Capitol.texas.gov



78R9042 T

By: Lindsay S.B. No. 1462

A BILL TO BE ENTITLED

AN ACT

authorizing transportation enhancement districts in certain counties, the imposition of local option motor fuel taxes and local option vehicle registration fees in such districts, subject to voter approval, the issuance of bonds and other obligations and related matters

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The Transportation Code is amended by adding a new Chapter 368 as follows:

CHAPTER 368. TRANSPORTATION ENHANCEMENT DISTRICTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 368.001. SHORT TITLE. This chapter may be cited as the Transportation Enhancement District Act.

Sec. 368.002. PURPOSES. The purpose of this chapter is to authorize transportation enhancement districts in certain counties, which may impose local option motor fuel taxes and local option vehicle registration fees, subject to voter approval, and may issue bonds and other obligations.

Sec. 368.003. DEFINITIONS. In this chapter:

(a) "Board" means the board of directors of a district organized under this chapter.

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

(c) "Comptroller" means the Comptroller of Public Accounts of the State of Texas.

(d) "Department" means the Texas Department of Transportation or any successor agency.

(e) "District" means a transportation enhancement district organized under this chapter.

(f) "Governmental entity" means the state, a political subdivision of the state, including a municipality or a county, a political subdivision of a county, a group of adjoining counties, a district organized or operating under Article III, Section 52 or Article XVI, Section 59, Texas Constitution or a nonprofit corporation, including a transportation or local government corporation created under Chapter 431.

(g) "Highway" means a road, highway, farm-to-market road or street under the supervision of the state or a political subdivision of the state.

(h) "Principal county" means the county in the district that has the largest population.

(i) "Project costs" means the cost of acquisition, construction, improvement, extension or expansion of a transportation enhancement project or system under this chapter and includes the cost of:

(1) the actual acquisition, construction, improvement, extension or expansion of the transportation enhancement project or system;

(2) the acquisition of real property, rights-of-way, property rights, easements and other interests in real property;

(3) machinery and equipment;

(4) interest payable before, during and after acquisition, construction, improvement, extension or expansion as provided in the bond proceedings;

(5) traffic estimates, engineering and legal services, plans, specifications, surveys, appraisals, construction cost estimates and other expenses necessary or incidental to the construction, improvement, extension or expansion;

(6) necessary or incidental administrative, legal and other expenses;

(7) compliance with laws, regulations and administrative rulings;

(8) financing; and

(9) expenses related to the initial operation of the transportation enhancement project or system.

(j) "Rail project" means rails, ties, switches, spurs, buildings, signals, trestles, bridges, land and other property, real or personal, that may be used for the purpose of providing freight rail or commuter rail services.

(k) "System" means a transportation enhancement project or any combination of transportation enhancement projects designated by the board under Section 368.601(n) as a system pursuant to a resolution of the board.

(l) "Transportation enhancement project" means:

(1) a highway of any number of lanes, with or without grade separation, including:

(A) an improvement to relieve traffic congestion and promote safety;

(B) a bridge, tunnel, overpass, underpass, interchange, service road, ramp or approach;

(C) an administration, storage or other building the district considers necessary for its operations;

(D) a parking area or structure or other building the district considers necessary for its operations; and

(E) property rights, easements and interests the district acquires to construct or operate a transportation enhancement project;

(2) an arterial street, thoroughfare or other road, including a bridge or grade separator;

(3) any project authorized by Chapter 284 [HCTRA], Chapter 361 [TTA; RMA's] or Chapter 451 [METRO], subject to the requirements of Section 368.005(b);

(4) rail projects; and

(5) Signalization systems, traffic management systems and intelligent transportation systems (ITS) associated with the projects described in subsections (1) through (4) above.

Sec. 368.004. CHAPTER LIBERALLY CONSTRUED. This chapter shall be liberally construed to effect its purposes.

Sec. 368.005. CONTRACTS WITH GOVERNMENTAL ENTITIES. (a) A district may contract with a governmental entity to plan, acquire, establish, develop, construct, renovate or operate a transportation enhancement project.

(b) A district may not plan, acquire, establish, develop, construct, renovate or operate a transportation enhancement project that another governmental entity, operating pursuant to its lawful authority, has determined to be a project under Chapter 284, a turnpike project under Chapter 361 or a transit authority system under Chapter 451 unless such other governmental entity enters into a written agreement with the district specifying the terms and conditions under which such project shall be undertaken.

(c) A district may not receive or be paid revenues derived by another governmental entity operating pursuant to Chapter 284, Chapter 361 or Chapter 451 unless such other governmental entity enters into a written agreement with the district specifying the terms and conditions under which such revenues shall be received by or paid to the district.

Sec. 368.006. POLITICAL SUBDIVISION; OPEN MEETINGS; OPEN RECORDS. (a) A district created under this chapter is a body politic and corporate and a political subdivision of this state.

(b) A district is subject to Chapter 551, Government Code.

