CHAPTER 460. COORDINATED COUNTY TRANSPORTATION AUTHORITIES

TRANSPORTATION CODE

TITLE 6. ROADWAYS

SUBTITLE K. MASS TRANSPORTATION

CHAPTER 460. COORDINATED COUNTY TRANSPORTATION AUTHORITIES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 460.001. DEFINITIONS. In this chapter:

(1) "Authority" means a coordinated county transportation

authority created under this chapter.

(2) "Balance of the county" means that part of the county that

is outside the boundaries of a municipality with a population of

12,000 or more.

(3) "Board of directors " means the governing body of the

authority.

(4) "Service plan" means an outline of the service that would be

provided by an authority.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001. Amended by Acts 2003, 78th Leg., ch. 306, Sec. 1, eff.

Sept. 1, 2003.

Sec. 460.002. APPLICABILITY. This chapter applies only to a

county that is adjacent to a county with a population of more

than one million.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.003. INELIGIBILITY OF CERTAIN MUNICIPALITIES. (a) A

municipality that is a member of a subregion of a transportation

authority governed by a board described in Subchapter O, Chapter

452, is not eligible to join or become a member of an authority

created under this chapter unless:

(1) the municipality holds a withdrawal election in accordance

with the requirements of Section 452.655 and a majority of the

voters at the election approve the withdrawal;

(2) the municipality has paid in full all amounts that it is

required to pay under Sections 452.659 and 452.660; and

(3) the comptroller has ceased under Section 452.658 to collect

sales and use taxes within the municipality that were levied and

collected in the municipality for purposes of the authority from

which the municipality has withdrawn.

(b) A municipality that is not eligible under this section for

membership in an authority created under this chapter may not be

added to or join an authority under Section 460.302 or 460.303

until the municipality meets the requirements of this section.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.004. REFERENCE. A reference in this chapter to the

executive committee means the board of directors.

Added by Acts 2003, 78th Leg., ch. 306, Sec. 2, eff. Sept. 1,

2003.

SUBCHAPTER B. CREATION OF AUTHORITY

Sec. 460.051. CREATION OF AUTHORITY. (a) The commissioners

court of a county may initiate the process to create an authority

to provide public transportation and transportation-related

services:

(1) on adoption of a resolution or order initiating the process

to create an authority; or

(2) on receipt of a petition requesting creation of an authority

signed by a number of registered voters of the county equal to or

greater than five percent of the votes cast in the county in the

most recent gubernatorial election.

(b) If a petition described by Subsection (a)(2) is received by

the commissioners court, the petition shall be verified by the

county clerk, consistent with Chapter 277, Election Code, and

returned to the commissioners court with a finding of

verification.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.052. HEARING. (a) The commissioners court shall hold

a public hearing on creation of an authority not later than the

60th day after the date the commissioners court:

(1) receives a petition described by Section 460.051(a)(2); or

(2) adopts a resolution or order to initiate the process to

create an authority.

(b) Notice of the time and place of the public hearing on the

creation of the authority shall be published, beginning at least

30 days before the date of the hearing, once a week for two

consecutive weeks in a newspaper of general circulation in the

county.

(c) Each municipality in the county with a population of 12,000

or more shall be notified of the public hearing by notice mailed

to the governing body of the municipality.

(d) Any person may appear at a hearing and offer evidence on:

(1) the creation of the authority;

(2) operation of the county transportation system;

(3) public interest served in the creation of the authority; or

(4) other facts relating to the creation of the authority.

(e) A hearing may be continued until completed.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.053. RESOLUTION OR ORDER. After the hearing, the

commissioners court may adopt a resolution or order:

(1) designating the name of the authority;

(2) stating that all land within the county shall be part of the

authority; and

(3) stating that the territory described in Subdivision (2) is

subject to the authority based on the results of the confirmation

election.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.054. MEMBERSHIP OF INTERIM EXECUTIVE COMMITTEE. (a)

After adopting a resolution or order under Section 460.053, the

commissioners court and certain municipalities, as provided by

this section, shall appoint an interim executive committee for

the authority.

(b) The interim executive committee is composed of:

(1) one member appointed by the governing body of each

municipality with a population of 12,000 or more that is located

in the county;

(2) three members appointed by the commissioners court, two of

whom must reside in the unincorporated area of the county; and

(3) three members to be designated by the remaining

municipalities with a population of more than 500 but less than

12,000 located in the county.

