TLC: Transportation Code Proposed Chapters

81C444(4) JTS

TITLE 5. RAILROADS

SUBTITLE I. SPECIAL DISTRICTS

CHAPTER 172. RURAL RAIL TRANSPORTATION DISTRICTS ......... 3

CHAPTER 173. INTERMUNICIPAL COMMUTER RAIL DISTRICTS ..... 46

CHAPTER 174. COMMUTER RAIL DISTRICTS .................... 82

CHAPTER 172. RURAL RAIL TRANSPORTATION DISTRICTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 172.001. DEFINITIONS ................................ 3

Sec. 172.002. NATURE OF DISTRICT ......................... 8

Sec. 172.003. FINDINGS ................................... 8

[Sections 172.004-172.050 reserved for expansion]

SUBCHAPTER B. CREATION

Sec. 172.051. APPLICABILITY ............................. 10

Sec. 172.052. CREATION OF DISTRICT BY MORE THAN ONE

COUNTY ................................... 10

Sec. 172.053. CREATION OF DISTRICT BY ONE COUNTY ......... 12

Sec. 172.054. NOTICE OF CREATION ......................... 13

Sec. 172.055. AUTOMATIC ASSUMPTION OF CONTRACTUAL

OBLIGATIONS AFTER CREATION BY CERTAIN

DISTRICTS ................................ 13

[Sections 172.056-172.100 reserved for expansion]

SUBCHAPTER C. BOARD OF DIRECTORS AND EMPLOYEES

Sec. 172.101. CONTROL OF DISTRICT ........................ 14

Sec. 172.102. TERMS ...................................... 14

Sec. 172.103. QUALIFICATIONS FOR OFFICE .................. 15

Sec. 172.104. VACANCY .................................... 15

Sec. 172.105. REMOVAL .................................... 16

Sec. 172.106. OFFICERS ................................... 16

Sec. 172.107. MEETINGS; NOTICE ........................... 16

Sec. 172.108. RULES FOR PROCEEDINGS ...................... 17

Sec. 172.109. EMPLOYEES .................................. 18

Sec. 172.110. PECUNIARY INTEREST IN CERTAIN CONTRACTS

PROHIBITED ............................... 18

[Sections 172.111-172.150 reserved for expansion]

SUBCHAPTER D. GENERAL POWERS AND DUTIES

Sec. 172.151. GENERAL POWERS OF DISTRICT; GOVERNMENTAL

FUNCTIONS ................................ 19

Sec. 172.152. RULES ...................................... 19

Sec. 172.153. AGREEMENTS GENERALLY ....................... 20

Sec. 172.154. AGREEMENTS WITH OTHER ENTITIES FOR JOINT

USE ...................................... 20

Sec. 172.155. JOINT OWNERSHIP AGREEMENTS ................. 21

Sec. 172.156. AWARDING CONSTRUCTION OR PURCHASE

CONTRACTS ................................ 21

Sec. 172.157. EMINENT DOMAIN ............................. 22

Sec. 172.158. DISPOSITION OF SURPLUS PROPERTY ............ 24

Sec. 172.159. SUITS ...................................... 25

Sec. 172.160. PERPETUAL SUCCESSION ....................... 26

[Sections 172.161-172.200 reserved for expansion]

SUBCHAPTER E. POWERS AND DUTIES RELATING TO ACQUISITION, CONSTRUCTION, AND OPERATION OF RAIL FACILITIES

Sec. 172.201. GENERAL AUTHORITY OVER RAIL FACILITIES ..... 26

Sec. 172.202. USE AND ALTERATION OF PROPERTY OF

ANOTHER POLITICAL SUBDIVISION ............ 26

Sec. 172.203. RULES GOVERNING SYSTEM; ROUTINGS ........... 27

Sec. 172.204. ACQUISITION OF PROPERTY .................... 27

Sec. 172.205. POWERS RELATING TO DISTRICT PROPERTY ....... 28

Sec. 172.206. ACQUISITION OF ROLLING STOCK AND OTHER

PROPERTY ................................. 28

Sec. 172.207. COMPENSATION FOR USE OF SYSTEM FACILITIES .. 29

Sec. 172.208. OPERATION OR USE CONTRACTS ................. 30

Sec. 172.209. RAIL TRANSPORTATION SERVICES AGREEMENTS

WITH OTHER POLITICAL SUBDIVISIONS ........ 31

Sec. 172.210. ABANDONMENT OF RAIL LINE ................... 31

[Sections 172.211-172.250 reserved for expansion]

SUBCHAPTER F. FINANCIAL PROVISIONS

Sec. 172.251. FISCAL YEAR ................................ 32

Sec. 172.252. ANNUAL BUDGET .............................. 32

Sec. 172.253. GRANTS AND LOANS ........................... 33

Sec. 172.254. DEPOSITORY ................................. 33

Sec. 172.255. APPLICABILITY OF PUBLIC PROPERTY

FINANCING LAW ............................ 34

Sec. 172.256. NONNEGOTIABLE PURCHASE MONEY NOTES; BOND

ANTICIPATION NOTES ....................... 34

Sec. 172.257. TAX EXEMPTION .............................. 35

[Sections 172.258-172.300 reserved for expansion]

SUBCHAPTER G. BONDS

Sec. 172.301. REVENUE BONDS .............................. 36

Sec. 172.302. SECURITY FOR PAYMENT OF BONDS .............. 37

Sec. 172.303. BONDS AS AUTHORIZED INVESTMENTS

AND SECURITY FOR DEPOSITS OF PUBLIC FUNDS 38

Sec. 172.304. APPLICABILITY OF PUBLIC IMPROVEMENT

FINANCING LAW ............................ 39

Sec. 172.305. LIMIT ON POWER ............................. 39

Sec. 172.306. EXEMPTION FROM REVIEW OF NOTES BY

ATTORNEY GENERAL ......................... 40

CHAPTER 172. RURAL RAIL TRANSPORTATION DISTRICTS

SUBCHAPTER A. GENERAL PROVISIONS

Revised Law

Sec. 172.001. DEFINITIONS. In this chapter:

(1) "Board" means a district's board of directors.

(2) "Bonds" means:

(A) bonds;

(B) notes, including bond anticipation notes, revenue anticipation notes, and grant anticipation notes;

(D) certificates of obligation;

(E) interest-bearing contracts;

(F) interest-bearing leases of property;

(G) equipment trust certificates;

(H) commercial paper; and

(I) any obligation issued to refund any type of bond.

(3) "Director" means a board member.

(4) "District" means a rural rail transportation district created under this chapter or under Chapter 623, Acts of the 67th Legislature, Regular Session, 1981 (Article 6550c, Vernon's Texas Civil Statutes), as that chapter existed before April 1, 2011.

(5) "Maintenance facility" includes a workshop, a service, storage, security, or personnel facility, temporary or transient lodging for district employees, and equipment for any type of facility.

(6) "Maintenance and operating expenses" means all expenses of operating and maintaining a district and its rail facilities, including:

(A) all compensation, labor, materials, repairs, and extensions necessary, required, or convenient in the board's discretion to render efficient service or to maintain and operate the district; and

(B) taxes or other amounts paid, payable, or to be paid to the United States under Section 148(f), Internal Revenue Code of 1986, or any similar law.

(7) "Rail facilities" means:

(A) property, or an interest in that property, that the board determines is necessary or convenient to provide a rural rail transportation system; and

(B) property or an interest necessary or convenient to acquire, provide, construct, enlarge, remodel, renovate, improve, furnish, use, or equip the system, including:

(i) a right-of-way;

(ii) an earthwork or structure, including clearing and grubbing of right-of-way, demolition of a structure, relocation of utilities, a pipeline, or any other obstacle in a right-of-way, stripping and stockpiling, removal of subsoil for embankment or spoil, a borrow pit, dressing and seeding of a slope, construction of a culvert, a road crossing, a bridge, restoration of a roadway, drainage within a right-of-way or along a road network, and restoration of a hydrologic system;

(iii) trackwork;

(iv) a train control, including signalling, interlocking equipment, speed monitoring equipment, an emergency braking system, a central traffic control facility, and a communication system;

(v) a passenger or freight service building, terminal, or station, a ticketing facility, a waiting area, a platform, a concession, an elevator, an escalator, a facility for handicapped access, an access road, a parking facility for passengers, a baggage handling facility, a local maintenance facility, and offices for district purposes and includes an interest in real property necessary or convenient for an item listed under this subparagraph;

(vi) rolling stock; and

(vii) a maintenance facility.

(8) "Revenue" means the income, receipts, and collections received by, to be received by, or pledged to the district from or by any source, except a restricted gift or a grant in aid of construction.

(9) "Right-of-way" means:

(A) a right of passage over property;

(B) a strip of land in length and width determined required, necessary, or convenient by the board over, on, or under which trackwork is or is to be constructed or acquired; or

(10) "Rolling stock" means a locomotive, an engine, a rail car, a repair construction car, or another car designed to operate on trackwork.

(11) "Trackwork" means track, a track bed, track bed preparation, a tie, a rail fastener, a slab, a rail, an emergency crossover, a setout track, storage track, and a switch. (V.A.C.S. Art. 6550c, Secs. 2(1), (2), (4), (5), (8), (9), (11), (12), (13), (14), (15), (16), (17); New.)

Source Law

Sec. 2. In this Act:

(1) "Board" means the board of directors of a rural rail transportation district.

(2) "Bonds" means bonds; notes, including bond anticipation notes, revenue anticipation notes, and grant anticipation notes; warrants; certificates of obligation; interest-bearing contracts; interest-bearing leases of property; equipment trust certificates; commercial paper; and any obligation issued to refund any type of bond.

(4) "District" means a rural rail transportation district created under this Act.

(5) "Earthworks and structures" includes the clearing and grubbing of right-of-way; demolition of structures; relocation of utilities, pipelines, and any other obstacles in right-of-way; stripping and stockpiling; removal of subsoils for embankment or spoil; borrow pits; dressing and seeding of slopes; construction of culverts; road crossings; bridges; restoration of roadway; drainage within a right-of-way or along road networks; and restoration of a hydrologic system.

(8) "Maintenance and operating expenses" means all expenses of operating and maintaining a district and its rail facilities, including all compensation, labor, materials, repairs, and extensions necessary, required, or convenient in the discretion of the board to render efficient service or to maintain and operate the district, and taxes or other amounts paid, payable, or to be paid to the United States pursuant to Section 148(f) of the Internal Revenue Code of 1986 (26 U.S.C. Section 148), or any similar law.

(9) "Maintenance facility" includes a workshop, a service, storage, security, or personnel facility, temporary or transient lodging for district employees, and equipment for any type of facility.

(11) "Rail facilities" means any real, personal, or mixed property, or any interest in that property that is determined by the board to be necessary or convenient for the provision of a rural rail transportation system and all property or interests necessary or convenient for the acquiring, providing, constructing, enlarging, remodeling, renovating, improving, furnishing, using, or equipping of the system, including rights-of-way, earthworks and structures, trackwork, train controls, stations, rolling stock, and maintenance facilities.

(12) "Revenues" means all income, receipts, and collections received by, to be received by, or pledged to the district from or by any source, except a restricted gift or a grant in aid of construction.

(13) "Right-of-way" means a right of passage over property; a strip of land in length and width determined required, necessary, or convenient by the board over, on, or under which trackwork is or is to be constructed or acquired; or a right of precedential passing.

(14) "Rolling stock" means locomotives, engines, rail cars, repair construction cars, or other cars designed to operate on trackwork.

(15) "Station" means a passenger or freight service building, terminal, or station, ticketing facility, waiting area, platform, concession, elevator, escalator, facility for handicapped access, access road, parking facility for passengers, baggage handling facility, local maintenance facility, and offices for district purposes, together with any interest in real property necessary or convenient for any of the listed items.

(16) "Trackwork" means track, track beds, track bed preparation, ties, rail fasteners, slabs, rails, emergency crossovers, setout tracks, storage track, and switches.

(17) "Train controls" includes signalling, interlocking equipment, speed monitoring equipment, emergency braking systems, central traffic control facilities, and communication systems.

Revisor's Note

(1) Section 2(10), V.A.C.S. Article 6550c, refers to the definition provided by Section 311.005, Government Code (Code Construction Act). The revised law omits the reference because Chapter 311 applies to the revised law under Section 311.002, Government Code. The omitted law reads:

(10) "Person" has the meaning assigned by Section 311.005, Government Code.

(2) Section 2(11), V.A.C.S. Article 6550c, refers to "real, personal, or mixed property." The revised law omits the reference to "real, personal, or mixed" property because under Section 311.005, Government Code (Code Construction Act), "property" means "real and personal property."

(3) The definition of "director" is added to the revised law for drafting convenience.

Revised Law

Sec. 172.002. NATURE OF DISTRICT. (a) A district is a public body and a political subdivision of this state exercising public and essential governmental functions.

(b) A district, in the exercise of powers under this chapter, is performing only governmental functions and is a governmental unit under Chapter 101, Civil Practice and Remedies Code. (V.A.C.S. Art. 6550c, Sec. 5(a) (part).)

Source Law

Sec. 5. (a) A rural rail transportation district is a public body and a political subdivision of the state exercising public and essential governmental functions and … . A district, in the exercise of powers under this Act, is performing only governmental functions and is a "governmental unit" within the meaning of Chapter 101, Civil Practice and Remedies Code. …

Revised Law

Sec. 172.003. FINDINGS. The legislature finds that:

(1) the state contains many rural areas that are heavily dependent on agriculture for economic survival;

(2) transportation of agricultural and industrial products is essential to the continued economic vitality of rural areas;

(3) the rail transportation systems in some rural areas are threatened by railroad bankruptcies and abandonment proceedings that would cause the cessation of rail services to the areas;

(4) it is in the interest of all citizens of the state that existing rail systems be maintained for the most efficient and economical movement of essential agricultural products from the areas of production to the local, national, and export markets;

(5) rural rail transportation districts are appropriate political subdivisions to provide for the continued operation of railroads, which are declared by Section 2, Article X, Texas Constitution, to be public highways;

(6) the creation, re-creation, financing, maintenance, and operation of rural rail transportation districts and facilities acquired by the districts under this chapter will help develop, maintain, and diversify the economy of the state, eliminate unemployment or underemployment, foster the growth of enterprises based on agriculture, and serve to develop and expand transportation and commerce within the state under the authority granted by Section 52-a, Article III, Texas Constitution; and

(7) financing by rural rail transportation districts for the purposes provided by this chapter is a lawful and valid public purpose. (V.A.C.S. Art. 6550c, Sec. 1.)

Source Law

Art. 6550c

Sec. 1. The legislature finds that:

(1) the state contains many rural areas that are heavily dependent on agriculture for economic survival;

(2) transportation of agricultural and industrial products is essential to the continued economic vitality of rural areas;

(3) the rail transportation systems in some rural areas are threatened by railroad bankruptcies and abandonment proceedings that would cause the cessation of rail services to the areas;

(5) rural rail transportation districts are appropriate political subdivisions to provide for the continued operation of railroads, which are declared by Article X, Section 2, of the Texas Constitution to be public highways;

(6) the creation, re-creation, financing, maintenance, and operation of rural rail transportation districts and facilities acquired by the districts under this Act will help develop, maintain, and diversify the economy of the state, eliminate unemployment or underemployment, foster the growth of enterprises based on agriculture, and serve to develop and expand transportation and commerce within the state under the authority granted by Article III, Section 52-a, of the Texas Constitution; and

(7) financing by rural rail transportation districts for the purposes provided by this Act is a lawful and valid public purpose.

[Sections 172.004-172.050 reserved for expansion]

SUBCHAPTER B. CREATION

Revised Law

Sec. 172.051. APPLICABILITY. A county is eligible to create a district as provided by this chapter only if a rail line is located in the county that:

(1) is being or has been abandoned through a bankruptcy court or Surface Transportation Board proceeding; or

(2) carries three million gross tons per mile per year or less. (V.A.C.S. Art. 6550c, Secs. 2(6) (part), 3(b), 3A(a) (part).)

Source Law

[Sec. 2]

(6) "Eligible counties" means [two or more] counties that meet the requirements of Sections 3[(a) and] (b) of this Act.

[Sec. 3]

(b) A county eligible to create or re-create a district is one in which is located a rail line that is in the process of being or has been abandoned through a bankruptcy court or Interstate Commerce Commission proceeding, or any line carrying 3 million gross tons per mile per year or less.

Sec. 3A. (a) In addition to eligible counties, … a county that meets the requirements of Section 3(b) of this Act … may create a rural rail transportation district … .

Revisor's Note

Section 3(b), V.A.C.S. Article 6550c, refers to the "Interstate Commerce Commission." The ICC Termination Act of 1995 (Pub. L. No. 104-88) abolished the Interstate Commerce Commission and established the Surface Transportation Board. The revised law substitutes "Surface Transportation Board" for "Interstate Commerce Commission" because the Surface Transportation Board is now the federal oversight agency for rail transportation regulatory matters.

Revised Law

Sec. 172.052. CREATION OF DISTRICT BY MORE THAN ONE COUNTY. (a) The commissioners courts of two or more counties that are a contiguous area may by concurrent order:

(1) create a district; or

(2) provide for the re-creation of a district by the addition of one or more counties.

(b) The district consists of the territory of each county whose commissioners court adopts the concurrent order.

(1) contain identical provisions for creation or re-creation;

(2) be adopted at the time of the creation or re-creation;

(3) declare the boundaries of the district as the boundaries of the counties included;

(4) designate the district's name; and

(5) designate the number of directors, which may not be less than four, and the manner of the directors' appointment by a commissioners court.

(d) The commissioners court of each county included in a district by order may provide for the district's dissolution if each commissioners court determines that the dissolution will not impair an obligation of any contract of the district. The dissolution order is effective only on the creation or re-creation of another district in which each county included in the dissolving district is included. (V.A.C.S. Art. 6550c, Secs. 2(3), (6) (part), 3(a), (c), (d).)

Source Law

[Sec. 2]

(3) "Concurrent orders" means the orders adopted by eligible counties that contain identical provisions regarding the creation or re-creation of a district.

(6) ["Eligible counties" means] two or more counties that meet the requirements of Sections 3(a) and [(b)] of this Act.

Sec. 3. (a) The commissioners courts of two or more eligible counties that, taken together, constitute a contiguous geographic area may by order create or re-create a rural rail transportation district consisting of the territory of the counties whose commissioners courts adopt the order.

(c) The commissioners courts of two or more eligible counties that create a district or provide for the re-creation of a district by the addition of one or more counties shall by concurrent order at the time of creation or re-creation:

(1) declare the boundaries of the district as the boundaries of the counties included;

(2) designate the name of the district; and

(3) designate the number of board members, which may not be less than four, and the manner of their appointment by a commissioners court.

(d) The commissioners courts of all counties included within a district by order may provide for the dissolution of the district if:

(1) the commissioners courts determine that the dissolution will not impair an obligation of any contract of the district; and

(2) the dissolution order will become effective only on the creation or re-creation of another district in which each county included within the dissolving district is included.

Revised Law

Sec. 172.053. CREATION OF DISTRICT BY ONE COUNTY. (a) The commissioners court of a county may by order create a district in that county to develop, finance, maintain, and operate a new rail system under this chapter and for other purposes of this chapter.