(c) The books, records and papers of a district relating to a transportation enhancement project and the revenue used to provide the project are public information and subject to disclosure under Chapter 552, Government Code.

(d) A district is a governmental unit as that term is defined in Chapter 101, Civil Practice and Remedies Code and the operations of a district are not proprietary functions for any purpose, including the application of Chapter 101, Civil Practice and Remedies Code.

(e) The exercise by a district of the powers conferred by this chapter in the acquisition, design, financing, construction, operation and maintenance of a transportation enhancement project or system is:

(1) in all respects for the benefit of the people of the counties in which a district operates and of the people of this state, for the increase of their commerce and prosperity and for the improvement of their health, living conditions and public safety; and

(2) an essential governmental function of the state.

SUBCHAPTER B. CREATION, EXPANSION AND DISSOLUTION

Sec. 368.101. CREATION. (a) A county with a population of [3.3] million or more, acting by order adopted by its commissioners court, may create a transportation enhancement district under this chapter to plan, acquire, establish, develop, construct, renovate or operate a transportation enhancement project or system.

(b) Two or more counties, acting by concurrent order adopted by the respective commissioners courts, may create a transportation enhancement district under this chapter to plan, acquire, establish, develop, construct, renovate or operate a transportation enhancement project or system if:

(1) one of the counties has a population of at least [one (1) million]; and

(2) the counties form a contiguous territory.

Sec. 368.102. ORDER OR CONCURRENT ORDER CREATING DISTRICT. (a) An order or concurrent order may contain any terms or conditions not inconsistent with this chapter that are deemed appropriate by the commissioners court of any county adopting the order or concurrent order, including terms relating to the purpose, scope and governance of a district.

(b) A concurrent order must:

(1) contain substantially similar provisions; and

(2) define the boundaries of the district to be coextensive with the combined boundaries of each county included in the district.

(c) An order or concurrent order may be amended from time to time to provide for the addition or withdrawal of a county or for other purposes not inconsistent with this chapter. Any such amendments shall be adopted in substantially the same manner in which the order or concurrent order was adopted initially.

(d) An order or concurrent order may provide for expansion of a district upon a majority vote of the board.

(e) An order or concurrent order may provide for the commencement date of terms of office for board members and the manner in which terms may be staggered.

Sec. 368.103. EXPANSION. (a) A county that is not included in a district, but which is contiguous to a county that is included within an established district, acting through its commissioners court, may petition such a district for inclusion in the district. After receipt of such a petition and approval thereof by the board of the district, the petitioning county shall become part of the district, upon

(1) adoption by the commissioners courts of all counties that are included in the district and by the commissioners court of the petitioning county of an amended order or concurrent order that redefines the boundaries of the district to include the petitioning county; and

(2) approval by the voters of such petitioning county at an election held pursuant to Section 368.302.

(b) Subsection (a)(1) shall not apply if the concurrent order provides for expansion of the district upon majority vote of the board.

Sec. 368.104. DISSOLUTION. If none of the counties receives a majority of votes in favor of inclusion in a district at an election held pursuant to Section 368.302, the district is dissolved on the day after the returns of the election or elections are canvassed.

SUBCHAPTER C. GOVERNANCE

Sec. 368.201. BOARD OF DIRECTORS. (a) A district within a single county is governed by a board of directors appointed as follows:

(1) the commissioners court of the county shall appoint four directors;

(2) the city council of the largest municipality in the county shall appoint one director; and

(3) the governor shall appoint two directors.

(b) A district within two counties is governed by a board of directors appointed as follows:

(1) the commissioners court of the principal county shall appoint four directors;

(2) the commissioners court of the county other than the principal county shall appoint one director; and

(3) the governor shall appoint two directors.

(c) A district within three or more counties is governed by a board of directors appointed as follows:

(1) If the population of the principal county is greater than the total population of all other counties in the district,

(A) the commissioners court of the principal county shall appoint four directors;

(B) a panel composed of representatives of all counties other than the principal county, which representatives shall be selected equally by the commissioners courts of such counties, shall appoint three directors; and

(C) the governor shall appoint two directors.

(2) If the population of the principal county is equal to or less than the total population of all other counties in the district,

(A) the commissioners court of the principal county shall appoint four directors;

(B) a panel composed of representatives of all counties other than the principal county, which representatives shall be selected equally by the commissioners courts of such counties, shall appoint four directors; and

(C) the governor shall appoint one director.

(d) If the largest municipality in the principal county has a population of at least 1.5 million, one of the directors to be appointed by the commissioners court of the principal county as provided in (b)(1), (c)(1)(A) and (c)(2)(A) shall be appointed by the city council of such city and not by the commissioners court of the principal county.

(e) If one or more counties join a district by petition following the creation of the district, the board of directors shall be appointed as provided in subsection (b) or (c), as applicable.

(f) Directors serve staggered two year terms. A director may be removed by the appointing authority at any time without cause. Successor directors are appointed in the same manner as the original appointees.

