By: Merritt, et al. (Senate Sponsor - Carona) H.B. No. 3650
(In the Senate - Received from the House May 11, 2009;
May 11, 2009, read first time and referred to Committee on
Transportation and Homeland Security; May 22, 2009, reported
favorably, as amended, by the following vote: Yeas 7, Nays 2;
May 22, 2009, sent to printer.)
COMMITTEE AMENDMENT NO. 1 By: Carona
Amend H.B. No. 3650 (engrossed version) as follows:
(1) In SECTION 1 of the bill, at the end of added Subchapter
A, Chapter 175, Transportation Code (page 1, between lines 61 and
62), add:
Sec. 175.002. ACTIVITIES OF HIGH-SPEED RAIL LOCAL
GOVERNMENT CORPORATION UNAFFECTED. An authority created and
operating under this chapter may not interfere or compete with,
obstruct, delay, or compromise the activities, goals, and
objectives of a local government corporation created to facilitate,
analyze, develop, maintain, and implement high-speed passenger
rail generally along the federally designated routes.
(2) In SECTION 1 of the bill, strike added Section 175.152,
Transportation Code (page 2, lines 49-67), and substitute:
Sec. 175.152. GENERAL POWERS OF AUTHORITY. An authority
has all the powers necessary or convenient to carry out the purposes
of this chapter.
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, including authority to:
(1) plan and develop a high-speed rail facility under
the authority in this chapter;
(2) solicit federal funding to be allocated to the
authority for the purposes of this chapter;
(3) coordinate with federal planners and
representatives from adjacent states for the interconnectivity of
high-speed rail systems in this state with systems developed in
federally designated high-speed rail corridors in other states;
(4) represent and negotiate on behalf of the authority
for the interconnectivity of high-speed rail with existing and
planned transportation systems, including airports, seaports,
transit systems, commuter rail systems, and highways; and
(5) coordinate with federal transportation planners
and officials at the United States Department of Defense or its
successor agency regarding issues related to the provision of
connectivity to military installations in this state.
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, food service, and telephone and utility services. The
acquisition, taxation, sale, and service of alcoholic beverages in
or on any of the authority's system, high-speed rail facilities,
rolling stock, and intermodal facilities shall comply in all
respects with the provisions of the Texas Alcoholic Beverage Code,
the rules of the Alcoholic Beverage Commission, and Chapter 183,
Tax Code.
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. (a) Except as provided in
Subsection (b), 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.
(b) An authority may not undertake any project or provide
any services, or contract to undertake any project or provide any
services, in an area that includes a county with a population of 3.3
million or more and any county adjacent to that county if the area
is served by a district created under Chapter 171, unless the
district and the authority enter into a written agreement
specifying the terms and conditions under which the project or
services will be undertaken or provided.
[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.
* * * * *