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From the 2005 Regular Session of the Texas Legislature

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	H.B. No. 2702



AN ACT



relating to the construction,
acquisition, financing, maintenance, management, operation,
ownership, and control of transportation facilities
and the progress, improvement, policing, and safety
of transportation in this state; providing a penalty.


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



ARTICLE
1.  RAIL FACILITIES



SECTION 1.01.  Section 91.001,
Transportation Code, is amended by amending Subdivision
(6) and adding Subdivision (13) to read as follows:


(6)  "Rail facility" means
real or personal property, or any interest in that
property, that is determined to be necessary or convenient
for the provision of a freight or passenger rail facility
or system, including commuter rail, intercity rail,
and high-speed rail, and tri-track.
 The term includes all property or interests necessary
or convenient for the acquiring, providing, using,
or equipping of a rail facility or system, including
rights-of-way, trackwork, train controls, stations,
and maintenance facilities.


(13)  "Tri-track" means
a triangular monorail beam guideway:


(A)  constructed at a grade
above surface modes of transportation;


(B)  for use by dual-mode
vehicles capable of using the guideway or a highway;
and


(C)  with entrances accessible
from and exits accessible to highways.


SECTION 1.02.  Section 91.004,
Transportation Code, is amended to read as follows:


Sec. 91.004.  GENERAL POWERS.
 (a)  The department may:


(1)  plan and make policies
for the location, construction, maintenance, and operation
of a rail facility or system in this state;


(2)  acquire, finance, construct,
maintain, and subject to Section 91.005, operate a
passenger or freight rail facility, individually or
as one or more systems;


(3)  for the purpose of acquiring
or financing a rail facility or system, accept a grant
or loan 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;


(4)  contract with a public
or private person to finance, construct, maintain,
or operate a rail facility under this chapter; or


(5)  perform any act necessary
to the full exercise of the department's powers under
this chapter.


(b)  Except as provided
by Subsection (c), money appropriated or allocated
by the United States for the construction and maintenance
in this state of rail facilities owned by any public
or private entity shall be administered by the commission
and may be spent only under the supervision of the
department.


(c)  Subsection (b) does
not apply to money appropriated or allocated:


(1)  to a transit authority
described by Chapter 451, a transportation authority
described by Chapter 452 or 460, or a transit department
described by Chapter 453; or


(2)  for use by:


(A)  a port authority or
navigation district created or operating under Section
52, Article III, or Section 59, Article XVI, Texas
Constitution; or


(B)  a district created
under Chapter 623, Acts of the 67th Legislature, Regular
Session, 1981 (Article 6550c, Vernon's Texas Civil
Statutes).


SECTION 1.03.  Section 91.051,
Transportation Code, is amended to read as follows:


Sec. 91.051.  AWARDING OF
CONTRACTS.  Except for a contract entered into under
Section 91.052, 91.054, or 91.102 Unless
otherwise provided by this subchapter, a
contract made by the department for the construction,
maintenance, or operation of a rail facility must be
let by a competitive bidding procedure in which the
contract is awarded to the lowest responsible bidder
that complies with the department's criteria.


SECTION 1.04.  Subchapter
C, Chapter 91, Transportation Code, is amended by adding
Section 91.054 to read as follows:


Sec. 91.054.  COMPREHENSIVE
DEVELOPMENT AGREEMENTS.  (a)  To the extent and in
the manner that the department may enter into a comprehensive
development agreement under Chapter 223, the department
may enter into a comprehensive development agreement
under this chapter that provides for the financing,
design, acquisition, construction, maintenance, or
operation of a rail facility or system.  All provisions
of Chapter 223 relating to comprehensive development
agreements apply to comprehensive development agreements
for facilities under this chapter, including provisions
relating to the confidentiality of information.  Claims
arising under a comprehensive development agreement
are subject to Section 201.112.


(b)  The department may
combine in a comprehensive development agreement under
this chapter a rail facility or system and a toll project
as defined by Section 201.001.


(c)  The department may
not enter into a comprehensive development agreement
with a private entity under this chapter that provides
for the lease or use of rights-of-way or related property
by the private entity to construct, operate, or maintain
a facility that is unrelated to the operation of the
rail facility or system.


SECTION 1.05.  Section 91.071(b),
Transportation Code, is amended to read as follows:


(b)  The Each
fiscal year, the total amount disbursed by the
department may not spend money from the general
revenue state highway fund to
implement this chapter except pursuant to a line-item
appropriation may not exceed $12.5 million.
 This subsection does not apply to:


(1)  the acquisition
of abandoned rail facilities described in Section 91.007;


(2)  funding derived
from the issuance of bonds, private investment, and
donations;


(3)  federal funds
from the Federal Railroad Administration, from the
Federal Transit Administration, or authorized and appropriated
by the United States Congress for a specific project;


(4)  grants awarded
by the governor from the Texas Enterprise Fund; and


(5)  grading and
bed preparation.


SECTION 1.06.  Section 91.074(c),
Transportation Code, is amended to read as follows:


(c)  The department may contract
with a person for the use of all or part of a rail
facility or system or may lease or sell all or part
of a rail facility or system, including all or any
part of the right-of-way adjoining trackwork, for any
purpose, including placing on the adjoining right-of-way
a storage or transfer facility, warehouse, garage,
parking facility, telecommunication line or facility,
restaurant, or gas station.  Any portion of a rail
facility or system that is used or leased by a private
person under this subsection for a commercial purpose
is not exempt from ad valorem taxation and is subject
to local zoning regulations and building standards.


SECTION 1.07.  Subchapter
D, Chapter 91, Transportation Code, is amended by adding
Section 91.075 to read as follows:


Sec. 91.075.  PASS-THROUGH
FARES.  (a)  In this section, "pass-through fare" means:


(1)  a per passenger fee
or a per passenger mile fee that is determined by the
number of passengers using a passenger rail facility;
or


(2)  a fee that is determined
based on the number of carloads or commodity tonnages
shipped using a freight rail facility.


(b)  The department may
enter into an agreement with a public or private entity
that provides for the payment of pass-through fares
to the public or private entity as reimbursement for
the acquisition, design, development, financing, construction,
relocation, maintenance, or operation of a passenger
rail facility or a freight rail facility by the entity.


(c)  The department may
use any available funds for the purpose of making a
pass-through fare payment under this section, including
funds from the state infrastructure bank.


(d)  The commission may
adopt rules necessary to implement this section.  Rules
adopted under this subsection may include criteria
for:


(1)  determining the amount
of pass-through fares to be paid under this section;
and


(2)  allocating the risk
that ridership on a passenger rail facility or carloads
or commodity tonnages shipped on a freight rail facility
will be higher or lower than the parties to an agreement
under this section anticipated in entering into the
agreement.


SECTION 1.08.  Effective October
1, 2005, Article 6445, Revised Statutes, is amended
to read as follows:


Art. 6445.  POWER AND AUTHORITY.
 (a)  Power and authority are hereby conferred
upon the Texas Department of Transportation
Railroad Commission of Texas over
all railroads, and suburban, belt and terminal railroads,
and over all public wharves, docks, piers, elevators,
warehouses, sheds, tracks and other property used in
connection therewith in this State, and over all persons,
associations and corporations, private or municipal,
owning or operating such railroad, wharf, dock, pier,
elevator, warehouse, shed, track or other property
to fix, and it is hereby made the duty of the said
department Commission to
adopt all necessary rates, charges and regulations,
to govern and regulate such railroads, persons, associations
and corporations, and to correct abuses and prevent
unjust discrimination in the rates, charges and tolls
of such railroads, persons, associations and corporations,
and to fix division of rates, charges and regulations
between railroads and other utilities and common carriers
where a division is proper and correct, and to prevent
any and all other abuses in the conduct of their business
and to do and perform such other duties and details
in connection therewith as may be provided by law.


(b)  All powers and duties
of the Railroad Commission of Texas that relate primarily
to railroads and the regulation of railroads are transferred
to the Texas Department of Transportation.


(c)  A reference in law
to the Railroad Commission of Texas that relates primarily
to railroads and the regulation of railroads means
the Texas Department of Transportation.


SECTION 1.09.  (a)  On October
1, 2005:


(1)  all powers, duties, obligations,
rights, contracts, leases, records, assets, property,
funds, and appropriations of the Railroad Commission
of Texas that relate primarily to railroads and the
regulation of railroads are transferred to the Texas
Department of Transportation;


(2)  all rules, policies,
forms, procedures, and decisions of the Railroad Commission
of Texas that relate primarily to railroads and the
regulation of railroads are continued in effect as
rules, policies, forms, procedures, and decisions of
the Texas Department of Transportation, until superseded
by a rule or other appropriate action of the Texas
Department of Transportation;


(3)  any investigation, complaint,
action, contested case, or other proceeding involving
the Railroad Commission of Texas that relates primarily
to railroads and the regulation of railroads is transferred
without change in status to the Texas Department of
Transportation, and the Texas Department of Transportation
assumes, without a change in status, the position of
the Railroad Commission of Texas in any investigation,
complaint, action, contested case, or other proceeding
that relates primarily to railroads and the regulation
of railroads involving the Railroad Commission of Texas;
and


(4)  all employees of the
Railroad Commission of Texas that perform duties relating
primarily to railroads and the regulation of railroads
become employees of the Texas Department of Transportation.


(b)  The transfer of the powers
and duties of the Railroad Commission of Texas that
relate primarily to railroads and the regulation of
railroads to the Texas Department of Transportation
does not affect the validity of a right, privilege,
or obligation accrued, a contract or acquisition made,
any liability incurred, a permit or license issued,
a penalty, forfeiture, or punishment assessed, a rule
adopted, a proceeding, investigation, or remedy begun,
a decision made, or other action taken by or in connection
with the Railroad Commission of Texas.


SECTION 1.10.  As soon as
possible after the effective date of this Act but before
October 1, 2005, the Railroad Commission of Texas shall
determine and report to the Texas Department of Transportation
on:


(1)  which obligations, contracts,
records, assets, and property of the Railroad Commission
of Texas relate primarily to railroads and the regulation
of railroads; and


(2)  which employees of the
Railroad Commission of Texas perform duties that relate
primarily to railroads and the regulation of railroads.






SECTION 2.01.  Section 201.001,
Transportation Code, is amended to read as follows:


Sec. 201.001.  DEFINITIONS.
 (a)  In this title:


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


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


(3)  "Director" means the
executive director of the Texas Department of Transportation.


(b)  In this subtitle,
"toll project" means one or more tolled lanes of a
highway or an entire toll highway constructed, maintained,
or operated as a part of the state highway system and
any improvement, extension, or expansion to the highway,
including:


(1)  a facility to relieve
traffic congestion and promote safety;


(2)  a bridge, tunnel,
overpass, underpass, interchange, entrance plaza, approach,
toll booth, toll plaza, service road, ramp, or service
center;


(3)  an administration,
storage, or other building, operations center, maintenance
or other facility, equipment, or system the department
considers necessary to operate the project;


(4)  property rights, easements,
and interests the department acquires to construct,
maintain, or operate the project;


(5)  a parking area or
structure, rest stop, park, and any other improvement
or amenity the department considers necessary, useful,
or beneficial for the operation and maintenance of
the project; and


(6)  a nontolled facility
that is appurtenant to and necessary for the efficient
operation and maintenance of the project, including
a connector, service road, access road, ramp, interchange,
bridge, or tunnel.