(g) To qualify to serve as a director, a person appointed by a county must be a resident of such county, a person appointed by a panel must be a resident of a county other than the principal county and a person appointed by the governor must be a resident of the district. An employee, officer or member of the governing body of a governmental entity may serve as a director, but may not have a personal interest in a contract executed by the district other than as an employee, officer or member of the governing body of the county.

Sec. 368.203. OFFICERS. The presiding officer of the board shall be appointed by a majority of the board. The board shall designate from the members of the board a secretary and other officers that the board considers necessary.

Sec. 368.204. BYLAWS. A district by majority vote of the board may adopt bylaws to govern its operations and affairs.

Sec. 368.205. QUORUM. A quorum is a majority of the entire membership of the board and shall be present for the conduct of official business of the district.

Sec. 368.206. COMPENSATION. A board member is not entitled to compensation, but is entitled to reimbursement for actual and necessary expenses.

Sec. 368.207. MEETINGS BY TELEPHONE CONFERENCE CALL. (a) Chapter 551, Government Code, does not prohibit any open or closed meeting of the board, a committee of the board or the staff or any combination of the board or staff, from being held by telephone conference call.

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

(c) Notice of a telephone conference call meeting that by law must be open to the public must specify the location of the meeting. The location must be a conference room of the district or other facility in a county of the district that is accessible to the public.

(d) Each part of the telephone conference call meeting that by law must be open to the public shall be audible to the public at the location specified in the notice and shall be tape-recorded or documented by written minutes. On conclusion of the meeting, the tape recording or the written minutes of the meeting shall be made available to the public.

Sec. 368.208. EVIDENCE OF DISTRICT ACTIONS. Actions of a district are the actions of its board and may be evidenced in any legal manner, including a board resolution.

Sec. 368.209. STRATEGIC PLAN. (a) A district shall prepare and adopt a strategic plan that describes the anticipated development of transportation enhancement projects by the district. The board of the district shall determine the types of information to be included in the strategic plan. The strategic plan shall be consistent with any transportation improvement plan promulgated by the local council of governments serving the region in which the district is located and shall provide that transportation enhancement projects within a county shall be located without regard to whether such projects are inside or outside the boundaries of any municipality or other governmental entity.

(b) The strategic plan shall provide that, on a rolling three-year average, each county shall receive a proportionate share of (1) the proceeds from any motor fuels taxes and vehicle registration fees imposed by the district and (2) the proceeds of the sale of any bonds or other obligations by the district that is not less than ninety percent (90%) of the ratio of such taxes and fees collected within a county to the total of such taxes and fees collected within the district.

(c) The district shall give notice to the commissioners court of each county of the district and the local council of governments serving the region in which the district is located not later than the 90th day before the date of issuance of bonds to finance implementation of the strategic plan.

Sec. 368.210. AUDIT. The district's books and accounts shall be audited at least annually. The cost of the audit may be treated as part of the cost of implementation of the strategic plan.

Sec. 368.211. CONFLICT OF INTEREST. Chapter 171, Local Government Code, applies to officers and directors of a district.

Sec. 368.212. PURCHASE OF LIABILITY INSURANCE. (a) A district shall insure its officers and employees from liability arising from the use, operation or maintenance of equipment that is used or may be used in connection with the laying out, construction or maintenance of the district's transportation enhancement projects.

(b) Insurance coverage under this section must be provided by the purchase of a policy of liability insurance from a reliable insurance company authorized to do business in this state. The form of the policy must be approved by the commissioner of insurance.

(c) This section is not a waiver of immunity of the district or the counties in a district from liability for the torts or negligence of an officer or employee of a district.

(d) In this section, "equipment" includes an automobile, motor truck, trailer, aircraft, motor grader, roller, tractor, tractor power mower and other power equipment.

SUBCHAPTER D. PROCEDURAL REQUIREMENTS

Sec. 368.301. TRANSPORTATION ENHANCEMENT FUND. (a) A district shall establish by resolution a fund known as the transportation enhancement fund. The district may establish separate accounts within the fund for the various revenue sources.

(b) The district shall deposit into the transportation enhancement fund:

(1) the proceeds from any motor fuels tax and any vehicle registration fees imposed by the district;

(2) the proceeds of the sale of bonds or other obligations by the district; and

(3) any other money required by law to be deposited in the fund.

(c) The district may use money in the transportation enhancement fund to:

(1) reimburse or pay project costs of planning, acquiring, establishing, developing or renovating a transportation enhancement project or system;

(2) pay the principal of, interest on and other costs relating to bonds or other obligations issued by the district or to refund bonds or other obligations; or

(3) pay the costs of operating or maintaining a transportation enhancement project or system.

(d) Money deposited into the transportation enhancement fund is the property of the district.

Sec. 368.302. VOTER APPROVAL REQUIRED. (a) The inclusion of a county in a district is subject to approval by the voters as provided in this section.