(b) The boundaries of a district created under this section are the boundaries of the county in which the district is created.

(1) designate the district's name; and

(2) appoint at least four residents of the county to serve as directors.

(d) The commissioners court of the county by order may provide for the district's dissolution if the commissioners court determines that the dissolution will not impair an obligation of any contract of the district. The dissolution order is effective only on the creation of another district in which the county is included. (V.A.C.S. Art. 6550c, Secs. 3A(a) (part), (b), (c), (f).)

Source Law

(a) … the commissioners court of a county … by order may create a rural rail transportation district for purposes of developing, financing, maintaining, and operating a new rail system under this Act and for other purposes of this Act.

(b) The boundaries of a district created under this section are the boundaries of the county in which the district is created.

(1) designate the name of the district; and

(2) appoint at least four residents of the county to serve as directors of the district.

(f) The commissioners court of the county by order may provide for the dissolution of the district if:

(1) the commissioners court determines that the dissolution will not impair an obligation of any contract of the district; and

(2) the dissolution order will become effective only on the creation of another district under this Act that includes the county and meets the requirements of Sections 3(a) and (b) of this Act.

Revised Law

Sec. 172.054. NOTICE OF CREATION. (a) The board of each newly created district shall provide notice to the Texas Transportation Institute of the district's creation.

(b) On being notified by the board, the Texas Transportation Institute shall make available to the board a guide to the services and information that the institute provides. (V.A.C.S. Art. 6550c, Sec. 3(f).)

Source Law

(f) The board of directors of each newly created district shall provide notice to the Texas Transportation Institute of the creation of the district. On being notified by the board, the Texas Transportation Institute shall make available to the board a guide to the services and information that the institute provides.

Revised Law

Sec. 172.055. AUTOMATIC ASSUMPTION OF CONTRACTUAL OBLIGATIONS AFTER CREATION BY CERTAIN DISTRICTS. A district created or re-created under Section 172.052 automatically assumes any obligation of a contract executed by the district or a predecessor district that is in force on the date of the creation or re-creation unless the contract expressly expires on the date of dissolution or re-creation of the district that executed the contract. (V.A.C.S. Art. 6550c, Sec. 3(e).)

Source Law

(e) A district created or re-created under this section automatically assumes any obligation of a contract executed by the district or a predecessor district and in force on the date of the creation or re-creation unless the contract expressly expires on the date of dissolution or re-creation of the district that executed the contract.

[Sections 172.056-172.100 reserved for expansion]

SUBCHAPTER C. BOARD OF DIRECTORS AND EMPLOYEES

Revised Law

Sec. 172.101. CONTROL OF DISTRICT. (a) The board is responsible for the management, operation, and control of the district.

(b) The right to control and regulate district affairs is vested exclusively in the board except as specifically otherwise provided by this chapter. (V.A.C.S. Art. 6550c, Secs. 4(a), (d) (part).)

Source Law

Sec. 4. (a) The board of directors is responsible for the management, operation, and control of the district.

(d) … The right to control and regulate the affairs of the district is vested exclusively in the board except as specifically otherwise provided by this Act.

Revised Law

Sec. 172.102. TERMS. (a) A director serves a two-year term.

(b) An initial director serves a term ending on the second anniversary of the date:

(1) the latest concurrent order creating or re-creating the district under Section 172.052 was adopted; or

(2) an order creating the district under Section 172.053 was adopted. (V.A.C.S. Art. 6550c, Secs. 3A(d), 4(b) (part).)

Source Law

[Sec. 3A]

(d) A member of the board of directors serves for a two-year term. An initial director serves for a term ending on the second anniversary of the date on which the order creating the district was adopted.

[Sec. 4]

(b) … A board member serves for a term of two years ending on the second anniversary of the latest date a concurrent order was adopted creating or re-creating the district. …

Revised Law

Sec. 172.103. QUALIFICATIONS FOR OFFICE. (a) To be eligible for appointment as a director, a person must be a resident of the county governed by the commissioners court that appoints the person.

(b) An elected officer of this state or a political subdivision of this state who is not prohibited by the Texas Constitution from serving on the board is eligible to serve on the board. (V.A.C.S. Art. 6550c, Secs. 3A(c) (part), (e), 4(b) (part), (g).)

Source Law

[Sec. 3A]

…

(2) [appoint at least four] residents of the county to serve as directors of the district.

(e) Section 4 of this Act applies to a board member appointed under this section.

[Sec. 4]

(b) To be eligible for appointment to the board, a person must be a resident of the county governed by the commissioners court that appoints the person. …

(g) An elected officer of the state or a political subdivision of the state who is not prohibited by the Texas Constitution from serving on the board is eligible to serve on the board.

Revised Law

Sec. 172.104. VACANCY. The commissioners court that appointed a director who vacates the position shall appoint a director for the unexpired term. (V.A.C.S. Art. 6550c, Secs. 3A(e), 4(b) (part).)

Source Law

[Sec. 3A]

(e) Section 4 of this Act applies to a board member appointed under this section.

[Sec. 4]

(b) … A vacancy on the board shall be filled for the remainder of the term by the commissioners court that appointed the member who vacated the position. …

Revised Law

Sec. 172.105. REMOVAL. (a) The commissioners court that appointed a director may remove the director from office for neglect of duty or malfeasance in office after:

(1) at least 10 days' written notice to the director; and

(2) a hearing before the commissioners court.

(b) At the hearing on the question of removal of a director, the director is entitled to be heard in person or through counsel. (V.A.C.S. Art. 6550c, Secs. 3A(e), 4(b) (part).)

Source Law

[Sec. 3A]

(e) Section 4 of this Act applies to a board member appointed under this section.

[Sec. 4]

(b) … A board member may be removed from office for neglect of duty or malfeasance in office by the commissioners court that appointed the member, after at least 10 days' written notice to the member and a hearing before the commissioners court. At a hearing on the question of removal of a board member, the board member is entitled to be heard in person or through counsel.

Revised Law

Sec. 172.106. OFFICERS. The board shall select a president, vice president, treasurer, and secretary. The secretary is not required to be a director. (V.A.C.S. Art. 6550c, Secs. 3A(e), 4(c) (part).)

Source Law

[Sec. 3A]

(e) Section 4 of this Act applies to a board member appointed under this section.

[Sec. 4]

(c) Members of the board shall select a president, vice-president, treasurer, and secretary. The secretary is not required to be a board member. …

Revised Law

Sec. 172.107. MEETINGS; NOTICE. (a) The board shall hold at least one regular meeting each month to conduct district business.

(b) The president may call a special board meeting.

(c) Chapter 551, Government Code, applies to board meetings, except that notice of a board meeting shall be posted at the administrative office of the district and at the courthouse in the county in which that office is located. (V.A.C.S. Art. 6550c, Secs. 3A(e), 4(c) (part), (f).)

Source Law

[Sec. 3A]

(e) Section 4 of this Act applies to a board member appointed under this section.

[Sec. 4]

(c) … The board shall hold at least one regular meeting each month for the purpose of transacting business of the district. The president may call special meetings of the board. …

(f) Notice of a meeting of the board shall be posted at the administrative office of the district and at the courthouse in the county in which that office is located. In all other respects Chapter 271, Acts of the 60th Legislature, Regular Session, 1967 (Article 6252-17, Vernon's Texas Civil Statutes), applies to meetings of the board.

Revisor's Note

(1) Section 4(c), V.A.C.S. Article 6550c, states that "[a] majority of the members [of the board] is a quorum." The revised law omits that provision because it duplicates Section 311.013, Government Code (Code Construction Act), which provides that a quorum of a public body is a majority of the number of members fixed by statute. The omitted law reads:

(2) Section 4(f), V.A.C.S. Article 6550c, refers to Chapter 271, Acts of the 60th Legislature, Regular Session, 1967 (Article 6252-17, Vernon's Texas Civil Statutes). That statute was codified in 1993 as Chapter 551, Government Code. The revised law is drafted accordingly.

Revised Law

Sec. 172.108. RULES FOR PROCEEDINGS. The board shall adopt rules for its proceedings. (V.A.C.S. Art. 6550c, Sec. 4(d) (part).)

Source Law

(d) The board shall adopt rules for its proceedings and … .

Revised Law

Sec. 172.109. EMPLOYEES. The board may employ and compensate persons to carry out the powers and duties of the district. (V.A.C.S. Art. 6550c, Sec. 4(d) (part).)

Source Law

(d) [The board] … may employ and compensate persons to carry out the powers and duties of the district. …

Revised Law

Sec. 172.110. PECUNIARY INTEREST IN CERTAIN CONTRACTS PROHIBITED. A district employee may not have a direct or indirect pecuniary interest in any contract or agreement to which the district is a party. (V.A.C.S. Art. 6550c, Sec. 4(e).)

Source Law

(e) A board member or employee of a district may not be pecuniarily interested, directly or indirectly, in any contract or agreement to which the district is a party.

Revisor's Note

Section 4(e), V.A.C.S. Article 6550c, states that a "board member or employee of a district may not be pecuniarily interested" in a contract or agreement to which the district is a party. The revised law omits the reference to a "board member" because the language in Section 4(e) regarding a board member was superseded by Chapter 640, Acts of the 68th Legislature, Regular Session, 1983 (Article 988b, Vernon's Texas Civil Statutes), codified in 1987 as Chapter 171, Local Government Code. Chapter 171, Local Government Code, regulates conflicts of interest for members of the governing body of certain local governments, including a district.

[Sections 172.111-172.150 reserved for expansion]

SUBCHAPTER D. GENERAL POWERS AND DUTIES

Revised Law

Sec. 172.151. GENERAL POWERS OF DISTRICT; GOVERNMENTAL FUNCTIONS. (a) A district has all powers necessary or convenient to carry out the purposes of this chapter.

(b) A district may generally perform all acts necessary for the full exercise of the district's powers. (V.A.C.S. Art. 6550c, Secs. 5(a) (part), (k) (part).)

Source Law

Sec. 5. (a) A rural rail transportation district is [a public body and a political subdivision of the state] … having all the powers necessary or convenient to carry out the purposes of this Act, including the powers granted in this section… .

(k) A district … may generally perform all acts necessary for the full exercise of the powers vested in it… .

Revisor's Note

Section 5(a), V.A.C.S. Article 6550c, states that a district has all powers necessary or convenient to carry out the purposes of Article 6550c, "including the powers granted in this section." The revised law omits the quoted language because the powers granted by Section 5 (revised in several places in this chapter) are included in the powers necessary or convenient to carry out the purposes of the article.

Revised Law

Sec. 172.152. RULES. To protect the state's health, safety, and general welfare, a district may adopt rules to govern the operation of the district, its employees, the rail facilities, service provided by the district, and any other necessary matter concerning its purposes, including rules regarding health, safety, alcohol or beverage service, food service, or telephone or utility service. (V.A.C.S. Art. 6550c, Sec. 5(h).)

Source Law

(h) A district may adopt rules to govern the operation of the district, its employees, the rail facilities, service provided by the district, and any other necessary matter concerning its purposes, including rules regarding health, safety, alcohol or beverage service, food service, and telephone and utility services, to protect the health, safety, and general welfare of the state.

Revised Law

Sec. 172.153. AGREEMENTS GENERALLY. A district may make contracts, leases, and agreements with the United States, this state and its agencies and political subdivisions, public or private corporations, and any other person. (V.A.C.S. Art. 6550c, Sec. 5(k) (part).)

Source Law

(k) A district may make contracts, leases, and agreements with, and … the United States of America, its departments and agencies, the state, its agencies, and political subdivisions, and public or private corporations and persons, and … .

Revisor's Note

Section 5(k), V.A.C.S. Article 6550c, refers to the United States of America, and "its departments and agencies." The revised law omits the quoted language because under Section 311.005, Government Code (Code Construction Act), "United States" includes a department, bureau, or other agency of the United States of America.

Revised Law

Sec. 172.154. AGREEMENTS WITH OTHER ENTITIES FOR JOINT USE. A district may:

(1) enter into agreements with a public utility, private utility, communication system, common carrier, or transportation system for the joint use of its facilities, installations, or property inside or outside the district; and

(2) establish:

(A) through routes;

(B) joint fares; and

(C) divisions of tariffs, subject to approval of a tariff-regulating body that has jurisdiction. (V.A.C.S. Art. 6550c, Sec. 5(g).)

Source Law

(g) A district may enter into agreements with any other public utility, private utility, communication system, common carrier, or transportation system for the joint use of its facilities, installations, or properties within or outside the district and establish through routes, joint fares, and, subject to approval of any tariff-regulating body having jurisdiction, divisions of tariffs.

Revised Law

Sec. 172.155. JOINT OWNERSHIP AGREEMENTS. A district may enter into a joint ownership agreement with any person. (V.A.C.S. Art. 6550c, Sec. 5(i).)

Source Law

(i) A district may enter into joint ownership agreements with any person.

Revised Law

Sec. 172.156. 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 except real property may be awarded only through competitive bidding after notice is published in a newspaper of general circulation in the district at least 15 days before the date set for receiving bids.

(b) A board may adopt rules governing the taking of bids and the awarding of contracts.

(1) personal or professional services; or

(2) the acquisition of an existing rail transportation system. (V.A.C.S. Art. 6550c, Sec. 7.)

Source Law

Sec. 7. 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 except real property may only be let on competitive bids after notice published, at least 15 days before the date set for receiving bids, in a newspaper of general circulation in the district. A board may adopt rules governing the taking of bids and the awarding of contracts. This section does not apply to personal or professional services or the acquisition of existing rail transportation systems.

Revisor's Note

Section 7, V.A.C.S. Article 6550c, refers to a contract "let on competitive bids." The revised law substitutes "awarded" for "let" because the terms are synonymous and "awarded" conforms to the modern usage found in competitive bidding statutes in the Local Government Code.

Revised Law

Sec. 172.157. EMINENT DOMAIN. (a) A district may exercise the power of eminent domain to acquire:

(1) land in fee simple; or

(2) any interest 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) A district may not exercise the power of eminent domain in a manner that would unduly interfere with interstate commerce.

(c) An eminent domain proceeding brought by a district is governed by Chapter 21, Property Code, except to the extent inconsistent with this chapter.

(d) An eminent domain proceeding is begun by the board's adoption of a resolution declaring that the district'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 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. (V.A.C.S. Art. 6550c, Sec. 5(f).)

Source Law

(f) A district has the right of eminent domain to acquire lands in fee simple and any interest less than fee simple in, on, under, or above lands, including, without limitation, easements, rights-of-way, rights of use of airspace or subsurface space. The right may not be exercised in a manner that would unduly interfere with interstate commerce. Eminent domain proceedings brought by a district are governed by Title 52, Revised Statutes, except as it is inconsistent with this Act. Proceedings for the exercise of the power of eminent domain are commenced by the adoption by the board of a resolution declaring the public necessity for the acquisition by the district of the property or interest described in the resolution, and that the acquisition is necessary and proper for the construction, extension, improvement, or development of rail facilities and is in the public interest. The resolution of the district is conclusive evidence of the public necessity of the proposed acquisition and that the real or personal property or interest in property is necessary for public use.

Revisor's Note

(1) Section 5(f), V.A.C.S. Article 6550c, provides that the district has the "right of eminent domain" to acquire property. The revised law substitutes for the quoted language "[a] district may exercise the power of eminent domain" because the phrases have the same meaning and the latter phrase is consistent with modern usage in laws relating to eminent domain, including Chapter 21, Property Code.

(2) Section 5(f), V.A.C.S. Article 6550c, refers to the acquisition of land, "including, without limitation" certain specific interests in land. The revised law omits "without limitation" because Section 311.005(13), Government Code (Code Construction Act), provides that "including" is a term of enlargement and not of limitation and does not create a presumption that components not expressed are excluded.

(3) Section 5(f), V.A.C.S. Article 6550c, states that eminent domain proceedings are governed by Title 52, Revised Statutes. Title 52 was repealed in 1983 and its provisions codified as Chapter 21, Property Code. The revised law is drafted accordingly.

(4) Section 5(f), V.A.C.S. Article 6550c, states that the resolution initiating an eminent domain proceeding is conclusive evidence that the "real or personal property or interest in property" is necessary for public use. The revised law omits the reference to personal property because Section 5(f) does not authorize a district to acquire personal property by eminent domain.

Revised Law

Sec. 172.158. DISPOSITION OF SURPLUS PROPERTY. (a) A district may sell, lease, convey, or otherwise dispose of any right, interest, or property not needed for or, in the case of a lease, not inconsistent with the efficient operation and maintenance of the system.

(b) A district may, on adoption of an order by the board, sell, lease, or otherwise dispose of surplus property not needed for district requirements or to carry out district powers under this chapter. (V.A.C.S. Art. 6550c, Sec. 5(l).)

Source Law

(l) A district may sell, lease, convey, or otherwise dispose of any of its rights, interests, or properties not needed for or, in the case of leases, not inconsistent with the efficient operation and maintenance of the system. It may, on adoption of an order by the board, sell, lease, or otherwise dispose of, at any time, any surplus materials or personal or real property not needed for its requirements or for the purpose of carrying out its power under this Act.

Revisor's Note

(1) Section 5(l), V.A.C.S. Article 6550c, refers to "personal or real" property. The revised law omits the reference to "personal or real" property because under Section 311.005, Government Code (Code Construction Act), "property" means "real and personal property."

(2) Section 5(l), V.A.C.S. Article 6550c, refers to "surplus materials or … property." The revised law omits "materials" because the term is included in the meaning of "property."

(3) Section 5(l), V.A.C.S. Article 6550c, states that the board may dispose of materials or property "at any time." The revised law omits the quoted language because the authority to dispose of materials or property implies the authority to do so at any time.

Revised Law

Sec. 172.159. SUITS. (a) A district 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 the district must be brought in the county in which the principal office of the district is located, except that a suit in eminent domain must be brought in the county in which the land is located. (V.A.C.S. Art. 6550c, Sec. 5(c).)

Source Law

(c) A district may sue and be sued in all courts of competent jurisdiction, may institute and prosecute suits without giving security for costs, and may appeal from a judgment without giving supersedeas or cost bond. An action at law or in equity against the district shall be brought in the county in which the principal office of the district is located, except that in eminent domain proceedings suit shall be brought in the county in which the land is located.

Revisor's Note

Section 5(c), V.A.C.S. Article 6550c, provides that a district may sue and be sued "in all courts of competent jurisdiction." The revised law omits the quoted language as unnecessary because a suit may be brought only in a court, and the general laws of civil jurisdiction determine which courts have jurisdiction over the matter. For example, see Sections 24.007-24.011, Government Code, for the general jurisdiction of district courts.

Revised Law

Sec. 172.160. PERPETUAL SUCCESSION. A district has perpetual succession. (V.A.C.S. Art. 6550c, Sec. 5(b).)

Source Law

(b) A district has perpetual succession.

[Sections 172.161-172.200 reserved for expansion]

SUBCHAPTER E. POWERS AND DUTIES RELATING TO ACQUISITION, CONSTRUCTION, AND OPERATION OF RAIL FACILITIES

Revised Law

Sec. 172.201. GENERAL AUTHORITY OVER RAIL FACILITIES. A district may plan, acquire, construct, complete, develop, own, operate, and maintain rail facilities inside or outside the district. (V.A.C.S. Art. 6550c, Sec. 5(e) (part).)