SECTION 2.02.  Section 201.1055,
Transportation Code, is amended to read as follows:


Sec. 201.1055.  AGREEMENTS
WITH PRIVATE ENTITIES.  (a)  Notwithstanding
any other law, including Subchapter A, Chapter 2254,
Government Code, Chapters 2165, 2166, and 2167, Government
Code, and Sections 202.052, 202.053, 203.051, 203.052,
and 223.001 of this code, the department and a private
entity that offers the best value to the state may
enter into an agreement for the that
includes:


(1)  acquisition, both
design, and construction,
or renovation, including site development, of a
building or other facility required to support department
operations district office headquarters
facility located on real property owned
or acquired by the department in a county
with a population of 3.3 million or more;
or


(2)  acquisition from the
private entity of real property, a building, or other
facility required to support department operations
that is constructed on the real property in exchange
for department-owned real property, including any improvements
a lease of department-owned real property
in a district that includes a county with a population
of 3.3 million or more to the private entity;


(3)  a provision
authorizing the private entity to construct and retain
ownership of a building on property leased to the entity
under Subdivision (2); and


(4)  a provision
under which the department agrees to enter into an
agreement to lease with an option or options to purchase
a building constructed on property leased to the entity
under Subdivision (2).


(b)  A project described
by this section that is not wholly paid for by an exchange
of department-owned real property may be financed in
accordance with Section 1232.111, Government Code.


(c)  Notwithstanding Section
202.024, the commission may authorize the executive
director to execute a deed exchanging department-owned
real property under Subsection (a)(2).


(d)  The commission shall
notify the Bond Review Board and Texas Public Finance
Authority of the proposed transaction not less than
45 days before the date the commission signs an agreement
under this section providing for the exchange of department-owned
real property under Subsection (a)(2).


(e)  An agreement under
this section providing for the exchange of department-owned
real property under Subsection (a)(2) that has an appraised
value greater than the appraised value of real property
and improvements acquired by the department under the
agreement must require the private entity to compensate
the department for the difference. Any compensation
paid by a private entity must be deposited to the credit
of the state highway fund and is exempt from the application
of Section 403.095, Government Code.


SECTION 2.03.  Section 201.113,
Transportation Code, is amended by adding Subsection
(c) to read as follows:


(c)  An agreement entered
into under this section may provide that an improvement
of a portion of the state highway system by a regional
tollway authority is governed by the provisions of
Chapter 366 applicable to the performance of the same
function for a turnpike project under that chapter
and the rules and procedures adopted by the regional
tollway authority under that chapter, in lieu of the
laws, rules, or procedures applicable to the department
for the performance of the same function.


SECTION 2.04.  Sections 201.115(a),
(b), and (c), Transportation Code, are amended to read
as follows:


(a)  The commission may authorize
the department to borrow money from any source
to carry out the functions of the department.


(b)  A loan under this section
may be in the form of an agreement, note, contract,
or other form as determined by the commission and may
contain any provisions the commission considers appropriate,
except:


(1)  the term of the loan
may not exceed two years;


(2)  the amount of the loan,
combined with any amounts outstanding on other loans
under this section, may not exceed an amount that
is two times the average monthly revenue deposited
to the state highway fund for the 12 months preceding
the month of the loan; and


(3)  the loan may not create
general obligation of the state and is payable only
as authorized by legislative appropriation.


(c)  If the department
commission borrows money by the
issuance of notes, the notes shall be considered
a state security for purposes of Chapter 1231, Government
Code issued in accordance with the requirements
of Subchapter N, except that the maturity limitations
in Subsection (b) supersede the maturity limitations
in Section 201.963.


SECTION 2.05.  Section 201.615,
Transportation Code, is amended by amending Subsection
(a) and adding Subsection (c) to read as follows:


(a)  The department shall
consider the following factors when developing transportation
projects that involve the construction, reconstruction,
rehabilitation, or resurfacing of a highway, other
than a maintenance resurfacing project:


(1)  the extent to which the
project promotes safety;


(2)  the durability of the
project;


(3)  the economy of maintenance
of the project;


(4)  the impact of the project
on:


(A)  the natural and artificial
environment;


(B)  the scenic and aesthetic
character of the area in which the project is located;


(C)  preservation efforts;
and


(D)  each affected local community
and its economy; and


(5)  the access for other
modes of transportation, including those that promote
physically active communities; and


(6)  except as provided
by Subsection (c), the aesthetic character of the project,
including input from each affected local community.


(c)  Subsection (a)(6)
does not apply to transportation projects that involve
the rehabilitation or resurfacing of a bridge or highway.


SECTION 2.06.  Section 202.112,
Transportation Code, is amended by adding Subsection
(d) to read as follows:


(d)  An option to acquire
property purchased under this section or Section 227.041
may not expire later than the fifth anniversary of
the date the option was purchased and may be renewed
for subsequent periods that expire not later than the
fifth anniversary of the date the option was renewed,
by agreement of the commission and the grantor of the
option or the grantor's heirs or assigns.


SECTION 2.07.  Section 203.004,
Transportation Code, is transferred to Subchapter H,
Chapter 201, Transportation Code, redesignated as Section
201.617, Transportation Code, and amended to read as
follows:


Sec. 201.617 203.004.
 CONTRACTS FOR MANAGEMENT OF PROPERTY USED
FOR MITIGATION OF ADVERSE ENVIRONMENTAL IMPACTS.
 (a)  If authorized by an applicable regulatory
authority, to mitigate an adverse environmental impact
that is a direct result of a state highway improvement
project, the The department
may:


(1)  pay a fee to an appropriate
public agency or private entity in lieu of acquiring
or agreeing to manage property;


(2)  transfer real property
to an appropriate public agency or private entity with
or without monetary consideration if the property is
used or is proposed to be used for mitigation purposes;
or


(3)  contract with
any public or private entity for the management of
property owned by the department and used for
the mitigation purposes of
an adverse environmental impact directly resulting
from the construction or maintenance of a state highway.


(a-1)  Before the commission
may acquire by purchase or condemnation real property
to mitigate an adverse environmental impact that is
a direct result of a state highway improvement project,
the department shall, if authorized by an applicable
regulatory authority, offer to purchase a conservation
easement from the owner of the real property.  If the
landowner does not accept the offer to execute a conservation
easement before the 61st day after the date the offer
is made, the department may acquire the property by
purchase or condemnation.


(b)  A contract under this
section is not subject to Chapter 771, Government Code.


(c)  In this section, "management"
"management," in connection with property,
means administration, control, or maintenance that
is required by an agency of the United States.


SECTION 2.08.  Section 201.943,
Transportation Code, is amended by adding Subsection
(l) to read as follows:


(l)  Obligations may not
be issued if the commission or the department requires
that toll roads be included in a regional mobility
plan in order for a local authority to receive an allocation
from the fund.


SECTION 2.09.  Subchapter
K, Chapter 201, Transportation Code, is amended by
adding Section 201.907 to read as follows:


Sec. 201.907.  CONTRACT
FOR ENFORCEMENT.  The department or a public or private
entity contracted to operate a toll project may contract
with an agency of this state or a local governmental
entity for the services of peace officers employed
by the agency or entity to enforce laws related to:


(1)  the regulation and
control of vehicular traffic on a state highway; and


(2)  the payment of the
proper toll on a toll project.


SECTION 2.10.  Section 203.052(b),
Transportation Code, is amended to read as follows:


(b)  Property necessary or
convenient to a state highway for purposes of Subsection
(a) includes an interest in real property, a property
right, or a material that the commission determines
is necessary or convenient to:


(1)  protect a state highway;


(2)  drain a state highway;


(3)  divert a stream, river,
or other watercourse from the right-of-way of a state
highway;


(4)  store materials or equipment
for use or used in the construction or maintenance
of a state highway;


(5)  construct or operate
a warehouse or other facility used in connection with
the construction, maintenance, or operation of a state
highway;


(6)  lay out, construct, or
maintain a roadside park;


(7)  lay out, construct, or
maintain a parking lot that will contribute to maximum
use of a state highway with the least possible congestion;


(8)  mitigate an adverse environmental
effect that directly results from construction or maintenance
of a state highway; or


(9)  provide a location
for an ancillary facility that is anticipated to generate
revenue for use in the design, development, financing,
construction, maintenance, or operation of a toll project,
including a gas station, garage, store, hotel, restaurant,
or other commercial facility;


(10)  construct or operate
a toll booth, toll plaza, service center, or other
facility used in connection with the construction,
maintenance, or operation of a toll project; or


(11)  accomplish any
other purpose related to the location, construction,
improvement, maintenance, beautification, preservation,
or operation of a state highway.


SECTION 2.11.  Section 203.0521,
Transportation Code, is amended to read as follows:


Sec. 203.0521.  ACQUISITION
OF REMAINDER.  (a)  If a proposed acquisition of a
tract of real property under Section 203.052 would
leave the owner of the property a remainder of the
tract, the department may negotiate for and purchase
the remainder or any part of a severed real property
if the department and the owner agree on terms for
the purchase.  The department commission
shall offer, except as provided by Subsection (f),
to purchase a the remainder
if the department commission
determines that:


(1)  the remainder has little
or no value or utility to the owner; or


(2)  the entire tract could
be acquired for substantially the same compensation
as the partial tract.


(b)  In acquiring real
property under Section 203.051, if the acquisition
severs an owner's real property, the department shall
pay:


(1)  the value of the property
acquired; and


(2)  the damages to the
remainder of the owner's property caused by the severance,
including damages caused by the inaccessibility of
one tract from the other The department
may acquire the remainder under this section only if
the owner of the property consents to the acquisition
of the remainder.


(b-1)  If a portion of
a tract or parcel of real property that, for the then
current tax year was appraised for ad valorem tax purposes
under a law enacted under Section 1-d or 1-d-1, Article
VIII, Texas Constitution, and that is outside the municipal
limits or the extraterritorial jurisdiction of a municipality
with a population of 25,000 or more is condemned for
state highway purposes, the special commissioners shall
consider the loss of reasonable access to or from the
remaining property in determining the damage to the
property owner.


(c)  Instead of a single
fixed payment for real property purchased under Subsection
(a) for a toll project, the department may agree to
a payment to the owner in the form of:


(1)  an intangible legal
right to receive a percentage of identified revenue
attributable to the applicable segment of the toll
project; or


(2)  a right to use, without
charge, a segment or part of the toll project The
department is not required to make an offer on a remainder
if an appraisal or environmental investigation indicates
the presence of hazardous materials or substances.


(d)  A right to receive
revenue under Subsection (c)(1) is subject to any pledge
of the revenue under the terms of a trust agreement
securing bonds issued for the applicable segment of
the toll project.


(e)  The department
and its designated agents may enter the real property
a remainder to conduct an appraisal,
survey, or environmental investigation to determine
whether the department will offer to acquire the real
property remainder.


