81R21772 JTS-F
 
  By: Merritt H.B. No. 3650
 
  Substitute the following for H.B. No. 3650:
 
  By:  Moody C.S.H.B. No. 3650
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the creation, administration, powers, duties,
  operations, and financing of a border region higher-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.  Subtitle I, Title 5, Transportation Code, is
  amended by adding Chapter 175 to read as follows:
  CHAPTER 175.  BORDER REGION HIGHER-SPEED RAIL AUTHORITIES
  SUBCHAPTER A.  GENERAL PROVISIONS
         Sec. 175.001.  DEFINITIONS.  In this chapter:
               (1)  "Authority" means a border region higher-speed
  rail authority created under this chapter.
               (2)  "Authority property" means all property an
  authority owns or leases under a long-term lease.
               (3)  "Board" means an authority's board of directors.
               (4)  "Border region" means the Texas-Louisiana border
  region or the Texas-Mexico border region, as defined by Section
  2056.002, Government Code.
               (5)  "Commission" means the Texas Transportation
  Commission.
               (6)  "Department" means the Texas Department of
  Transportation.
               (7)  "Director" means a board member.
               (8)  "Higher-speed rail" means the rail technology that
  permits the operation of rolling stock between scheduled stops at
  speeds greater than 70 miles per hour but less than 110 miles per
  hour.
               (9)  "Higher-speed rail facility" means any property
  necessary for the transportation of passengers and baggage between
  points in a border region by higher-speed rail. The term includes
  rolling stock, locomotives, stations, parking areas, and rail
  lines.
               (10)  "System" means all of the higher-speed rail and
  intermodal facilities leased or owned by or operated on behalf of an
  authority.
  [Sections 175.002-175.050 reserved for expansion]
  SUBCHAPTER B.  CREATION
         Sec. 175.051.  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 higher-speed
  rail system in each border region.
  [Sections 175.052-175.100 reserved for expansion]
  SUBCHAPTER C.  GOVERNANCE
         Sec. 175.101.  COMPOSITION OF BOARDS. (a)  The governing
  body of an authority in the Texas-Louisiana border region is a board
  of seven directors consisting of:
               (1)  the county judges of the five most populous
  counties in the region; and
               (2)  two directors selected by the county judges to
  represent the remaining counties in the region.
         (b)  The governing body of an authority in the Texas-Mexico
  border region is a board of 11 directors consisting of:
               (1)  the county judges of the seven most populous
  counties in the region; and
               (2)  four directors selected by the county judges to
  represent the remaining counties in the region.
         Sec. 175.102.  PRESIDING OFFICER.  (a)  The directors shall
  elect one director as presiding officer.
         (b)  The presiding officer may select another director to
  preside in the absence of the presiding officer.
         Sec. 175.103.  MEETINGS.  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.
         Sec. 175.104.  COMPENSATION; REIMBURSEMENT.  A director is
  not entitled to compensation for serving as a director but is
  entitled to reimbursement for reasonable expenses incurred while
  serving as a director.
         Sec. 175.105.  RULES FOR PROCEEDINGS.  The board shall adopt
  rules for its proceedings and appoint an executive committee.
         Sec. 175.106.  EMPLOYEES.  The board may employ and
  compensate persons to carry out the powers and duties of the
  authority.
         Sec. 175.107.  CONFLICTS OF INTEREST.  Chapter 171, Local
  Government Code, applies to a director.
  [Sections 175.108-175.150 reserved for expansion]
  SUBCHAPTER D.  POWERS AND DUTIES OF AUTHORITY
         Sec. 175.151.  NATURE OF AUTHORITY.  (a)  An authority is a
  public body and a political subdivision of the state exercising
  public and essential governmental functions.
         (b)  An authority, in the exercise of powers under this
  chapter, is performing only governmental functions and is a
  governmental unit within the meaning of Chapter 101, Civil Practice
  and Remedies Code.