Source Law

(e) A district may plan, acquire, construct, complete, develop, own, operate, and maintain rail facilities inside or outside the district, and … .

Revised Law

Sec. 172.202. USE AND ALTERATION OF PROPERTY OF ANOTHER POLITICAL SUBDIVISION. For a purpose described by Section 172.201, as necessary or useful in the construction, reconstruction, repair, maintenance, and operation of rail facilities, and subject to a grant previously secured or with the consent of a municipality, county, or other political subdivision, a district may:

(1) use streets, alleys, roads, highways, and other public ways of the political subdivision; and

(2) relocate, raise, reroute, change the grade of, or alter, at the district's expense, the construction of a publicly owned or privately owned street, alley, highway, road, railroad, electric line or facility, telegraph or telephone property or facility, pipeline or facility, conduit or facility, and other property. (V.A.C.S. Art. 6550c, Sec. 5(e) (part).)

Source Law

(e) [A district may plan, acquire, construct, complete, develop, own, operate, and maintain rail facilities inside or outside the district, and] for those purposes subject to a grant previously secured or with the consent of any municipality, county, or other political subdivision may use streets, alleys, roads, highways, and other public ways of any municipality, county, or other political subdivision and may relocate, raise, reroute, change the grade of, or alter, at the expense of the district, the construction of any street, alley, highway, road, railroad, electric lines and facilities, telegraph and telephone properties and facilities, pipelines and facilities, conduits and facilities, and other properties, whether publicly or privately owned, as necessary or useful in the construction, reconstruction, repair, maintenance, and operation of rail facilities… .

Revised Law

Sec. 172.203. RULES GOVERNING SYSTEM; ROUTINGS. A district by resolution may adopt rules governing the use, operation, and maintenance of the system and shall determine all routings and change them when the board considers it advisable. (V.A.C.S. Art. 6550c, Sec. 5(m).)

Source Law

(m) A district by resolution may adopt rules and regulations governing the use, operation, and maintenance of the system and shall determine all routings and change them whenever the board considers it advisable.

Revisor's Note

Section 5(m), V.A.C.S. Article 6550c, refers to "rules and regulations." The revised law omits the reference to "regulations" because under Section 311.005(5), Government Code (Code Construction Act), a rule is defined to include a regulation.

Revised Law

Sec. 172.204. ACQUISITION OF PROPERTY. (a) A district may purchase, whenever the district considers the purchase expedient, land, property rights, right-of-way, franchises, easements, and other interests in land the district considers necessary to acquire, construct, or operate a rail facility on terms and at a price to which the district and the owner agree.

(b) The district may take title to the land or interest in the district's name.

(c) The governing body of a municipality, a county, any other political subdivision, or a public agency may convey without advertisement the title or the rights and easements to property needed by the district for its purposes in connection with the acquisition, construction, or operation of rail facilities. (V.A.C.S. Art. 6550c, Sec. 5(e) (part).)

Source Law

(e) … A district may acquire by purchase, whenever it considers the purchase expedient, any land, property rights, right-of-way, franchises, easements, and other interests in land as it considers necessary for the acquisition, construction, or operation of any rail facility on such terms and at such price as agreed to between the district and the owner and may take title in the name of the district. The governing body of every municipality, county, other political subdivision, or public agency is authorized without any form of advertisement to make conveyance of title or rights and easements to any property needed by the district to effect its purposes in connection with the acquisition, construction, or operation of rail facilities.

Revised Law

Sec. 172.205. POWERS RELATING TO DISTRICT PROPERTY. A district may acquire by grant, purchase, gift, devise, lease, or otherwise and may hold, use, sell, lease, or dispose of property, including a license, a patent, a right, or an interest, necessary, convenient, or useful for the full exercise of its powers under this chapter. (V.A.C.S. Art. 6550c, Sec. 5(d).)

Source Law

(d) A district 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 any of its powers under this Act.

Revisor's Note

Section 5(d), V.A.C.S. Article 6550c, refers to "real and personal" property. The revised law omits the quoted language because under Section 311.005, Government Code (Code Construction Act), "property" means "real and personal property."

Revised Law

Sec. 172.206. ACQUISITION OF ROLLING STOCK AND OTHER PROPERTY. A district may acquire rolling stock or other property, under a conditional sales contract, lease, equipment trust certificate, or other form of contract or trust agreement. (V.A.C.S. Art. 6550c, Sec. 5(k) (part).)

Source Law

(k) … A district may acquire rolling stock or other property under conditional sales contracts, leases, equipment trust certificates, or any other form of contract or trust agreement… .

Revised Law

Sec. 172.207. COMPENSATION FOR USE OF SYSTEM FACILITIES. (a) A district shall establish and maintain reasonable and nondiscriminatory rents or other compensation for the use of the facilities of the system acquired, constructed, operated, regulated, or maintained by the district.

(b) Together with grants received by the district, the rents or other compensation must be sufficient to produce revenue adequate to:

(1) pay all expenses necessary for the operation and maintenance of the district's property and facilities;

(2) pay the principal of and interest on all bonds issued by the district payable wholly or partly from the revenue, as they become due and payable; and

(3) fulfill the terms of agreements made with the holders of bonds or with any person on their behalf. (V.A.C.S. Art. 6550c, Sec. 5(j).)

Source Law

(j) A district shall establish and maintain rents or other compensation for the use of the facilities of the system acquired, constructed, operated, regulated, or maintained by the district that are reasonable and nondiscriminatory and, together with grants received by the district, are sufficient to produce revenues adequate:

(1) to pay all expenses necessary to the operation and maintenance of the properties and facilities of the district;

(2) to pay the interest on and principal of all bonds issued by the district under this Act payable in whole or in part from the revenues, as they become due and payable; and

(3) to fulfill the terms of any agreements made with the holders of bonds or with any person in their behalf.

Revised Law

Sec. 172.208. OPERATION OR USE CONTRACTS. (a) A district may:

(1) lease all or part of the rail facilities to any operator; or

(2) contract for the use or operation of all or part of the rail facilities by any operator.

(b) To the maximum extent practicable, the district shall encourage the participation of private enterprise in the operation of rail facilities.

(c) The term of an operating contract under this section may not exceed 20 years. In this subsection, "operating contract" means a professional services contract executed by a district and another person under which the person agrees to provide all or part of the:

(1) rolling stock required for operation as a common carrier over all or a part of the rail facilities of the district; and

(2) personnel required for the operation of the rolling stock owned or leased by the district or for the operation of the rail facilities of the district. (V.A.C.S. Art. 6550c, Secs. 2(7), 5(n).)

Source Law

[Sec. 2]

(7) "Operating contract" means a professional services contract executed by a district and another person under which the person agrees to provide:

(A) all or part of the rolling stock required for operation as a common carrier over all or a part of the rail facilities of the district; and

(B) all or part of the personnel required for the operation of the rolling stock owned or leased by the district or for the operation of the rail facilities of the district.

[Sec. 5]

(n) A district may lease the rail facilities or any part to, or contract for the use or operation of the rail facilities or any part by, any operator. A district shall encourage to the maximum extent practicable the participation of private enterprise in the operation of rail facilities. The term of an operating contract under this subsection may not exceed 20 years.

Revised Law

Sec. 172.209. RAIL TRANSPORTATION SERVICES AGREEMENTS WITH OTHER POLITICAL SUBDIVISIONS. A district may contract with a county or other political subdivision of this state for the district to provide rail transportation services to an area outside the district on terms to which the parties agree. (V.A.C.S. Art. 6550c, Sec. 5(o).)

Source Law

(o) A district may contract with any county or other political subdivision of the state for the district to provide rail transportation services to any area outside the boundaries of the district on such terms and conditions as may be agreed to by the parties.

Revisor's Note

Section 5(o), V.A.C.S. Article 6550c, refers to "terms and conditions" of a contract. The revised law omits the reference to "conditions" because "conditions" is included in the meaning of "terms."

Revised Law

Sec. 172.210. ABANDONMENT OF RAIL LINE. (a) A district may not abandon a district rail line for which state money has been loaned or granted unless the abandonment is approved by the commission as being consistent with the policies of this chapter.

(b) The commission by rule shall adopt procedures for applying for and obtaining approval for abandonment under this section. (V.A.C.S. Art. 6550c, Sec. 5(r).)

Source Law

(r) A district may not abandon a rail line of the district with respect to which state funds have been loaned or granted unless the abandonment is approved by the Texas Transportation Commission as being consistent with the policies of this Act. The commission by rule shall adopt procedures for applying for and obtaining approval under this subsection.

[Sections 172.211-172.250 reserved for expansion]

SUBCHAPTER F. FINANCIAL PROVISIONS

Revised Law

Sec. 172.251. FISCAL YEAR. (a) Unless the board changes the fiscal year, the district's fiscal year ends on September 30.

(b) The board may not change the fiscal year more than once in a three-year period. (V.A.C.S. Art. 6550c, Sec. 5(p) (part).)

Source Law

(p) … The fiscal year of the district ends September 30 unless changed by the board not more than once in any three-year period… .

Revised Law

Sec. 172.252. ANNUAL BUDGET. (a) Before beginning the operation of rail facilities, the board shall adopt an annual operating budget specifying the district's anticipated revenue and expenses for the remainder of the fiscal year. The district shall adopt an operating budget for each succeeding fiscal year.

(b) The board must hold a public hearing before adopting each budget except the initial budget. Notice of the hearing must be published at least seven days before the date of the hearing in a newspaper of general circulation in the district.

(d) An expenditure that is not budgeted may not be made. (V.A.C.S. Art. 6550c, Sec. 5(p) (part).)

Source Law

(p) Before beginning the operation of rail facilities the board of a district shall adopt an annual operating budget specifying the anticipated revenues and expenses of the district for the remainder of the fiscal year, and the district shall adopt an operating budget for each succeeding fiscal year… . The board shall hold a public hearing before adopting each budget except 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 the district. A budget may be amended at any time if notice of the proposed amendment is given in the notice of meeting. An expenditure that is not budgeted may not be made.

Revisor's Note

Section 5(p), V.A.C.S. Article 6550c, states that a budget may be amended "at any time." The revised law omits the quoted language because the authority to amend the budget implies the authority to do so at any time.

Revised Law

Sec. 172.253. GRANTS AND LOANS. A district may accept a grant or loan from the United States, this state and its agencies and political subdivisions, public or private corporations, and any other person. (V.A.C.S. Art. 6550c, Sec. 5(k) (part).)

Source Law

(k) A district may … accept grants and loans from the United States of America, its departments and agencies, the state, its agencies, and political subdivisions, and public or private corporations and persons, and … .

Revisor's Note

Section 5(k), V.A.C.S. Article 6550c, refers to the United States of America and "its departments and agencies." The revised law omits the quoted language for the reason stated in the revisor's note to Section 172.153.

Revised Law

Sec. 172.254. DEPOSITORY. (a) The board by resolution shall name one or more banks for the deposit of district funds.

(b) District funds are public funds and may be invested in securities permitted by Chapter 2256, Government Code.

(c) To the extent district funds are not insured by the Federal Deposit Insurance Corporation or its successor, the funds shall be collateralized in the manner provided for county funds. (V.A.C.S. Art. 6550c, Sec. 5(q).)

Source Law

(q) The board of a district shall by resolution name one or more banks for the deposit of district funds. District funds are public funds and may be invested in securities permitted by the Public Funds Investment Act of 1987 (Article 842a-2, Vernon's Texas Civil Statutes). To the extent funds of the district are not insured by the Federal Deposit Insurance Corporation or its successor, they shall be collateralized in the manner provided for county funds.

Revisor's Note

Section 5(q), V.A.C.S. Article 6550c, refers to the Public Funds Investment Act of 1987 (Article 842a-2, Vernon's Texas Civil Statutes). That act was codified in 1993 as Chapter 2256, Government Code. The revised law is drafted accordingly.

Revised Law

Sec. 172.255. APPLICABILITY OF PUBLIC PROPERTY FINANCING LAW. A district may use the procedures provided by Chapter 271, Local Government Code, to finance the district's rail facilities, except to the extent of a conflict with this chapter, and except that the district may not impose an ad valorem tax. (V.A.C.S. Art. 6550c, Sec. 6A(a).)

Source Law

Sec. 6A. (a) A district may use the procedures provided by Chapter 271, Local Government Code, to finance rail facilities of the district, except to the extent of conflict with this Act and except that the district may not levy or collect ad valorem taxes.

Revisor's Note

Section 6A(a), V.A.C.S. Article 6550c, refers to the district's authority to "levy or collect" ad valorem taxes. The revised law substitutes "impose" for "levy or collect" because "impose" is the term generally used in Title 1, Tax Code, and includes the levy and collection of an ad valorem tax.

Revised Law

Sec. 172.256. NONNEGOTIABLE PURCHASE MONEY NOTES; BOND ANTICIPATION NOTES. (a) A district may:

(1) issue nonnegotiable purchase money notes, payable in installments and secured by the property being acquired or constructed, to acquire or construct rail facilities; or

(2) secure the obligation of the notes by a pledge or by issuing bonds, including bond anticipation notes.

(b) A district may covenant with the purchaser of bond anticipation notes that the proceeds of one or more particular series of bonds will be used for the ultimate payment of the purchase money notes or bond anticipation notes. (V.A.C.S. Art. 6550c, Sec. 6A(b).)

Source Law

(b) A district may issue nonnegotiable purchase money notes, payable in installments and secured by the property being acquired or constructed, to acquire or construct rail facilities. A district may also secure the obligation of the notes by a pledge or undertaking to issue bonds or bond anticipation notes. A district may covenant with the purchaser of bond anticipation notes that the proceeds of one or more particular series of bonds will be used for the ultimate payment of the purchase money notes or bond anticipation notes.

Revised Law

Sec. 172.257. TAX EXEMPTION. District property and revenue and the interest on bonds issued by the district are exempt from any tax imposed by this state or a political subdivision of this state. (V.A.C.S. Art. 6550c, Sec. 8.)

Source Law

Sec. 8. The property, revenues, and income of a district and the interest on bonds and notes issued by a district are exempt from all taxes levied by the state or a political subdivision of the state.

Revisor's Note

(1) Section 8, V.A.C.S. Article 6550c, refers to the "property, revenues, and income" of a district. The revised law omits the reference to "income" because Section 2(12), V.A.C.S. Article 6550c (revised in this chapter as Section 172.001(8)), defines "revenue" to include district income.

(2) Section 8, V.A.C.S. Article 6550c, refers to the interest on "bonds and notes" issued by a district. Throughout this chapter, the revised law omits the reference to "notes" when used with "bonds" because Section 2(2), V.A.C.S. Article 6550c (revised in this chapter as Section 172.001(2)), defines "bonds" to include notes.

[Sections 172.258-172.300 reserved for expansion]

SUBCHAPTER G. BONDS

Revised Law

Sec. 172.301. REVENUE BONDS. A district, by board resolution, may issue revenue bonds in amounts that the board considers necessary or appropriate for the acquisition, purchase, construction, reconstruction, repair, equipping, improvement, or extension of its rail facilities. (V.A.C.S. Art. 6550c, Secs. 6(a) (part), (e).)

Source Law

Sec. 6. (a) A district may issue revenue bonds and notes from time to time and in such amounts as its board considers necessary or appropriate for the acquisition, purchase, construction, reconstruction, repair, equipping, improvement, or extension of its rail facilities… .

(e) Bonds payable solely from revenues may be issued by resolution of the board.

Revisor's Note

(1) Section 6(a), V.A.C.S. Article 6550c, provides that a district may issue revenue bonds and notes "from time to time." The revised law omits the quoted language because the authority to issue revenue bonds implies the authority to do so at any time.

(2) Section 6(a), V.A.C.S. Article 6550c, provides that district bonds and notes are fully negotiable and may be redeemed before maturity under terms fixed by the district's board. The revised law omits that provision because it duplicates, in substance, parts of Sections 1201.021 and 1201.022, Government Code, which provide that public securities, including bonds and notes, may be redeemed before maturity and be payable in specified amounts and at specified times, and Section 1201.041, Government Code, which provides that public securities are negotiable. Chapter 1201, Government Code, applies to district bonds by application of Section 1201.002, Government Code. The omitted law reads:

(a) … All bonds and notes are fully negotiable and may be made redeemable before maturity, at the option of the issuing district, at such price or prices and under such terms and conditions as may be fixed by the issuing district in the resolution authorizing the bonds or notes, and … .

(3) Section 6(a), V.A.C.S. Article 6550c, provides that district bonds and notes may be sold at a public or private sale. The revised law omits the provision because it duplicates Section 1201.022(a)(3)(A), Government Code. Chapter 1201, Government Code, applies to district bonds and notes by application of Section 1201.002, Government Code. The omitted law reads:

(a) … [the bonds and notes] … may be sold at public or private sale, as determined by the board.

Revised Law

Sec. 172.302. SECURITY FOR PAYMENT OF BONDS. (a) To secure payment of district bonds, the district may:

(1) encumber and pledge all or part of the revenue of its rail facilities; and

(2) encumber all or part of the property of the rail facilities and everything pertaining to them acquired or to be acquired.

(b) Unless prohibited by the resolution or indenture relating to outstanding bonds, a district may encumber separately any item of property. (V.A.C.S. Art. 6550c, Sec. 6(c) (part).)

Source Law

(c) In order to secure the payment of the bonds or notes, the district may encumber and pledge all or any part of the revenues of its rail facilities, may mortgage and encumber all or any part of the properties of the rail facilities, and everything pertaining to them acquired or to be acquired, and … . If not prohibited by the resolution or indenture relating to outstanding bonds or notes, any district may encumber separately any item or items of real estate or personalty.

Revisor's Note

(1) Section 6(c), V.A.C.S. Article 6550c, refers to a district's power to "mortgage and encumber" its property. The revised law omits "mortgage" because "mortgage" is included within the meaning of "encumber."

(2) Section 6(c), V.A.C.S. Article 6550c, refers to "real estate or personalty." The revised law substitutes "property" for "real estate or personalty" because under Section 311.005, Government Code (Code Construction Act), "property" means "real and personal property."

Revised Law

Sec. 172.303. BONDS AS AUTHORIZED INVESTMENTS AND SECURITY FOR DEPOSITS OF PUBLIC FUNDS. (a) District bonds 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 are:

(1) eligible to secure the deposit of public funds of this state or a municipality, a county, a school district, or any other political corporation or subdivision of this state; and

(2) lawful and sufficient security for the deposit to the extent of the principal amount or market value of the bonds, whichever is less. (V.A.C.S. Art. 6550c, Sec. 6(d).)

Source Law

(d) All bonds and notes are legal and authorized investments for banks, trust companies, savings and loan associations, and insurance companies. The bonds and notes are eligible to secure the deposit of public funds of the state, cities, towns, villages, counties, school districts, or other political corporations or subdivisions of the state. The bonds and notes are lawful and sufficient security for the deposits to the extent of the bonds' principal amount or market value, whichever is less.