(f)  The department is
not required under Subsection (a) to make an offer
on a remainder if an appraisal or environmental investigation
indicates the presence of hazardous materials or substances.


SECTION 2.12.  Section 203.055,
Transportation Code, is amended to read as follows:


Sec. 203.055.  ACQUISITION
OF RIGHTS IN PUBLIC REAL PROPERTY CONVEYANCE
OF PROPERTY BELONGING TO POLITICAL SUBDIVISION OR PUBLIC
AGENCY.  (a)  The governing body of a
political subdivision or public agency that owns or
is in charge of public real property may consent to
the use of the property for highway purposes.


(b)  The governing
body of a political subdivision or public agency may,
without advertisement, convey the title to or rights
or easements a right in real
property that the department needs:


(1)  is owned by
the political subdivision or public agency; and


(2)  may be acquired
by the commission under this subchapter for
highway purposes.


(c)  Notwithstanding any
law to the contrary, at the request of the department,
a political subdivision or a state agency may lease,
lend, grant, or convey to the department real property,
including a highway or real property currently devoted
to public use, that may be necessary or appropriate
to accomplish the department's purposes.  The political
subdivision or state agency may lease, lend, grant,
or convey the property:


(1)  on terms the subdivision
or agency determines reasonable and fair; and


(2)  without advertisement,
court order, or other action or formality other than
the regular and formal action of the subdivision or
agency concerned.


(b)  In this section,
"political subdivision" includes a county or municipality.


SECTION 2.13.  Sections 361.137,
361.138, 361.233, and 361.142, Transportation Code,
are transferred to Subchapter D, Chapter 203, Transportation
Code, redesignated as Sections 203.066, 203.067, 203.068,
and 203.069, Transportation Code, and amended to read
as follows:


Sec. 203.066 361.137.
 DECLARATION OF TAKING FOR TOLL PROJECT.  (a)
 This section and Section 203.067 apply only to
a taking for a toll project.


(b)  The department
may file a declaration of taking with the clerk of
the court:


(1)  in which the department
files a condemnation petition under Chapter 21, Property
Code; or


(2)  to which the case is
assigned.


(c) (b)
 The department may file the declaration of taking
concurrently with or subsequent to the petition but
may not file the declaration after the special commissioners
have made an award in the condemnation proceeding.


(d) (c)
 The department may not file a declaration of taking
before the completion of:


(1)  all environmental documentation,
including a final environmental impact statement or
a record of decision, that is required by federal or
state law;


(2)  all public hearings and
meetings, including those held in connection with the
environmental process and under Sections 201.604 and
203.021, that are required by federal or state law;
and


(3)  all notifications required
by Section 203.022; and


(4)  if the property contains
a business, farm, or ranch, a written notification
to the property owner that the occupants:


(A)  will not be required
to move before the 90th day after the date of the notice;
and


(B)  will receive, not
later than the 30th day before the date by which the
property must be vacated, a written notice specifying
the date by which the property must be vacated.


(e) (d)
 The declaration of taking must include:


(1)  a specific reference
to the legislative authority for the condemnation;


(2)  a description and plot
plan of the real property to be condemned, including
the following information if applicable:


(A)  the municipality in which
the property is located;


(B)  the street address of
the property; and


(C)  the lot and block number
of the property;


(3)  a statement of the property
interest to be condemned;


(4)  the name and address
of each property owner that the department can obtain
after reasonable investigation and a description of
the owner's interest in the property; and


(5)  a statement that immediate
possession of all or part of the property to be condemned
is necessary for the timely construction of a toll
turnpike project.


(f) (d-1)
 A deposit to the registry of the court of an amount
equal to the appraised value, as determined by the
department, of the property to be condemned must accompany
the declaration of taking.


(g) (e)
 The date on which the declaration is filed is the
date of taking for the purpose of assessing damages
to which a property owner is entitled.


(h)  The filing of a declaration
of taking does not affect the special commissioners'
hearing or any other proceeding (f)  After
a declaration of taking is filed, the case shall proceed
as any other case in eminent domain under
Chapter 21, Property Code.


Sec. 203.067 361.138.
 POSSESSION OF PROPERTY FOR TOLL PROJECT.  (a)
 Immediately on the filing of a declaration of taking
under Section 203.066, the department shall
serve a copy of the declaration on each person possessing
an interest in the condemned property by a method prescribed
by Section 21.016(d), Property Code.  The department
shall file evidence of the service with the clerk of
the court.  On filing of that evidence, the department
may take possession of the property pending the litigation.


(b)  If the condemned property
is a homestead or a portion of a homestead as defined
by Section 41.002, Property Code, the department may
not take possession sooner than the 91st day after
the date of service under Subsection (a).


(c)  A property owner or tenant
who refuses to vacate the property or yield possession
is subject to forcible entry and detainer under Chapter
24, Property Code.


Sec. 203.068 361.233.
 RIGHT OF ENTRY FOR TOLL PROJECT.  (a)  The
department and its authorized agents may enter any
real property, water, or premises in this state to
make a survey, sounding, drilling, or examination it
determines necessary or appropriate for the purposes
of the development of a toll project this
chapter.


(b)  An entry under this section
is not:


(1)  a trespass; or


(2)  an entry under a pending
condemnation proceeding.


(c)  The department shall
make reimbursement for any actual damages to real property,
water, or premises that result from an activity described
by Subsection (a).


Sec. 203.069 361.142.
 COVENANTS, CONDITIONS, RESTRICTIONS, OR LIMITATIONS.
 Covenants, conditions, restrictions, or limitations
affecting property acquired in any manner by the department
are not binding against the department and do not impair
the department's ability to use the property for a
purpose authorized by this chapter.  The beneficiaries
of the covenants, conditions, restrictions, or limitations
are not entitled to enjoin the department from using
the property for a purpose authorized under this chapter,
but this section does not affect the right of a person
to seek damages to the person's property under Section
17, Article I, Texas Constitution.


SECTION 2.14.  Section 203.092,
Transportation Code, is amended by amending Subsection
(a) and adding Subsections (a-1), (a-2), and (a-3)
to read as follows:


(a)  A utility shall make
a relocation of a utility facility at the expense of
this state if:


(1)  relocation
of the utility facility is required by improvement
of:


(1)  a highway in this
state established by appropriate authority as part
of the National System of Interstate and Defense Highways
and the relocation is eligible for federal participation;
or


(2)  relocation of
the utility facility is required by improvement of
any segment of the state highway system and the utility
has a compensable property interest in the land occupied
by the facility to be relocated; or


(3)  a segment of the state
highway system that was designated by the commission
as a turnpike project or toll project before September
1, 2005.


(a-1)  Notwithstanding
Subsection (a), the department and the utility shall
share equally the cost of the relocation of a utility
facility that is made before September 1, 2007, and
required by the improvement of a nontolled highway
to add one or more tolled lanes.  This subsection expires
September 1, 2007.


(a-2) Notwithstanding Subsection
(a), the department and the utility shall share equally
the cost of the relocation of a utility facility that
is made before September 1, 2007,  and required for
the improvement of a nontolled highway that has been
converted to a turnpike project or toll project.  This
subsection expires September 1, 2007.


(a-3) Notwithstanding Subsection
(a), the department and the utility shall share equally
the cost of the relocation of a utility facility that
is made before September 1, 2007, and required for
the construction on a new location of a turnpike project
or toll project or the expansion of such a turnpike
project or toll project.  This subsection expires September
1, 2007.


SECTION 2.15.  Section 221.001(1),
Transportation Code, is amended to read as follows:


(1)  "Highway" includes a
tolled or nontolled public road or part of a
tolled or nontolled public road and a bridge,
culvert, building, or other necessary structure
related to a public road.


SECTION 2.16.  Subchapter
B, Chapter 222, Transportation Code, is amended by
adding Section 222.035 to read as follows:


Sec. 222.035.  PRIVATE
ACTIVITY BONDS.  (a)  In this section, "private activity
bond" has the meaning assigned by Section 141(a), Internal
Revenue Code of 1986.


(b)  If the attorney general
makes a determination that the United States Congress
has enacted legislation amending the Internal Revenue
Code of 1986 to include highway facilities or surface
freight transfer facilities among the types of facilities
for which private activity bonds may be used:


(1)  the determination
shall be published in the Texas Register; and


(2)  Subsections (d), (e),
(f), and (g) take effect on the 30th day after the
date on which the attorney general's determination
is published in the Texas Register.


(c)  The attorney general
shall monitor federal legislation for purposes of this
section.


(d)  The department shall
establish and administer a program for private activity
bonds issued for highway facilities or surface freight
transfer facilities in this state.


(e)  The program, at a
minimum, must include a process by which the department
and the Bond Review Board receive and evaluate applications
for issuance of private activity bonds for highway
facilities or surface freight transfer facilities.


(f)  The department shall
adopt rules to administer the program established under
this section.


(g)  To the extent that
private activity bonds for highway facilities or surface
freight transfer facilities are subject to the state
ceiling under Section 146, Internal Revenue Code of
1986, the issuance of bonds for those facilities is
governed by Chapter 1372, Government Code.


SECTION 2.17.  Section 222.103(h),
Transportation Code, is amended to read as follows:


(h)  Money granted by the
department each fiscal year under this section may
not exceed an amount that, together with the money
granted for the preceding four fiscal years, results
in an average annual expenditure of $2 billion
$800 million.  This limitation does
not apply to money required to be repaid.


SECTION 2.18.  Section 222.104,
Transportation Code, is amended to read as follows:


Sec. 222.104.  PASS-THROUGH
TOLLS.  (a)  In this section, "pass-through toll" means
a per vehicle fee or a per vehicle mile fee that is
determined by the number of vehicles using a highway.


(b)  The department may enter
into an agreement with a public or private entity that
provides for the payment of pass-through tolls to the
public or private entity as reimbursement for the design,
development, financing, construction, maintenance,
or operation of a toll or nontoll facility on the state
highway system by the public or private entity.


(c)  The department may
enter into an agreement with a private entity that
provides for the payment of pass-through tolls to the
department as reimbursement for the department's design,
development, financing, construction, maintenance,
or operation of a toll or nontoll facility on the state
highway system that is financed by the department.


(d)  The department
and a regional mobility authority, a regional tollway
authority, or a county acting under Chapter 284
may enter into an agreement with a regional
mobility authority, a regional tollway authority, or
a county acting under Chapter 284 that provides
for:


(1)  the payment of
pass-through tolls to the authority or county as compensation
for the payment of all or a portion of the costs of
maintaining a state highway or a portion of a state
highway transferred to the authority or county after
being converted to a toll facility of
the authority or county that the department
estimates it would have incurred if the highway had
not been converted; or


(2)  the payment by the
authority or county of pass-through tolls to the department
as reimbursement for all or a portion of the costs
incurred by the department to design, develop, finance,
construct, and maintain a state highway or a portion
of a state highway transferred to the authority or
county after being converted to a toll facility.


(e) (d)
 The department may use any available funds for the
purpose of making a pass-through toll payment under
this section.


