additional member, all rights, contracts, obligations, and
  property, both real and personal, of a municipality or county used
  for or in relation to transportation by air shall vest in the
  authority created under this subchapter unless otherwise specified
  by the resolution including the municipality or county in the
  authority.
         Sec. 27.054.  STATE JOINING AIRPORT AUTHORITY.  The
  governor, on behalf of the state, may authorize the state to join in
  the creation of an authority under this subchapter or to join an
  existing authority created under this subchapter.
         Sec. 27.055.  CONTENTS OF CERTIFICATE OF INCORPORATION. The
  certificate of incorporation of an authority shall state:
               (1)  the name and county of residence of each person
  forming the authority;
               (2)  the name of the authority, which must include the
  words "airport authority";
               (3)  the duration of the authority or if the duration is
  perpetual, the fact that the authority is of perpetual duration;
               (4)  the names of the governmental entities in the
  authority and the date on which the:
                     (A)  governing body of the county or municipality
  adopted the resolution authorizing the incorporation of the
  authority or consented to the inclusion of the county or
  municipality in the authority; or
                     (B)  governor authorized the state to join in the
  creation of the authority or the existing authority;
               (5)  the proposed location in this state of the
  principal office of the authority; and
               (6)  any other matters relating to the authority that
  the incorporators choose to insert and that are not inconsistent
  with this chapter or the laws of this state.
         Sec. 27.056.  INCORPORATION; EXECUTION AND FILING OF
  ARTICLES. (a)  The articles of incorporation of an authority
  shall:
               (1)  be signed and acknowledged by the incorporators;
  and
               (2)  have attached a certified copy of each of the
  resolutions described by Section 27.051.
         (b)  An authority shall file its articles of incorporation
  with the documents required to be attached under Subsection (a),
  with the secretary of state.
         (c)  When a certificate of incorporation is issued by the
  secretary of state after the filing of the articles and attached
  documents, the authority referred to in the certificate shall:
               (1)  come into existence;
               (2)  constitute a public corporation under the name
  listed in the certificate; and
               (3)  have all the rights and powers given to an
  authority under this chapter.
         (d)  The articles must include the number and terms of board
  members.  A term may not exceed two years.
  [Sections 27.057-27.100 reserved for expansion]
  SUBCHAPTER C.  BOARD OF DIRECTORS; ADMINISTRATION
         Sec. 27.101.  COMPOSITION OF BOARD OF DIRECTORS.  (a)  The
  governing body of an authority is a board with at least five but not
  more than nine members appointed as follows:
               (1)  if the state alone authorizes an authority, the
  members shall be elected by the governor, the lieutenant governor,
  and the speaker of the house of representatives with the total
  number of members set out in the articles of incorporation of the
  authority;
               (2)  if the sole authorizing governmental entity is a
  county, the commissioners court of the county shall appoint the
  members with the number of members set out in the articles of
  incorporation of the authority; and
               (3)  in all other cases:
                     (A)  one member shall be appointed by each
  governing body of an authorizing governmental entity;
                     (B)  one member shall be appointed by the
  commissioners court of the county in which the principal office of
  the authority is located, if the county is not an authorizing
  governmental entity; and
                     (C)  one additional member shall be elected by the
  governing bodies of each authorizing governmental entity and the
  commissioners court of the county in which the principal office of
  the authority is located.
         (b)  Each member appointed by a governing body of an
  authorizing governmental entity must reside in the authorizing
  governmental entity.  The additional member elected under
  Subsection (a)(3)(C) must reside in any county electing the member.
         (c)  Other than the additional member elected under
  Subsection (a)(3)(C), each authorizing governmental entity may
  appoint the same number of members as any other authorizing
  governmental entity.
         (d)  If the state joins in the creation of an airport
  authority under this chapter or joins an existing airport authority
  created under this chapter, the state is entitled to the number of
  board members agreed on by the authorizing governmental entities
  and the state, but is entitled to at least one board member. The
  governor shall appoint each board member representing the state.