Revisor's Note

Section 6(d), V.A.C.S. Article 6550c, refers to "cities, towns, [and] villages." The revised law substitutes "a municipality" for "cities, towns, [and] villages" because "municipality" is the term used for those entities in the Local Government Code.

Revised Law

Sec. 172.304. APPLICABILITY OF PUBLIC IMPROVEMENT FINANCING LAW. For purposes of Chapter 1371, Government Code:

(1) a district is an issuer; and

(2) the acquisition, improvement, or repair of rail facilities by a district is an eligible project. (V.A.C.S. Art. 6550c, Sec. 5(a) (part).)

Source Law

(a) … A district is … an "issuer" under … Chapter 656, Acts of the 68th Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas Civil Statutes); and … . The acquisition, improvement, or repair of rail facilities by a district is an "eligible project" under Chapter 656, Acts of the 68th Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas Civil Statutes).

Revisor's Note

Section 5(a), V.A.C.S. Article 6550c, refers to Chapter 656, Acts of the 68th Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas Civil Statutes). That statute was codified in 1999 as Chapter 1371, Government Code. The revised law is drafted accordingly.

Revised Law

Sec. 172.305. LIMIT ON POWER. A revenue bond indenture may limit the exercise of the power granted by Section 172.002, 172.151, 172.152, 172.153, 172.154, 172.155, 172.157, 172.158, 172.159, 172.160, 172.201, 172.202, 172.203, 172.204, 172.205, 172.206, 172.207, 172.208, 172.209, 172.210, 172.251, 172.252, 172.253, 172.254, or 172.304. The limitation applies while any of the revenue bonds issued under the indenture are outstanding and unpaid. (V.A.C.S. Art. 6550c, Sec. 5(k) (part).)

Source Law

(k) … Any revenue bond indenture may provide limitations on the exercise of the powers granted by this section, and the limitations apply so long as any of the revenue bonds issued pursuant to the indenture are outstanding and unpaid.

Revisor's Note

Section 5(k), V.A.C.S. Article 6550c, provides that any revenue bond indenture may limit the exercise of powers granted by "this section." The powers in Section 5 are revised in certain sections of this chapter. The revised law is drafted accordingly.

Revised Law

Sec. 172.306. EXEMPTION FROM REVIEW OF NOTES BY ATTORNEY GENERAL. District notes authorized to be issued to an agency of the federal or state government, and related records, are not required to be submitted to the attorney general for examination under Chapter 1202, Government Code. (V.A.C.S. Art. 6550c, Sec. 6(b) (part).)

Source Law

(b) [Before delivery, all bonds and notes authorized to be issued,] except notes issued to an agency of the federal or state government, and the records relating to their issuance [shall be submitted to the attorney general for examination.] …

Revisor's Note

Section 6(b), V.A.C.S. Article 6550c, requires district bonds and notes to be approved by the attorney general and registered by the comptroller. Section 6(b) also provides that after approval, registration, and sale and delivery, the bonds and notes are incontestable. The revised law omits those provisions because they duplicate, in substance, parts of Chapter 1202, Government Code. Section 1202.003(a), Government Code, requires that public securities, including bonds and notes, be submitted to the attorney general. Section 1202.003(b), Government Code, provides for approval of the public securities by the attorney general and requires the attorney general to submit the approved public securities to the comptroller for registration. Section 1202.005, Government Code, requires registration of the public securities by the comptroller. Section 1202.006, Government Code, provides that after approval and registration the public securities are incontestable and binding obligations. In addition, for the convenience of the reader, the revised law adds a cross-reference to Chapter 1202. Chapter 1202, Government Code, applies to district bonds by application of Section 1202.001, Government Code. The omitted law reads:

(b) Before delivery, all bonds and notes authorized to be issued, … [and the records relating to their issuance] shall be submitted to the attorney general for examination. If the attorney general finds that they have been issued in accordance with the constitution and this Act, and that they will be binding obligations of the district issuing them, the attorney general shall approve them, and they shall be registered by the state comptroller of public accounts. After approval, registration, and sale and delivery of the bonds to the purchaser, they are incontestable.

Revisor's Note

(End of Subchapter)

Section 6(c), V.A.C.S. Article 6550c, provides that the district may prescribe the terms of district bonds and notes. The revised law omits that provision because it duplicates, in substance, provisions of general law. Sections 1201.005 and 1201.022, Government Code, provide that an issuer may specify the terms under which public securities, including bonds and notes, are issued. Chapter 1201, Government Code, applies to district bonds by application of Section 1201.002, Government Code. The omitted law reads:

(c) … [the district] … may prescribe the terms and provisions of the bonds and notes in any manner not inconsistent with this Act… .

Revisor's Note

(End of Chapter)

(1) Section 5(a), V.A.C.S. Article 6550c, refers to various laws that have been codified. Section 5(a) provides that a district is a "local government" under Chapter 1084, Acts of the 70th Legislature, Regular Session, 1987 (Article 715c, Vernon's Texas Civil Statutes), an "issuer" under Chapter 503, Acts of the 54th Legislature, 1955 (Article 717k, Vernon's Texas Civil Statues), Chapter 784, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-3, Vernon's Texas Civil Statutes), the Bond Procedures Act of 1981 (Article 717k-6, Vernon's Texas Civil Statutes), Chapter 53, Acts of the 70th Legislature, 2nd Called Session, 1987 (Article 717k-8, Vernon's Texas Civil Statutes), and a "public agency" under Chapter 3, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes), and Chapter 400, Acts of the 66th Legislature, 1979 (Article 717m-1, Vernon's Texas Civil Statutes).

Article 715c was codified in 1999 as Chapter 2259, Government Code. Articles 717k and 717k-3 were codified in 1999 as Chapter 1207, Government Code. Article 717k-6 was codified in 1999 as Chapters 1201, 1202, and 1206, Government Code. Article 717k-8 was codified in 1999 as Chapter 1202, Government Code. Article 717k-2 was codified in 1999 as Chapter 1204, Government Code. Article 717m-1 was codified in 1999 as Chapter 1205, Government Code. The revised law omits the references to the Government Code chapters because they apply to rural rail transportation districts by their own terms. The omitted law reads:

(a) … A district is a "local government" under Chapter 1084, Acts of the 70th Legislature, Regular Session, 1987 (Article 715c, Vernon's Texas Civil Statutes); [an "issuer"] under Chapter 503, Acts of the 54th Legislature, 1955 (Article 717k, Vernon's Texas Civil Statutes), Chapter 784, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-3, Vernon's Texas Civil Statutes), the Bond Procedures Act of 1981 (Article 717k-6, Vernon's Texas Civil Statutes), Chapter 53, Acts of the 70th Legislature, 2nd Called Session, 1987 (Article 717k-8, Vernon's Texas Civil Statutes), and … a "public agency" under Chapter 3, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes), and Chapter 400, Acts of the 66th Legislature, 1979 (Article 717m-1, Vernon's Texas Civil Statutes)… .

(2) Section 9, V.A.C.S. Article 6550c, provides that the powers and duties under that article are in addition to powers and duties provided by other law. The revised law omits the provision because an accepted general principle of statutory construction requires a statute to be given cumulative effect with other statutes unless it provides otherwise or unless the statutes are in conflict. The general principle applies to the revised law. The omitted law reads:

Sec. 9. The powers and duties provided by this Act are in addition to the powers and duties provided by other law for counties regarding rail transportation.

CHAPTER 173. INTERMUNICIPAL COMMUTER RAIL DISTRICTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 173.001. DEFINITION OF PERSON ...................... 46

Sec. 173.002. DEFINITIONS ............................... 47

Sec. 173.003. LOCATION OF MUNICIPALITY IN COUNTY ........ 48

Sec. 173.004. NATURE OF DISTRICT ........................ 49

Sec. 173.005. SUNSET PROVISION .......................... 49

[Sections 173.006-173.050 reserved for expansion]

SUBCHAPTER B. CREATION

Sec. 173.051. CREATION OF DISTRICT ...................... 49

Sec. 173.052. ADDITION OF POLITICAL SUBDIVISION TO

DISTRICT ................................ 50

[Sections 173.053-173.100 reserved for expansion]

SUBCHAPTER C. BOARD OF DIRECTORS AND EMPLOYEES

Sec. 173.101. CONTROL OF DISTRICT ....................... 50

Sec. 173.102. COMPOSITION OF BOARD; TERMS ............... 51

Sec. 173.103. VACANCY ................................... 52

Sec. 173.104. PRESIDING OFFICER ......................... 52

Sec. 173.105. MEETINGS .................................. 52

Sec. 173.106. BOARD MEETINGS BY TELEPHONE OR

VIDEOCONFERENCE ......................... 53

Sec. 173.107. RULES FOR PROCEEDINGS ...................... 54

Sec. 173.108. COMPENSATION; REIMBURSEMENT ................ 55

Sec. 173.109. EMPLOYEES .................................. 55

Sec. 173.110. EXECUTIVE COMMITTEE ........................ 55

Sec. 173.111. RETIREMENT BENEFITS ........................ 55

[Sections 173.112-173.150 reserved for expansion]

SUBCHAPTER D. GENERAL POWERS AND DUTIES

Sec. 173.151. GENERAL POWERS OF DISTRICT ................. 56

Sec. 173.152. RULES ...................................... 56

Sec. 173.153. AGREEMENTS GENERALLY ....................... 57

Sec. 173.154. AGREEMENTS WITH OTHER ENTITIES FOR JOINT

USE ...................................... 57

Sec. 173.155. JOINT OWNERSHIP AGREEMENTS ................. 58

Sec. 173.156. EXCLUSIVE DEVELOPMENT AGREEMENTS ........... 58

Sec. 173.157. INTERLOCAL AGREEMENTS WITH COMMISSION ...... 58

Sec. 173.158. AWARDING CONSTRUCTION OR PURCHASE

CONTRACTS ................................ 59

Sec. 173.159. EMINENT DOMAIN ............................. 60

Sec. 173.160. SUITS ...................................... 61

[Sections 173.161-173.200 reserved for expansion]

SUBCHAPTER E. POWERS AND DUTIES RELATING TO ACQUISITION, CONSTRUCTION, AND OPERATION OF COMMUTER RAIL FACILITIES

Sec. 173.201. GENERAL AUTHORITY OVER COMMUTER RAIL

FACILITIES ............................... 62

Sec. 173.202. POWERS RELATING TO DISTRICT PROPERTY ....... 63

Sec. 173.203. USE AND ALTERATION OF PROPERTY OF

ANOTHER POLITICAL SUBDIVISION ............ 63

Sec. 173.204. RULES GOVERNING SYSTEM AND ROUTINGS ........ 64

Sec. 173.205. ACQUISITION OF PROPERTY .................... 64

Sec. 173.206. ACQUISITION OF ROLLING STOCK AND OTHER

PROPERTY ................................. 65

Sec. 173.207. COMPENSATION FOR USE OF SYSTEM

FACILITIES ............................... 65

Sec. 173.208. OPERATION OR USE CONTRACTS ................. 66

Sec. 173.209. RAIL TRANSPORTATION SERVICES AGREEMENTS

WITH OTHER POLITICAL SUBDIVISIONS ........ 66

[Sections 173.210-173.250 reserved for expansion]

SUBCHAPTER F. FINANCIAL PROVISIONS

Sec. 173.251. FISCAL YEAR ................................ 67

Sec. 173.252. ANNUAL BUDGET .............................. 67

Sec. 173.253. GRANTS AND LOANS ........................... 68

Sec. 173.254. DEPOSITORY ................................. 69

Sec. 173.255. PURCHASE OF ADDITIONAL INSURED

PROVISIONS ............................... 69

Sec. 173.256. FINANCING OF CERTAIN TRANSPORTATION

INFRASTRUCTURE ........................... 69

Sec. 173.257. TAX EXEMPTION .............................. 71

[Sections 173.258-173.300 reserved for expansion]

SUBCHAPTER G. BONDS

Sec. 173.301. REVENUE BONDS .............................. 71

Sec. 173.302. SECURITY FOR PAYMENT OF BONDS .............. 72

Sec. 173.303. BONDS AS AUTHORIZED INVESTMENTS AND SECURITY FOR

DEPOSITS OF PUBLIC FUNDS ................. 73

Sec. 173.304. LIMIT ON POWER ............................. 74

[Sections 173.305-173.350 reserved for expansion]

SUBCHAPTER H. SALES AND USE TAXES

Sec. 173.351. TAX AUTHORIZED ............................. 76

Sec. 173.352. TAX RATE ................................... 76

Sec. 173.353. PREEMPTION OF OTHER SALES AND USE TAXES .... 77

Sec. 173.354. APPLICABILITY OF TAX CODE .................. 77

Sec. 173.355. NOTICE TO COMPTROLLER ...................... 77

Sec. 173.356. NOTICE TO LOCAL GOVERNMENTS ................ 78

Sec. 173.357. ACQUISITION OF ADDITIONAL TERRITORY

SUBJECT TO TAX ........................... 78

Sec. 173.358. DUTY OF COMPTROLLER ........................ 79

Sec. 173.359. EFFECTIVE DATE OF TAX ...................... 79

CHAPTER 173. INTERMUNICIPAL COMMUTER RAIL DISTRICTS

SUBCHAPTER A. GENERAL PROVISIONS

Revised Law

Sec. 173.001. DEFINITION OF PERSON. For each provision in this chapter added April 1, 2011, as part of the revision of former Title 112, Revised Statutes:

(1) "person" includes a corporation, as provided by Section 312.011, Government Code; and

(2) the definition of "person" assigned by Section 311.005, Government Code, does not apply. (New.)

Revisor's Note

To ensure that no substantive change is made by the revision of the term "person" as used in Title 112, Revised Statutes, the revised law adds a provision stating that, for the purposes of the provisions of Title 112, Revised Statutes, revised in this chapter, "person" includes a corporation, as provided by Section 312.011, Government Code, and the definition of "person" in Section 311.005, Government Code, does not apply. Section 312.011(10), Government Code, which applies to Title 112, provides that "person" includes a corporation. Section 311.005(2), Government Code (Code Construction Act), which applies to the Transportation Code, defines "person" to include a "corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity."

Revised Law

Sec. 173.002. DEFINITIONS. In this chapter:

(1) "Board" means a district's board of directors.

(2) "Commuter rail facility" means any property necessary for the transportation of passengers and baggage between locations in a district. The term includes rolling stock, locomotives, stations, parking areas, and rail lines.

(3) "Creating municipality" means a municipality described by Section 173.051(a).

(4) "Director" means a board member.

(5) "District" means an intermunicipal commuter rail district created under this chapter or under Article 6550c-1, Revised Statutes, as that article existed before April 1, 2011.

(6) "District property" means property the district owns or leases under a long-term lease.

(7) "System" means all of the commuter rail and intermodal facilities leased or owned by or operated on behalf of a district. (V.A.C.S. Art. 6550c-1, Secs. 1(2), (3), (5), (6), (7); New.)

Source Law

Sec. 1. In this article:

(2) "Commuter rail facility" means any property necessary for the transportation of passengers and baggage between points in a district. The term includes rolling stock, locomotives, stations, parking areas, and rail lines.

(3) "Creating municipality" means a municipality described by Section 2(a) of this article.

(5) "District" means an intermunicipal commuter rail district created under this article.

(6) "District property" means all property the district owns or leases under a long-term lease.

(7) "System" means all of the commuter rail and intermodal facilities leased or owned by or operated on behalf of a district created under this article.

Revisor's Note

(1) The definitions of "board" and "director" are added to the revised law for drafting convenience.

(2) Section 1(1), V.A.C.S. Article 6550c-1, defines "[c]ommission" as the Texas Transportation Commission and Section 1(4) of that article defines "[d]epartment" as the Texas Department of Transportation. The revised law omits the definitions because they duplicate the definitions of those terms in Section 81.001, which apply to Chapter 173. The omitted law reads:

(1) "Commission" means the Texas Transportation Commission.

(4) "Department" means the Texas Department of Transportation.

Revised Law

Sec. 173.003. LOCATION OF MUNICIPALITY IN COUNTY. For purposes of this chapter, a municipality is located in a county only if 90 percent or more of the population of the municipality resides in that county. (V.A.C.S. Art. 6550c-1, Sec. 2(d).)

Source Law

(d) For purposes of this article, a municipality is located in a county only if 90 percent or more of the population of the municipality resides in that county according to the most recent federal census.

Revisor's Note

Section 2(d), V.A.C.S. Article 6550c-1, describes a population number that is to be determined according to the most recent federal census. The revised law omits the reference to the federal census because Section 311.005(3), Government Code (Code Construction Act), defines "population" as population according to the most recent federal decennial census. That definition applies to the revised law.

Revised Law

Sec. 173.004. NATURE OF DISTRICT. (a) A district is a public body and a political subdivision of this state exercising public and essential governmental functions.

Source Law

Sec. 4. (a) A district created under this article is a public body and a political subdivision of the state exercising public and essential governmental functions and … . A district, in the exercise of powers under this article, is performing only governmental functions and is a governmental unit within the meaning of Chapter 101, Civil Practice and Remedies Code.

Revised Law

Sec. 173.005. SUNSET PROVISION. A district is subject every 12th year to review under Chapter 325, Government Code (Texas Sunset Act). (V.A.C.S. Art. 6550c-1, Sec. 4(b).)

Source Law

(b) A district is subject every 12th year to review under Chapter 325, Government Code (Texas Sunset Act).

[Sections 173.006-173.050 reserved for expansion]

SUBCHAPTER B. CREATION

Revised Law

Sec. 173.051. CREATION OF DISTRICT. (a) A district may be created to provide commuter rail service between two municipalities:

(1) each of which has a population of more than 450,000; and

(2) that are located not farther than 100 miles apart as determined by the department.

(b) The creating municipalities and the counties in which the creating municipalities are located may create a district on passage of a resolution favoring creation by the governing body of each municipality or county. (V.A.C.S. Art. 6550c-1, Secs. 2(a), (b).)

Source Law

Sec. 2. (a) A district may be created to provide commuter rail service between two municipalities:

(1) each of which has a population of more than 450,000; and

(2) that are located not farther than 100 miles apart as determined by the department.

(b) A district is created on passage of a resolution favoring the creation of the district by the governing body of each creating municipality and the governing body of each county in which a creating municipality is located.

Revised Law

Sec. 173.052. ADDITION OF POLITICAL SUBDIVISION TO DISTRICT. The following political subdivisions may become a part of a district with the approval of the governing body of the political subdivision:

(1) a county located adjacent to the county in which a creating municipality is located; and

(2) a municipality with a population of more than 18,000 located in a county described by Subdivision (1). (V.A.C.S. Art. 6550c-1, Sec. 2(c).)

Source Law

(c) The following political subdivisions may become a part of a district created under Subsection (b) of this section with the approval of the governing body of the political subdivision:

(1) a county located adjacent to a county in which a creating municipality is located; and

(2) a municipality with a population of more than 18,000 located in a county described by Subdivision (1) of this subsection.

[Sections 173.053-173.100 reserved for expansion]

SUBCHAPTER C. BOARD OF DIRECTORS AND EMPLOYEES

Revised Law

Sec. 173.101. CONTROL OF DISTRICT. A district is governed by a board of directors. The board is responsible for the management, operation, and control of the district. (V.A.C.S. Art. 6550c-1, Sec. 3(a).)