(f)  A regional mobility
authority, a regional tollway authority, or a county
acting under Chapter 284 is authorized to secure and
pay its obligations under an agreement under this section
from any lawfully available funds.


(g) (e)
 The commission may adopt rules necessary to implement
this section.  Rules adopted under this subsection
may include establish criteria
for:


(1)  determining the amount
of pass-through tolls to be paid under this section;
and


(2)  allocating the risk that
traffic volume will be higher or lower than the parties
to an agreement under this section anticipated in entering
the agreement.


(h)  Money repaid to the
department under this section shall be deposited to
the credit of the fund from which the money was originally
provided and is exempt from the application of Section
403.095, Government Code.


(i)  To the maximum extent
permitted by law, the department may delegate the full
responsibility for design, bidding, and construction,
including oversight and inspection, to a municipality,
county, regional mobility authority, or regional tollway
authority with which the department enters into an
agreement under this section.


(j)  An agreement under
this section must provide that the municipality, county,
regional mobility authority, or regional tollway authority
is required to meet state design criteria, construction
specifications, and contract administration procedures
unless the department grants an exception.


(k)  An agreement under
this section must prescribe the roles and responsibilities
of the parties and establish time frames for any department
reviews or approvals in a manner that will, to the
maximum extent possible, expedite the development of
the project.


SECTION 2.19.  Subchapter
E, Chapter 222, Transportation Code, is amended by
adding Section 222.1045 to read as follows:


Sec. 222.1045.  CONTRACTS
OF CERTAIN PUBLIC ENTITIES.  (a)  In this section,
"public entity" means a municipality, county, regional
mobility authority, or regional tollway authority.


(b)  A public entity may
contract with a private entity to act as the public
entity's agent in:


(1)  the design, financing,
maintenance, operation, or construction, including
oversight and inspection, of a toll or nontoll facility
under Section 222.104(b); or


(2)  the maintenance of
a state highway or a portion of a state highway subject
to an agreement under Section 222.104(d)(1).


(c)  A public entity shall:


(1)  select a private entity
under Subsection (b) on the basis of the private entity's
qualifications and experience; and


(2)  enter into a project
development agreement with the private entity.


(d)  A private entity selected
shall comply with Chapter 1001, Occupations Code, and
all laws related to procuring engineering services
and construction bidding that are applicable to the
public entity that selected the private entity.


(e)  A public entity may
assign the public entity's right to payment of pass-through
tolls under Section 222.104(b) or (d)(1) to the private
entity.


SECTION 2.20.  Sections 223.041(b),
(c), and (d), Transportation Code, are amended to read
as follows:


(b)  The department, in setting
a minimum level of expenditures in these engineering-related
activities that will be paid to the private sector
providers, shall provide that index
the level of expenditures from the amount set by rider
in the General Appropriations Act enacted by the 75th
Legislature at its regular session in 1997, expressed
as a percentage of the total funds appropriated in
Strategy A.1.1.  Plan/Design/Manage.


(c)  Beginning in
fiscal year 2000, the department shall increase its
expenditures to private sector providers for engineering-related
services at least one percentage point per year until
the expenditure level for a state fiscal year
in all strategies paid to private sector providers
for all department engineering-related services for
transportation projects is not less than reaches
a minimum of 35 percent of the total
funds appropriated in Strategy A.1.1.  Plan/Design/Manage
and Strategy A.1.2. of the General Appropriations
Act for that state fiscal biennium.  The department
shall attempt to make expenditures for engineering-related
services with private sector providers under this subsection
with historically underutilized businesses, as defined
by Section 2161.001, Government Code, in an amount
consistent with the applicable provisions of the Government
Code, any applicable state disparity study, and in
accordance with the good-faith-effort procedures outlined
in the rules adopted by the Texas Building and Procurement
General Services Commission.


(d)  The commission
shall provide for hearings at which private sector
complaints relating to the selection process are heard.


SECTION 2.21.  Chapter 223,
Transportation Code, is amended by adding Subchapter
E to read as follows:






Sec. 223.201.  AUTHORITY.
 (a)  Subject to Section 223.202, the department may
enter into a comprehensive development agreement with
a private entity to design, develop, finance, construct,
maintain, repair, operate, extend, or expand a:


(1)  toll project;


(2)  facility or a combination
of facilities on the Trans-Texas Corridor;


(3)  state highway improvement
project that includes both tolled and nontolled lanes
and may include nontolled appurtenant facilities;


(4)  state highway improvement
project in which the private entity has an interest
in the project; or


(5)  state highway improvement
project financed wholly or partly with the proceeds
of private activity bonds, as defined by Section 141(a),
Internal Revenue Code of 1986.


(b)  In this subchapter,
"comprehensive development agreement" means an agreement
that, at a minimum, provides for the design and construction,
rehabilitation, expansion, or improvement of a project
described in Subsection (a) and may also provide for
the financing, acquisition, maintenance, or operation
of a project described in Subsection (a).


(c)  The department may
negotiate provisions relating to professional and consulting
services provided in connection with a comprehensive
development agreement.


(d)  Money disbursed by
the department under a comprehensive development agreement
is not included in the amount:


(1)  required to be spent
in a state fiscal biennium for engineering and design
contracts under Section 223.041; or


(2)  appropriated in Strategy
A.1.1. Plan/Design/Manage of the General Appropriations
Act for that biennium for the purpose of making the
computation under Section 223.041.


(e)  The department may
authorize the investment of public and private money,
including debt and equity participation, to finance
a function described by this section.


(f)  The authority to enter
into comprehensive development agreements provided
by this section expires on August 31, 2011.


(g)  The department may
combine in a comprehensive development agreement under
this subchapter a toll project and a rail facility
as defined by Section 91.001.


Sec. 223.202.  LIMITATION
ON DEPARTMENT FINANCIAL PARTICIPATION.  The amount
of money disbursed by the department from the state
highway fund and the Texas mobility fund during a federal
fiscal year to pay the costs under comprehensive development
agreements may not exceed 40 percent of the obligation
authority under the federal-aid highway program that
is distributed to this state for that fiscal year.


Sec. 223.203.  PROCESS
FOR ENTERING INTO COMPREHENSIVE DEVELOPMENT AGREEMENTS.
 (a)  If the department enters into a comprehensive
development agreement, the department shall use a competitive
procurement process that provides the best value for
the department.  The department may accept unsolicited
proposals for a proposed project or solicit proposals
in accordance with this section.


(b)  The department shall
establish rules and procedures for accepting unsolicited
proposals that require the private entity to include
in the proposal:


(1)  information regarding
the proposed project location, scope, and limits;


(2)  information regarding
the private entity's qualifications, experience, technical
competence, and capability to develop the project;
and


(3)  any other information
the department considers relevant or necessary.


(c)  The department shall
publish a notice advertising a request for competing
proposals and qualifications in the Texas Register
that includes the criteria to be used to evaluate the
proposals, the relative weight given to the criteria,
and a deadline by which proposals must be received
if:


(1)  the department decides
to issue a request for qualifications for a proposed
project; or


(2)  the department authorizes
the further evaluation of an unsolicited proposal.


(d)  A proposal submitted
in response to a request published under Subsection
(c) must contain, at a minimum, the information required
by Subsections (b)(2) and (3).


(e)  The department may
interview a private entity submitting an unsolicited
proposal or responding to a request under Subsection
(c).  The department shall evaluate each proposal based
on the criteria described in the request for competing
proposals and qualifications and may qualify or shortlist
private entities to submit detailed proposals under
Subsection (f).  The department must qualify or shortlist
at least two private entities to submit detailed proposals
for a project under Subsection (f) unless the department
does not receive more than one proposal or one response
to a request under Subsection (c).


(e-1)  Notwithstanding
the requirements of this section, the department may
prequalify a private entity to submit a detailed proposal
to provide services under a design-build contract.
 The department is not required to publish a request
under Subsection (c) for a design-build contract, and
may enter into a design-build contract based solely
on an evaluation of detailed proposals submitted in
response to a request under Subsection (f) by prequalified
private entities.  The commission shall adopt rules
establishing criteria for the prequalification of a
private entity that include the precertification requirements
applicable to providers of engineering services and
the qualification requirements for bidders on highway
construction contracts.  Rules for design-build projects
adopted pursuant to this subsection shall also provide
for an expedited selection process that includes design
innovation as a selection criterion.


(e-2)  In this section,
"design-build contract" means a comprehensive development
agreement that includes the design and construction
of a turnpike project, does not include the financing
of a turnpike project, and may include the acquisition,
maintenance, or operation of a turnpike project.


(f)  The department shall
issue a request for detailed proposals from all private
entities qualified or shortlisted under Subsection
(e) or prequalified under Subsection (e-1) if the department
proceeds with the further evaluation of a proposed
project.  A request under this subsection may require
additional information relating to:


(1)  the private entity's
qualifications and demonstrated technical competence;


(2)  the feasibility of
developing the project as proposed;


(3)  engineering or architectural
designs;


(4)  the private entity's
ability to meet schedules;


(5)  a financial plan,
including costing methodology and cost proposals; or


(6)  any other information
the department considers relevant or necessary.


(g)  In issuing a request
for proposals under Subsection (f), the department
may solicit input from entities qualified under Subsection
(e) or any other person.  The department may also solicit
input regarding alternative technical concepts after
issuing a request under Subsection (f).


(h)  The department shall
evaluate each proposal based on the criteria described
in the request for detailed proposals and select the
private entity whose proposal offers the apparent best
value to the department.


(i)  The department may
enter into negotiations with the private entity whose
proposal offers the apparent best value.


(j)  If at any point in
negotiations under Subsection (i) it appears to the
department that the highest ranking proposal will not
provide the department with the overall best value,
the department may enter into negotiations with the
private entity submitting the next highest ranking
proposal.


(k)  The department may
withdraw a request for competing proposals and qualifications
or a request for detailed proposals at any time.  The
department may then publish a new request for competing
proposals and qualifications.


(l)  The department may
require that an unsolicited proposal be accompanied
by a nonrefundable fee sufficient to cover all or part
of its cost to review the proposal.


(m)  The department shall
pay an unsuccessful private entity that submits a responsive
proposal in response to a request for detailed proposals
under Subsection (f) a stipulated amount in exchange
for the work product contained in that proposal.  The
stipulated amount must be stated in the request for
proposals and may not exceed the value of any work
product contained in the proposal that can, as determined
by the department, be used by the department in the
performance of its functions.  The use by the department
of any design element contained in an unsuccessful
proposal is at the sole risk and discretion of the
department and does not confer liability on the recipient
of the stipulated amount under this section.  After
payment of the stipulated amount:


(1)  the department owns
with the unsuccessful proposer jointly the rights to,
and may make use of any work product contained in,
the proposal, including the technologies, techniques,
methods, processes, ideas, and information contained
in the project design; and


(2)  the use by the unsuccessful
proposer of any portion of the work product contained
in the proposal is at the sole risk of the unsuccessful
proposer and does not confer liability on the department.


(n)  The department may
prescribe the general form of a comprehensive development
agreement and may include any matter the department
considers advantageous to the department.  The department
and the private entity shall finalize the specific
terms of a comprehensive development agreement.