(c) The members described by Subsection (b)(3) shall be

designated as follows:

(1) each municipality with a population of more than 500 but

less than 12,000 located in the county shall nominate one person

using a nomination form sent to the governing body of the

municipality by mail;

(2) the county judge shall add the names on the nomination forms

that are received before the 31st day after the date of the

mailing of the nomination forms;

(3) each municipality with a population of more than 500 but

less than 12,000 located in the county is entitled to cast one

vote;

(4) only ballots returned to the county judge on or before a

predetermined date shall be counted;

(5) the county judge shall designate the three persons with the

highest plurality vote as members of the interim executive

committee; and

(6) if three members are not designated by this process, the

county judge shall name the balance of the members of the interim

executive committee described by Subsection (b)(3).

(d) The county judge may fill a vacancy in a position described

by Subsection (b)(3) by naming a person nominated under

Subsection (c) for the unexpired term.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2005, 79th Leg., Ch.

991, Sec. 2, eff. September 1, 2005.

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 1, eff. September 1, 2007.

Sec. 460.055. DUTIES OF INTERIM EXECUTIVE COMMITTEE. (a) The

interim executive committee shall elect three of its members to

serve as the chair, vice chair, and secretary.

(b) The interim executive committee shall develop a service plan

and determine a proposed tax not later than the 180th day after

the date of the interim executive committee's first meeting.

(c) The interim executive committee shall hold at least one

regular meeting a month for the purpose of developing a service

plan and determining a proposed tax rate.

(d) The interim executive committee shall consider the following

in developing the service plan:

(1) the regional transportation plan for the county and major

thoroughfare plan;

(2) actual and projected traffic counts of private passenger

vehicles and projected destinations of the vehicles;

(3) feasible alternative modes of public transportation,

including:

(A) a fixed guideway system;

(B) passenger commercial carriers;

(C) dedicated thoroughfare lanes;

(D) fixed skyway rail;

(E) high occupancy toll lanes;

(F) traffic management systems; and

(G) bus transit and associated lanes;

(4) the most efficient location of collection points and

transfer points;

(5) alternative routes linking access and discharge points;

(6) alternative alignments using least populous areas if

right-of-way acquisition will be required for a transit route;

(7) estimates of capital expenditures for a functional public

transportation system;

(8) various forms of public transportation consistent with use

of transit routes, including for each form a determination of:

(A) cost per passenger per mile;

(B) the capital expense of acquisition of the public

transportation system;

(C) costs associated with the acquisition, improvement, or

modification of the transit way; and

(D) maintenance and operating costs;

(9) administrative overhead costs separately from other costs;

(10) load factors based on surveys, interviews, and other

reasonable quantification for the modes of transportation;

(11) a fare structure for the ridership of the public

transportation system by mode;

(12) a comparison of revenue from all sources, including fares,

fees, grants, and debt issuance, with estimated costs and

expenses;

(13) revenue minus expenses expressed numerically and a per

rider factor for each trip or segment of a trip;

(14) if the service plan contemplates joint use of other transit

systems or transfer to them, estimated dates of access; and

(15) segments of the service plan separately if:

(A) some segments are more profitable than others; or

(B) some segments show a smaller deficit than others.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.056. APPROVAL OF SERVICE PLAN AND TAX RATE. (a) On

approval by the interim executive committee of the service plan

and tax rate, a copy of the plan and tax rate shall be provided

to the commissioners court and the governing body of each

municipality with a population of 12,000 or more located in the

county.

(b) Notice of the interim executive committee's approval of the

service plan and tax rate shall be published in a newspaper of

general circulation in the county and mailed to all governing

bodies of municipalities with a population of more than 500

located in the county.

(c) Not later than the 60th day after the date the interim

executive committee approves the service plan and tax rate, the

governing body of a municipality with a population of 12,000 or

more may approve by resolution or order the service plan and tax

rate.

(d) A municipality with a population of 12,000 or more located

in the county that does not give its approval under Subsection

(c) may not participate in the service plan or the confirmation

election for the authority.

(e) The commissioners court may not order a confirmation

election in a municipality with a population of 12,000 or more in

which the governing body of the municipality does not approve the

service plan and tax rate.

(f) The board of directors of a confirmed authority may by rule

create a procedure by which a municipality described by

Subsection (d) may become a participating member of an authority.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001. Amended by Acts 2003, 78th Leg., ch. 306, Sec. 4, eff.

Sept. 1, 2003.

Sec. 460.057. CONFIRMATION ELECTION. (a) The interim executive

committee shall notify the commissioners court of the need to

call a confirmation election.

(b) The commissioners court in ordering the confirmation

election shall submit to the qualified voters in the county the

following proposition:

"Shall the creation of (name of authority) be confirmed?"

(c) In addition to other information required by law, the notice

of the election must include:

(1) a brief description of the service plan; and

(2) a statement that an imposition of a tax to pay for the

service plan must be approved by the voters at a subsequent

election.