Source Law

Sec. 3. (a) A district is governed by a board of directors. The board is responsible for the management, operation, and control of the district.

Revised Law

Sec. 173.102. COMPOSITION OF BOARD; TERMS. (a) The board is composed of:

(1) two public directors appointed by the commission;

(2) one elected member of the governing body of each political subdivision that has become a part of the district under Subchapter B;

(3) one elected director appointed by the regional planning organization of which a creating municipality is a part;

(4) one director appointed by each creating municipality to represent the business community of the municipality;

(5) one director appointed by each authority created under Chapter 451 that serves a creating municipality;

(6) one director appointed by each county in which a creating municipality is located to represent transportation providers that provide service to rural areas in the county; and

(7) one director appointed by all other directors to represent all municipalities in the district that do not otherwise have representation on the board who is an elected official of one of those municipalities.

(b) Each director serves a staggered two-year term, with as near as possible to half of the directors' terms expiring February 1 of each year. If one or more directors are added to the board, the directors other than the new directors shall determine the lengths of the new directors' terms so that one-half, or as near one-half as possible, of the directors serve terms expiring each year. (V.A.C.S. Art. 6550c-1, Secs. 3(b), (c) (part).)

Source Law

(b) The board is composed of the following members:

(1) two public members appointed by the commission;

(2) one elected member of the governing body of each political subdivision that has become a part of the district under Section 2 of this article;

(3) one elected member appointed by the regional planning organization of which a creating municipality is a part;

(4) one member appointed by each creating municipality to represent the business community of the municipality;

(5) one member appointed by each authority created under Chapter 451, Transportation Code, that serves a creating municipality;

(6) one member appointed by each county in which a creating municipality is located to represent transportation providers that provide service to rural areas in the county; and

(7) one member appointed by all other board members to represent all municipalities in the district that do not otherwise have representation on the board and who shall be an elected official of one of those municipalities.

(c) … Each member serves a staggered two-year term with as near as possible to half of the members' terms expiring February 1 of each year. If one or more members are added to the board, the board members other than the new members shall determine the lengths of the new members' terms so that one-half, or as near one-half as possible of the members serve terms expiring each year.

Revised Law

Sec. 173.103. VACANCY. A vacancy on the board shall be filled in the same manner as the original appointment or election. (V.A.C.S. Art. 6550c-1, Sec. 3(c) (part).)

Source Law

(c) If a vacancy occurs on the board, a successor shall be appointed or elected in the same manner as the original appointment or election. …

Revised Law

Sec. 173.104. PRESIDING OFFICER. (a) The directors shall elect one member as presiding officer.

(b) The presiding officer may select another director to preside in the absence of the presiding officer. (V.A.C.S. Art. 6550c-1, Sec. 3(d).)

Source Law

(d) The members of the board shall elect one member as presiding officer. The presiding officer may select another member to preside in the absence of the presiding officer.

Revised Law

Sec. 173.105. MEETINGS. The presiding officer shall call at least one meeting of the board each year and may hold other meetings as the presiding officer determines are appropriate. (V.A.C.S. Art. 6550c-1, Sec. 3(e).)

Source Law

(e) The presiding officer shall call at least one meeting of the board a year and may hold other meetings as the presiding officer determines are appropriate.

Revised Law

Sec. 173.106. BOARD MEETINGS BY TELEPHONE OR VIDEOCONFERENCE. (a) Chapter 551, Government Code, does not prohibit the board from holding an open or closed meeting by telephone conference call or videoconference.

(b) A meeting held by telephone conference call or videoconference need not have a quorum present at any one location.

(c) A telephone conference call or videoconference meeting is subject to the notice requirements applicable to other meetings.

(d) The notice of a telephone conference call or videoconference meeting must specify each location of the meeting where a director will participate. The notice must also specify the physical location from which the presiding officer of the board will preside. All locations must be open to the public during the open portion of the meeting.

(e) Each part of a telephone conference call meeting that is required to be open to the public must be audible to the public at the location specified in the notice of the meeting as the location of the meeting and shall be tape recorded. The tape recording shall be made available to the public.

(f) Each part of a videoconference meeting that is required to be open to the public must:

(1) be visible and audible to the public at all locations specified in the notice of the meeting as the locations of the meeting; and

(2) have two-way audio and video communications with each participant in the meeting during the entire meeting.

(g) Without regard to whether a director is participating in a meeting from a remote location by videoconference call, the board may allow a member of the public to testify at a meeting from a remote location by videoconference call. The board shall designate the location for public participation in the notice of the meeting. (V.A.C.S. Art. 6550c-1, Sec. 3A.)

Source Law

Sec. 3A. (a) Chapter 551, Government Code, does not prohibit the board from holding an open or closed meeting by telephone conference call or videoconference.

(b) A meeting held by telephone conference call or videoconference need not have a quorum present at any one location.

(c) A telephone conference call or videoconference meeting is subject to the notice requirements applicable to other meetings.

(d) The notice of a telephone conference call or videoconference meeting must specify all locations of the meeting where a member of the board will participate. The notice must also specify the physical location from which the presiding officer of the board will preside. All locations must be open to the public during the open portion of the meeting.

(e) Each part of a telephone conference call meeting that is required to be open to the public shall be audible to the public at the location specified in the notice of the meeting as the location of the meeting and shall be tape recorded. The tape recording shall be made available to the public.

(f) Each part of a videoconference meeting that is required to be open to the public shall:

(1) be visible and audible to the public at all locations specified in the notice of the meeting as the locations of the meeting; and

(2) have two-way audio and video communications with each participant in the meeting during the entire meeting.

(g) Without regard to whether a member of the board is participating in a meeting from a remote location by videoconference call, the board may allow a member of the public to testify at a meeting from a remote location by videoconference call. The board shall designate the location for public participation in the notice of the meeting.

Revised Law

Sec. 173.107. RULES FOR PROCEEDINGS. The board shall adopt rules for its proceedings. (V.A.C.S. Art. 6550c-1, Sec. 3(g) (part).)

Source Law

(g) The board shall adopt rules for its proceedings and … .

Revised Law

Sec. 173.108. 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. (V.A.C.S. Art. 6550c-1, Sec. 3(f).)

Source Law

(f) A member of the board is not entitled to compensation for serving as a member but is entitled to reimbursement for reasonable expenses incurred while serving as a member.

Revised Law

Sec. 173.109. EMPLOYEES. The board may employ and compensate persons to carry out the powers and duties of the district. (V.A.C.S. Art. 6550c-1, Sec. 3(g) (part).)

Source Law

(g) The board … may employ and compensate persons to carry out the powers and duties of the district.

Revised Law

Sec. 173.110. EXECUTIVE COMMITTEE. The board shall appoint an executive committee. (V.A.C.S. Art. 6550c-1, Sec. 3(g) (part).)

Source Law

(g) The board shall … appoint an executive committee and … .

Revised Law

Sec. 173.111. RETIREMENT BENEFITS. A district is eligible to participate in the Texas County and District Retirement System. (V.A.C.S. Art. 6550c-1, Sec. 4(q).)

Source Law

(q) A district is eligible to participate in the Texas County and District Retirement System.

Revisor's Note

(End of Subchapter)

Section 3(h), V.A.C.S. Article 6550c-1, states that Chapter 171, Local Government Code, applies to the board members. The revised law omits the provision because Chapter 171, Local Government Code, applies to the board members by its own terms. Chapter 171 regulates conflicts of interest for members of the governing body of certain local governmental entities, including a district. The omitted law reads:

(h) Chapter 171, Local Government Code, applies to a board member of a district.

[Sections 173.112-173.150 reserved for expansion]

SUBCHAPTER D. GENERAL POWERS AND DUTIES

Revised Law

Sec. 173.151. GENERAL POWERS OF DISTRICT. (a) A district has all the powers necessary or convenient to carry out the purposes of this chapter.

(b) A district may generally perform all acts necessary for the full exercise of the district's powers. (V.A.C.S. Art. 6550c-1, Secs. 4(a) (part), (k) (part).)

Source Law

Sec. 4. (a) A district … has all the powers necessary or convenient to carry out the purposes of this article. …

(k) A district … may generally perform all acts necessary for the full exercise of the powers vested in it… .

Revised Law

Sec. 173.152. RULES. To protect district residents' health, safety, and general welfare, a district may adopt rules to govern the operation of the district, its employees, the system, service provided by the district, and any other necessary matter concerning its purposes, including rules regarding health, safety, alcohol or beverage service, food service, or telephone or utility service. (V.A.C.S. Art. 6550c-1, Sec. 4(h).)

Source Law

(h) A district may adopt rules to govern the operation of the district, its employees, the system, service provided by the district, and any other necessary matter concerning its purposes, including rules regarding health, safety, alcohol or beverage service, food service, and telephone and utility services, to protect the health, safety, and general welfare of residents of the district.

Revised Law

Sec. 173.153. AGREEMENTS GENERALLY. A district may make contracts, leases, and agreements with the United States, this state and its agencies and political subdivisions, public or private corporations, and any other person. (V.A.C.S. Art. 6550c-1, Sec. 4(k) (part).)

Source Law

(k) A district may make contracts, leases, and agreements with, and … the United States of America, its departments and agencies, the state, its agencies and political subdivisions, and public or private corporations and persons and … .

Revisor's Note

Section 4(k), V.A.C.S. Article 6550c-1, refers to the United States of America and "its departments and agencies." The revised law omits the quoted language because under Section 311.005, Government Code (Code Construction Act), "United States" includes a department, bureau, or other agency of the United States of America.

Revised Law

Sec. 173.154. AGREEMENTS WITH OTHER ENTITIES FOR JOINT USE. A district 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 property inside or outside the district; and

(2) establish:

(A) through routes;

(B) joint fares; and

(C) divisions of tariffs, subject to approval of a tariff-regulating body that has jurisdiction. (V.A.C.S. Art. 6550c-1, Sec. 4(g).)

Source Law

(g) A district may make agreements with any other public utility, private utility, communication system, common carrier, state agency, or transportation system for the joint use of facilities, installations, or properties within or outside the district and establish through routes, joint fares, and, subject to approval of any tariff-regulating body having jurisdiction, divisions of tariffs.

Revised Law

Sec. 173.155. JOINT OWNERSHIP AGREEMENTS. A district may make a joint ownership agreement with any person. (V.A.C.S. Art. 6550c-1, Sec. 4(i).)

Source Law

(i) A district may make joint ownership agreements with any person.

Revised Law

Sec. 173.156. EXCLUSIVE DEVELOPMENT AGREEMENTS. (a) A board may enter into an exclusive development agreement with a private entity.

(b) The exclusive development agreement:

(1) at a minimum must provide for the design and construction of a commuter rail facility or system; and

(2) may provide for the financing, acquisition, maintenance, or operation of a commuter rail facility or system.

Source Law

Sec. 6A. (a) In this section, "exclusive development agreement" means an agreement with a private entity that at a minimum provides for the design and construction of a commuter rail facility or system. The agreement may also provide for the financing, acquisition, maintenance, or operation of a commuter rail facility or system.

(b) A board may enter into an exclusive development agreement with a private entity.

Revised Law

Sec. 173.157. INTERLOCAL AGREEMENTS WITH COMMISSION. The commission may enter into an interlocal agreement with a district under which the district may exercise a power or duty of the commission for the development and efficient operation of intermodal corridors in the district. (V.A.C.S. Art. 6550c-1, Sec. 4(k) (part).)

Source Law

(k) … The commission may enter an interlocal agreement with a district under which a district may exercise a power or duty of the commission for the development and efficient operation of intermodal corridors in the district… .

Revised Law

Sec. 173.158. 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 except real property may be awarded only through competitive bidding after notice is published in a newspaper of general circulation in the district at least 15 days before the date set for receiving bids.

(b) A board may adopt rules governing the taking of bids and the awarding of contracts.

(1) personal or professional services;

(2) the acquisition of an existing rail transportation system;

(3) a contract with a common carrier to construct lines and to operate commuter rail service on lines wholly or partly owned by the carrier; or

(4) an agreement with a private entity under Section 173.156. (V.A.C.S. Art. 6550c-1, Sec. 6.)

Source Law

Sec. 6. 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 except real property may be let only on competitive bids after notice published, at least 15 days before the date set for receiving bids, in a newspaper of general circulation in the district. A board may adopt rules governing the taking of bids and the awarding of contracts. This section does not apply to:

(1) personal or professional services;

(2) the acquisition of existing rail transportation systems;

(3) a contract with a common carrier to construct lines and to operate commuter rail service on lines owned in whole or in part by the carrier; or

(4) an agreement with a private entity under Section 6A of this Article.

Revisor's Note

Section 6, V.A.C.S. Article 6550c-1, refers to a contract "let only on competitive bids." The revised law substitutes "awarded" for "let" because the terms are synonymous and "awarded" conforms to the modern usage found in competitive bidding statutes in the Local Government Code.

Revised Law

Sec. 173.159. EMINENT DOMAIN. (a) A district may exercise the power of eminent domain to acquire:

(1) land in fee simple; or

(2) any interest 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 a metropolitan transit authority; or

(2) a rail line owned by a common carrier or municipality.

(c) To the extent possible, the district 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 district'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 commuter rail facilities and is in the public interest.

Source Law

(f) A district has the right of eminent domain to acquire lands in fee simple and any interest less than fee simple in, on, under, or above lands, including easements, rights-of-way, and rights of use of airspace or subsurface space. The power of eminent domain under this section does not apply, however, to land under the jurisdiction of the department or a metropolitan transit authority or a rail line owned by a common carrier or municipality. The district shall, to the extent possible, use existing rail or intermodal transportation corridors for the alignment of its system. Proceedings for the exercise of the power of eminent domain are begun by the adoption by the board of a resolution declaring the public necessity for the acquisition by the district of the property or interest described in the resolution and that the acquisition is necessary and proper for the construction, extension, improvement, or development of commuter rail facilities and is in the public interest. The resolution of the district is conclusive evidence of the public necessity of the proposed acquisition and that the real or personal property or interest in property is necessary for public use.

Revisor's Note

(1) Section 4(f), V.A.C.S. Article 6550c-1, provides that the district has the "right of eminent domain" to acquire property. The revised law substitutes for the quoted language "[a] district may exercise the power of eminent domain" because the phrases have the same meaning and the latter phrase is consistent with modern usage in laws relating to eminent domain, including Chapter 21, Property Code.

(2) Section 4(f), V.A.C.S. Article 6550c-1, states that the resolution initiating an eminent domain proceeding is conclusive evidence that the "real or personal property or interest in property" is necessary for public use. The revised law omits the reference to personal property because Section 4(f) does not authorize a district to acquire personal property by eminent domain.

Revised Law

Sec. 173.160. SUITS. (a) A district 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 the district must be brought in the county in which a principal office of the district is located, except that a suit in eminent domain must be brought in the county in which the land is located. (V.A.C.S. Art. 6550c-1, Sec. 4(c).)

Source Law

(c) A district may sue and be sued in all courts of competent jurisdiction, may institute and prosecute suits without giving security for costs, and may appeal from a judgment without giving supersedeas or cost bond. An action at law or in equity against the district must be brought in the county in which a principal office of the district is located, except that in eminent domain proceedings, suit must be brought in the county in which the land is located.

Revisor's Note

Section 4(c), V.A.C.S. Article 6550c-1, provides that a district may sue and be sued "in all courts of competent jurisdiction." The revised law omits the quoted language as unnecessary because a suit may be brought only in a court, and the general laws of civil jurisdiction determine which courts have jurisdiction over the matter. For example, see Sections 24.007-24.011, Government Code, for the general jurisdiction of district courts.

[Sections 173.161-173.200 reserved for expansion]

SUBCHAPTER E. POWERS AND DUTIES RELATING TO ACQUISITION, CONSTRUCTION, AND OPERATION OF COMMUTER RAIL FACILITIES

Revised Law

Sec. 173.201. GENERAL AUTHORITY OVER COMMUTER RAIL FACILITIES. A district may acquire, construct, develop, own, operate, and maintain intermodal and commuter rail facilities inside, or connect political subdivisions in, the district. (V.A.C.S. Art. 6550c-1, Sec. 4(e) (part).)

Source Law

(e) A district may acquire, construct, develop, own, operate, and maintain intermodal and commuter rail facilities inside, or connect political subdivisions in, the district. …

Revised Law

Sec. 173.202. POWERS RELATING TO DISTRICT PROPERTY. A district may acquire by grant, purchase, gift, devise, lease, or otherwise and may hold, use, sell, lease, or dispose of property, including a license, a patent, a right, or an interest, necessary, convenient, or useful for the full exercise of its powers under this chapter. (V.A.C.S. Art. 6550c-1, Sec. 4(d).)

Source Law

Revisor's Note

Section 4(d), V.A.C.S. Article 6550c-1, refers to "real and personal" property. The revised law omits the quoted language because under Section 311.005, Government Code (Code Construction Act), "property" means "real and personal property."

Revised Law

Sec. 173.203. USE AND ALTERATION OF PROPERTY OF ANOTHER POLITICAL SUBDIVISION. (a) For a purpose described by Section 173.201, as necessary or useful in the construction, reconstruction, repair, maintenance, and operation of the system, and with the consent of a municipality, county, or other political subdivision, a district may:

(1) use streets, alleys, roads, highways, and other public ways of the political subdivision; and

(b) A district may not use or alter:

(1) a road or highway in the state highway system without the permission of the commission; or

(2) a railroad without permission of the railroad. (V.A.C.S. Art. 6550c-1, Sec. 4(e) (part).)

Source Law

(e) … For these purposes and with the consent of any municipality, county, or other political subdivision, the district may use streets, alleys, roads, highways, and other public ways of any municipality, county, or other political subdivision and may relocate, raise, reroute, change the grade of, or alter, at the expense of the district, the construction of any street, alley, highway, road, railroad, electric lines and facilities, telegraph and telephone properties and facilities, pipelines and facilities, conduits and facilities, and other properties, whether publicly or privately owned, as necessary or useful in the construction, reconstruction, repair, maintenance, and operation of the system. A district may not use or alter a road or highway in the state highway system without the permission of the commission or a railroad without permission of the railroad. …

Revised Law

Sec. 173.204. RULES GOVERNING SYSTEM AND ROUTINGS. A district by resolution may adopt rules governing the use, operation, and maintenance of the system and shall determine all routings and change them when the board considers it advisable. (V.A.C.S. Art. 6550c-1, Sec. 4(l).)

Source Law

(l) A district by resolution may adopt rules governing the use, operation, and maintenance of the system and shall determine all routings and change them when the board considers it advisable.

Revised Law

Sec. 173.205. ACQUISITION OF PROPERTY. (a) A district may purchase any interest in real property to acquire, construct, or operate a commuter rail facility on terms and at a price to which the district 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 property needed by the district for its purposes in connection with the acquisition, construction, or operation of the system. (V.A.C.S. Art. 6550c-1, Sec. 4(e) (part).)

Source Law

(e) … A district may at its discretion acquire by purchase any interest in real property for the acquisition, construction, or operation of any commuter rail facility on terms and at a price as agreed to between the district and the owner. The governing body of any municipality, county, other political subdivision, or public agency may make conveyance of title or rights and easements to any property needed by the district to effect its purposes in connection with the acquisition, construction, or operation of the system.