(o)  Subchapter A of this
chapter and Chapter 2254, Government Code, do not apply
to a comprehensive development agreement entered into
under this subchapter.


Sec. 223.204.  CONFIDENTIALITY
OF INFORMATION.  (a)  To encourage private entities
to submit proposals under this subchapter, the following
information is confidential, is not subject to disclosure,
inspection, or copying under Chapter 552, Government
Code, and is not subject to disclosure, discovery,
subpoena, or other means of legal compulsion for its
release until a final contract for a proposed project
is entered into:


(1)  all or part of a proposal
that is submitted by a private entity for a comprehensive
development agreement, except information provided
under Sections 223.203(b)(1) and (2), unless the private
entity consents to the disclosure of the information;


(2)  supplemental information
or material submitted by a private entity in connection
with a proposal for a comprehensive development agreement,
unless the private entity consents to the disclosure
of the information or material; and


(3)  information created
or collected by the department or its agent during
consideration of a proposal for a comprehensive development
agreement.


(b)  After the department
completes its final ranking of proposals under Section
223.203(h), the final rankings of each proposal under
each of the published criteria are not confidential.


Sec. 223.205.  PERFORMANCE
AND PAYMENT SECURITY.  (a)  Notwithstanding Section
223.006 and the requirements of Subchapter B, Chapter
2253, Government Code, the department shall require
a private entity entering into a comprehensive development
agreement under this subchapter to provide a performance
and payment bond or an alternative form of security
in an amount sufficient to:


(1)  ensure the proper
performance of the agreement; and


(2)  protect:


(A)  the department; and


(B)  payment bond beneficiaries
who have a direct contractual relationship with the
private entity or a subcontractor of the private entity
to supply labor or material.


(b)  A performance and
payment bond or alternative form of security shall
be in an amount equal to the cost of constructing or
maintaining the project.


(c)  If the department
determines that it is impracticable for a private entity
to provide security in the amount described by Subsection
(b), the department shall set the amount of the bonds
or the alternative forms of security.


(d)  A payment or performance
bond or alternative form of security is not required
for the portion of an agreement that includes only
design or planning services, the performance of preliminary
studies, or the acquisition of real property.


(e)  The amount of the
payment security must not be less than the amount of
the performance security.


(f)  In addition to or
instead of a performance and payment bond, the department
may require one or more of the following alternative
forms of security:


(1)  a cashier's check
drawn on a financial entity specified by the department;


(2)  a United States bond
or note;


(3)  an irrevocable bank
letter of credit; or


(4)  any other form of
security determined suitable by the department.


(g)  The department by
rule shall prescribe requirements for an alternative
form of security provided under this section.


Sec. 223.206.  OWNERSHIP
OF HIGHWAY.  (a)  A state highway or another facility
described by Section 223.201(a) that is the subject
of a comprehensive development agreement with a private
entity, including the facilities acquired or constructed
on the project, is public property and shall be owned
by the department.


(b)  Notwithstanding Subsection
(a), the department may enter into an agreement that
provides for the lease of rights-of-way, the granting
of easements, the issuance of franchises, licenses,
or permits, or any lawful uses to enable a private
entity to construct, operate, and maintain a project,
including supplemental facilities.  At the termination
of the agreement, the highway or other facilities are
to be in a state of proper maintenance as determined
by the department and shall be returned to the department
in satisfactory condition at no further cost.


(c)  A highway asset or
toll project that is used or leased by a private entity
under Section 202.052 or 228.053 for a commercial purpose
is not exempt from ad valorem taxation and is subject
to local zoning regulations and building standards.


(d)  The department may
not enter into a comprehensive development agreement
with a private entity under this subchapter or Section
227.023 that provides for the lease, license, or other
use of rights-of-way or related property by the private
entity for the purpose of constructing, operating,
or maintaining an ancillary facility that is used for
commercial purposes.


Sec. 223.207.  LIABILITY
FOR PRIVATE OBLIGATIONS.  The department may not incur
a financial obligation for a private entity that designs,
develops, finances, constructs, maintains, or operates
a state highway or other facility under this subchapter.
 The state or a political subdivision of the state
is not liable for any financial or other obligations
of a project solely because a private entity constructs,
finances, or operates any part of the project.


Sec. 223.208.  TERMS OF
PRIVATE PARTICIPATION.  (a)  The department shall negotiate
the terms of private participation under this subchapter,
including:


(1)  methods to determine
the applicable cost, profit, and project distribution
among the private participants and the department;


(2)  reasonable methods
to determine and classify toll rates and responsibility
for the setting of tolls;


(3)  acceptable safety
and policing standards; and


(4)  other applicable professional,
consulting, construction, operation, and maintenance
standards, expenses, and costs.


(b)  A comprehensive development
agreement entered into under this subchapter or Section
227.023(c) may include any provision that the department
considers appropriate, including provisions:


(1)  providing for the
purchase by the department, under terms and conditions
agreed to by the parties, of the interest of a private
participant in the comprehensive development agreement
and related property, including any interest in a highway
or other facility designed, developed, financed, constructed,
operated, or maintained under the comprehensive development
agreement;


(2)  establishing the purchase
price for the interest of a private participant in
the comprehensive development agreement and related
property, which price may be determined in accordance
with the methodology established by the parties in
the comprehensive development agreement;


(3)  providing for the
payment of obligations incurred pursuant to the comprehensive
development agreement, including any obligation to
pay the purchase price for the interest of a private
participant in the comprehensive development agreement,
from any lawfully available source, including securing
such obligations by a pledge of revenues of the commission
or the department derived from the applicable project,
which pledge shall have such priority as the department
may establish;


(4)  permitting the private
participant to pledge its rights under the comprehensive
development agreement;


(5)  concerning the private
participant's right to operate and collect revenue
from the project; and


(6)  restricting the right
of the commission or the department to terminate the
private participant's right to operate and collect
revenue from the project unless and until any applicable
termination payments have been made.


(c)  The department may
enter into a comprehensive development agreement under
this subchapter or under Section 227.023(c) with a
private participant only if the project is identified
in the department's unified transportation program
or is located on a transportation corridor identified
in the statewide transportation plan.


(d)  Section 223.207 does
not apply to the obligations of the department under
a comprehensive development agreement.


(e)  Notwithstanding anything
in Section 201.112 or other law to the contrary, and
subject to compliance with the dispute resolution procedures
set out in the comprehensive development agreement,
an obligation of the commission or the department under
a comprehensive development agreement entered into
under this subchapter or Section 227.023(c) to make
or secure payments to a person because of the termination
of the agreement, including the purchase of the interest
of a private participant or other investor in a project,
may be enforced by mandamus against the commission,
the department, and the comptroller in a district court
of Travis County, and the sovereign immunity of the
state is waived for that purpose.  The district courts
of Travis County shall have exclusive jurisdiction
and venue over and to determine and adjudicate all
issues necessary to adjudicate any action brought under
this subsection.  The remedy provided by this subsection
is in addition to any legal and equitable remedies
that may be available to a party to a comprehensive
development agreement.


(f)  A comprehensive development
agreement entered into under this subchapter or Section
227.023(c) and any obligations incurred, issued, or
owed under the agreement does not constitute a state
security under Chapter 1231, Government Code.


(g)  If the department
enters into a comprehensive development agreement with
a private participant that includes the collection
by the private participant of tolls for the use of
a toll project, the private participant shall submit
to the department for approval:


(1)  the methodology for:


(A)  the setting of tolls;
and


(B)  increasing the amount
of the tolls;


(2)  a plan outlining methods
the private participant will use to collect the tolls,
including:


(A)  any charge to be imposed
as a penalty for late payment of a toll; and


(B)  any charge to be imposed
to recover the cost of collecting a delinquent toll;
and


(3)  any proposed change
in an approved methodology for the setting of a toll
or a plan for collecting the toll.


(h)  Except as provided
by this section, a comprehensive development agreement
with a private participant that includes the collection
by the private participant of tolls for the use of
a toll project may be for a term not longer than 50
years.  The comprehensive development agreement may
be for a term not longer than 70 years if the agreement:


(1)  contains an explicit
mechanism for setting the price for the purchase by
the department of the interest of the private participant
in the comprehensive development agreement and related
property, including any interest in a highway or other
facility designed, developed, financed, constructed,
operated, or maintained under the agreement; and


(2)  outlines the benefit
the state will derive from having a term longer than
50 years.


Sec. 223.209.  RULES, PROCEDURES,
AND GUIDELINES GOVERNING SELECTION AND NEGOTIATING
PROCESS.  (a)  The commission shall adopt rules, procedures,
and guidelines governing selection of a developer for
a comprehensive development agreement and negotiations
to promote fairness, obtain private participants in
projects, and promote confidence among those participants.
 The rules must contain criteria relating to the qualifications
of the participants and the award of the contracts.


(b)  The department shall
have up-to-date procedures for participation in negotiations
under this subchapter.


(c)  The department has
exclusive judgment to determine the terms of an agreement.


SECTION 2.22.  Section 224.151(9),
Transportation Code, is amended to read as follows:


(9)  "Restricted lane" includes:


(A)  a high occupancy vehicle
lane;


(B)  a toll lane under Section
228.007 224.154; and


(C)  an exclusive lane.


SECTION 2.23.  Subchapter
B, Chapter 225, Transportation Code, is amended by
adding Section 225.061 to read as follows:


Sec. 225.061.  SPEAKER
JIMMY TURMAN ROAD.  (a)  Farm-to-Market Road 68 in
Fannin County is designated as Speaker Jimmy Turman
Road.


(b)  The department shall
design and construct markers indicating the road number,
the designation as Speaker Jimmy Turman Road, and any
other appropriate information.


(c)  Except as provided
by Subsection (d), the department shall erect a marker
at each end of the road and at appropriate intermediate
sites along the road.


(d)  The department is
not required to design, construct, or erect a marker
required by this section unless a grant or donation
of private funds is made to the department to cover
the cost of the design, construction, and erection
of the marker.


(e)  Money received under
Subsection (d) shall be deposited to the credit of
the state highway fund.


SECTION 2.24.  Section 227.001(9),
Transportation Code, is amended to read as follows:


(9)  "Turnpike" has the meaning
assigned to toll turnpike
project under Section 201.001(b) 361.001.


SECTION 2.25.  Subchapter
A, Chapter 227, Transportation Code, is amended by
adding Section 227.004 to read as follows:


Sec. 227.004.  ENVIRONMENTAL
DOCUMENTATION.  (a)  The department shall include in
a draft or final environmental impact statement prepared
as part of the environmental review of a Trans-Texas
Corridor project information detailing:


(1)  the reasons for the
immediate and future needs of the project;


(2)  the reasonableness
of and necessity for the project; and


(3)  after a segment of
the project has advanced:


(A)  the reasons for the
immediate and future needs for each mode of transportation
in that segment of the project; and


(B)  the reasonableness
and necessity for each mode of transportation in that
segment of the project.


(b)  After receiving approval
from the federal government, the department shall:


(1)  post the final environmental
impact statement on the department's Internet website,
along with information concerning where a copy of the
 environmental impact statement may be reviewed or
obtained; and


(2)  provide notice to
each state senator and representative who represents
all or part of the area in which a segment of the project
is located, and the commissioners court of each county
in which a segment of the project is located, that
the environmental impact statement is available on
the department's Internet website.