         Sec. 175.152.  GENERAL POWERS OF AUTHORITY.  An authority
  has all the powers necessary or convenient to carry out the purposes
  of this chapter.
         Sec. 175.153.  SUNSET REVIEW.  An authority is subject every
  12th year to review under Chapter 325, Government Code (Texas
  Sunset Act).
         Sec. 175.154.  SUITS.  (a)  An authority may:
               (1)  sue and be sued;
               (2)  institute and prosecute suits without giving
  security for costs; and
               (3)  appeal from a judgment without giving a
  supersedeas or cost bond.
         (b)  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.
         Sec. 175.155.  POWERS RELATED TO DISTRICT PROPERTY.  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.
         Sec. 175.156.  GENERAL AUTHORITY OVER HIGHER-SPEED RAIL
  FACILITIES.  An authority may acquire, construct, develop, own,
  operate, maintain, and improve intermodal and higher-speed rail
  facilities to connect political subdivisions in the applicable
  border region.
         Sec. 175.157.  USE AND ALTERATION OF PROPERTY OF ANOTHER
  POLITICAL SUBDIVISION.  (a)  For a purpose described by Section
  175.156, as necessary or useful in the construction,
  reconstruction, repair, maintenance, operation, and improvement of
  the system, and with the consent of a municipality, county, or other
  political subdivision, an authority may:
               (1)  use streets, alleys, roads, highways, and other
  public ways of the municipality, county, or other political
  subdivision; and
               (2)  relocate, raise, reroute, change the grade of, or
  alter, at the authority's expense, the construction of any publicly
  owned or privately owned street, alley, highway, road, railroad,
  electric line or facility, telegraph or telephone property and
  facility, pipeline or facility, conduit or facility, and other
  property.
         (b)  An authority may not use or alter:
               (1)  a road or highway that is part of the state highway
  system without the permission of the commission; or
               (2)  a railroad without permission of the railroad.
         Sec. 175.158.  ACQUISITION OF PROPERTY.  (a)  An authority
  may purchase any interest in real property to acquire, construct,
  operate, or improve a higher-speed rail facility on terms and at a
  price to which the authority and the owner agree.
         (b)  The governing body of a municipality, a county, any
  other political subdivision, or a public agency may convey the
  title or the rights and easements to any property needed by an
  authority for its purposes in connection with the acquisition,
  construction, operation, or improvement of the system.
         Sec. 175.159.  EMINENT DOMAIN.  (a)  An authority may
  exercise the power of eminent domain to acquire:
               (1)  real property in fee simple; or
               (2)  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.
         (b)  The power of eminent domain under this section does not
  apply to:
               (1)  land under the jurisdiction of the department; or
               (2)  a rail line owned by a common carrier or
  municipality.
         (c)  To the extent possible, an authority shall use existing
  rail or intermodal transportation corridors for the alignment of
  its system.
         (d)  An eminent domain proceeding is begun by the board's
  adoption of a resolution declaring that the authority's acquisition
  of the property or interest described in the resolution:
               (1)  is a public necessity; and
               (2)  is necessary and proper for the construction,
  extension, improvement, or development of higher-speed rail
  facilities and is in the public interest.
         (e)  The resolution is conclusive evidence of the public
  necessity of the proposed acquisition and that the real property or
  interest in property is necessary for public use.
         (f)  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;
  or
               (2)  an exclusive or nonexclusive right to use or
  operate a part of the system.
         Sec. 175.160.  AGREEMENTS WITH OTHER ENTITIES FOR JOINT USE.  
  An authority may:
               (1)  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
               (2)  establish through routes and joint fares.
         Sec. 175.161.  RULES.  To protect the health, safety, and
  general welfare of residents of the border region and people who use
  the authority's services, 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.
         Sec. 175.162.  JOINT OWNERSHIP AGREEMENTS.  An authority may
  enter into a joint ownership agreement with any person.
         Sec. 175.163.  COMPENSATION FOR USE OF SYSTEM FACILITIES.  