         Sec. 27.102.  VACANCY; REMOVAL.  (a)  Except as provided by
  Subsection (b), if a board member resigns, dies, or becomes
  incapable or ineligible to act as a board member, a successor to
  serve the unexpired portion of the board member's term shall be
  elected in the same manner provided by Section 27.101 as the board
  member whose unexpired term the successor is filling.
         (b)  If a vacancy in the office of the additional member
  elected under Section 27.101(a)(3)(C) continues for more than 30
  days, the governor shall, on the request of any governmental entity
  that elected the member, appoint a successor.
         (c)  A board member may be removed from office.
         Sec. 27.103.  ELIGIBILITY.  An officer of the state, a
  county, or a municipality is not eligible to serve as a board
  member.
         Sec. 27.104.  TERMS.  (a)  The term of office of a board
  member is as set out in the articles of incorporation of an
  authority.
         (b)  Board members serve staggered terms so that the term of
  at least one member expires each year.
         Sec. 27.105.  QUORUM.  (a)  Except as provided by Subsection
  (b), a majority of the board members constitutes a quorum for the
  transaction of business.
         (b)  A meeting of a board may be adjourned by a majority of
  the board members present or may be adjourned by a single board
  member if the member is the only board member present at the
  meeting.
         (c)  A vacancy on the board does not impair the right of a
  quorum to exercise all the powers and duties of an authority.
         Sec. 27.106.  MEETINGS.  (a)  A board shall hold regular
  monthly meetings and any other meeting as provided for in the bylaws
  of the authority.
         (b)  A board may hold a special meeting at the call of the
  chair of the authority or two board members.
         (c)  Any matter on which the board is authorized to act may be
  acted upon at a regular or special meeting.
         (d)  At the request of a board member, the vote on a question
  before a board shall be taken by yeas and nays and entered on the
  record. All board proceedings shall be reduced to writing by the
  secretary of the authority and open to board members and to the
  public at all times.  Copies of the proceedings, when certified by
  the secretary of an authority under its seal, are admissible in a
  court as evidence of the matters certified in the proceedings.
         Sec. 27.107.  COMPENSATION.  A board member is not entitled
  to receive compensation but is entitled to reimbursement for actual
  and necessary expenses.
         Sec. 27.108.  OFFICERS. (a)  The board shall elect from the
  board members a chair, a vice chair, a secretary, and any other
  officer the board considers necessary, for a term of one year.
         (b)  A treasurer or any other officer a board considers
  necessary is not required to be a board member.  The officer may be
  appointed by the board for a term determined by the board.
         (c)  The offices of secretary and treasurer may be held by
  the same person.
  [Sections 27.109-27.150 reserved for expansion]
  SUBCHAPTER D.  POWERS AND DUTIES
         Sec. 27.151.  GENERAL POWERS.  An authority may:
               (1)  have succession by the authority's corporate name
  for the duration of time specified in the articles of
  incorporation;
               (2)  sue and be sued in the authority's own name in
  civil suits and actions, except actions in tort against the
  authority;
               (3)  adopt and make use of a corporate seal;
               (4)  adopt and alter bylaws for the regulation and
  conduct of the authority's affairs and business;
               (5)  acquire, receive, take, and hold, by purchase,
  gift, lease, devise, or other means, property, regardless of
  whether in one or more counties or within or outside the corporate
  limits of an authorizing governmental entity, and manage the
  property, including developing undeveloped property owned, leased,
  or controlled by the authority;
               (6)  execute a contract or other instrument;
               (7)  enter on land, water, and premises for the
  purposes of making surveys, soundings, and examinations;
               (8)  plan, establish, develop, acquire, construct,
  enlarge, improve, maintain, equip, operate, regulate, and protect
  an airport and air navigation facility, including the:
                     (A)  acquisition, construction, installation,
  equipment, maintenance, and operation at, in connection with, or in
  furtherance of the use at an airport of sanitary and storm sewage
  systems and water, electric, and gas systems, buildings, hangars,
  and other facilities for:
                           (i)  airlines, United States military
  aircraft, and general aviation aircraft; or
                           (ii)  the comfort, use, and accommodation of
  air travelers; and
                     (B)  purchase and sale of supplies, goods, and
  commodities incident to the operation of an airport property;
               (9)  construct, acquire, establish, improve, extend,
  enlarge, reconstruct, equip, maintain, repair, and operate a
  heliport, an aerial aircraft landing, loading, or storage area, and
  a transportation terminal;
               (10)  construct, acquire, establish, improve, extend,
  enlarge, reconstruct, equip, maintain, and repair a building,
  structure, or facility that is suitable for use as a manufacturing
  plant, industrial plant, retail shopping area, park, or exhibit, or