SECTION 2.26.  Section 227.021,
Transportation Code, is amended by adding Subsection
(f) to read as follows:


(f)  The department may
not limit the public's direct access to or from the
Trans-Texas Corridor with the intent to benefit the
economic viability of an ancillary facility.


SECTION 2.27.  Section 227.023,
Transportation Code, is amended by amending Subsection
(c) and adding Subsections (d), (e), and (f) to read
as follows:


(c)  To the extent and in
the manner that the department may enter into comprehensive
development agreements under Chapter 223 361
with regard to turnpikes, the department
may enter into a comprehensive development agreement
under this chapter that provides for the financing,
development, design, construction, or operation of
a facility or a combination of facilities on the Trans-Texas
Corridor.  All provisions of Chapter 223 361
relating to comprehensive development agreements for
turnpikes apply to comprehensive development
agreements for facilities under this chapter, including
provisions relating to the confidentiality of information.
 Claims arising under a comprehensive development agreement
are subject to Section 201.112.


(d)  Property that is licensed
or leased to a private entity under Section 227.082
for a commercial purpose is not exempt from ad valorem
taxation and is subject to local zoning regulations
and building standards.


(e)  If a contract between
the department and a private entity includes the collection
by the private entity of a fee for the use of a facility
or a combination of facilities that are part of the
Trans-Texas Corridor, the private entity shall submit
to the department for approval:


(1)  the methodology for:


(A)  the setting of the
amount of a fee; and


(B)  increasing the amount
of the fee;


(2)  a plan outlining methods
the entity will use to collect the fee, including:


(A)  any charge to be imposed
as a penalty for late payment of the fee; and


(B)  any charge to be imposed
to recover the cost of collecting a delinquent fee;
and


(3)  any proposed change
in an approved methodology for the setting of the amount
of a fee or a plan for collecting the fee.


(f)  A contract with a
private entity that includes the collection by the
private entity of a fee for the use of a facility may
not be for a term longer than 50 years.


SECTION 2.28.  Section 227.028(a),
Transportation Code, is amended to read as follows:


(a)  Subject to Section
201.617(a-1), the The department
may acquire, maintain, hold, restore, enhance, develop,
or redevelop property for the purpose of mitigating
a past, present, or future adverse environmental effect
arising from the construction or operation of any part
of the Trans-Texas Corridor without regard to whether
the need for mitigation is established for a particular
project.


SECTION 2.29.  Section 227.029(b),
Transportation Code, is amended to read as follows:


(b)  If the department finds
it necessary to change the location of a portion of
a facility, it shall reconstruct the facility at a
the location that the department
determines restores the utility of the facility
to be most favorable.  The reconstructed
facility must be of substantially the same type and
in as good condition as the original facility.  The
department shall determine and pay the cost of the
reconstruction and any damage incurred in changing
the location of a facility.


SECTION 2.30.  Subchapter
C, Chapter 227, Transportation Code, is amended by
adding Sections 227.032, 227.033, and 227.034 to read
as follows:


Sec. 227.032.  HIGHWAYS
INTERSECTING TRANS-TEXAS CORRIDOR.  (a)  The department
shall ensure that, at each intersection of a segment
of a state highway that is designated as part of the
Trans-Texas Corridor and a segment of a highway that
is designated as an interstate highway, state highway,
or United States highway, the Trans-Texas Corridor
and the interstate highway, state highway, or United
States highway are directly accessible to each other.


(b)  The department shall
make every reasonable effort to connect a segment of
a state highway that is designated as part of the Trans-Texas
Corridor with significant farm-to-market and ranch-to-market
roads and major county and city arterials included
in the locally adopted long-range transportation plan
as determined by the department, taking into consideration:


(1)  financial feasibility;


(2)  advice solicited from:


(A)  county commissioners
courts;


(B)  governing bodies of
municipalities; and


(C)  metropolitan planning
organizations;


(3)  circuity of travel
for landowners;


(4)  access for emergency
vehicles; and


(5)  traffic volume.


Sec. 227.033.  GROUNDWATER.
 (a)  After receipt of an unsolicited proposal or after
soliciting proposals to construct a facility for the
transportation of groundwater from the county in which
the groundwater is pumped or extracted, but not later
than the 90th calendar day before entering into a lease
agreement, license agreement, or franchise agreement
for the use of any part of the Trans-Texas Corridor
for that purpose, the department shall provide written
notice of the proposal or the solicitation to:


(1)  each groundwater conservation
district, subsidence district, or other local water
authority having territory in the county in which the
groundwater is pumped or extracted; and


(2)  the commissioners
court of the county in which the groundwater is pumped
or extracted.


(b)  The department may
not pump or extract, or allow the pumping or extracting,
of groundwater from the right-of-way of the Trans-Texas
Corridor unless the groundwater is needed for the construction,
operation, or maintenance of a facility other than
a public utility facility.  If a well drilled and operated
on the Trans-Texas Corridor is located inside the boundaries
of a groundwater conservation district or a subsidence
district, the well is subject to the rules of the district.


Sec. 227.034.  PROHIBITION
AGAINST LIMITING OR PROHIBITING CONSTRUCTION OF TRANSPORTATION
PROJECTS.  (a)  A contract for the acquisition, construction,
maintenance, or operation of a facility on the Trans-Texas
Corridor may not contain a provision that limits or
prohibits construction or operation of a highway or
other transportation project that is:


(1)  included in the unified
transportation program of the department in effect
at the time the contract is executed;


(2)  a project of a local
government; or


(3)  constructed or operated
for the safety of pedestrian or vehicular traffic.


(b)  In this section, "transportation
project" has the meaning assigned by Section 370.003.


SECTION 2.31.  Section 227.041,
Transportation Code, is amended by amending Subsections
(a) and (b) and adding Subsections (b-1), and (d),
and (e) to read as follows:


(a)  Except as otherwise provided
by this subchapter, the commission has the same powers
and duties relating to the condemnation and acquisition
of real property for a facility of the Trans-Texas
Corridor that the commission and the department have
relating to the condemnation or purchase of real property
under Subchapter D, Chapter 203, 361,
and Section 361.233 for a toll turnpike
project.  The commission may purchase an option to
purchase property, other than real property, a property
right, or a right-of-way used for a public utility
facility, that the commission is considering for possible
use as part of the Trans-Texas Corridor even if it
has not been finally decided that the Trans-Texas Corridor
will be located on that property.  An option to purchase
may be purchased along alternative potential routes
for the Trans-Texas Corridor even if only one of those
potential routes will be selected as the final route.


(b)  An interest in real property
or a property right is necessary or convenient for
the construction or operation of a facility if it is
located in or contiguous to an existing or planned
segment of the Trans-Texas Corridor or is needed
for mitigation of adverse environmental effects,
and if its acquisition will further the primary purposes
of the Trans-Texas Corridor.  Primary purposes include:


(1)  providing right-of-way
or a location for a facility;


(2)  providing land for mitigation
of adverse environmental effects;


(3)  providing buffer zones
for scenic or safety purposes;


(4)  allowing for possible
future expansion of any facility; and


(5)  providing a location
for a gas station, convenience store, or similar facility
generating revenue, directly or indirectly,
for use in constructing or operating the Trans-Texas
Corridor from or for ancillary facilities that directly
benefit users of the Trans-Texas Corridor.


(b-1) The commission may
not acquire property for an ancillary facility that
will be used for commercial purposes, except to provide
a location between the main lanes of a highway or between
a highway and a department rail facility for a gas
station, convenience store, or similar facility that:


(1)  provides services
to and directly benefits users of the Trans-Texas Corridor;
and


(2)  is not located within
10 miles of an intersection of a segment of a state
highway that is designated as part of the Trans-Texas
Corridor and a segment of a state highway that is designated
as an interstate highway.


(d)  If the commission
acquires property not immediately needed for department
purposes, the department is encouraged to acquire an
option to purchase the property under Subsection (a)
or to lease back purchased land under Section 227.043
to continue the agricultural or recreational use of
the property.


(e)  The commission may
not condemn property contiguous to an existing or planned
segment of the Trans-Texas Corridor for an ancillary
facility.


SECTION 2.32.  Subchapter
D, Chapter 227, Transportation Code, is amended by
adding Section 227.047 to read as follows:


Sec. 227.047.  ALTERNATIVE
ACCESS TO SEVERED PROPERTY.  If the department acquires
a tract for the Trans-Texas Corridor that severs an
owner's property, the department may allow the owner
to build, in compliance with federal law, an alternative
access between the severed tracts below the tract acquired
by the department.  An owner must obtain department
approval of the design specifications of the alternative
access.


SECTION 2.32A.  Subchapter
D, Chapter 227, Transportation Code, is amended by
adding Section 227.0415 to read as follows:


Sec. 227.0415.  DEVELOPMENT
RIGHTS.  (a) In connection with the acquisition of
property located in an existing or planned segment
of the Trans-Texas Corridor for the purpose of providing
a location for an ancillary facility to be used for
a commercial purpose, the owner of the property to
be acquired may elect to retain the right to develop
the property in accordance with the department's development
plans.  If more than one person owns an interest in
the property, the election under this subsection must
be made by unanimous written consent of all persons
who own an interest in the property.


(b)  If the owner does
not develop the property within the time period set
out in the department's development plans, the department
may acquire the development rights for the property
by purchase or condemnation.


(c)  Property that is developed
by the owner under this section is not exempt from
ad valorem taxation and is subject to local zoning
regulations and building standards.


SECTION 2.33.  Section 227.062(c),
Transportation Code, is amended to read as follows:


(c)  The Each
fiscal year, the total amount disbursed by the
department may not spend money from the general
revenue fund out of state and federal
funds shall not exceed  $25 million for the
construction or purchase of non-highway facilities
on the Trans-Texas Corridor except pursuant to a
line-item appropriation.  This subsection
does not apply to funds derived from the issuance of
bonds, private investment, donations, the Federal Transit
Administration, or the Federal Railroad Administration.
 This subsection also does not apply to:


(1)  activities that
are subject to the limitation in Subsection (a); and


(2)  activities described
in Subsection (b)(1).


SECTION 2.33A.  Section 227.082,
Transportation Code, is amended by amending Subsections
(c) and (d) and adding Subsection (f) to read as follows:


(c)  The department may grant
an exclusive or nonexclusive license to access or use
any portion of the Trans-Texas Corridor for
any purpose.  A license granted under this
section may be for a definite or indefinite term. 
The department may not grant an exclusive license to
access or use a highway on the Trans-Texas Corridor.
 The department may not grant an exclusive license
for use of the Trans-Texas Corridor by an owner of
a public utility facility if the exclusive use is prohibited
by other law.


(d)  Property may be leased
or a franchise or license granted for any purpose reasonably
necessary for the effective, including
use or operation of a facility and to provide a
location between the main lanes of a highway or between
a highway and a department rail facility for a gas
station, convenience store, or a similar facility that:


(1)  provides services
to and directly benefits users of the Trans-Texas Corridor;
and


(2)  is not located within
10 miles of an intersection of a segment of a state
highway that is designated as part of the Trans-Texas
Corridor and a segment of a state highway that is designated
as an interstate highway as a facility
and use for unrelated commercial, industrial, or agricultural
purpose.