  (a)  An authority shall establish and maintain reasonable and
  nondiscriminatory rates or other compensation for the use of the
  facilities of the system acquired, constructed, operated,
  regulated, or maintained by the authority.
         (b)  Together with grants received by the authority, the
  rates or other compensation must be sufficient to produce revenues
  adequate to:
               (1)  pay all expenses necessary for the operation and
  maintenance of the properties and facilities of the authority;
               (2)  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)  comply with the terms of an agreement made with the
  holders of bonds or with any person in their behalf.
         Sec. 175.164.  AGREEMENTS GENERALLY.  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.
         Sec. 175.165.  INTERLOCAL AGREEMENTS WITH COMMISSION.  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 applicable border region.
         Sec. 175.166.  ACQUISITION OF ROLLING STOCK AND OTHER
  PROPERTY.  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.
         Sec. 175.167.  LIMIT ON POWER.  A revenue bond indenture may
  limit the exercise of the powers granted by this subchapter, and a
  limit applies as long as the revenue bonds issued under the
  indenture are outstanding and unpaid.
         Sec. 175.168.  RULES GOVERNING SYSTEM AND ROUTINGS.  An
  authority by resolution may adopt rules governing the use,
  operation, and maintenance of the system and may determine all
  routings and change them as the board considers advisable.
         Sec. 175.169.  OPERATION OR USE CONTRACTS.  (a)  An authority
  may:
               (1)  lease all or part of the higher-speed rail
  facilities to an operator; or
               (2)  contract for the use or operation of all or part of
  the higher-speed rail facilities by an operator.
         (b)  To the maximum extent practicable, an authority shall
  encourage the participation of private enterprise in the operation
  of higher-speed rail facilities.
         (c)  The term of an operating contract under this section may
  not exceed 20 years.
         Sec. 175.170.  RAIL TRANSPORTATION SERVICES AGREEMENTS WITH
  OTHER POLITICAL SUBDIVISIONS.  An authority may contract with a
  county or other political subdivision of this state for the
  authority to provide higher-speed rail transportation services to
  an area outside the border region on the terms and conditions to
  which the parties agree.
  [Sections 175.171-175.200 reserved for expansion]
  SUBCHAPTER E.  FINANCIAL PROVISIONS
         Sec. 175.201.  PURCHASE OF ADDITIONAL INSURED PROVISIONS.  
  An authority may purchase an additional insured provision to any
  liability insurance contract.
         Sec. 175.202.  FISCAL YEAR.  Unless the board changes the
  fiscal year, the fiscal year of an authority ends September 30.
         Sec. 175.203.  ANNUAL BUDGET.  (a)  Before beginning the
  operation of higher-speed rail facilities, the board shall adopt an
  annual operating budget specifying the authority's anticipated
  revenues and expenses for the remainder of the fiscal year.  The
  board shall adopt an operating budget for each succeeding fiscal
  year.
         (b)  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.
         (c)  A budget may be amended at any time if notice of the
  proposed amendment is given in the notice of the meeting.
         (d)  An expenditure that is not budgeted may not be made.
         Sec. 175.204.  RETIREMENT BENEFITS.  An authority is
  eligible to participate in the Texas County and District Retirement
  System.
         Sec. 175.205.  DEPOSITORY.  (a)  The board by resolution
  shall name one or more banks for the deposit of authority funds.
         (b)  Authority funds are public funds and may be invested in
  securities permitted by Chapter 2256, Government Code.
         (c)  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.
         Sec. 175.206.  AGREEMENTS RELATED TO FOREIGN AND DOMESTIC
  CURRENCY.  (a)  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.
         (b)  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.
         (c)  In connection with any transaction authorized by this
  section, 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 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 counterparty to a payment
  agreement, financial guarantee, or insurance contract under this
  subsection must have 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.
         (d)  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
  section is considered for all purposes to be property owned and held
  by the authority and used for public purposes.