(d) The election must be held on a uniform election date.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.058. CONDUCT OF ELECTION. (a) A confirmation election

shall be conducted so that the votes are separately tabulated and

canvassed in order to show the results for:

(1) each municipality located in the county that passed a

resolution or order approving the service plan and tax rate; and

(2) the qualified voters in the balance of the county.

(b) The interim executive committee shall canvass the returns

and declare the results of the election.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.059. RESULTS OF ELECTION. (a) If a majority of votes

received in the county favor the proposition, the authority is

confirmed, except that the authority does not include a

municipality with a population of 12,000 or more located in the

county in which a majority of the votes did not favor the

proposition.

(b) The authority ceases unless one or more municipalities with

a population of 12,000 or more votes in favor of the proposition.

(c) If the authority is confirmed, the interim executive

committee shall record the results in its minutes and adopt an

order:

(1) declaring that the creation of the authority is confirmed;

(2) stating the date of the election; and

(3) showing the number of votes cast for or against the

proposition in each municipality that passed a resolution or

order approving the service plan and tax rate and in the

unincorporated area of the county.

(d) On adoption of the order confirming the authority, the

interim executive committee becomes the board of directors of the

authority.

(e) A certified copy of the order shall be filed with the Texas

Department of Transportation and the comptroller of public

accounts.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 2, eff. September 1, 2007.

Sec. 460.060. FAILURE TO CONFIRM AUTHORITY. (a) If the

authority ceases, the interim executive committee shall record

the results of the election in its minutes and adopt an order

declaring that the authority is dissolved.

(b) The county and each municipality that passed a resolution or

order approving the service plan and tax rate shall share the

expenses of the election proportionately based on the population

of the areas in which the election was conducted.

(c) An authority that has not been confirmed expires on the

third anniversary of the effective date of the resolution or

order initiating the process to create the authority.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

SUBCHAPTER C. POWERS OF AUTHORITY

Sec. 460.101. POWERS APPLICABLE TO CONFIRMED AUTHORITY. This

subchapter applies only to an authority that has been confirmed.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.102. NATURE OF AUTHORITY. (a) An authority:

(1) is a governmental body and a corporate body;

(2) has perpetual succession; and

(3) exercises public and essential governmental functions.

(b) An authority is a governmental unit under Chapter 101, Civil

Practice and Remedies Code, and the operations of the authority

are not proprietary functions for any purpose including the

application of Chapter 101, Civil Practice and Remedies Code.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.103. GENERAL POWERS OF AUTHORITY. (a) The authority

has any power necessary or convenient to carry out this chapter

or effect the purpose of this chapter.

(b) An authority may sue and be sued. An authority may not be

required to give security for costs in a suit brought or

prosecuted by the authority and may not be required to post a

supersedeas or cost bond in an appeal of a judgment.

(c) An authority may hold, use, sell, lease, dispose of, and

acquire, by any means, property and licenses, patents, rights and

other interests necessary, convenient, or useful to the exercise

of any power under this chapter.

(d) An authority may sell, lease, or dispose of in another

manner:

(1) any right, interest, or property of the authority that is

not necessary for the efficient operation and maintenance of

public transportation; or

(2) at any time, surplus materials or other property that is not

needed by the authority to carry out a power under this chapter.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.104. POWER TO CONTRACT; GRANTS AND LOANS. (a) An

authority may contract with any person.

(b) An authority may accept a gift, grant, donation, or loan

from any person.

(c) An authority may enter into an agreement, including an

interlocal agreement, with a transportation or transit entity,

including a municipality, that is consistent with and beneficial

to the service plan approved by the authority.

(d) An authority may acquire rolling stock or other real or

personal property under a contract or trust agreement, including

a conditional sales contract, a lease, a lease-purchase

agreement, or an equipment trust.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 3, eff. September 1, 2007.

Sec. 460.105. OPERATION OF PUBLIC TRANSPORTATION SYSTEM. (a)

An authority may:

(1) acquire, construct, develop, plan, own, operate, and

maintain a public transportation system in the territory of the

authority, including the territory of a political subdivision or

municipality partially located in the territory of the authority;

(2) contract with a municipality, county, or other political

subdivision for the authority to provide public transportation

services outside the authority;

(3) lease all or part of the public transportation to, or

contract for the operation of all or a part of the public

transportation system by, an operator;

(4) contract with a political subdivision or governmental entity

to provide public transportation services inside the authority

consistent with rules and regulations established by the

authority, including capital, maintenance, operation, and other

costs specifically approved and audited by the authority; and

(5) acquire, construct, develop, plan, own, operate, maintain,

or manage a public transportation system or project not located

in the territory of the authority if the system or project

provides a service, benefit, or convenience to the people in the

territory of the authority.