(b) Each county that through its commissioners court adopts an order or concurrent order to create a district pursuant to Section 368.101 shall hold an election to confirm the inclusion of the county in the district and to authorize the imposition of taxes and fees under this chapter. A county shall not be included in a district and taxes and fees of a district may not be imposed in a county unless authorized and approved by a majority of the votes received at an election held by that county for that purpose, as provided herein.

(c) For a district created pursuant to Section 368.101(a), the ballot at the election held under this section must be printed to permit voting for or against the proposition: "Authorizing the appropriate county to be included in the designated district and authorizing such district to impose within the county motor fuels taxes at the rate not to exceed 5# cents per gallon and to impose a vehicle registration fee at a rate not to exceed $5.00 per vehicle for the purpose of providing transportation enhancement projects." If a majority of the votes cast at the election approves the proposition, the county may be included in the district and the district may impose the taxes and fees authorized at the election.

(d) For a district created pursuant to Section 368.101(b), the elections in each county shall be held on the same day and the ballot at the elections held under this section must be printed to permit voting for or against the proposition: "Authorizing the appropriate county to be included in the designated district and authorizing such district to impose within the county motor fuels taxes at the rate not to exceed 5# cents per gallon and to impose a vehicle registration fee at a rate not to exceed $5.00 per vehicle for the purpose of providing transportation enhancement projects." If a majority of the votes cast at the election in a county approves the proposition, the county may be included in the district and the district may impose the taxes and fees authorized at the election within that county. If the majority of the votes cast in a county does not approve the proposition, that county may not be included in the district and the district may not impose the taxes and fees within that county.

(e) A county joining the district by petition may call and hold its own election in the same manner as an election called pursuant to subsection (d).

(f) The board of the district may order an election to increase the rate of the motor fuels taxes or vehicle registration fees if the current rate is less than the maximum rate authorized by this chapter. Any such election called by the board may be held in the same manner as an election called pursuant to subsection (c).

(g) The Election Code governs an election held under this chapter.

SUBCHAPTER E. LOCAL OPTION MOTOR FUELS TAXES

Sec. 368.401. TAX AUTHORIZED. (a) A district by resolution may impose a tax on the following:

(1) the first sale or use of gasoline in the district;

(2) the first sale or use of diesel fuel in the district; and

(3) the use of liquefied gas for the propulsion of motor vehicles on the public highways of the district.

(b) A district may impose a tax under this subchapter only if:

(1) a transportation enhancement project is or is planned to be located in the district; and

(2) the tax is approved at one or more elections held pursuant to Section 368.302.

Sec. 368.402. GASOLINE TAX RATE. (a) The gasoline tax authorized by this subchapter is imposed at a rate not to exceed 5# cents for each gross or volumetric gallon or fractional part sold or used in the district, except as provided by subsection (b).

(b) For gasoline sold to a transit company for exclusive use in its transit carrier vehicles under an exemption certificate promulgated by the comptroller is imposed at a rate not to exceed 5# cents for each gallon.

Sec. 368.403. DIESEL FUEL TAX RATE. (a) The diesel fuel tax authorized by this subchapter is imposed at a rate not to exceed 5# cents for each gross or volumetric gallon or fractional part sold or used in the district, except as provided by subsection (b).

(b) For diesel fuel sold by a permitted supplier to a transit company for exclusive use in its transit carrier vehicles under an exemption certificate promulgated by the comptroller, the diesel fuel tax authorized by this subchapter is imposed at a rate not to exceed 5# cents for each gallon.

Sec. 368.404. LIQUEFIED GAS TAX RATE. The liquefied gas tax authorized by this subchapter is imposed at a rate not to exceed 5# cents a gallon.

Sec. 368.405. TAX CODE APPLICABLE. (a) Chapter 153, Tax Code, governs the computation, administration, collection and remittance of the taxes authorized under this subchapter except as inconsistent with this subchapter.

(b) The taxes authorized by this subchapter are in addition to any tax imposed under Chapter 153, Tax Code.

(c) The taxes authorized by this chapter are not occupation taxes.

Sec. 368.406. EXEMPTIONS APPLICABLE. The exemptions provided by Chapter 153, Tax Code, apply to the taxes authorized by this subchapter.

Sec. 368.407. EFFECTIVE DATE OF TAX. A tax imposed under this subchapter or a change in the tax rate takes effect on the first day of the first calendar quarter after the district notifies the comptroller. The district must adopt a resolution imposing the tax and notify the comptroller not later than 30 days after an election authorizing the imposition of the tax or any change thereof.

Sec. 368.408. TAX COLLECTION; PENALTY. (a) The person required to collect the tax imposed under this subchapter shall report and send the taxes collected to the comptroller in accordance with Chapter 153, Tax Code and as provided by the resolution imposing the tax.

(b) A district by resolution may prescribe penalties, including interest charges, for failure to keep records required by the district, to report when required or to pay the tax when due.

(c) The attorney acting for the district may bring suit against a person who fails to collect a tax under this subchapter and to pay it over to the comptroller as required.

Sec. 368.409. DEPOSIT IN TRANSPORTATION ENHANCEMENT FUND. Revenues derived from the taxes imposed pursuant to this subchapter shall deposited to the credit of the transportation enhancement fund.