  for the conduct of lawful business at, on, or adjacent to an airport
  or aircraft landing area owned or operated by the authority;
               (11)  lease a building, structure, or facility
  described in Subdivision (10) to a tenant under terms approved by
  the authority;
               (12)  for compensation, furnish or supply on an airport
  or aircraft landing area owned or operated by or under the
  jurisdiction of the authority, to persons and aircraft, goods,
  commodities, area facilities, and services convenient or useful to
  the owners, operators, and users of aircraft and to persons at the
  airport or aircraft landing area, including food, lodging, shelter,
  drinks, confections, reading matter, oil, gasoline, jet fuel,
  motors, engines, aircraft, aircraft parts and equipment, space in
  buildings, space for buildings and structures, and the services of
  mechanics and instructors;
               (13)  confer on any person, for compensation, the
  privilege or concession of supplying on an airport or aircraft
  landing area owned or operated by or under the jurisdiction of the
  authority, all of the items to be furnished or supplied under
  Subdivision (12);
               (14)  acquire, including by eminent domain, establish,
  construct, expand, own, control, equip, improve, maintain,
  operate, and regulate a satellite airport or landing field for the
  use of aircraft in the state;
               (15)  acquire, including by purchase, gift, devise,
  lease, or eminent domain proceedings, an existing airport and air
  navigation facility with the consent of the county, municipality,
  or other governmental entity of the state that owns or controls the
  airport and air navigation facility;
               (16)  issue interest-bearing bonds payable from the
  limited sources available under this chapter;
               (17)  pledge for payment of bonds any revenues and
  funds from which the bonds are made payable;
               (18)  enter into a contract, lease, or other agreement
  incidental to or necessary for the accomplishment of any purpose
  for which the authority was organized;
               (19)  exercise the power of eminent domain with respect
  to property, including airspace, air navigation easements,
  structures, obstructions to flight, and property already devoted to
  public use that reasonably may be necessary for the construction,
  extension, maintenance, operation, protection, enlargement,
  improvement, or preservation of an airport or airport facility or
  sanitary or storm sewage systems or water, electric, or gas systems
  on, adjacent to, or in connection with or for the furtherance of the
  use of an airport, aircraft landing area, or other property owned by
  or operated by the authority;
               (20)  appoint, employ, contract with, and compensate
  officers, employees, and agents, including engineers, security
  officers and guards, attorneys, consultants, fiscal advisers, and
  other employees the authority may require;
               (21)  fix, establish, collect, and alter landing fees,
  tolls, rents, and other charges for the use of an airport, landing
  area, building, structure, facility, or other property owned or
  controlled by the authority;
               (22)  adopt and enforce rules governing the use of an
  airport, landing area, or airport facility owned or controlled by
  the authority;
               (23)  provide for insurance, including use and
  occupancy insurance, as determined by the board;
               (24)  invest funds of the authority that the board
  determines are not presently needed for its corporate purposes in:
                     (A)  a direct general obligation of the United
  States;
                     (B)  an obligation that is unconditionally
  guaranteed as to both principal and interest by the United States;
  or
                     (C)  bonds of the state, a county, or a
  municipality;
               (25)  contract with the state, a county, a
  municipality, a public corporation, an agency, a department, or
  another political subdivision of this state if the board determines
  that the contract accomplishes the purposes for which the authority
  was established;
               (26)  sell and convey property that is obsolete, worn
  out, or no longer needed or useful;
               (27)  receive and accept for the construction,
  extension, improvement, maintenance, or operation of an airport or
  airport facility money, property, labor, or other thing of value
  from any source, including grants from the United States, the
  state, or any political subdivision of the state;
               (28)  purchase services, equipment, and supplies
  necessary or convenient for the exercise of any power of the
  authority;
               (29)  enter into a management agreement with a county
  or municipality for the management by the authority of an airport,
  air navigation facility, or other facility useful to the authority;
               (30)  require the relocation, removal, or other
  adjustment of public utility facilities to accommodate a project of
  the authority, only if the authority reimburses the public utility
  for the cost of the relocation, removal, or other adjustment,
  including the value of any easement or other associated property
  right; and
               (31)  take any other action necessary or convenient to
  carry out the purposes of this chapter or the exercise of a power
  granted under this chapter.