(b) An authority shall determine routes of the public

transportation system or approve routes submitted to the

authority.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2005, 79th Leg., Ch.

991, Sec. 3, eff. September 1, 2005.

Sec. 460.106. AUTHORIZATION OF TAX LEVY. (a) An authority may

call an authorization election for a tax levy associated with the

service plan developed by the interim executive committee or a

tax rate that has been modified by action of the authority at any

time after the confirmation election that creates the authority.

(b) The authority in ordering the authorization election shall

submit to the qualified voters in the county located in an area

participating in the authority the following proposition:

"Shall the (name of authority) levy of a proposed tax, not to

exceed (rate), be authorized?"

(c) An election authorizing a tax levy shall be conducted in the

same manner as a confirmation election under Subchapter B.

(d) A service plan may be implemented in an area of the county

participating in the authority only if a majority of votes

received favor the authorization of a tax levy by the authority.

(e) An authority that does not authorize an initial tax levy at

an authorization election expires on the second anniversary of

the date the executive committee adopts an order declaring that

the creation of the authority is confirmed.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 4, eff. September 1, 2007.

Sec. 460.107. ACQUISITION OF PROPERTY. (a) As necessary or

useful in the construction, repair, maintenance, or operation of

a public transportation system, an authority may use a public

way, including an alley.

(b) An authority may acquire by eminent domain any interest in

real property, including a fee simple interest and the use of air

or subsurface space, except the right of eminent domain may not

be exercised:

(1) in a municipality without the approval of the proposed

acquisition by the governing body of the municipality; or

(2) in an unincorporated area without the approval of the

proposed acquisition by the commissioners court of the county in

which the property to be condemned is located.

(c) If an authority, through the exercise of eminent domain,

makes any relocation necessary, the relocation costs shall be

paid by the authority.

(d) An eminent domain proceeding by an authority is initiated by

the adoption by the executive committee of a resolution

authorizing the exercise that:

(1) describes the property to be condemned;

(2) declares the public necessity for the acquisition; and

(3) declares that the acquisition is necessary for the

construction, extension, improvement, or development of the

public transportation system.

(e) A resolution adopted under this section and approved by the

appropriate municipal governing body or commissioners court is

conclusive evidence of the public necessity for the acquisition

described in the resolution.

(f) Chapter 21, Property Code, applies to an eminent domain

proceeding by an authority.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.108. AGREEMENT WITH UTILITIES, CARRIERS. (a) An

authority may agree with any other public or private utility,

communication system, common carrier, or transportation system

for:

(1) the joint use of the property or fixtures of the agreeing

entities; and

(2) the establishment of through routes, joint fares, or

transfers of passengers between the agreeing entities.

(b) If the exercise of a power granted to an authority under

this subchapter requires a public utility facility to be

relocated, adjusted, raised, lowered, rerouted, or changed as to

grade or construction, the authority shall take the required

action at the authority's expense.

(c) An authority may not impose an impact fee or assessment on

the property, equipment, or facilities of a utility.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.109. FARES AND USE FEES. (a) An authority shall

impose reasonable and nondiscriminatory fares, tolls, charges,

rents, and other forms of compensation for the use of the public

transportation system. The fares and other forms of compensation

shall be sufficient to produce revenue, together with tax revenue

and grants received by the authority, in an amount adequate to:

(1) pay annually the expenses necessary to operate and maintain

the public transportation system;

(2) pay as due the principal of and interest on, and sinking

fund or reserve fund payments agreed to be made with respect to,

all bonds that are issued by the authority and payable in whole

or part from the revenue; and

(3) fulfill the terms of any other agreement with the holders of

bonds issued by the authority.

(b) Fares for passenger transportation may be set according to a

zone system or by any other classification system that the

authority determines to be reasonable.

(c) This section does not limit the state's power to regulate

taxes imposed by an authority. The state agrees not to alter the

power granted to an authority under this section to impose taxes,

fares, tolls, charges, rents, and other compensation sufficient

to pay obligations incurred by the authority.

(d) The state agrees not to impair the rights and remedies of an

authority bondholder, or a person acting on behalf of a

bondholder, until the principal and interest on the bonds, the

interest on unpaid installments of interest, costs, and expenses

in connection with an action or proceeding by or on behalf of a

bondholder are discharged.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.110. INSURANCE. (a) An authority may insure, through

purchased insurance policies, self-insurance programs, or both,

the legal liability of the authority and of its contractors and

subcontractors arising from the acquisition, construction, or

operation of the programs and facilities of the authority for:

(1) personal or property damage; and

(2) officers' and employees' liability.