Sec. 368.410. HIGHWAY FUNDS. The counties included within a district shall receive a proportionate share of all highway funds distributed by the department that is not less than ninety percent (90%) of the ratio of vehicle miles traveled within such counties to total vehicle miles traveled within the state, as calculated under applicable rules of the department.

Sec. 368.411. COUNTY AND OTHER LOCAL FUNDS. After the imposition within a county of the local option fuels taxes authorized by the chapter, such county and any other local governmental entity within its boundaries that provides highways, arterial streets, thoroughfares or other roads shall continue to provide funding for such types of projects at not less than the level of funding being provided as of the date of imposition of such taxes.

SUBCHAPTER F. VEHICLE REGISTRATION FEES

Sec. 368.501. OPTIONAL VEHICLE REGISTRATION FEE. (a) A district by resolution may impose a vehicle registration fee, in addition to any other fee authorized by law, not to exceed $5.00 for registering a vehicle in the district.

(b) A vehicle that may be registered under Chapter 502 without payment of a registration fee may be registered in a district imposing a fee under this section without payment of the additional fee.

(c) A fee imposed under this section shall take effect on the first day of the first calendar quarter after the district notifies the [collecting authority]. The district must adopt a resolution imposing the fee and notify the collecting authority not later than 30 days after an election authorizing the imposition of the fee or any increase thereof.

(d) A fee imposed under this section may be removed. The removal may take effect only on January 1 of a year. A district may remove the fee only by:

(1) rescinding the resolution imposing the fee; and

(2) notifying the department not later than September 1 of the year preceding the year in which the removal takes effect.

(e) The county assessor-collector of a county within the district imposing a fee under this section shall collect the additional fee for a vehicle when other fees imposed under Chapter 502 are collected. The county assessor-collector shall send all fees collected for a district under this subsection to the district to be credited to the transportation enhancement fund.

(f) The department shall collect the additional fee on a vehicle that is owned by a resident of a county within the district imposing a fee under this section and that, under Chapter 502, must be registered directly with the department. The department shall send all fees collected for a district under this subsection to the district to be credited to the transportation enhancement fund.

(g) The department shall adopt rules and develop forms necessary to administer registration by mail for a vehicle being registered in a county within the district imposing a fee under this section.

SUBCHAPTER G. POWERS AND DUTIES

Sec. 368.601. GENERAL POWERS OF A DISTRICT. (a) A district, acting through its board, without state approval, supervision or regulation, may:

(1) perform any act necessary to the full exercise of the district's powers;

(2) accept a gift, grant, loan or other contribution from a:

(A) department or agency of the United States;

(B) department, agency or political subdivision of this state; or

(C) public or private person;

(3) acquire, sell, lease, convey or otherwise dispose of property or an interest in property, including a right-of-way or easement or a transportation enhancement project, under terms and conditions determined by the district;

(4) employ necessary personnel; and

(5) adopt rules to govern the operation of the district and its employees and property and the conduct of its business.

(6) study, evaluate, design, acquire, construct, maintain, repair and operate transportation enhancement projects, individually or as one or more systems;

(7) acquire, hold and dispose of property in the exercise of its powers and the performance of its duties and under this chapter;

(8) enter into contracts or operating agreements with similar authorities or agencies of the United States, a state of the United States, the United Mexican States or a state of the United Mexican States;

(9) enter into contracts or agreements necessary or incidental to its duties and powers under this chapter;

(10) cooperate and work directly with property owners and governmental agencies and officials to support an activity required to promote or develop a transportation enhancement project or system;

(11) employ and set the compensation and benefits of administrators, consulting engineers, attorneys, accountants, construction and financial experts, superintendents, managers, full-time and part-time employees, agents, consultants and such other persons as the district considers necessary or useful;

(12) adopt an official seal;

(13) install, construct, maintain, repair, renew, relocate and remove public utility facilities in, on, along, over or under a transportation enhancement project;

(14) organize a corporation under Chapter 431 for the promotion and development of transportation enhancement projects and systems;

(15) adopt and enforce rules not inconsistent with this chapter for the use of any transportation enhancement project or system, including traffic and other public safety rules; and

(16) enter into leases, operating agreements, service agreements, licenses, franchises and similar agreements with public or private parties governing the parties' use of all or any portion of a transportation enhancement project and the rights and obligations of the district with respect to a transportation enhancement project;

(17) do all things necessary or appropriate to carry out the powers expressly granted by this chapter.

(b) Property comprising a part of a transportation enhancement project or a system is not subject to condemnation or the power of eminent domain by any person, including a governmental entity.

(c) A district may, if requested by the commission, perform any function not specified by this chapter to promote or develop transportation enhancement projects and systems in this state.

(d) A district may sue and be sued and plead and be impleaded in its own name.

(e) A district may rent, lease, franchise, license or otherwise make portions of its properties available for use by others in furtherance of its powers under this chapter by increasing the feasibility or the revenue of a transportation enhancement project or system.