(f)  The department may
lease property or grant a franchise or license under
this section only if each agreement has been approved
by the commissioners court of the county in which the
property, facility, or other part of the Trans-Texas
Corridor is located.  This subsection does not apply
to a lease of property or a grant of a franchise or
license to a private entity for the purpose of operating
a highway, turnpike, rail facility, or utility facility
under a comprehensive development agreement.


SECTION 2.34.  Subtitle B,
Title 6, Transportation Code, is amended by adding
Chapter 228, and Sections 361.001, 361.301, 361.307,
and 361.032, Transportation Code, are transferred to
Chapter 228, Transportation Code, designated as Subchapter
A, and amended to read as follows:



CHAPTER
228.  STATE HIGHWAY TOLL PROJECTS




SUBCHAPTER
A.  GENERAL PROVISIONS



Sec. 228.001 361.001.
 DEFINITIONS.  In this chapter:


(1)  "Air quality project"
means a project or program of the department or another
governmental entity that the commission determines
will mitigate or prevent air pollution caused by the
construction, maintenance, or use of public roads.
 "Authority" means the Texas Turnpike Authority
division of the Texas Department of Transportation.


(2)  "Bond" means bonds,
notes, or other obligations issued under Subchapter
C or another law with respect to a toll project or
system. "Owner" includes a person having
title to or an interest in any property, rights, easements,
and interests authorized to be acquired under this
chapter.


(3)  "Region" means:


(A)  a metropolitan statistical
area and any county contiguous to that metropolitan
statistical area; or


(B)  two adjacent districts
of the department.


(4)  "System" means a toll
project or any combination of toll projects designated
as a system under Section 228.010.


(5)  "Toll "Turnpike
project" has the meaning assigned by Section 201.001(b)
means a toll highway constructed, maintained,
or operated under this chapter as part of the state
highway system and any improvement, extension, or expansion
to the highway and includes:


(A)  a facility to
relieve traffic congestion and promote safety;


(B)  a bridge, tunnel,
overpass, underpass, interchange, entrance plaza, approach,
toll house, service road, ramp, or service station;


(C)  an administration,
storage, or other building the department considers
necessary to operate the project;


(D)  property rights,
easements, and interests the department acquires to
construct or operate the project;


(E)  a parking area
or structure, rest stop, park, and any other improvement
or amenity the department considers necessary, useful,
or beneficial for the operation of a turnpike project;
and


(F)  a toll-free
facility that is appurtenant to and necessary for the
efficient operation of a turnpike project, including
a service road, access road, ramp, interchange, bridge,
or tunnel.


(6)  "Transportation project"
means:


(A)  a tolled or nontolled
state highway improvement project;


(B)  a toll project eligible
for department cost participation under Section 222.103;


(C)  the acquisition, construction,
maintenance, or operation of a rail facility or system
under Chapter 91;


(D)  the acquisition, construction,
maintenance, or operation of a state-owned ferry under
Subchapter A, Chapter 342;


(E)  a public transportation
project under Chapter 455 or 456;


(F)  the establishment,
construction, or repair of an aviation facility under
Chapter 21; and


(G)  a passenger rail project
of another governmental entity.  (4) 
"Regional tollway authority" means a regional tollway
authority created under Chapter 366.


Sec. 228.002 361.301.
 AGREEMENTS WITH PUBLIC OR PRIVATE
ENTITIES TO CONSTRUCT, MAINTAIN, REPAIR, AND
OPERATE TURNPIKE PROJECTS.  (a)  The
Notwithstanding Section 361.231 and Subchapter
A, Chapter 2254, Government Code, the department
may enter into an agreement with a public or
private entity, including a toll
road corporation, to permit the entity, independently
or jointly with the department, to design, develop,
finance, construct, maintain, repair, or
and operate a toll project
turnpike projects.


(b)  An agreement entered
into under this section with a regional tollway authority
governed by Chapter 366 may provide that a function
described by Subsection (a) that is performed by a
regional tollway authority is governed by the provisions
of Chapter 366 applicable to the performance of the
same function for a turnpike project under that chapter
and the rules and procedures adopted by the regional
tollway authority under that chapter, in lieu of the
laws, rules, or procedures applicable to the department
for the performance of the same function.  The
department may authorize the investment of public and
private money, including debt and equity participation,
to finance a function described by this section.


Sec. 228.003 361.307.
 AGREEMENTS WITH PRIVATE ENTITIES AND
OTHER GOVERNMENTAL AGENCIES.  (a)  The department and
a private entity jointly may, with the
approval of the commission, enter into an agreement
with another governmental agency or entity, including
a federal agency, an agency of this or another state,
including the United Mexican States or a state of the
United Mexican States, or a political subdivision,
to independently or jointly provide services, to study
the feasibility of a toll turnpike
project, or to finance, construct, operate, and maintain
a toll turnpike project.
 The department must obtain the approval of the
governor to enter into an agreement with an agency
of another state, the United Mexican States, or a state
of the United Mexican States.


(b)  If the department
enters into an agreement with a private entity, including
a comprehensive development agreement under Subchapter
E, Chapter 223, the department and the private entity
may jointly enter into an agreement under Subsection
(a).  The department may not enter into
an agreement with the United Mexican States or a state
of the United Mexican States without the approval of
the governor.


Sec. 228.004.  PROMOTION
OF TOLL PROJECT.  361.032.  GENERAL POWERS
AND DUTIES.  (a)  The commission shall adopt rules
for the implementation and administration of this chapter.


(b)  The
department may,:


(1)  construct, maintain,
repair, and operate turnpike projects in this state;


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


(3)  with the approval
of the governor and the commission, enter into contracts
or operating agreements with similar authorities or
agencies of another state, including a state of the
United Mexican States;


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


(5)  employ consulting
engineers, accountants, construction and financial
experts, superintendents, managers, and other employees
and agents the department considers necessary and set
their compensation;


(6)  receive grants
for the construction of a turnpike project and receive
contributions of money, property, labor, or other things
of value from any source to be used for the purposes
for which the grants or contributions are made;


(7)  notwithstanding
Chapter 2113, Government Code, engage in marketing,
advertising, and other activities to promote the development
and use of toll turnpike
projects and may enter into contracts or agreements
necessary to procure marketing, advertising, or other
promotional services from outside service providers;
and


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


SECTION 2.35.  Subchapter
A, Chapter 228, Transportation Code, is amended by
adding Sections 228.005 and 228.0055 to read as follows:


Sec. 228.005.  REVENUE
OF TOLL PROJECT OR SYSTEM.  Except as provided by Subchapter
C, toll revenue or other revenue derived from a toll
project or system that is collected or received by
the department under this chapter, and a payment received
by the department under a comprehensive development
agreement for a toll project or system:


(1)  shall be deposited
in the state highway fund; and


(2)  is exempt from the
application of Section 403.095, Government Code.


Sec. 228.0055.  USE OF
CONTRACT PAYMENTS.  Payments received by the department
under a comprehensive development agreement may be
used by the department to finance the construction,
maintenance, or operation of a transportation project
or air quality project in the region.


SECTION 2.36.  Sections 361.189
and 224.154, Transportation Code, are transferred to
Subchapter A, Chapter 228, Transportation Code, redesignated
as Sections 228.006 and 228.007, Transportation Code,
and amended to read as follows:


Sec. 228.006 361.189.
 USE OF SURPLUS REVENUE.  (a)  The commission
shall by order may authorize
the use of surplus revenue of a toll turnpike
project or system to pay the costs of a transportation
another turnpike project, highway
project, or air quality project within a department
district in which any part of the toll project is located
the region.


(b)  The commission
may not revise the formula as provided in the department's
unified transportation program, or its successor document,
in a manner that results in a decrease of a district's
allocation because of a payment under Subsection (a).


(c)  The commission
in the order prescribe terms for the use of
the revenue, including the pledge of the revenue, but
may not take an action under this section that violates,
impairs, or is inconsistent with a bond order, trust
agreement, or indenture governing the use of the surplus
revenue.


Sec. 228.007 224.154.
 TOLL LANES.  (a)  Subject to Section 228.201
Notwithstanding any law of this state relating
to charging tolls on existing free public highways,
and subject to Section 224.1541(d), the commission
may by order authorize the department to charge a toll
for the use of one or more lanes of a state highway
facility, including a high occupancy
vehicle lane designated under Section 224.153 or
an exclusive lane designated under Section 224.1541,
for the purposes of congestion mitigation.


(b)  If the commission authorizes
the department to charge a toll under Subsection (a),
the department may enter into an agreement with a regional
tollway authority described in Chapter 366, a transit
authority described in Chapter 451, 452, or 453, a
coordinated county transportation authority under Chapter
460, a regional mobility authority under Chapter
370 361, a county acting
under Chapter 284, or a transportation corporation:


(1)  to design, construct,
operate, or maintain a toll lane under this section;
and


(2)  to charge a toll for
the use of one or more lanes of a state highway facility
under this section.


(c)  The commission may by
order authorize the department or the entity contracted
to operate the toll lane to set the amount of toll
charges.  Any toll charges shall be imposed in a reasonable
and nondiscriminatory manner.


(d)  Revenue generated
from toll charges and collection fees assessed by the
department in connection with a toll lane shall be
deposited in the state highway fund and may be used
only for projects for the improvement of the state
highway system.  Revenue generated from toll
charges and collection fees assessed by an entity with
whom the department contracts under this section shall
be allocated as required by the terms of the agreement.


(e)  The powers granted
by this section are subject to the restrictions of
23 U.S.C. Section 129.


SECTION 2.37.  Section 224.1541(d),
Transportation Code, is transferred to Subchapter A,
Chapter 228, Transportation Code, redesignated as Section
228.008, Transportation Code, and amended to read as
follows:


Sec. 228.008.  TOLLS ON
EXCLUSIVE LANE.  (d)  The department
may not charge a toll for the use of an exclusive lane
unless:


(1)  the lanes or multilane
facility adjacent to the exclusive lane is tolled;
or


(2)  a vehicle that is authorized
to use the tolled exclusive lane is authorized to use
nontolled adjacent lanes or an adjacent nontolled multilane
facility.


SECTION 2.38.  Section 361.033,
Transportation Code, is transferred to Subchapter A,
Chapter 228, Transportation Code, redesignated as Section
228.009, Transportation Code, and amended to read as
follows:


Sec. 228.009 361.033.
 AUDIT.  Notwithstanding any other law to the contrary,
the department shall have an independent certified
public accountant audit the department's books and
accounts for each toll project or system activities
under this chapter at least annually.  The
audit shall be conducted in accordance with the requirements
of any trust agreement securing bonds issued under
Subchapter C this chapter
that is in effect at the time of the audit.  The cost
of the audit may be treated as part of the cost of
construction or operation of a toll project or system
turnpike project.  This section
does not affect the ability of a state agency to audit
the department's books and accounts.