         Sec. 27.1511.  ACQUISITION OR OPERATION OF CERTAIN AIRPORTS.  
  An authority may not acquire or operate an airport located in the
  authority's jurisdiction that, as of the effective date of the Act
  that enacted this chapter, has total annual commercial airline
  enplanements of 300,000 passengers or more, as reported by the
  United States Department of Transportation.
         Sec. 27.152.  ZONING.  (a)  An authority is exempt from
  municipal or county zoning laws, ordinances, and regulations.
         (b)  An authority has the same zoning powers, for the zoning
  of an airport in an unincorporated area owned or operated by the
  authority and the zoning of the unincorporated area lying within
  two miles of the boundaries of the airport, as a municipality that
  owns or operates an airport.
         Sec. 27.153.  LIMIT ON EMINENT DOMAIN POWER.  An authority
  may not acquire by eminent domain real property or rights:
               (1)  owned or held by a railroad or utility; or
               (2)  under the management and control of the governing
  body of an institution of higher education, as defined by Section
  61.003, Education Code, including lands set aside and appropriated
  to or acquired by the permanent university fund as provided by
  Section 11, Article VII, Texas Constitution.
         Sec. 27.154.  MUNICIPAL VOTE REQUIRED FOR MUNICIPAL
  AIRPORTS.  (a)  Before an authority may own, acquire, construct, or
  operate an airport or an airport facility within the corporate
  limits of a municipality, a majority of the governing body of the
  municipality must vote in favor of the proposed airport or airport
  facility.
         (b)  If all the constituent agencies of a joint board created
  under Section 22.074 are populous home-rule municipalities, before
  an authority may own or operate an existing airport operated by the
  joint board, each constituent agency must vote in favor of the
  authority's ownership or operation of the airport.
         Sec. 27.155.  PEACE OFFICERS.  The authority may employ
  security officers who have obtained a peace officer license issued
  by the Commission on Law Enforcement Officer Standards and
  Education.
  [Sections 27.156-27.200 reserved for expansion]
  SUBCHAPTER E.  GENERAL FINANCIAL PROVISIONS; TAX EXEMPTIONS
         Sec. 27.201.  TAX EXEMPTION; BONDS, PROPERTY, INCOME.  
  (a)  Bonds issued by an authority and the income on the bonds are
  exempt from all state taxation.
         (b)  All property and income of an authority are exempt from
  all state, county, municipal, and other local taxation.
         (c)  Subsection (b) does not exempt concessionaires,
  licensees, tenants, operators, or lessees of an authority from the
  payment of any taxes, including licenses or privilege taxes imposed
  by the state, a county, or a municipality.
         Sec. 27.202.  TAX EXEMPTION; ACCESS TO AIRPORTS. A county or
  municipality may not require the payment of any tax or privilege
  license from a person for the reasonable use of public streets,
  roads, or highways leading to or from an airport or aircraft landing
  area owned or operated by or under the jurisdiction of an authority.
         Sec. 27.203.  FUNDING.  (a)  An authority is authorized to
  accept, receive, disburse, and expend federal money, state money,
  and any other money made available by grant or loan to accomplish an
  authority purpose.