(f) A district and any governmental entity may enter into a contract under which the district will operate a transportation enhancement project or system on behalf of the governmental entity. A district may enter into a contract with the department under which the district will operate a transportation enhancement project or system on behalf of the department.

(g) The payments to be made to a district under a contract described by Subsection (g) shall constitute operating expenses of the facility or system that is to be operated under the contract and the contract may extend for a number of years as the parties agree.

(h) A district may contract with a public or private person, including one or more counties that created the district, to:

(1) plan, acquire, establish, develop, construct, renovate or operate a transportation enhancement project; or

(2) perform any other act the district is authorized to perform under this chapter, other than conducting an election under this chapter.

(i) A district may not levy an ad valorem tax.

(j) In a transaction with another public entity that is made as provided by Subsection (a)(3), the public purpose found by the legislature under Section 363.032 is adequate consideration for the district and the other public entity.

(k) Subject to approval by the commissioners court of the county in which real property is located, a district has the right and power of eminent domain under Chapter 21, Property Code, to acquire and condemn any interest, including a fee simple interest, in real property in the district, in connection with the planning, acquisition, establishment, development, construction, renovation, repair, maintenance or operation of a transportation enhancement project. A district is not required to provide bond for appeal or bond for costs under Section 21.021(a)(2) or (3), Property Code, in any lawsuit to which the district is a party and is not required to deposit more than the amount of the award in a suit.

(l) Subject to approval by the commissioners court of the county in which real property is located, the governing body of a district has the same powers and duties that the commission has under Subchapter D, Chapter 361, relating to the condemnation of real property.

(m) A district shall have the rights and powers of a county relating to roads and bridges, except as otherwise provided in the order or concurrent order creating the district.

(n) The governing body of a district by resolution may designate a transportation enhancement project or a combination of projects as a system.

Sec. 368.602. PUBLIC PURPOSE OF TRANSPORTATION ENHANCEMENT PROJECT. (a) The legislature finds for all constitutional and statutory purposes that a transportation enhancement project is owned, used and held for public purposes by the district.

(b) Section 25.07(a), Tax Code, does not apply to a leasehold or other possessory interest granted by the district while the district owns the transportation enhancement project.

(c) A transportation enhancement project is exempt from taxation under Section 11.11, Tax Code, while the district owns the transportation enhancement project.

Sec. 368.603. PROJECTS EXTENDING INTO OTHER COUNTIES. A district may acquire, construct, operate, maintain, expand or extend a transportation enhancement project in:

(a) a county that is a part of the district; or

(b) a county in which the district operates or is constructing a transportation enhancement project if the project in the affected county is a continuation of the district's transportation enhancement project or system extending from an adjacent county.

Sec. 368.604. BONDS AND OTHER OBLIGATIONS. (a) A district may issue bonds, including revenue bonds and refunding bonds or other obligations to pay the costs of a transportation enhancement project or system. Project costs incurred before the issuance of bonds or other obligations to finance a transportation enhancement project or system may be reimbursed from the proceeds of sale of the bonds or other obligations.

(b) The bonds or other obligations and the proceedings authorizing the bonds or other obligations shall be submitted to the attorney general for review and approval as required by Chapter 1202, Government Code.

(c) The bonds or other obligations must be payable from and secured by the designated revenues in the transportation enhancement fund.

(d) The bonds or other obligations may mature serially or otherwise not more than 40 years from their date of issuance.

(e) The bonds or other obligations are not a debt of and do not create a claim for payment against the revenue or property of the district other than the revenue sources pledged and a transportation enhancement project for which the bonds are issued.

(f) A district may issue obligations and enter into credit agreements under Chapter 1371, Government Code. For purposes of that chapter, a district is a "public utility" and a transportation enhancement project is an "eligible project."

(g) All laws affecting the issuance of bonds by local governmental entities, including Chapters 1201, 1202, 1204 and 1371, Government Code, apply to bonds issued under this chapter. To the extent of a conflict between those laws and this chapter, the provisions of this chapter prevail.

Sec. 368.605. TAX EXEMPTION. (a) The property, revenue and income of a district are exempt from state and local taxes.

(b) A district is exempt from payment of development fees, utility connection fees, assessments and service fees imposed or assessed by a county, municipality, road and utility district, river authority, any other state or local governmental entity or any property owners' or homeowners' association.

Sec. 368.606. COMPETITIVE BIDDING. (a) A contract made by a district that requires the expenditures of public funds for the construction or maintenance of a transportation enhancement project must be let by a competitive bidding procedure in which the contract is awarded to the lowest responsible bidder that complies with the district's criteria.

(b) The district shall adopt rules governing the award of contracts through competitive bidding.

Sec. 368.607. INVESTMENTS AND DEPOSITORIES. A district is subject to Chapter 2256 and 2257, Government Code.