  [Sections 175.207-175.300 reserved for expansion]
  SUBCHAPTER F.  BONDS
         Sec. 175.301.  REVENUE BONDS.  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 higher-speed rail facilities.
         Sec. 175.302.  SECURITY FOR PAYMENT OF BONDS.  (a)  To secure
  the payment of a bond or note, an authority may:
               (1)  encumber and pledge all or any part of the revenues
  of its higher-speed rail facilities;
               (2)  mortgage and encumber all or part of the property
  of the higher-speed rail facilities and any thing pertaining to
  them that is acquired or to be acquired; and
               (3)  prescribe the terms and provisions of the bond or
  note in any manner not inconsistent with this chapter.
         (b)  Unless prohibited by the resolution or indenture
  relating to outstanding bonds or notes, an authority may encumber
  separately any item of property.
         Sec. 175.303.  BONDS AND NOTES AS AUTHORIZED INVESTMENTS AND
  SECURITY FOR DEPOSITS OF PUBLIC FUNDS.  (a)  Bonds and notes are
  legal and authorized investments for:
               (1)  a bank;
               (2)  a trust company;
               (3)  a savings and loan association; and
               (4)  an insurance company.
         (b)  The bonds and notes are:
               (1)  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; and
               (2)  lawful and sufficient security for the deposits to
  the extent of the principal amount or market value of the bonds and
  notes, whichever is less.
         Sec. 175.304.  AWARDING CONSTRUCTION OR PURCHASE CONTRACTS.  
  (a)  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 through competitive bidding after
  notice is 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.
         (b)  The board may adopt rules governing the taking of bids
  and the awarding of contracts.
         (c)  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 higher-speed rail service on lines wholly or
  partly owned by the carrier.
  [Sections 175.305-175.350 reserved for expansion]
  SUBCHAPTER G.  TAXES
         Sec. 175.351.  TAX EXEMPTION.  Authority property, material
  purchases, revenues, and income 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. 175.352.  SALES AND USE TAX IMPOSED.  A sales and use
  tax is imposed on items sold on authority property.
         Sec. 175.353.  TAX RATE.  The sales and use tax imposed under
  Section 175.352 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.
         Sec. 175.354.  ABOLITION OF OTHER TAXES.  All other local
  sales and use taxes that would otherwise be imposed on authority
  property are abolished by the imposition of the tax under Section
  175.352.
         Sec. 175.355.  DUTY OF COMPTROLLER.  The comptroller shall:
               (1)  administer, collect, and enforce the tax imposed
  under Section 175.352; and
               (2)  remit to the authority the local sales and use tax
  collected on the authority's property.
         Sec. 175.356.  APPLICABILITY OF TAX CODE.  Chapter 321, Tax
  Code, governs the computation, administration, governance, and use
  of the tax except as inconsistent with this chapter.
         Sec. 175.357. NOTICE TO COMPTROLLER.  (a)  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 Section 175.352.
         (b)  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.
         (c)  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.
         Sec. 175.358.  NOTICE TO LOCAL GOVERNMENTS.  At the same time
  an authority notifies the comptroller under Section 175.357, the
  authority shall:
               (1)  notify each affected local governmental unit of
  the authority's creation; and
               (2)  provide each with an adequate map showing the
  property boundaries of the authority.
         Sec. 175.359.  ACQUISITION OF ADDITIONAL TERRITORY SUBJECT
  TO TAX.  (a)  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.
         (b)  The authority must include with each notification:
               (1)  an adequate map showing the new boundaries of the
  authority; and
               (2)  the date the additional territory was added.
         (c)  Not later than the 30th day after the date the
  comptroller receives the notice under this section, the comptroller
  shall inform the authority of whether the comptroller is prepared
  to administer the tax imposed under Section 175.352 in the
  additional territory.
         Sec. 175.360.  EFFECTIVE DATE OF TAX.  A tax imposed under
  Section 175.352 or the abolition of a tax under Section 175.354
  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 subchapter.
         SECTION 2.  This Act takes effect September 1, 2009.