(b) An authority may use contracts, rating plans, and risk

management programs designed to encourage accident prevention.

(c) In developing an insurance or self-insurance program, an

authority may consider the peculiar hazards, indemnity standards,

and past and prospective loss and expense experience of the

authority and similar authorities and of its contractors and

subcontractors.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.111. TAX EXEMPTION. The property, revenue, and income

of an authority are exempt from state and local taxes.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.112. MASS TRANSIT RAIL SYSTEM; EXEMPTION. (a) An

authority that constructs or operates or contracts with another

entity to construct or operate a mass transit rail system is not

subject to any state law regulating or governing the design,

construction, or operation of a railroad, railway, street

railway, streetcar, or interurban railway.

(b) For purposes of ownership or transfer of ownership of an

interest in real property, a light rail mass transit system line

operating on property previously used by a railroad, railway,

street railway, or interurban railway is a continuation of

existing rail use.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

SUBCHAPTER D. PROVISIONS APPLICABLE TO BOARD OF DIRECTORS

Sec. 460.201. TERMS; VACANCY. (a) Each member of the board of

directors serves a term of two years.

(b) Repealed by Acts 2007, 80th Leg., R.S., Ch. 326, Sec. 22,

eff. September 1, 2007.

(c) Except as provided by Section 460.2015, a vacancy on the

board of directors is filled in the same manner as the original

appointment to the interim executive committee.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001. Amended by Acts 2003, 78th Leg., ch. 306, Sec. 5, eff.

Sept. 1, 2003.

Amended by:

Acts 2005, 79th Leg., Ch.

991, Sec. 4, eff. September 1, 2005.

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 6, eff. September 1, 2007.

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 22, eff. September 1, 2007.

Sec. 460.2015. MEMBERSHIP OF BOARD OF DIRECTORS. (a) The board

of directors of an authority confirmed under Subchapter B may

increase the population amount stated by Section 460.054(b)(1) in

increments of up to 5,000. If the board increases that

population amount, the board shall also increase each population

amount stated by Sections 460.054(b)(3) and 460.054(c) by the

same amount.

(b) The board of directors may act under Subsection (a) only

once a year.

(c) A municipality that has appointed a member to the board of

directors under Section 460.054(b)(1) before the effective date

of an increase under Subsection (a) may continue to appoint a

member to the board of directors.

Added by Acts 2005, 79th Leg., Ch.

991, Sec. 5, eff. September 1, 2005.

Sec. 460.202. ELIGIBILITY. To be eligible for appointment to

the board of directors, a person must have professional

experience in the field of transportation, business, government,

engineering, or law.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 7, eff. September 1, 2007.

Sec. 460.203. CONFLICTS OF INTEREST. Members of the board of

directors and officers and employees of the authority are subject

to Chapter 171, Local Government Code.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 8, eff. September 1, 2007.

Sec. 460.204. MEETINGS. (a) The board of directors shall meet

at least monthly to transact the business of an authority.

(b) The chair may call special meetings as necessary.

(c) The board of directors by resolution shall:

(1) set the time, place, and date of regular meetings; and

(2) adopt rules and bylaws as necessary to conduct meetings.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 9, eff. September 1, 2007.

Sec. 460.205. QUORUM; VOTING REQUIREMENTS. (a) Five members

constitute a quorum of the board of directors.

(b) An action of the board of directors requires a vote of a

majority of the members present unless the bylaws require a

larger number for a specific action.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 10, eff. September 1, 2007.

Sec. 460.206. RULES. The board of directors may adopt rules

relating to the creation of a vacancy on the board by the absence

of a board member at the board meetings, staggering the terms of

up to one-half of the board of directors, and providing for

alternates.

Added by Acts 2003, 78th Leg., ch. 306, Sec. 6, eff. Sept. 1,

2003.

SUBCHAPTER E. ADDITION OF TERRITORY

Sec. 460.301. ADDITION OF TERRITORY BY MUNICIPAL ANNEXATION.

When a municipality that is part of an authority annexes

territory that before the annexation is not part of the

authority, the annexed territory becomes part of the authority.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.302. ADDITION OF MUNICIPALITY BY ELECTION. (a) The

territory of a municipality that is not initially part of an

authority may be added to an authority if:

(1) any part of the municipality is located in the territory of

the authority;

(2) the governing body of the municipality requests in writing

that the authority call an election under this section on whether

the territory of the municipality should be added to the

authority, the authority calls the election, and submits to the

qualified voters of the municipality the following proposition:

"Shall the (name of authority) levy of a proposed tax, not to

exceed (rate), be authorized?"; and

(3) a majority of the votes received in the election favor the

measure.