SUBCHAPTER H. WITHDRAWAL OF TERRITORY FROM AUTHORITY

Sec. 368.701. WITHDRAWAL OF COUNTY. (a) The commissioners court of a county may order an election to withdraw the county from a district.

(b) On the determination by a commissioners court of a county that a petition for withdrawal under this subchapter is valid, the commissioners court shall order an election to withdraw the county from the district.

(c) An election to withdraw may not be ordered and a petition for an election to withdraw may not be accepted for filing, on or before the fifth anniversary after the date of a previous election in the county to withdraw from the district.

(d) An attempt by a county to withdraw from a district in a manner other than as provided by this subchapter is void.

Sec. 368.702. PETITION FOR WITHDRAWAL ELECTION. (a) At the request of a registered voter of a county in a district, the clerk or administrator of the county shall deliver to the voter, in the number requested, petition signature sheets for a petition to withdraw from the district prepared by, numbered and authenticated by such official. During the period that signatures on the petition may be obtained, the official shall authenticate and deliver additional petition signature sheets as requested by the voter. Only one petition for withdrawal may be in circulation at a time.

(b) Each sheet of a petition must have a heading in capital letters as follows:

"THIS PETITION IS TO REQUIRE AN ELECTION TO BE HELD IN (name of the county) TO WITHDRAW (name of the county) FROM THE (name of district) SUBJECT TO THE CONTINUED COLLECTION OF MOTOR FUEL TAXES AND VEHICLE REGISTRATION FEES FOR THE PERIOD REQUIRED BY LAW."

(c) In addition to the requirements of Section 277.002, Election Code, to be valid a petition must:

(1) be signed on authenticated petition sheets by not less than 20 percent of the number of registered voters of the county as shown on the voter registration list of each county in which the county is located;

(2) be filed with the clerk or administrator of the county not later than the 60th day after the date the first sheet of the petition was received under Subsection (a);

(3) contain signatures that are signed in ink or indelible pencil by the voter; and

(4) have affixed or printed on each sheet an affidavit that is executed before a notary public by the person who circulated the sheet and that is in the following form and substance:

"STATE OF TEXAS

"COUNTY OF ________________

"I, _______________, affirm that I personally witnessed each signer affix his or her signature to this page of this petition for the withdrawal from (name of district) by (name of county). I affirm to the best of my knowledge and belief that each signature is the genuine signature of the person whose name is signed and that the date entered next to each signature is the date the signature was affixed to this page.

___________________________________________

"Sworn to and subscribed before me this the _____ day of _______, ____.

(SEAL)

________________________________

Notary Public, State of Texas"

(d) Each sheet of the petition must be filed under Subsection (c)(2) at the same time as a single filing.

Sec. 368.703. REVIEW OF PETITION. (a) The clerk or administrator of a county in which a petition for withdrawal from a district is filed, shall examine the petition and file with the commissioners court of the county a report stating whether the petition, in the opinion of the clerk or administrator, is valid.

(b) On receipt of a petition and a report under Subsection (a), the commissioners court shall examine the petition to determine whether the petition is valid. The commissioners court may hold public hearings and conduct or order investigations as appropriate to make the determination. The commissioners court's determination is conclusive of the issues.

Sec. 368.704. INVALID PETITION. (a) The commissioners court of a county that receives an invalid petition shall reject the petition.

(b) A petition that is rejected is void and the petition and each sheet of the rejected petition may not be used in connection with a subsequent petition.

Sec. 368.705. ELECTION. (a) An election to withdraw from a district ordered under this subchapter must be held on the first applicable uniform election date occurring after the expiration of 90 days after the date the commissioners court orders the election.

(b) The commissioners court shall give notice of the election to the board, the department and the comptroller immediately on calling the election.

(c) At the election the ballot shall be printed to provide for voting for or against the proposition: "Shall (name of county) continue to be included in the (name of district)?"

(d) The election shall be held in the regular precincts and at the regular voting places.

Sec. 368.706. RESULT OF WITHDRAWAL ELECTION. (a) If a majority of the votes received on the measure in an election held under Section 368.705 favor the proposition, the county continues in the district.

(b) If less than a majority of the votes received on the measure in the election favor the proposition, the county ceases to be included in the district on the day after the day the election returns are canvassed.

Sec. 368.707. EFFECT OF WITHDRAWAL. (a) On the effective date of a withdrawal from a district:

(1) the district shall, except as provided by Section 368.708, cease providing transportation services in the withdrawn county; and

(2) the financial obligations of the district attributable to the withdrawn county cease to accrue.

(b) Taxes of the district continue to be collected in the territory of a withdrawn county after withdrawal until the net financial obligation of the county to the district has been collected.

Sec. 368.708. DETERMINATION OF TOTAL AMOUNT OF FINANCIAL OBLIGATIONS OF WITHDRAWN UNIT. (a) The net financial obligation of a withdrawn county to the district is an amount equal to:

(1) the gross financial obligations of the county, which is the sum of:

(A) the county's apportioned share of the district's outstanding obligations; and

(B) the amount, not computed in Subdivision (1)(A), that is necessary and appropriate to allocate to the county because of financial obligations of the district that specifically relate to the county; minus

(2) the county's apportioned share of the unencumbered assets of the district that consist of cash, cash deposits, certificates of deposit and bonds, stocks and other negotiable securities.