         (b)  Federal money accepted under this section shall be
  accepted and expended by an authority on terms prescribed by the
  United States that are not inconsistent with the laws of this state.
         Sec. 27.204.  TAX IMPLICATIONS.  This subchapter does not
  affect the taxability of any property that is taxable under the Tax
  Code on the effective date of the Act that enacted this chapter.
  [Sections 27.205-27.250 reserved for expansion]
  SUBCHAPTER F.  BONDS
         Sec. 27.251.  GENERAL PROVISIONS.  (a)  An authority may
  issue interest-bearing revenue bonds for any of the authority's
  corporate purposes.
         (b)  The principal of and the interest on bonds is payable
  solely from and may be secured by a pledge of the revenue derived by
  an authority from the operation of authority airports, facilities,
  and other property.
         (c)  Bonds issued or contracts entered into by an authority
  under this chapter do not create debt of the state, a county, or a
  municipality and do not create a charge against the credit or taxing
  powers of the state, a county, or a municipality.
         Sec. 27.252.  BONDS ISSUED.  (a)  Board proceedings shall
  determine how bonds are issued, including the following matters:
               (1)  whether the bonds are issued at any time and from
  time to time;
               (2)  bond form and denominations;
               (3)  bond tenor, payable in installments, and at times
  not to exceed 40 years from the date of issue;
               (4)  place of issue; and
               (5)  rate of interest.
         (b)  A bond having a stated maturity date more than 10 years
  after its date of issue is subject to redemption at the option of an
  authority not later than the 10th anniversary of its date of issue
  and on any interest payment date after that time at a price, after
  notice, on terms, in the manner provided in the board proceeding
  that authorized the bond issuance.
         (c)  Bonds of an authority may be sold at public or private
  sale in the manner and from time to time as may be determined by the
  board.
         (d)  An authority may pay all reasonable expenses, premiums,
  fees, and commissions that the board determines are necessary or
  advantageous in connection with the authorization, sale, and
  issuance of bonds.
         (e)  Bonds must contain a recital that the bonds are issued
  under this chapter.
         (f)  A public hearing is not required for the issuance of
  bonds by an authority.
         (g)  Bonds issued under this chapter are negotiable
  instruments within the meaning of the negotiable instruments law of
  this state if the bonds otherwise possess all the characteristics
  of a negotiable instrument under the law of this state.
         Sec. 27.253.  NOTICE; CHALLENGES. (a)  On the adoption of a
  resolution providing for the issuance of bonds, an authority may
  publish, once a week for two consecutive weeks, in a newspaper that
  is distributed in the county in which the principal office of the
  authority is located, notice in substantially the following form at
  the end of which shall be printed the name and title of either the
  chair or secretary of the authority:
  "_______, a public corporation of the State of Texas,
  on the ____ day of _____ authorized the issuance of
  $______ principal amount of revenue bonds of the
  corporation for purposes authorized in the Act of the
  Legislature of Texas under which the corporation was
  organized.  Any action or proceeding questioning the
  validity of the bonds, or the pledge and any
  instruments securing the bonds, or the proceedings
  authorizing the bonds, must be commenced within 20
  days after the first publication of this notice."
         (b)  An action or proceeding in a court to set aside or
  question the proceedings for the issuance of bonds referred to in a
  notice under Subsection (a) or to contest the validity of the bonds
  or the validity of the pledge and any instruments made to secure the
  bonds must be commenced before the 31st day after the date of first
  publication of the notice.
         (c)  After the 30-day period described under Subsection (b)
  expires:
               (1)  a right of action or defense questioning or
  attacking the validity of the proceedings, bonds, pledge, or
  instruments may not be asserted; and
               (2)  the validity of the proceedings, bonds, pledge, or
  instruments is not open to question in a court on any ground.
         Sec. 27.254.  EXECUTION AND DELIVERY.  (a)  Bonds shall be
  signed by the chair or vice chair and by the secretary or treasurer
  of an authority.  The signature of one of the officers whose
  signatures will appear on the bonds may be imprinted or otherwise
  reproduced.