Revised Law

Sec. 173.206. ACQUISITION OF ROLLING STOCK AND OTHER PROPERTY. A district may acquire rolling stock or other property under a conditional sales contract, lease, equipment trust certificate, or other form of contract or trust agreement. (V.A.C.S. Art. 6550c-1, Sec. 4(k) (part).)

Source Law

(k) … A district may acquire rolling stock or other property under conditional sales contracts, leases, equipment trust certificates, or any other form of contract or trust agreement… .

Revised Law

Sec. 173.207. COMPENSATION FOR USE OF SYSTEM FACILITIES. (a) A district 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 district.

(b) Together with grants received by the district, the rates or other compensation must be sufficient to produce revenue adequate to:

(1) pay all expenses necessary for the operation and maintenance of the district's property and facilities;

(2) pay the principal of and interest on all bonds issued by the district under this chapter payable wholly or partly from the revenue, as they become due and payable; and

(3) fulfill the terms of agreements made with the holders of bonds or with any person on their behalf. (V.A.C.S. Art. 6550c-1, Sec. 4(j).)

Source Law

(j) A district shall establish and maintain rates or other compensation for the use of the facilities of the system acquired, constructed, operated, regulated, or maintained by the district that is reasonable and nondiscriminatory and, together with grants received by the district, is sufficient to produce revenues adequate:

(1) to pay all expenses necessary to the operation and maintenance of the properties and facilities of the district;

(2) to pay the interest on and principal of all bonds issued by the district under this article and payable in whole or in part from the revenues, as they become due and payable; and

(3) to fulfill the terms of any agreements made with the holders of bonds or with any person in their behalf.

Revised Law

Sec. 173.208. OPERATION OR USE CONTRACTS. (a) A district may:

(1) lease all or part of the commuter rail facilities to any operator; or

(2) contract for the use or operation of all or part of the commuter rail facilities by any operator.

(b) To the maximum extent practicable, the district shall encourage the participation of private enterprise in the operation of commuter rail facilities.

Source Law

(m) A district may lease the commuter rail facilities or any part to, or contract for the use or operation of the commuter rail facilities or any part by, any operator. A district shall encourage to the maximum extent practicable the participation of private enterprise in the operation of commuter rail facilities. The term of an operating contract under this subsection may not exceed 20 years.

Revised Law

Sec. 173.209. RAIL TRANSPORTATION SERVICES AGREEMENTS WITH OTHER POLITICAL SUBDIVISIONS. A district may contract with a county or other political subdivision of this state for the district to provide commuter rail transportation services to an area outside the district on terms to which the parties agree. (V.A.C.S. Art. 6550c-1, Sec. 4(n).)

Source Law

(n) A district may contract with any county or other political subdivision of the state for the district to provide commuter rail transportation services to any area outside the boundaries of the district on such terms and conditions as the parties agree to.

Revisor's Note

Section 4(n), V.A.C.S. Article 6550c-1, refers to "terms and conditions" of a contract. The revised law omits the reference to "conditions" because "conditions" is included in the meaning of "terms."

[Sections 173.210-173.250 reserved for expansion]

SUBCHAPTER F. FINANCIAL PROVISIONS

Revised Law

Sec. 173.251. FISCAL YEAR. Unless the board changes the fiscal year, the district's fiscal year ends on September 30. (V.A.C.S. Art. 6550c-1, Sec. 4(p) (part).)

Source Law

(p) … The fiscal year of the district ends September 30 unless changed by the board… .

Revised Law

Sec. 173.252. ANNUAL BUDGET. (a) Before beginning the operation of commuter rail facilities, the board shall adopt an annual operating budget specifying the district's anticipated revenue and expenses for the remainder of the fiscal year. The district shall adopt an operating budget for each succeeding fiscal year.

(d) An expenditure that is not budgeted may not be made. (V.A.C.S. Art. 6550c-1, Sec. 4(p) (part).)

Source Law

(p) Before beginning the operation of commuter rail facilities, the board of a district shall adopt an annual operating budget specifying the anticipated revenues and expenses of the district for the remainder of the fiscal year, and the district shall adopt an operating budget for each succeeding fiscal year… . The board shall hold a public hearing before adopting each budget except 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 the district. A budget may be amended at any time if notice of the proposed amendment is given in the notice of meeting. An expenditure that is not budgeted may not be made.

Revisor's Note

Section 4(p), V.A.C.S. Article 6550c-1, states that a budget may be amended "at any time." The revised law omits the quoted language because the authority to amend the budget implies the authority to do so at any time.

Revised Law

Sec. 173.253. GRANTS AND LOANS. A district may accept grants and loans from the United States, this state and its agencies and political subdivisions, public or private corporations, and other persons. (V.A.C.S. Art. 6550c-1, Sec. 4(k) (part).)

Source Law

(k) A district may … accept grants and loans from, the United States of America, its departments and agencies, the state, its agencies and political subdivisions, and public or private corporations and persons … .

Revisor's Note

Section 4(k), V.A.C.S. Article 6550c-1, refers to the United States of America and "its departments and agencies." The revised law omits the quoted language for the reason stated in the revisor's note to Section 173.153.

Revised Law

Sec. 173.254. DEPOSITORY. (a) The board by resolution shall name one or more banks for the deposit of district funds.

(b) District funds are public funds and may be invested in securities permitted by Chapter 2256, Government Code.

Source Law

(r) The board of a district shall by resolution name one or more banks for the deposit of district funds. District funds are public funds and may be invested in securities permitted by Chapter 2256, Government Code. To the extent funds of the district are not insured by the Federal Deposit Insurance Corporation or its successor, they shall be collateralized in the manner provided for county funds.

Revised Law

Sec. 173.255. PURCHASE OF ADDITIONAL INSURED PROVISIONS. A district may purchase an additional insured provision to any liability insurance contract. (V.A.C.S. Art. 6550c-1, Sec. 4(o).)

Source Law

(o) A district may purchase an additional insured provision to any liability insurance contract.

Revised Law

Sec. 173.256. FINANCING OF CERTAIN TRANSPORTATION INFRASTRUCTURE. (a) This section applies only to a local government that is a member of a district, other than a school district, that is authorized to impose ad valorem taxes on real property.

(b) A district may enter into an interlocal contract with a local government member for the financing of transportation infrastructure that is constructed or that is to be constructed in the territory of the local government by the district.

(1) the duration of the agreement;

(2) a description of each transportation infrastructure project or proposed project;

(3) a map showing the location of each project; and

(4) an estimate of the cost of each project.

(d) The agreement may establish one or more transportation infrastructure zones. The district and the local government may agree that, at one or more specified times, the local government will pay to the district an amount that is calculated on the basis of increased ad valorem tax collections in a zone that are attributable to increased values of property located in the zone resulting from an infrastructure project. The amount may not exceed an amount that is equal to 30 percent of the increase in ad valorem tax collections for the specified period.

(e) Money received by the district under this section may be used:

(1) to provide a local match for the acquisition of right-of-way in the territory of the local government; or

(2) for design, construction, operation, or maintenance of transportation facilities in the territory of the local government. (V.A.C.S. Art. 6550c-1, Sec. 8.)

Source Law

Sec. 8. (a) This section applies only to a local government which is a member of a district, other than a school district, that is authorized to impose ad valorem taxes on real property.

(1) the duration of the agreement;

(2) a description of each transportation infrastructure project or proposed project;

(3) a map showing the location of each project; and

(4) an estimate of the cost of each project.

(e) Money received by the district under this section may be used:

(1) to provide a local match for the acquisition of right-of-way in the territory of the local government; or

(2) for design, construction, operation, or maintenance of transportation facilities in the territory of the local government.

Revised Law

Sec. 173.257. TAX EXEMPTION. District property, material purchases, revenue, and income and the interest on bonds and notes issued by the district are exempt from any tax imposed by this state or a political subdivision of this state. (V.A.C.S. Art. 6550c-1, Sec. 7.)

Source Law

Sec. 7. The property, material purchases, revenues, and income of a district and the interest on bonds and notes issued by a district are exempt from all taxes levied by the state or a political subdivision of the state.

[Sections 173.258-173.300 reserved for expansion]

SUBCHAPTER G. BONDS

Revised Law

Sec. 173.301. REVENUE BONDS. A district may issue revenue bonds and notes in amounts that the board considers necessary or appropriate for the acquisition, purchase, construction, reconstruction, repair, equipping, improvement, or extension of its commuter rail facilities. (V.A.C.S. Art. 6550c-1, Sec. 5(a) (part).)

Source Law

Sec. 5. (a) A district may issue revenue bonds and notes from time to time and in such amounts as its board considers necessary or appropriate for the acquisition, purchase, construction, reconstruction, repair, equipping, improvement, or extension of its commuter rail facilities… .

Revisor's Note

(1) Section 5(a), V.A.C.S. Article 6550c-1, provides that a district may issue revenue bonds and notes "from time to time." The revised law omits the quoted language because the authority to issue revenue bonds and notes implies the authority to do so at any time.

(2) Section 5(a), V.A.C.S. Article 6550c-1, provides that district bonds and notes are fully negotiable and may be redeemed before maturity under terms fixed by the district's board. The revised law omits that provision because it duplicates, in substance, parts of Sections 1201.021 and 1201.022, Government Code, which provide that public securities, including bonds and notes, may be redeemed before maturity and be payable in specified amounts and at specified times, and Section 1201.041, Government Code, which provides that public securities are negotiable. Chapter 1201, Government Code, applies to district bonds and notes by application of Section 1201.002, Government Code. The omitted law reads:

(a) … All bonds and notes are fully negotiable and may be made redeemable before maturity, at the option of the issuing district and at prices and under terms and conditions the issuing district determines in the resolution authorizing the bonds or notes, and … .

(3) Section 5(a), V.A.C.S. Article 6550c-1, provides that district bonds and notes may be sold at a public or private sale. The revised law omits the provision because it duplicates Section 1201.022(a)(3)(A), Government Code. Chapter 1201, Government Code, applies to district bonds and notes by application of Section 1201.002, Government Code. The omitted law reads:

(a) … [All bonds and notes] … may be sold at public or private sale, as the board determines.

Revised Law

Sec. 173.302. SECURITY FOR PAYMENT OF BONDS. (a) To secure payment of district bonds or notes, the district may:

(1) encumber and pledge all or part of the revenue of its commuter rail facilities; and

(2) encumber all or part of the property of the commuter rail facilities and everything pertaining to them acquired or to be acquired.

(b) Unless prohibited by the resolution or indenture relating to outstanding bonds or notes, a district may encumber separately any item of property. (V.A.C.S. Art. 6550c-1, Sec. 5(c) (part).)

Source Law

(c) To secure the payment of the bonds or notes, the district may encumber and pledge all or any part of the revenues of its commuter rail facilities, may mortgage and encumber all or any part of the properties of the commuter rail facilities and everything pertaining to them acquired or to be acquired, and … . If not prohibited by the resolution or indenture relating to outstanding bonds or notes, a district may encumber separately any item of real estate or personalty.

Revisor's Note

(1) Section 5(c), V.A.C.S. Article 6550c-1, refers to a district's power to "mortgage and encumber" its property. The revised law omits "mortgage" because "mortgage" is included within the meaning of "encumber."

(2) Section 5(c), V.A.C.S. Article 6550c-1, refers to "real estate or personalty." The revised law substitutes "property" for "real estate or personalty" because under Section 311.005, Government Code (Code Construction Act), "property" means "real and personal property."

Revised Law

Sec. 173.303. BONDS AS AUTHORIZED INVESTMENTS AND SECURITY FOR DEPOSITS OF PUBLIC FUNDS. (a) District 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, a county, a school district, or any other political corporation or subdivision of this state; and

(2) lawful and sufficient security for the deposit to the extent of the principal amount or market value of the bonds or notes, whichever is less. (V.A.C.S. Art. 6550c-1, Sec. 5(d).)

Source Law

(d) All bonds and notes are legal and authorized investments for banks, trust companies, savings and loan associations, and insurance companies. The bonds and notes are eligible to secure the deposit of public funds of the state, cities, towns, villages, counties, school districts, or other political corporations or subdivisions of the state. The bonds and notes are lawful and sufficient security for the deposits to the extent of the principal amount or market value of the bonds or notes, whichever is less.

Revisor's Note

Section 5(d), V.A.C.S. Article 6550c-1, refers to "cities, towns, [and] villages." The revised law substitutes "a municipality" for "cities, towns, [and] villages" because "municipality" is the term used for those entities in the Local Government Code.

Revised Law

Sec. 173.304. LIMIT ON POWER. (a) A revenue bond indenture may limit the exercise of a power granted by Section 173.004, 173.005, 173.111, 173.151, 173.152, 173.153, 173.154, 173.155, 173.157, 173.159, 173.160, 173.201, 173.202, 173.203, 173.204, 173.205, 173.206, 173.207, 173.208, 173.209, 173.251, 173.252, 173.253, 173.254, or 173.255.

(b) The limitation applies while any of the revenue bonds issued under the indenture are outstanding and unpaid. (V.A.C.S. Art. 6550c-1, Sec. 4(k) (part).)

Source Law

Revisor's Note

Section 4(k), V.A.C.S. Article 6550c-1, provides that any revenue bond indenture may limit the exercise of powers granted by "this section." The powers in Section 4 are revised in certain sections of this chapter. The revised law is drafted accordingly.

Revisor's Note

(End of Subchapter)

(1) Section 5(b), V.A.C.S. Article 6550c-1, requires district bonds and notes to be approved by the attorney general and registered by the comptroller. Section 5(b) also provides that after approval, registration, and sale and delivery, the bonds and notes are incontestable. The revised law omits these provisions because they duplicate, in substance, parts of Chapter 1202, Government Code. Section 1202.003(a), Government Code, requires that public securities, including bonds and notes, be submitted to the attorney general. Section 1202.003(b), Government Code, provides for approval of the public securities by the attorney general and requires the attorney general to submit the approved public securities to the comptroller for registration. Section 1202.005, Government Code, requires registration of the public securities by the comptroller. Section 1202.006, Government Code, provides that after approval and registration the public securities are incontestable and binding obligations. Chapter 1202, Government Code, applies to district bonds and notes by application of Section 1202.001, Government Code. The omitted law reads:

(b) A district shall submit all bonds and notes authorized to be issued and the records relating to their issuance to the attorney general for examination before delivery. If the attorney general determines that they have been issued in accordance with the constitution and this article and that they will be binding obligations of the district issuing them, the attorney general shall approve them, and the comptroller shall register them. Bonds and notes issued under this article are incontestable after approval, registration, and sale and delivery of the bonds to the purchaser.

(2) Section 5(c), V.A.C.S. Article 6550c-1, provides that the district may prescribe the terms of district bonds. The revised law omits that provision because it duplicates, in substance, provisions of general law. Sections 1201.005 and 1201.022, Government Code, provide that an issuer may specify the terms under which a bond is issued. Chapter 1201, Government Code, applies to district bonds by application of Section 1201.002, Government Code. The omitted law reads:

(c) … [the district] … may prescribe the terms and provisions of the bonds and notes in any manner not inconsistent with this article… .

[Sections 173.305-173.350 reserved for expansion]

SUBCHAPTER H. SALES AND USE TAXES

Revised Law

Sec. 173.351. TAX AUTHORIZED. A sales and use tax is imposed on items sold on district property. (V.A.C.S. Art. 6550c-1, Sec. 9(a) (part).)

Source Law

Sec. 9. (a) A sales and use tax is imposed on items sold on district property. …

Revised Law

Sec. 173.352. TAX RATE. The sales and use tax shall be imposed at the rate of the highest combination of local sales and use taxes imposed at the time of the district's creation in any local governmental jurisdiction that is part of the district. (V.A.C.S. Art. 6550c-1, Sec. 9(a) (part).)

Source Law

(a) … The sales and use tax shall be imposed at the rate of the highest combination of local sales and use taxes imposed at the time of the district's creation in any local governmental jurisdiction which is a member of a district. . . .

Revised Law

Sec. 173.353. PREEMPTION OF OTHER SALES AND USE TAXES. The tax imposed under this subchapter preempts all other local sales and use taxes that would otherwise be imposed on district property. (V.A.C.S. Art. 6550c-1, Sec. 9(a) (part).)

Source Law

(a) … All other local sales and use taxes that would otherwise be imposed on district property are preempted by the imposition of this tax.

Revised Law

Sec. 173.354. APPLICABILITY OF TAX CODE. Chapter 321, Tax Code, governs the computation, administration, governance, and use of the tax except as inconsistent with this chapter. (V.A.C.S. Art. 6550c-1, Sec. 9(b) (part).)

Source Law

(b) . . . Chapter 321, Tax Code, governs the computation, administration, governance, and use of the tax except as inconsistent with this Act.

Revised Law

Sec. 173.355. NOTICE TO COMPTROLLER. (a) The district shall notify the comptroller in writing by United States registered or certified mail of the district's creation and of its intent to impose the sales and use tax under this chapter.

(b) The district shall provide to the comptroller all information required to implement the tax, including:

(1) an adequate map showing the property boundaries of the district;

(2) a certified copy of the resolution of the board adopting the tax; and

(3) certified copies of the resolutions of the governing bodies of the creating municipalities and of the commissioners courts of the counties in which the municipalities are located.

(c) Not later than the 30th day after the date the comptroller receives the notice, map, and other information, the comptroller shall inform the district whether the comptroller is prepared to administer the tax. (V.A.C.S. Art. 6550c-1, Secs. 9(c), (d).)

Source Law

(c) The district shall notify the comptroller in writing by United States registered or certified mail of the district's creation and of its intent to impose the sales and use tax under this Act. The district shall provide to the comptroller all information required to implement the tax, including:

(1) an adequate map showing the property boundaries of the district;

(2) a certified copy of the resolution of the district board adopting the tax; and

(3) certified copies of the resolutions of the governing bodies of the municipalities creating the district and of the commissioners courts in the counties in which the municipalities are located.

(d) Not later than the 30th day after the date the comptroller receives the notice, map, and other information, the comptroller shall inform the district whether the comptroller is prepared to administer the tax.

Revised Law

Sec. 173.356. NOTICE TO LOCAL GOVERNMENTS. At the same time the district notifies the comptroller under Section 173.355, the district shall:

(1) notify each affected local governmental jurisdiction of the district's creation; and

(2) provide each jurisdiction with an adequate map showing the property boundaries of the district. (V.A.C.S. Art. 6550c-1, Sec. 9(e).)

Source Law

(e) At the same time the district notifies the comptroller under Subsection (c) of this section, the district shall notify each affected local governmental jurisdiction of the district's creation and provide each jurisdiction with an adequate map showing the property boundaries of the district.

Revised Law

Sec. 173.357. ACQUISITION OF ADDITIONAL TERRITORY SUBJECT TO TAX. (a) Not later than the 30th day after the date a district acquires additional territory, the district shall notify the comptroller and each affected local governmental jurisdiction of the acquisition.

(b) The district must include with each notification:

(1) an adequate map showing the new property boundaries of the district; and

(2) the date the additional territory was acquired.

(c) Not later than the 30th day after the date the comptroller receives the notice under this section, the comptroller shall inform the district whether the comptroller is prepared to administer the tax in the additional territory. (V.A.C.S. Art. 6550c-1, Sec. 9(f).)