(b) A district's outstanding obligations under Subsection (a)(1)(A) is the sum of:

(1) the obligations of the district authorized in the budget of and contracted for by, the district;

(2) outstanding contractual obligations for capital or other expenditures, including expenditures for a subsequent year, the payment of which is not made or provided for from the proceeds of notes, bonds or other obligations;

(3) payments due or to become due in a subsequent year on notes, bonds or other securities or obligations for debt issued by the district;

(4) the amount required by the district to be reserved for all years to comply with financial covenants made with lenders, note or bond holders or other creditors or contractors; and

(5) the amount necessary for the full and timely payment of the obligations of the district, to avoid a default or impairment of those obligations, including contingent liabilities.

(c) The apportioned share of a unit's obligation or assets is the amount of the obligation or assets times a fraction, the numerator of which is the number of inhabitants of the withdrawing county and the denominator of which is the number of inhabitants of the district, including the number of inhabitants of the county.

(d) The board shall determine the amount of each component of the computations required under this section, including the components of the county's apportioned share, as of the effective date of withdrawal. The number of inhabitants shall be determined according to the most recent and available applicable data of an agency of the United States.

Sec. 368.709. CERTIFICATION OF NET FINANCIAL OBLIGATION OF COUNTY. (a) The board shall certify to the commissioners court of a withdrawn county and to the comptroller the net financial obligation of the county to the district as determined under this subchapter.

(b) If there is no net financial obligation of the county, the certification must show that fact.

Sec. 368.710. COLLECTION OF MOTOR FUEL TAXES AND VEHICLE REGISTRATION FEES AFTER WITHDRAWAL. (a) Until the amount of revenue from a district's motor fuels taxes and vehicle registration fees collected in a withdrawn county after the effective date of withdrawal and paid to the district equals the net financial obligation of the county, the taxes and fees continue to be collected in the territory of the county.

(b) After the amount described by Subsection (a) has been collected or if the share of the district's assets computed for the county under Section 368.708 is greater than the gross financial obligation of the county to the district, the comptroller and county tax-assessor collector or other collection authority, shall discontinue collecting the taxes and fees in the territory of the county.

Sec. 368.711. REFUNDS OF EXCESS REVENUES FROM MOTOR FUEL TAXES AND VEHICLE REGISTRATION FEES. (a) The applicable collecting authority shall refund to the county the amount of the district's taxes and fees:

(1) that is in excess of the net financial obligation of the county and was collected in the county after the date of withdrawal; or

(2) if the county's share of authority assets exceeded the county's gross financial obligation to the district, that was collected in the county after the date of withdrawal.

(b) The collecting authority may:

(1) determine the amount refundable under Subsection (a) in any reasonable manner; and

(2) subtract any deduction otherwise allowed by law.

(c) If the withdrawn county has continuously been a part of the district since the district was created at the initial election, the collecting authority shall also refund to the commissioners court of the county an amount equal to the amount by which the county's apportioned share of the district's assets exceeds the gross financial obligation of the county.

Sec. 368.712. USE OF REFUNDED REVENUE. (a) The commissioners court of a county that receives a refund under Section 368.712 may use the refund only for public purposes directly related to the functions of government that will benefit the residents of the county as a whole.

(b) If the commissioners court distributes refund revenue to any other person, the commissioners court shall:

(1) ensure that the recipient spends the amount received to benefit the residents of the county as a whole;

(2) ensure that the amount distributed is spent for public purposes that are the predominant purpose of the distribution; and

(3) condition the distribution by contract or other legal manner to provide the commissioners court with sufficient control of the use of the amounts distributed to ensure that the public purposes for which the distribution is made are carried out and to protect the public investment in the revenue.

SECTION 2. Section 153.015, Tax Code, is amended to read as follows:

"Except for the taxes authorized by Chapter 368, Transportation Code, the taxes imposed by this chapter are in lieu of any other excise or occupation tax imposed by a political subdivision of the state on the sale, use or distribution of gasoline, diesel fuel or liquefied gas."

SECTION 3. Subsection (a), Section 502.003, Transportation Code, is amended to read as follows:

"(a) Except as provided in Chapter 368, Transportation Code and except as provided by Subsection (b), a political subdivision of this state may not require an owner of a motor vehicle to:

(1) register the vehicle;

(2) pay a motor vehicle registration fee; or

(3) pay an occupation tax or license fee in connection with a motor vehicle."

SECTION 4. EFFECTIVE DATE. This Act takes effect January 1, 2004, but only if the constitutional amendment proposed by the 78th Legislature, Regular Session, 2003, to authorize transportation enhancement authorities imposes taxes and vehicle registration fees is held in the State and approved by the voters. If that amendment is not approved by the voters, this Act has no effect.

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