         (b)  The seal of an authority must be affixed onto the bonds
  or a facsimile of the seal of an authority must be imprinted or
  otherwise reproduced on the bonds.
         (c)  Coupons must be signed by the chair or vice chair and by
  the secretary or treasurer of an authority.  The signature of the
  secretary or treasurer may be imprinted or otherwise reproduced.
         (d)  Delivery of bonds executed as provided under this
  section is valid regardless of any changes in officers or in the
  authority seal after the signing and sealing of the bonds.
         Sec. 27.255.  SECURITY.  (a)  At the discretion of an
  authority, bonds may be issued under and secured by an indenture
  between the authority and a trustee.  A trustee may be a private
  person or corporation, including a trust company or bank having
  trust powers.
         (b)  In an indenture or resolution providing for the issuance
  of bonds, the authority may:
               (1)  pledge, for payment of the principal of and the
  interest on bonds, authority revenue;
               (2)  assign, as security for payment, a lease,
  franchise, permit, or contract; and
               (3)  mortgage a property.
         (c)  A pledge of revenue is valid from the time it is made.  
  Pledged revenue received after the pledge by an authority
  immediately becomes subject to the lien of the pledge without
  physical delivery or further act.  The lien of the pledge is binding
  against a party having a claim of any kind against the authority,
  regardless of whether the party has actual notice of the lien, from
  the time a statement is filed in the office of the county clerk of:
               (1)  the county in which the principal office of the
  authority is located; or
               (2)  a county in which any part of the property, the
  revenue from which are pledged, is located.
         (d)  A statement under Subsection (c) must contain:
               (1)  the date on which a resolution authorizing the
  issuance of bonds was adopted by a board;
               (2)  the principal amount of bonds issued;
               (3)  a brief description of the revenue pledged; and
               (4)  a brief description of property the revenue from
  which is pledged.
         (e)  In an indenture or resolution pledging revenue from an
  airport, building, or facility, an authority may include provisions
  customarily contained in instruments securing evidence of
  indebtedness, including provisions relating to:
               (1)  the collection, segregation, and application of
  rental or other revenue due or to become due to the authority;
               (2)  the terms to be incorporated in a lease agreement
  pertaining to authority property;
               (3)  the maintenance and insurance of a building or
  structure owned by the authority;
               (4)  the creation and maintenance of special funds from
  revenue of the authority;
               (5)  the rights and remedies available in the event of
  default to the holder of the bonds or the trustee under the
  indenture; and
               (6)  restricting the individual rights of action of the
  holders of the bonds and coupons.
         (f)  If an authority defaults in payment of the principal of
  or interest on bonds or in an agreement included in an indenture
  securing the bonds, a holder of the bonds or any of the coupons, or
  the trustee under an indenture if authorized in the indenture:
               (1)  may enforce payment of the principal or interest
  by civil action, mandamus, or other proceeding;
               (2)  may compel performance of a duty of the board and
  officers of the authority; and
               (3)  is as a matter of right and regardless of the
  sufficiency of the security entitled to the appointment of a
  receiver with all the powers of a receiver for the:
                     (A)  operation and maintenance of the property of
  the authority covered by the indenture; and
                     (B)  collection, segregation, and application of
  revenue from property of the authority covered by the indenture.
         Sec. 27.256.  PROCEEDS. (a)  Proceeds derived from the sale
  of bonds may be used only to pay the cost of acquiring,
  constructing, improving, enlarging, and equipping an airport,
  facility, or other property as specified in the proceedings in
  which the bonds are authorized to be issued.
         (b)  Eligible costs under Subsection (a) include:
               (1)  the cost of land forming a part of an airport,
  facility, or other property;
               (2)  the cost of labor, material, and supplies used in
  the construction, improvement, or enlargement, including
  architects' and engineers' fees and the cost of preparing contract
  documents and advertising for bids;
               (3)  the purchase price of and the cost of installing
  equipment for the airport, facility, or other property;
               (4)  the cost of landscaping the lands forming a part of
  an airport, facility, or property, and of constructing roads,
  sidewalks, curbs, gutters, utilities, and parking places in
  connection with an airport, facility, or other property;
               (5)  legal, fiscal, and recording fees and expenses
  incurred in connection with the authorization, sale, and issuance
  of bonds issued in connection with an airport, facility, or other
  property; and
               (6)  interest on bonds issued in connection with an
  airport, facility, or other property for a reasonable period before
  and during the time required for the construction and equipment not
  to exceed 18 months after the date of completion of the construction
  and equipment.