Source Law

(f) Not later than the 30th day after the date the district acquires additional territory, the district shall notify the comptroller and each affected local governmental jurisdiction of the acquisition. The district must include with each notification an adequate map showing the new property boundaries of the district and the date the additional territory was acquired. Not later than the 30th day after the date the comptroller receives the notice under this subsection, the comptroller shall inform the district whether the comptroller is prepared to administer the tax in the additional territory.

Revised Law

Sec. 173.358. DUTY OF COMPTROLLER. The comptroller shall:

(1) administer, collect, and enforce a tax imposed under this chapter; and

(2) remit to a district the tax collected on the district's property. (V.A.C.S. Art. 6550c-1, Secs. 9(a) (part), (b) (part).)

Source Law

(a) . . . The comptroller shall remit to a district the local sales and use tax collected on the district's property. …

(b) The comptroller shall administer, collect, and enforce a tax imposed under this Act. …

Revised Law

Sec. 173.359. EFFECTIVE DATE OF TAX. A tax imposed under this chapter or the repeal of a tax imposed under this chapter takes effect on the first day of the first calendar quarter that begins 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. (V.A.C.S. Art. 6550c-1, Sec. 9(g).)

Source Law

(g) A tax imposed under this Act or the repeal of a tax abolished under this Act takes effect on the first day of the first complete calendar quarter that occurs after the expiration of the first complete calendar quarter that occurs after the date the comptroller receives a notice of the action as required by this section.

CHAPTER 174. COMMUTER RAIL DISTRICTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 174.001. DEFINITION OF PERSON ...................... 82

Sec. 174.002. DEFINITIONS ............................... 83

Sec. 174.003. NATURE OF DISTRICT ........................ 84

Sec. 174.004. REQUIREMENT FOR SERVICE TO

MUNICIPALITIES IN DISTRICT .............. 85

[Sections 174.005-174.050 reserved for expansion]

SUBCHAPTER B. CREATION

Sec. 174.051. CREATION OF DISTRICT ...................... 85

[Sections 174.052-174.100 reserved for expansion]

SUBCHAPTER C. BOARD OF DIRECTORS AND EMPLOYEES

Sec. 174.101. CONTROL OF DISTRICT ....................... 85

Sec. 174.102. COMPOSITION OF BOARD; TERMS ............... 86

Sec. 174.103. PRESIDING OFFICER ......................... 86

Sec. 174.104. MEETINGS .................................. 86

Sec. 174.105. RULES FOR PROCEEDINGS ..................... 86

Sec. 174.106. COMPENSATION; REIMBURSEMENT ............... 87

Sec. 174.107. EMPLOYEES ................................. 87

Sec. 174.108. EXECUTIVE COMMITTEE ....................... 87

Sec. 174.109. RETIREMENT BENEFITS ....................... 87

[Sections 174.110-174.150 reserved for expansion]

SUBCHAPTER D. GENERAL POWERS AND DUTIES

Sec. 174.151. GENERAL POWERS OF DISTRICT; GOVERNMENTAL

FUNCTIONS ............................... 88

Sec. 174.152. RULES ..................................... 88

Sec. 174.153. AGREEMENTS GENERALLY ...................... 88

Sec. 174.154. AGREEMENTS WITH OTHER ENTITIES FOR JOINT

USE ..................................... 89

Sec. 174.155. JOINT OWNERSHIP AGREEMENTS ................ 89

Sec. 174.156. INTERLOCAL AGREEMENTS WITH COMMISSION ...... 90

Sec. 174.157. AWARDING CONSTRUCTION OR PURCHASE

CONTRACTS ................................ 90

Sec. 174.158. EMINENT DOMAIN ............................. 91

Sec. 174.159. SUITS ...................................... 93

[Sections 174.160-174.200 reserved for expansion]

SUBCHAPTER E. POWERS AND DUTIES RELATING TO ACQUISITION, CONSTRUCTION, AND OPERATION OF COMMUTER RAIL FACILITIES

Sec. 174.201. GENERAL AUTHORITY OVER COMMUTER RAIL

FACILITIES ............................... 93

Sec. 174.202. POWERS RELATING TO DISTRICT PROPERTY ....... 94

Sec. 174.203. USE AND ALTERATION OF PROPERTY OF

ANOTHER POLITICAL SUBDIVISION ............ 94

Sec. 174.204. RULES GOVERNING SYSTEM AND ROUTINGS ........ 95

Sec. 174.205. ACQUISITION OF PROPERTY .................... 95

Sec. 174.206. ACQUISITION OF ROLLING STOCK AND OTHER

PROPERTY ................................. 96

Sec. 174.207. COMPENSATION FOR USE OF SYSTEM

FACILITIES ............................... 96

Sec. 174.208. OPERATION OR USE CONTRACTS ................. 97

Sec. 174.209. RAIL TRANSPORTATION SERVICES AGREEMENTS

WITH OTHER POLITICAL SUBDIVISIONS ........ 98

[Sections 174.210-174.250 reserved for expansion]

SUBCHAPTER F. FINANCIAL PROVISIONS

Sec. 174.251. FISCAL YEAR ................................ 98

Sec. 174.252. ANNUAL BUDGET .............................. 98

Sec. 174.253. GRANTS AND LOANS ........................... 99

Sec. 174.254. DEPOSITORY ................................ 100

Sec. 174.255. PURCHASE OF ADDITIONAL INSURED

PROVISIONS .............................. 100

Sec. 174.256. TAX EXEMPTION ............................. 100

[Sections 174.257-174.300 reserved for expansion]

SUBCHAPTER G. BONDS

Sec. 174.301. REVENUE BONDS ............................. 101

Sec. 174.302. SECURITY FOR PAYMENT OF BONDS ............. 102

Sec. 174.303. BONDS AS AUTHORIZED INVESTMENTS AND

SECURITY FOR DEPOSITS OF PUBLIC FUNDS ... 103

Sec. 174.304. LIMIT ON POWER ............................ 103

[Sections 174.305-174.350 reserved for expansion]

SUBCHAPTER H. TAXES

Sec. 174.351. TAX AUTHORIZED ............................ 105

Sec. 174.352. IMPOSITION OF TAX ......................... 106

Sec. 174.353. TAX RATE .................................. 106

Sec. 174.354. EFFECTIVE DATE OF TAX ..................... 107

CHAPTER 174. COMMUTER RAIL DISTRICTS

SUBCHAPTER A. GENERAL PROVISIONS

Revised Law

Sec. 174.001. DEFINITION OF PERSON. For each provision in this chapter added April 1, 2011, as part of the revision of former Title 112, Revised Statutes:

(1) "person" includes a corporation, as provided by Section 312.011, Government Code; and

(2) the definition of "person" assigned by Section 311.005, Government Code, does not apply. (New.)

Revisor's Note

Revised Law

Sec. 174.002. DEFINITIONS. In this chapter:

(1) "Board" means a district's board of directors.

(3) "Director" means a board member.

(4) "District" means a commuter rail district created under this chapter or under Article 6550c-3, Revised Statutes, as that article existed before April 1, 2011.

(5) "System" means all of the commuter rail and intermodal facilities leased or owned by or operated on behalf of a district. (V.A.C.S. Art. 6550c-3, Secs. 1(2), (5), (7); New.)

Source Law

Sec. 1. In this article:

(5) "District" means a commuter rail district created under this article.

(7) "System" means all of the commuter rail and intermodal facilities leased or owned by or operated on behalf of a district.

Revisor's Note

(1) The definitions of "board" and "director" are added to the revised law for drafting convenience.

(2) Section 1(1), V.A.C.S. Article 6550c-3, defines "[c]ommission" as the Texas Transportation Commission and Section 1(4) of that article defines "[d]epartment" as the Texas Department of Transportation. The revised law omits the definitions because they duplicate the definitions of those terms in Section 81.001, which apply to Chapter 174. The omitted law reads:

(1) "Commission" means the Texas Transportation Commission.

(4) "Department" means the Texas Department of Transportation.

(3) Sections 1(3) and (6), V.A.C.S. Article 6550c-3, define "[c]reating county" and "[d]istrict property." The revised law omits the definitions because the defined terms are not used elsewhere in Article 6550c-3, revised as this chapter. The omitted law reads:

(3) "Creating county" means a county described by Section 2(b) of this article.

(6) "District property" means all property the district owns or leases under a long-term lease.

Revised Law

Sec. 174.003. NATURE OF DISTRICT. (a) A district is a public body and a political subdivision of this state exercising public and essential governmental functions.

Source Law

Revised Law

Sec. 174.004. REQUIREMENT FOR SERVICE TO MUNICIPALITIES IN DISTRICT. A municipality located in a district that wishes to be served by commuter rail facilities of the district must pay for construction of a commuter rail station. (V.A.C.S. Art. 6550c-3, Sec. 9.)

Source Law

Sec. 9. A municipality located within the district that wishes to be served by district commuter rail facilities must pay for construction of a commuter rail station.

[Sections 174.005-174.050 reserved for expansion]

SUBCHAPTER B. CREATION

Revised Law

Sec. 174.051. CREATION OF DISTRICT. (a) A district may be created to provide commuter rail service to counties along the Texas-Mexico border.

(b) The commissioners court of a county may create a commuter rail district on adoption of an order favoring the creation. (V.A.C.S. Art. 6550c-3, Sec. 2.)

Source Law

Sec. 2. (a) A commuter rail district may be created to provide commuter rail service to counties along the Texas-Mexico border.

(b) The commissioners court of a county may create a commuter rail district on adoption of an order favoring the creation.

[Sections 174.052-174.100 reserved for expansion]

SUBCHAPTER C. BOARD OF DIRECTORS AND EMPLOYEES

Revised Law

Sec. 174.101. CONTROL OF DISTRICT. A district is governed by a board of directors. The board is responsible for the management, operation, and control of the district. (V.A.C.S. Art. 6550c-3, Sec. 3(a).)

Source Law

Sec. 3. (a) A district is governed by a board of directors. The board is responsible for the management, operation, and control of the district.

Revised Law

Sec. 174.102. COMPOSITION OF BOARD; TERMS. (a) The board is composed of five directors appointed as follows:

(1) one director appointed by the county judge; and

(2) one director appointed by each county commissioner.

(b) Each director serves a four-year term. The board may provide for the staggering of the terms of its directors. (V.A.C.S. Art. 6550c-3, Sec. 3(b).)

Source Law

(b) The board is composed of five members. The county judge appoints one member and each county commissioner appoints one member. Each member serves a term of four years. The board may provide for the staggering of the terms of its members.

Revised Law

Sec. 174.103. 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. (V.A.C.S. Art. 6550c-3, Sec. 3(c).)

Source Law

(c) The members of the board shall elect one member as presiding officer. The presiding officer may select another member to preside in the absence of the presiding officer.

Revised Law

Sec. 174.104. 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. (V.A.C.S. Art. 6550c-3, Sec. 3(d).)

Source Law

(d) 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.

Revised Law

Sec. 174.105. RULES FOR PROCEEDINGS. The board shall adopt rules for its proceedings. (V.A.C.S. Art. 6550c-3, Sec. 3(f) (part).)

Source Law

(f) The board shall adopt rules for its proceedings and … .

Revised Law

Sec. 174.106. 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. (V.A.C.S. Art. 6550c-3, Sec. 3(e).)

Source Law

(e) A member of the board is not entitled to compensation for serving as a member but is entitled to reimbursement for reasonable expenses incurred while serving as a member.

Revised Law

Sec. 174.107. EMPLOYEES. The board may employ and compensate persons to carry out the powers and duties of the district. (V.A.C.S. Art. 6550c-3, Sec. 3(f) (part).)

Source Law

(f) … The board may employ and compensate persons to carry out the powers and duties of the district.

Revised Law

Sec. 174.108. EXECUTIVE COMMITTEE. The board shall appoint an executive committee. (V.A.C.S. Art. 6550c-3, Sec. 3(f) (part).)

Source Law

(f) [The board shall] … appoint an executive committee. …

Revised Law

Sec. 174.109. RETIREMENT BENEFITS. A district is eligible to participate in the Texas County and District Retirement System. (V.A.C.S. Art. 6550c-3, Sec. 4(p).)

Source Law

(p) A district is eligible to participate in the Texas County and District Retirement System.

[Sections 174.110-174.150 reserved for expansion]

SUBCHAPTER D. GENERAL POWERS AND DUTIES

Revised Law

Sec. 174.151. GENERAL POWERS OF DISTRICT; GOVERNMENTAL FUNCTIONS. (a) A district has all the powers necessary or convenient to carry out the purposes of this chapter.

(b) A district may perform any act necessary for the full exercise of the district's powers. (V.A.C.S. Art. 6550c-3, Secs. 4(a) (part), (j) (part).)

Source Law

Sec. 4. (a) [A district] … has all the powers necessary or convenient to carry out the purposes of this article… .

(j) A district … may perform any act necessary for the full exercise of the powers vested in it… .

Revised Law

Sec. 174.152. RULES. To protect the health, safety, and general welfare of district residents and people who use district services, a district may adopt rules to govern the operation of the district, its employees, the system, service provided by the district, and any other necessary matter concerning its purposes, including rules regarding health, safety, alcohol or beverage service, food service, or telephone or utility service. (V.A.C.S. Art. 6550c-3, Sec. 4(g).)

Source Law

(g) A district may adopt rules to govern the operation of the district, its employees, the system, service provided by the district, and any other necessary matter concerning its purposes, including rules relating to health, safety, alcohol or beverage service, food service, and telephone and utility services, to protect the health, safety, and general welfare of residents of the district and people who use the district's services.

Revised Law

Sec. 174.153. AGREEMENTS GENERALLY. A district may make contracts, leases, and agreements with the United States, this state and its agencies and political subdivisions, and other persons and entities. (V.A.C.S. Art. 6550c-3, Sec. 4(j) (part).)

Source Law

(j) [A district] may make contracts, leases, and agreements with, and … the United States of America, its departments and agencies, this state, agencies and political subdivisions of this state, and other persons and entities and … .

Revisor's Note

Section 4(j), V.A.C.S. Article 6550c-3, refers to the United States of America and "its departments and agencies." The revised law omits the quoted language because under Section 311.005, Government Code (Code Construction Act), "United States" includes a department, bureau, or other agency of the United States of America.

Revised Law

Sec. 174.154. AGREEMENTS WITH OTHER ENTITIES FOR JOINT USE. A district may:

(2) establish:

(A) through routes; and

(B) joint fares. (V.A.C.S. Art. 6550c-3, Sec. 4(f).)

Source Law

(f) A district may make agreements with a public utility, private utility, communication system, common carrier, state agency, or transportation system for the joint use of facilities, installations, or properties inside or outside the district and establish through routes and joint fares.

Revised Law

Sec. 174.155. JOINT OWNERSHIP AGREEMENTS. A district may enter into a joint ownership agreement with any person. (V.A.C.S. Art. 6550c-3, Sec. 4(h).)

Source Law

(h) A district may enter into a joint ownership agreement with any person.

Revised Law

Sec. 174.156. INTERLOCAL AGREEMENTS WITH COMMISSION. The commission may enter into an interlocal agreement with the district under which the district may exercise a power or duty of the commission for the development and efficient operation of an intermodal corridor in the district. (V.A.C.S. Art. 6550c-3, Sec. 4(j) (part).)

Source Law

(j) … The commission may enter an interlocal agreement with a district under which the district may exercise a power or duty of the commission for the development and efficient operation of an intermodal corridor in the district… .

Revised Law

Sec. 174.157. 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 except real property may be awarded only through competitive bidding after notice is published in a newspaper of general circulation in the district at least 15 days before the date set for receiving bids.

(b) The board may adopt rules governing the taking of bids and the awarding of contracts.

(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 commuter rail service on lines wholly or partly owned by the carrier. (V.A.C.S. Art. 6550c-3, Sec. 6.)

Source Law

Sec. 6. A contract in the amount of more than $15,000 for the construction of improvements or the purchase of material, machinery, equipment, supplies, or any other property other than real property may be let only on competitive bids after notice published, at least 15 days before the date set for receiving bids, in a newspaper of general circulation in the district. The board may adopt rules governing the taking of bids and the awarding of contracts. This section does not apply to:

(1) personal or professional services;

(2) the acquisition of an existing rail transportation system; or

(3) a contract with a common carrier to construct lines or to operate commuter rail service on lines owned in whole or in part by the carrier.

Revisor's Note

Section 6, V.A.C.S. Article 6550c-3, refers to a contract "let only on competitive bids." The revised law substitutes "awarded" for "let" because the terms are synonymous and "awarded" conforms to the modern usage found in competitive bidding statutes in the Local Government Code.

Revised Law

Sec. 174.158. EMINENT DOMAIN. (a) A district 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, the district 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 district'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 commuter rail facilities and is in the public interest.

Source Law

(e) A district has the right of eminent domain to acquire real property in fee simple or an interest in real property less than fee simple in, on, under, or above land, including an easement, right-of-way, or right of use of airspace or subsurface space. The power of eminent domain under this section does not apply to land under the jurisdiction of the department or a rail line owned by a common carrier or municipality. The district shall, to the extent possible, use existing rail or intermodal transportation corridors for the alignment of its system. A proceeding for the exercise of the power of eminent domain is begun by the adoption by the board of a resolution declaring the public necessity for the acquisition by the district of the property or interest described in the resolution and that the acquisition is necessary and proper for the construction, extension, improvement, or development of commuter rail facilities and is in the public interest. The resolution of the district is conclusive evidence of the public necessity of the proposed acquisition and that the real or personal property or interest in property is necessary for public use.

Revisor's Note

(1) Section 4(e), V.A.C.S. Article 6550c-3, provides that the district has the "right of eminent domain" to acquire property. The revised law substitutes for the quoted language "[a] district may exercise the power of eminent domain" because the phrases have the same meaning and the latter phrase is consistent with modern usage in laws relating to eminent domain, including Chapter 21, Property Code.

(2) Section 4(e), V.A.C.S. Article 6550c-3, states that a resolution initiating an eminent domain proceeding is conclusive evidence that the "real or personal property or interest in property" is necessary for public use. The revised law omits the reference to personal property because Section 4(e) does not authorize a district to acquire personal property by eminent domain.

Revised Law

Sec. 174.159. SUITS. (a) A district 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 the district must be brought in the county in which a principal office of the district is located, except that a suit in eminent domain involving an interest in land must be brought in the county in which the land is located. (V.A.C.S. Art. 6550c-3, Sec. 4(b).)

Source Law

(b) A district may sue and be sued in all courts, may institute and prosecute suits without giving security for costs, and may appeal from a judgment without giving a supersedeas or cost bond. An action at law or in equity against the district must be brought in the county in which a principal office of the district 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.

Revisor's Note

Section 4(b), V.A.C.S. Article 6550c-3, allows a district to sue and be sued "in all courts." The revised law omits the quoted language as unnecessary because a suit may only be brought in a court, and the general laws of civil jurisdiction determine which courts have jurisdiction over the matter. For example, see Sections 24.007-24.011, Government Code, for the general jurisdiction of district courts.