(b) The governing body of the authority shall canvass the

returns, declare the result, and notify the comptroller and the

department.

(c) If approval by a municipality would cause the tax in a

municipality that has imposed a dedicated or special-purpose

sales and use tax to exceed the limit imposed under Section

460.552(a), the governing body of the municipality may request in

writing that an authority call an election under this section on

whether the territory of the municipality should be added with a

combined ballot proposition to lower or repeal any dedicated or

special-purpose sales and use tax. A combined ballot proposition

under this subsection:

(1) shall contain substantially the same language, if any,

required by law for the lowering, repealing, raising, or adopting

of each tax as appropriate; and

(2) that receives a negative vote shall have no effect on either

the sales tax to be lowered or repealed by the proposition or the

sales tax to be raised or adopted by the proposition.

(c-1) This section shall not be construed to change the

substantive law of any sales tax, including the allowed maximum

rate or combined rate of local sales taxes.

(d) At any time after the date of an election approving the

addition of a municipality under this section, the authority and

the governing body of the municipality may enter into an

interlocal agreement that provides for the eventual admission of

the municipality to the territory of the authority and for the

payment of proportional capital recovery fees as determined by

the authority. The authority is not required to provide

transportation services to the municipality until any capital

recovery fees provided for in the agreement are paid to the

authority.

(e) A sales and use tax imposed by an authority takes effect in

a municipality added to the authority under this section on the

first day after the expiration of the first complete calendar

quarter that begins after the date the comptroller receives a

certified copy of an order adopted by the authority relating to

the addition of the municipality or other notice of the addition

of the municipality, accompanied by a map of the authority

clearly showing the territory added.

(f) In this section, "dedicated or special-purpose sales and use

tax" means a tax referred to or described by:

(1) Chapter 504 or 505, Local Government Code;

(2) Section 379A.081, Local Government Code;

(3) Section 363.055, Local Government Code; or

(4) Section 327.003, Tax Code.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 11, eff. September 1, 2007.

Acts 2009, 81st Leg., R.S., Ch.

87, Sec. 23.005, eff. September 1, 2009.

Sec. 460.303. JOINING AUTHORITY; CERTAIN AUTHORITIES. (a) A

municipality that has a population of more than 500,000 and that

is located in a county with a population of more than one million

may join a separate authority.

(b) If a municipality described by Subsection (a) joins an

authority created under this chapter and another separate

authority is subsequently established in the county in which the

municipality is located, the municipality may:

(1) remain in the authority that was created first;

(2) join the new authority in the county in which the

municipality is located; or

(3) participate with both authorities.

(c) A municipality that has requested, participated in, or

received a benefit of capital improvements made by an authority

shall on its transfer to a different authority or participation

with more than one authority continue to honor reimbursement

obligations resulting from the improvements.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.304. TAX IMPOSED IN ADDED TERRITORY. (a) Except as

provided by Section 460.302(e), a sales and use tax imposed by an

authority takes effect in territory added to the authority under

this subchapter on the first day of the first calendar quarter

that begins after the addition of the territory.

(b) An authority shall send to the comptroller of public

accounts:

(1) a certified copy of an order adding the territory or of an

order canvassing the returns and declaring the results of the

election; and

(2) a map showing the territory added to the authority.

(c) The order must include the effective date of the tax.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 12, eff. September 1, 2007.

SUBCHAPTER F. MANAGEMENT OF AUTHORITY

Sec. 460.401. MANAGEMENT OF AUTHORITY. The board of directors

is responsible for the management, operation, and control of the

authority and its properties.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 13, eff. September 1, 2007.

Sec. 460.402. FINANCIAL AUDIT. (a) The authority shall have an

annual audit of the affairs of the authority prepared by an

independent certified public accountant.

(b) The audit is a public record as defined by Chapter 552,

Government Code.

(c) On receipt of the audit prescribed by Subsection (a), the

board of directors shall address on the record any deficiencies

noted in the report at a regular meeting of the board of

directors.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 14, eff. September 1, 2007.

Sec. 460.403. BUDGET. The board of directors shall prepare an

annual budget.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 15, eff. September 1, 2007.

Sec. 460.404. FUNDING. (a) An authority may request funds for

its operation from a municipality, the commissioners court, or

both a municipality and the commissioners court. The request

shall be accompanied by a budget.

(b) Funds appropriated to an authority are subject to audit.

(c) Federal funds or grants may be used to offset the

authority's annual cost of debt service.