         (c)  If any proceeds derived from the sale of bonds remain
  undisbursed after completion of the work described under Subsection
  (a) and payment of costs under Subsection (b), the proceeds shall be
  used for retirement of the principal of the bonds of the same issue.
         Sec. 27.257.  REFUNDING BONDS.  (a)  An authority may at any
  time issue refunding bonds for the purpose of:
               (1)  refunding the principal of and interest on
  outstanding bonds of the authority regardless of whether the
  principal and interest have matured at the time of the refunding;
  and
               (2)  paying the expenses incurred in connection with
  the refunding and any premium necessary to be paid to redeem,
  retire, or purchase for retirement the bonds to be refunded.
         (b)  Proceeds derived from the sale of refunding bonds may be
  used only for the purposes for which the refunding bonds were
  authorized to be issued.
         (c)  Refunding may be effected:
               (1)  by sale of the refunding bonds and the application
  of the proceeds; or
               (2)  by exchange of the refunding bonds for the bonds or
  interest coupons to be refunded, except that the holders of the
  bonds or coupons to be refunded may not be compelled without their
  consent to surrender their bonds or coupons for payment or exchange
  before the date on which they may be paid or redeemed by call of the
  authority under their respective provisions.
         (d)  If an authority issues bonds for the purpose of
  refunding the principal of and interest on any of its bonds or for
  any other purpose for which it is authorized to issue bonds, this
  section applies only to the portion of the combined issue
  authorized for refunding purposes, and the rest of this subchapter
  applies to the remaining portion of the combined issue.
         Sec. 27.258.  LOCAL GOVERNMENT INVESTMENT. A governing body
  of a county or municipality may invest idle or surplus money held in
  its treasury in authority bonds.
         Sec. 27.259.  LEGAL INVESTMENTS.  (a)  Bonds issued under
  this subchapter are legal investments for executors,
  administrators, trustees, and other fiduciaries, unless otherwise
  directed by the court having jurisdiction of the fiduciary relation
  or by the document that is the source of the fiduciary's authority.
         (b)  Bonds issued under this subchapter are legal
  investments for savings banks and insurance companies organized
  under the laws of this state.
  [Sections 27.260-27.300 reserved for expansion]
  SUBCHAPTER G.  WITHDRAWAL OR DISSOLUTION
         Sec. 27.301.  WITHDRAWAL FROM AUTHORITY.  (a)  After the
  organization of an airport authority by more than one governmental
  entity, the state, a county, or a municipality in an authority may
  withdraw from the authority by resolution of the governor, the
  commissioners court of the county, or the governing body of the
  municipality.
         (b)  A withdrawing entity may not claim or remove an asset of
  the authority.
         Sec. 27.302.  DISSOLUTION.  (a)  If an authority does not
  have outstanding bonds, the authority may be dissolved on the
  filing of articles of dissolution with the secretary of state by
  each member of the authority.
         (b)  On issue of a certificate of dissolution by the
  secretary of state, an authority dissolves.  On dissolution, all
  rights, titles, and interests of the authority in property:
               (1)  vest in the authorizing governmental entities as
  provided by the articles of incorporation; or
               (2)  if not provided for in the articles of
  incorporation, vest in the authorizing governmental entities
  equally.
         SECTION 3.  EFFECTIVE DATE.  This Act takes effect
  immediately if it receives a vote of two-thirds of all the members
  elected to each house, as provided by Section 39, Article III, Texas
  Constitution.  If this Act does not receive the vote necessary for
  immediate effect, this Act takes effect September 1, 2007.
 
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