[Sections 174.160-174.200 reserved for expansion]

SUBCHAPTER E. POWERS AND DUTIES RELATING TO ACQUISITION, CONSTRUCTION, AND OPERATION OF COMMUTER RAIL FACILITIES

Revised Law

Sec. 174.201. GENERAL AUTHORITY OVER COMMUTER RAIL FACILITIES. A district may acquire, construct, develop, own, operate, and maintain intermodal and commuter rail facilities to connect political subdivisions in the district. (V.A.C.S. Art. 6550c-3, Sec. 4(d) (part).)

Source Law

(d) A district may acquire, construct, develop, own, operate, and maintain intermodal and commuter rail facilities to connect political subdivisions in the district… .

Revised Law

Sec. 174.202. POWERS RELATING TO DISTRICT PROPERTY. A district may acquire by grant, purchase, gift, devise, lease, or otherwise and may hold, use, sell, lease, or dispose of property, including a license, a patent, a right, or an interest, necessary, convenient, or useful for the full exercise of its powers. (V.A.C.S. Art. 6550c-3, Sec. 4(c).)

Source Law

(c) A district 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.

Revisor's Note

Section 4(c), V.A.C.S. Article 6550c-3, refers to "real and personal" property. The revised law omits the quoted language because under Section 311.005, Government Code (Code Construction Act), "property" means "real and personal property."

Revised Law

Sec. 174.203. USE AND ALTERATION OF PROPERTY OF ANOTHER POLITICAL SUBDIVISION. (a) For a purpose described by Section 174.201, as necessary or useful in the construction, reconstruction, repair, maintenance, and operation of the system, and with the consent of a municipality, county, or other political subdivision, a district may:

(1) use streets, alleys, roads, highways, and other public ways of the political subdivision; and

(b) A district may not use or alter:

(1) a road or highway in the state highway system without the permission of the commission; or

(2) a railroad without permission of the railroad. (V.A.C.S. Art. 6550c-3, Sec. 4(d) (part).)

Source Law

(d) … For this purpose and with the consent of a municipality, county, or other political subdivision, the district may use streets, alleys, roads, highways, and other public ways of the municipality, county, or other political subdivision and may relocate, raise, reroute, change the grade of, or alter, at the expense of the district, the construction of any street, alley, highway, road, railroad, electric lines and facilities, telegraph and telephone properties and facilities, pipelines and facilities, conduits and facilities, and other properties, whether publicly or privately owned, as necessary or useful in the construction, reconstruction, repair, maintenance, and operation of the system. A district may not use or alter a road or highway that is part of the state highway system without the permission of the commission or a railroad without permission of the railroad… .

Revised Law

Sec. 174.204. RULES GOVERNING SYSTEM AND ROUTINGS. A district by resolution may adopt rules governing the use, operation, and maintenance of the system and may determine or change a routing as the board considers advisable. (V.A.C.S. Art. 6550c-3, Sec. 4(k).)

Source Law

(k) A district by resolution may adopt rules governing the use, operation, and maintenance of the system and may determine or change a routing as the board considers advisable.

Revised Law

Sec. 174.205. ACQUISITION OF PROPERTY. (a) A district may purchase any interest in real property to acquire, construct, or operate a commuter rail facility on terms and at a price to which the district and the owner agree.

Source Law

(d) … A district may acquire by purchase any interest in real property for the acquisition, construction, or operation of a commuter rail facility on terms and at a price as agreed to between the district and the owner. The governing body of a municipality, county, other political subdivision, or public agency may convey title or rights and easements to any property needed by the district to effect its purposes in connection with the acquisition, construction, or operation of the system.

Revised Law

Sec. 174.206. ACQUISITION OF ROLLING STOCK AND OTHER PROPERTY. A district may acquire rolling stock or other property under a conditional sales contract, lease, equipment trust certificate, or other form of contract or trust agreement. (V.A.C.S. Art. 6550c-3, Sec. 4(j) (part).)

Source Law

(j) … A district may acquire rolling stock or other property under conditional sales contracts, leases, equipment trust certificates, or any other form of contract or trust agreement… .

Revised Law

Sec. 174.207. COMPENSATION FOR USE OF SYSTEM FACILITIES. (a) A district 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 district.

(b) Together with grants received by the district, the rates or other compensation must be sufficient to produce revenue adequate to:

(1) pay all expenses necessary for the operation and maintenance of the district's property and facilities;

(2) pay the principal of and interest on bonds issued by the district payable wholly or partly from the revenue, as they become due and payable; and

(3) fulfill the terms of agreements made with the holders of bonds or with any person on their behalf. (V.A.C.S. Art. 6550c-3, Sec. 4(i).)

Source Law

(i) A district shall establish and maintain rates or other compensation for the use of the facilities of the system acquired, constructed, operated, regulated, or maintained by the district that is reasonable and nondiscriminatory and, together with grants received by the district, is sufficient to produce revenues adequate:

(1) to pay all expenses necessary for the operation and maintenance of the properties and facilities of the district;

(2) to pay the interest on and principal of bonds issued by the district and payable in whole or in part from the revenues, as they become due and payable; and

(3) to fulfill the terms of an agreement made with the holders of bonds or with any person in their behalf.

Revised Law

Sec. 174.208. OPERATION OR USE CONTRACTS. (a) A district may:

(1) lease all or part of the commuter rail facilities to an operator; or

(2) contract for the use or operation of all or part of the commuter rail facilities by an operator.

(b) To the maximum extent practicable, the district shall encourage the participation of private enterprise in the operation of commuter rail facilities.

Source Law

(l) A district may lease all or part of the commuter rail facilities to, or contract for the use or operation of all or part of the commuter rail facilities by, an operator. A district shall encourage to the maximum extent practicable the participation of private enterprise in the operation of commuter rail facilities. The term of an operating contract under this subsection may not exceed 20 years.

Revised Law

Sec. 174.209. RAIL TRANSPORTATION SERVICES AGREEMENTS WITH OTHER POLITICAL SUBDIVISIONS. A district may contract with a county or other political subdivision of this state for the district to provide commuter rail transportation services to an area outside the district on terms to which the parties agree. (V.A.C.S. Art. 6550c-3, Sec. 4(m).)

Source Law

(m) A district may contract with a county or other political subdivision of this state for the district to provide commuter rail transportation services to an area outside the boundaries of the district on such terms and conditions as the parties agree to.

Revisor's Note

Section 4(m), V.A.C.S. Article 6550c-3, refers to "terms and conditions" of a contract. The revised law omits the reference to "conditions" because "conditions" is included in the meaning of "terms."

[Sections 174.210-174.250 reserved for expansion]

SUBCHAPTER F. FINANCIAL PROVISIONS

Revised Law

Sec. 174.251. FISCAL YEAR. Unless the board changes the fiscal year, the district's fiscal year ends on September 30. (V.A.C.S. Art. 6550c-3, Sec. 4(o) (part).)

Source Law

(o) … The fiscal year of the district ends September 30 unless changed by the board… .

Revised Law

Sec. 174.252. ANNUAL BUDGET. (a) Before beginning the operation of commuter rail facilities, the board shall adopt an annual operating budget specifying the district's anticipated revenue and expenses for the remainder of the fiscal year. The district shall adopt an operating budget for each succeeding fiscal year.

(c) A budget may be amended if notice of the proposed amendment is given in the notice of the meeting at which the amendment will be considered.

(d) An expenditure that is not budgeted may not be made. (V.A.C.S. Art. 6550c-3, Sec. 4(o) (part).)

Source Law

(o) Before beginning the operation of commuter rail facilities, the board shall adopt an annual operating budget specifying the anticipated revenues and expenses of the district for the remainder of the fiscal year. Each year the board shall adopt an operating budget for the district… . 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 the district. A budget may be amended at any time if notice of the proposed amendment is given in the notice of the meeting at which the amendment will be considered. An expenditure that is not budgeted may not be made.

Revisor's Note

Section 4(o), V.A.C.S. Article 6550c-3, states that a budget may be amended "at any time." The revised law omits the quoted language because the authority to amend the budget implies the authority to do so at any time.

Revised Law

Sec. 174.253. GRANTS AND LOANS. A district may accept grants and loans from the United States, this state and its agencies and political subdivisions, and other persons and entities. (V.A.C.S. Art. 6550c-3, Sec. 4(j) (part).)

Source Law

(j) A district may … accept grants and loans from, the United States of America, its departments and agencies, this state, agencies and political subdivisions of this state, and other persons and entities and … .

Revisor's Note

Section 4(j), V.A.C.S. Article 6550c-3, refers to the United States of America and "its departments and agencies." The revised law omits the quoted language for the reason stated in the revisor's note following Section 174.153.

Revised Law

Sec. 174.254. DEPOSITORY. (a) The board by resolution shall name one or more banks for the deposit of district funds.

(b) District funds are public funds and may be invested in securities permitted by Chapter 2256, Government Code.

Source Law

(q) The board of a district shall by resolution name one or more banks for the deposit of district funds. District funds are public funds and may be invested in securities permitted by Chapter 2256, Government Code. To the extent funds of the district are not insured by the Federal Deposit Insurance Corporation or its successor, they shall be collateralized in the manner provided for county funds.

Revised Law

Sec. 174.255. PURCHASE OF ADDITIONAL INSURED PROVISIONS. A district may purchase an additional insured provision to any liability insurance contract. (V.A.C.S. Art. 6550c-3, Sec. 4(n).)

Source Law

(n) A district may purchase an additional insured provision to any liability insurance contract.

Revised Law

Sec. 174.256. TAX EXEMPTION. District property, material purchases, revenue, and income and the interest on a bond or note issued by a district are exempt from any tax imposed by this state or a political subdivision of this state. (V.A.C.S. Art. 6550c-3, Sec. 7.)

Source Law

Sec. 7. The property, material purchases, revenues, and income of a district and the interest on a bond or note issued by a district are exempt from all taxes imposed by this state or a political subdivision of this state.

[Sections 174.257-174.300 reserved for expansion]

SUBCHAPTER G. BONDS

Revised Law

Sec. 174.301. REVENUE BONDS. A district may issue revenue bonds and notes in amounts that the board considers necessary or appropriate for the acquisition, purchase, construction, reconstruction, repair, equipping, improvement, or extension of its commuter rail facilities. (V.A.C.S. Art. 6550c-3, Sec. 5(a) (part).)

Source Law

Sec. 5. (a) A district may issue revenue bonds and notes in amounts as the board considers necessary or appropriate for the acquisition, purchase, construction, reconstruction, repair, equipping, improvement, or extension of the district's commuter rail facilities. …

Revisor's Note

(1) Section 5(a), V.A.C.S. Article 6550c-3, provides that district bonds and notes are fully negotiable and may be redeemed before maturity under terms fixed by the district's board. The revised law omits that provision because it duplicates, in substance, parts of Sections 1201.021 and 1201.022, Government Code, which provide that public securities, including bonds and notes, may be redeemed before maturity and be payable in specified amounts and at specified times, and Section 1201.041, Government Code, which provides that public securities are negotiable. Chapter 1201, Government Code, applies to district bonds and notes by application of Section 1201.002, Government Code. The omitted law reads:

(a) … A bond or note is fully negotiable and may be made redeemable before maturity, at the option of the district and at the price and under the terms the board determines in the resolution authorizing the bond or note and … .

(2) Section 5(a), V.A.C.S. Article 6550c-3, provides that district bonds and notes may be sold at a public or private sale. The revised law omits the provision because it duplicates Section 1201.022(a)(3)(A), Government Code. Chapter 1201, Government Code, applies to district bonds and notes by application of Section 1201.002, Government Code. The omitted law reads:

(a) … [A bond or note] … may be sold at public or private sale, as the board determines.

Revised Law

Sec. 174.302. SECURITY FOR PAYMENT OF BONDS. (a) To secure payment of district bonds or notes, the district may:

(1) encumber and pledge all or part of the revenue of its commuter rail facilities; and

(2) encumber all or part of the property of the commuter rail facilities and everything pertaining to them that is acquired or to be acquired.

(b) Unless prohibited by the resolution or indenture relating to outstanding bonds or notes, a district may encumber separately any item of property. (V.A.C.S. Art. 6550c-3, Sec. 5(c) (part).)

Source Law

(c) To secure the payment of the bond or note, the district may encumber and pledge all or any part of the revenues of its commuter rail facilities, may mortgage and encumber all or part of the property of the commuter rail facilities and everything pertaining to them that is acquired or to be acquired, and … . If not prohibited by the resolution or indenture relating to outstanding bonds or notes, a district may encumber separately any item of real or personal property.

Revisor's Note

(1) Section 5(c), V.A.C.S. Article 6550c-3, refers to a district's power to "mortgage and encumber" its property. The revised law omits "mortgage" because "mortgage" is included within the meaning of "encumber."

(2) Section 5(c), V.A.C.S. Article 6550c-3, refers to "real or personal property." The revised law substitutes "property" for "real or personal property" because under Section 311.005, Government Code (Code Construction Act), "property" means "real and personal property."

Revised Law

Sec. 174.303. BONDS AS AUTHORIZED INVESTMENTS AND SECURITY FOR DEPOSITS OF PUBLIC FUNDS. (a) District 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, a county, a school district, or any other political corporation or subdivision of this state; and

(2) lawful and sufficient security for the deposit to the extent of the principal amount or market value of the bonds or notes, whichever is less. (V.A.C.S. Art. 6550c-3, Sec. 5(d).)

Source Law

(d) A bond or note is a legal and authorized investment for banks, trust companies, savings and loan associations, and insurance companies. The bond or note is eligible to secure the deposit of public funds of this state or a municipality, county, school district, or other political corporation or subdivision of this state. The bond or note is lawful and sufficient security for the deposits to the extent of the principal amount or market value of the bond or note, whichever is less.

Revised Law

Sec. 174.304. LIMIT ON POWER. (a) A revenue bond indenture may limit the exercise of the power granted by Section 174.003, 174.109, 174.151, 174.152, 174.153, 174.154, 174.155, 174.156, 174.158, 174.159, 174.201, 174.202, 174.203, 174.204, 174.205, 174.206, 174.207, 174.208, 174.209, 174.251, 174.252, 174.253, 174.254, or 174.255.

(b) A limit applies while any of the revenue bonds issued under the indenture are outstanding and unpaid. (V.A.C.S. Art. 6550c-3, Sec. 4(j) (part).)

Source Law

(j) … A revenue bond indenture may limit the exercise of the powers granted by this section, and a limit applies as long as the revenue bonds issued under the indenture are outstanding and unpaid.

Revisor's Note

Section 4(j), V.A.C.S. Article 6550c-3, provides that any revenue bond indenture may limit the exercise of powers granted by "this section." The powers in Section 4 are revised in certain sections of this chapter. The revised law is drafted accordingly.

Revisor's Note

(End of Subchapter)

(1) Section 5(b), V.A.C.S. Article 6550c-3, requires district bonds and notes to be approved by the attorney general and registered by the comptroller. Section 5(b) also provides that after approval, registration, and sale and delivery the bonds and notes are incontestable. The revised law omits these provisions because they duplicate, in substance, parts of Chapter 1202, Government Code. Section 1202.003(a), Government Code, requires that public securities, including bonds and notes, be submitted to the attorney general. Section 1202.003(b), Government Code, provides for approval of the public securities by the attorney general and requires the attorney general to submit the approved public securities to the comptroller for registration. Section 1202.005, Government Code, requires registration of the public securities by the comptroller. Section 1202.006, Government Code, provides that after approval and registration the public securities are incontestable and binding obligations. Chapter 1202, Government Code, applies to district bonds and notes by application of Section 1202.001, Government Code. The omitted law reads:

(b) A district shall submit all bonds and notes and the record of proceedings relating to their issuance to the attorney general for examination before delivery. If the attorney general determines that they have been issued in accordance with the constitution and this article and that they will be binding obligations of the district issuing them, the attorney general shall approve them, and the comptroller shall register them. A bond or note issued under this article is incontestable after approval, registration, and sale and delivery of the bond or note to the purchaser.

(2) Section 5(c), V.A.C.S. Article 6550c-3, provides that the district may prescribe the terms of district bonds and notes. The revised law omits that provision because it duplicates, in substance, provisions of general law. Sections 1201.005 and 1201.022, Government Code, provide that an issuer may specify the terms under which public securities, including bonds and notes, are issued. Chapter 1201, Government Code, applies to district bonds and notes by application of Section 1201.002, Government Code. The omitted law reads:

[Sections 174.305-174.350 reserved for expansion]

SUBCHAPTER H. TAXES

Revised Law

Sec. 174.351. TAX AUTHORIZED. A district may impose any kind of tax except an ad valorem property tax. (V.A.C.S. Art. 6550c-3, Sec. 8(a).)

Source Law

Sec. 8. (a) A district may impose any kind of tax except an ad valorem property tax.

Revised Law

Sec. 174.352. IMPOSITION OF TAX. (a) A district may not impose a tax or increase the rate of an existing tax unless a proposition proposing the imposition or rate increase is approved by a majority of the votes received at an election held for that purpose.

(b) Each new tax or rate increase must be expressed in a separate proposition consisting of a brief statement of the nature of the proposed tax.

(c) The notice of the election must contain a statement of the base or rate of the proposed tax. (V.A.C.S. Art. 6550c-3, Secs. 8(b), (c), (d).)

Source Law

(b) A district may not impose a tax or increase the rate of an existing tax unless a proposition proposing the imposition or rate increase is approved by a majority of the votes received at an election held for that purpose.

(c) Each new tax or rate increase must be expressed in a separate proposition consisting of a brief statement of the nature of the proposed tax.

(d) The notice of the election must contain a statement of the base or rate of the proposed tax.

Revised Law

Sec. 174.353. TAX RATE. (a) The board, subject to Section 174.352(a), may impose for a district a sales and use tax at the rate of:

(1) one-quarter of one percent;

(2) one-half of one percent;

(3) three-quarters of one percent; or

(4) one percent.

(b) A district may not adopt a sales and use tax rate, including a rate increase, that when combined with the rates of all sales and use taxes imposed by other political subdivisions of this state having territory in the district exceeds two percent in any location in the district. (V.A.C.S. Art. 6550c-3, Secs. 8(e), (f).)

Source Law

(e) The board, subject to Subsection (b) of this section, may impose for an authority a sales and use tax at the rate of:

(1) one-quarter of one percent;

(2) one-half of one percent;

(3) three-quarters of one percent; or

(4) one percent.

(f) A district may not adopt a sales and use tax rate, including a rate increase, that when combined with the rates of all sales and use taxes imposed by other political subdivisions of the state having territory in the district exceeds two percent in any location in the district.

Revisor's Note

Section 8(e), V.A.C.S. Article 6550c-3, allows a board of a district to impose a sales and use tax "for an authority." The revised law substitutes "district" for "authority" because it is clear from the context of Article 6550c-3 that the commuter rail district that the board governs is the entity for which the board will impose the tax.

Revised Law

Sec. 174.354. EFFECTIVE DATE OF TAX. A district's sales and use tax takes effect on the first day of the second calendar quarter beginning after the election approving the tax. (V.A.C.S. Art. 6550c-3, Sec. 8(g).)

Source Law

(g) The adoption of a district's sales and use tax takes effect on the first day of the second calendar quarter beginning after the election approving the tax.


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