(d) An authority may accept gifts, grants, donations, receipts,

or funds from any source to carry out its powers and duties under

this chapter.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001. Amended by Acts 2003, 78th Leg., ch. 306, Sec. 7, eff.

Sept. 1, 2003.

Sec. 460.405. PROHIBITIONS. (a) Federal funds and appropriated

state funds may not be spent by or on behalf of an authority to

influence or affect the award or outcome of a state or federal

contract, loan, or cooperative agreement.

(b) This section does not apply to:

(1) a contested administrative matter; or

(2) pending or reasonably anticipated litigation.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2005, 79th Leg., Ch.

991, Sec. 6, eff. September 1, 2005.

Sec. 460.406. PURCHASES: COMPETITIVE BIDDING. (a) Except as

provided by Subsection (c), an authority may not award a contract

for construction, services, or property, other than real

property, except through the solicitation of competitive sealed

bids or proposals ensuring full and open competition.

(b) The authority shall describe in a solicitation each factor

to be used to evaluate a bid or proposal and give the factor's

relative importance.

(c) The board of directors may authorize the negotiation of a

contract without competitive sealed bids or proposals if:

(1) the aggregate amount involved in the contract is $25,000 or

less;

(2) the contract is for construction for which not more than one

bid or proposal is received;

(3) the contract is for services or property for which there is

only one source or for which it is otherwise impracticable to

obtain competition;

(4) the contract is to respond to an emergency for which the

public exigency does not permit the delay incident to the

competitive process;

(5) the contract is for personal or professional services or

services for which competitive bidding is precluded by law;

(6) the contract, without regard to form and which may include

bonds, notes, loan agreements, or other obligations, is for the

purpose of borrowing money or is a part of a transaction relating

to the borrowing of money, including:

(A) a credit support agreement, such as a line or letter of

credit or other debt guaranty;

(B) a bond, note, debt sale or purchase, trustee, paying agent,

remarketing agent, indexing agent, or similar agreement;

(C) an agreement with a securities dealer, broker, or

underwriter; and

(D) any other contract or agreement considered by the board of

directors to be appropriate or necessary in support of the

authority's financing activities;

(7) the contract is for work that is performed and paid for by

the day as the work progresses;

(8) the contract is for the purchase of land or a right-of-way;

(9) the contract is for the purchase of personal property sold:

(A) at an auction by a state licensed auctioneer;

(B) at a going out of business sale held in compliance with

Subchapter F, Chapter 17, Business & Commerce Code; or

(C) by a political subdivision of this state, a state agency, or

an entity of the federal government;

(10) the contract is for services performed by blind or severely

disabled persons;

(11) the contract is for the purchase of electricity; or

(12) the contract is one awarded for alternate project delivery

under Sections 271.117-271.119, Local Government Code.

(d) For the purposes of entering into a contract authorized by

Subsection (c)(12), an authority is considered a "governmental

entity" as defined by Section 271.111, Local Government Code.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 16, eff. September 1, 2007.

SUBCHAPTER G. BONDS AND NOTES

Sec. 460.501. DEFINITION. In this subchapter, "bond" includes a

note.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.502. POWER TO ISSUE BONDS. (a) An authority may issue

bonds at any time and for amounts the executive committee

determines are appropriate.

(b) The bonds may be issued as necessary for:

(1) the acquisition, construction, repair, improvement, or

extension of an authority's public transportation system; or

(2) the creation or funding of self-insurance or retirement or

pension fund reserves.

(c) A bond issued by the authority may have a maturity of up to

30 years from the date of issuance.

(d) A bond any portion of which is secured by a pledge of sales

and use tax revenues and that has a maturity of five years or

longer from the date of issuance may not be issued by an

authority until an election has been held in the municipalities

in which the authority has been authorized to impose a sales and

use tax and the proposition proposing the issue has been approved

by a majority of the votes received on the issue.

(e) Subsection (d) does not apply to the issuance of refunding

bonds or bonds described by Subsection (b)(2).

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001. Amended by Acts 2003, 78th Leg., ch. 306, Sec. 8, eff.

Sept. 1, 2003.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

557, Sec. 1, eff. September 1, 2009.

Acts 2009, 81st Leg., R.S., Ch.

928, Sec. 1, eff. September 1, 2009.

Sec. 460.503. BOND TERMS. The bonds of an authority are fully

negotiable. An authority may make the bonds redeemable before

maturity. The terms and conditions of authority bonds are subject

to rules adopted by the board of directors.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001. Amended by Acts 2003, 78th Leg., ch. 306, Sec. 9, eff.

Sept. 1, 2003.

Sec. 460.504. SALE. An authority's bonds may be sold at a

public or private sale as determined by the board of directors to

be the more financially beneficial.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 17, eff. September 1, 2007.

Sec. 460.505. INCONTESTABILITY. An authority's bonds are

incontestable after the bonds are:

(1) approved by the attorney general;

(2) registered by the comptroller of public accounts; and

(3) sold to the purchaser.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.506. SECURITY PLEDGED. To secure the payment of an

authority's bonds, the authority may:

(1) pledge all or part of revenue realized from any tax that is

approved and levied;

(2) pledge any part of the revenue of the public transportation

system;

(3) mortgage any part of the public transportation system

regardless of when acquired; or

(4) pledge government grants, contractual revenue, or lease

revenue.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001. Amended by Acts 2003, 78th Leg., ch. 306, Sec. 10, eff.

Sept. 1, 2003.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

557, Sec. 2, eff. September 1, 2009.

Acts 2009, 81st Leg., R.S., Ch.

928, Sec. 2, eff. September 1, 2009.

Sec. 460.507. REFUNDING BONDS. An authority may issue refunding

bonds at any time.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001. Amended by Acts 2003, 78th Leg., ch. 306, Sec. 11, eff.

Sept. 1, 2003.

Sec. 460.508. NOTES. (a) An authority may issue negotiable

notes payable from any of the authority's sources of revenue to

pay for any lawful expenditure, other than principal and interest

on the authority's debt.

(b) Notes issued by an authority shall be payable over a period

not to exceed five years from the date of issuance.

(c) The Texas Commission on Environmental Quality is not

required to approve notes issued under this section.

(d) An authority may not have outstanding notes in excess of $10

million at any one time.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001. Amended by Acts 2003, 78th Leg., ch. 306, Sec. 12, eff.

Sept. 1, 2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 18, eff. September 1, 2007.

Sec. 460.509. OBLIGATIONS AND CREDIT AGREEMENTS. An authority

may issue obligations and enter into credit agreements under

Chapter 1371, Government Code.

Added by Acts 2009, 81st Leg., R.S., Ch.

557, Sec. 3, eff. September 1, 2009.

Added by Acts 2009, 81st Leg., R.S., Ch.

928, Sec. 3, eff. September 1, 2009.

SUBCHAPTER H. TAXATION

Sec. 460.551. SALES AND USE TAX. (a) The board of directors

may impose for an authority a sales and use tax at the rate of:

(1) one-quarter of one percent;

(2) three-eighths of one percent;

(3) one-half of one percent;

(4) five-eighths of one percent;

(5) three-quarters of one percent;

(6) seven-eighths of one percent; or

(7) one percent.

(b) The imposition of an authority's sales and use tax must be

approved at an election conducted in the manner provided by this

chapter and may not be imposed in an area that has not confirmed

the authority.

(c) A sales and use tax may be imposed, as prescribed by this

section, by a municipality that participates in a transportation

or transit authority other than an authority created under this

chapter if:

(1) the combined rates of all sales and use taxes imposed in the

municipality does not exceed two percent; and

(2) the ballot of the authorization vote for the sales and use

tax reads:

"(Name of city) already imposes a sales and use tax for

participation in the (name of transportation or transit

authority). The proposed sales and use tax is solely for the

benefit of, and will be dedicated to, the (name of authority

created under this chapter)."

(d) The authority shall impose a sales and use tax at a minimum

uniform rate as determined by the board of directors if the tax

is approved at an election in an area that has confirmed the

authority.

(e) A municipality with a population of 12,000 or more that has

confirmed the authority may impose a sales and use tax at a rate

higher than the minimum uniform rate established under Subsection

(d) on approval at an election if the authority will provide the

municipality a higher level of service.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001. Amended by Acts 2003, 78th Leg., ch. 306, Sec. 3, eff.

Sept. 1, 2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 19, eff. September 1, 2007.

Sec. 460.552. MAXIMUM TAX RATE IN AUTHORITY AREA. (a) An

authority 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 having

territory in the authority exceeds two percent in any location in

the authority.

(b) An increase in the tax rate to a higher rate must be

approved by a majority of the voters at a confirmation election.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.553. INITIAL SALES TAX: EFFECTIVE DATE. The adoption

of a sales and use tax takes effect on the first day of the first

calendar quarter after the confirmation election.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Sec. 460.554. RATE DECREASE. The board of directors by order

may direct the comptroller of public accounts to collect the

authority's sales and use tax at a rate that is lower than the

rate approved by the voters at the confirmation hearing if the

board of directors determines that it is in the best interest of

the authority.

Added by Acts 2001, 77th Leg., ch. 1186, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

326, Sec. 20, eff. September 1, 2007.