SECTION 2.39.  Subchapter
A, Chapter 228, Transportation Code, is amended by
adding Section 228.010 to read as follows:


Sec. 228.010.  ESTABLISHMENT
OF TOLL SYSTEMS.  (a)  If the commission determines
that the mobility needs of a region of this state could
be most efficiently and economically met by jointly
operating two or more toll projects in that region
as one operational and financial enterprise, it may
create a system composed of those projects.  The commission
may create more than one system in a region and may
combine two or more systems in a region into one system.
 The department may finance, acquire, construct, and
operate additional toll projects in the region as additions
to or expansions of a system if the commission determines
that the toll project could most efficiently and economically
be acquired or constructed if it were part of the system
and that the addition will benefit the system.


(b)  The revenue of a system
shall be accounted for separately and may not be commingled
with the revenue of a toll project that is not part
of the system or with the revenue of another system.


SECTION 2.40.  Chapter 228,
Transportation Code, is amended by adding Subchapter
B to read as follows:



SUBCHAPTER
B.  USE AND OPERATION OF TOLL PROJECTS OR SYSTEMS



Sec. 228.051.  DESIGNATION.
 Subject to Section 228.201, the commission by order
may designate one or more lanes of a segment of the
state highway system as a toll project or system.


Sec. 228.052.  OPERATION
OF TOLL PROJECT OR SYSTEM.  The department may enter
into an agreement with one or more persons to provide,
on terms approved by the department, personnel, equipment,
systems, facilities, and services necessary to operate
a toll project or system, including the operation of
toll plazas and lanes and customer service centers
and the collection of tolls.


SECTION 2.41.  Sections 361.179,
361.252, 361.253, 361.254, 361.255, and 361.256, Transportation
Code, are transferred to Subchapter B, Chapter 228,
Transportation Code, redesignated as Sections 228.053,
228.054, 228.055, 228.056, 228.057, and 228.058, Transportation
Code, and amended to read as follows:


Sec. 228.053 361.179.
 REVENUE.  (a)  The department may:


(1)  impose tolls for the
use of each toll turnpike
project or system and the different segments
or parts of each turnpike project
or system; and


(2)  notwithstanding anything
in Chapter 202 to the contrary, contract with a person
for the use of part of a toll turnpike
project or system or lease part of a toll
turnpike project or system
for a gas station, garage, store, hotel, restaurant,
railroad tracks, utilities, and telecommunications
facilities and equipment and set the terms for the
use or lease.


(b)  The tolls shall be set
so that, at a minimum, the aggregate of tolls
from the toll turnpike project
or system:


(1)  provides a fund sufficient
with other revenue and contributions, if any, to pay:


(A)  the cost of maintaining,
repairing, and operating the project or system;
and


(B)  the principal of and
interest on the bonds issued under Subchapter C
for the project or system as those bonds become
due and payable; and


(2)  creates reserves for
the purposes listed under Subdivision (1).


(c)  The tolls are not subject
to supervision or regulation by any other state agency.


(d)  The tolls and other revenue
derived from the toll turnpike
project or system for which bonds were issued,
except the part necessary to pay the cost of maintenance,
repair, and operation and to provide reserves for those
costs as may be provided in the order authorizing the
issuance of the bonds or in the trust agreement securing
the bonds, shall be set aside at regular intervals
as may be provided in the order or trust agreement
in a sinking fund that is pledged to and charged with
the payment of:


(1)  interest on the bonds
as it becomes due;


(2)  principal of the bonds
as it becomes due;


(3)  necessary charges of
paying agents for paying principal and interest; and


(4)  the redemption price
or the purchase price of bonds retired by call or purchase
as provided by the bonds.


(e)  Use and disposition of
money to the credit of the sinking fund are subject
to the order authorizing the issuance of the bonds
or to the trust agreement.


(f)  The revenue and disbursements
for each toll turnpike project
or system shall be kept separately.  The revenue
from one turnpike project may not
be used to pay the cost of another project except as
authorized by Sections 228.0055 and 228.006
Section 361.189.


(g)  Money in the sinking
fund, less the reserve provided by the order or trust
agreement, if not used within a reasonable time to
purchase bonds for cancellation, shall be applied to
the redemption of bonds at the applicable redemption
price.


Sec. 228.054 361.252.
 FAILURE OR REFUSAL TO PAY TOLL; OFFENSE.  (a)  The
operator of a vehicle, other than an authorized emergency
vehicle, that is driven or towed through a toll collection
facility shall pay the proper toll.


(b)  The operator of a vehicle
who drives or tows a vehicle through a toll collection
facility and does not pay the proper toll commits an
offense.


(c)  An offense under this
section is a misdemeanor punishable by a fine not to
exceed $250.


(d)  In this section, "authorized
emergency vehicle" has the meaning assigned by Section
541.201.


Sec. 228.055 361.253.
 ADMINISTRATIVE FEE; NOTICE; OFFENSE.  (a)  In the
event of nonpayment of the proper toll as required
by Section 228.054 361.252,
on issuance of a written notice of nonpayment, the
registered owner of the nonpaying vehicle is liable
for the payment of both the proper toll and an administrative
fee.


(b)  The department may impose
and collect the administrative fee, so as to recover
the cost of collecting the unpaid toll, not to exceed
$100.  The department shall send a written notice of
nonpayment to the registered owner of the vehicle at
that owner's address as shown in the vehicle registration
records of the department by first class mail not
later than the 30th day after the date of the alleged
failure to pay and may require payment not
sooner than the 30th day after the date the
notice was mailed.  The registered owner shall pay
a separate toll and administrative fee for each event
of nonpayment under Section 228.054 361.252.


(c)  The registered owner
of a vehicle for which the proper toll was not paid
who is mailed a written notice of nonpayment under
Subsection (b) and fails to pay the proper toll and
administrative fee within the time specified by the
notice of nonpayment commits an offense.  Each failure
to pay a toll or administrative fee under this subsection
is a separate offense.


(d)  It is an exception to
the application of Subsection (a) or (c) if the registered
owner of the vehicle is a lessor of the vehicle and
not later than the 30th day after the date the notice
of nonpayment is mailed provides to the department
a copy of the rental, lease, or other contract document
covering the vehicle on the date of the nonpayment
under Section 228.054 361.252,
with the name and address of the lessee clearly legible.
 If the lessor provides the required information within
the period prescribed, the department may send a notice
of nonpayment to the lessee at the address shown on
the contract document by first class mail before the
30th day after the date of receipt of the required
information from the lessor.  The lessee of the vehicle
for which the proper toll was not paid who is mailed
a written notice of nonpayment under this subsection
and fails to pay the proper toll and administrative
fee within the time specified by the notice of nonpayment
commits an offense.  The lessee shall pay a separate
toll and administrative fee for each event of nonpayment.
 Each failure to pay a toll or administrative fee under
this subsection is a separate offense.


(e)  It is an exception to
the application of Subsection (a) or (c) if the registered
owner of the vehicle transferred ownership of the vehicle
to another person before the event of nonpayment under
Section 228.054 361.252 occurred,
submitted written notice of the transfer to the department
in accordance with Section 520.023, and, before the
30th day after the date the notice of nonpayment is
mailed, provides to the department the name and address
of the person to whom the vehicle was transferred.
 If the former owner of the vehicle provides the required
information within the period prescribed, the department
may send a notice of nonpayment to the person to whom
ownership of the vehicle was transferred at the address
provided the former owner by first class mail before
the 30th day after the date of receipt of the required
information from the former owner.  The subsequent
owner of the vehicle for which the proper toll was
not paid who is mailed a written notice of nonpayment
under this subsection and fails to pay the proper toll
and administrative fee within the time specified by
the notice of nonpayment commits an offense.  The subsequent
owner shall pay a separate toll and administrative
fee for each event of nonpayment under Section 228.054
361.252.  Each failure to pay a
toll or administrative fee under this subsection is
a separate offense.


(f)  An offense under this
section is a misdemeanor punishable by a fine not to
exceed $250.


(g)  The court in which a
person is convicted of an offense under this section
shall also collect the proper toll and administrative
fee and forward the toll and fee to the department
for deposit in the depository bank used for that purpose.


(h)  In this section, "registered
owner" means the owner of a vehicle as shown on the
vehicle registration records of the department or the
analogous department or agency of another state or
country.


(i)  The department may contract,
in accordance with Section 2107.003, Government Code,
with a person to collect the unpaid toll and administrative
fee before referring the matter to a court with jurisdiction
over the offense.


Sec. 228.056 361.254.
 PRESUMPTIONS; PRIMA FACIE EVIDENCE; DEFENSES.  (a)
 In the prosecution of an offense under Section 228.054
361.252 or 228.055 361.253,
proof that the vehicle was driven or towed through
the toll collection facility without payment of the
proper toll may be shown by a video recording, photograph,
electronic recording, or other appropriate evidence,
including evidence obtained by automated enforcement
technology.


(b)  In the prosecution of
an offense under Section 228.055(c) 361.253(c),
(d), or (e):


(1)  it is presumed that the
notice of nonpayment was received on the fifth day
after the date of mailing;


(2)  a computer record of
the department of the registered owner of the vehicle
is prima facie evidence of its contents and that the
defendant was the registered owner of the vehicle when
the underlying event of nonpayment under Section 228.054
361.252 occurred; and


(3)  a copy of the rental,
lease, or other contract document covering the vehicle
on the date of the underlying event of nonpayment under
Section 228.054 361.252 is
prima facie evidence of its contents and that the defendant
was the lessee of the vehicle when the underlying event
of nonpayment under Section 228.054 361.252
occurred.


(c)  It is a defense to prosecution
under Section 228.055(c) 361.253(c),
(d), or (e) that the motor vehicle in question was
stolen before the failure to pay the proper toll occurred
and had not been recovered before the failure to pay
occurred, but only if the theft was reported to the
appropriate law enforcement authority before the earlier
of:


(1)  the occurrence of the
failure to pay; or


(2)  eight hours after the
discovery of the theft.


Sec. 228.057 361.255.
 ELECTRONIC TOLL COLLECTION USE AND
RETURN OF TRANSPONDERS.  (a)  For purposes
of this section, a "transponder" means a device, placed
on or within an automobile, that is capable of transmitting
information used to assess or to collect tolls.  A
transponder is "insufficiently funded" when there are
no remaining funds in the account in connection with
which the transponder was issued.


(b)  Any peace officer of
this state may seize a stolen or insufficiently funded
transponder and return it to the department, except
that an insufficiently funded transponder may not be
seized sooner than the 30th day after the date the
department has sent a notice of delinquency to the
holder of the account.


(c)  The department may
enter into an agreement with one or more persons to
market and sell transponders for use on department
toll roads.


(d)  The department may
charge reasonable fees for administering electronic
toll collection customer accounts.


(e)  Electronic toll collection
customer account information, including contact and
payment information and trip data, is confidential
and not subject to disclosure under Chapter 552, Government
Code.


(f)  A contract for the
acquisition, construction, maintenance, or operation
of a toll project must ensure the confidentiality of
all electronic toll collection customer account information
under Subsection (e).


Sec. 228.058 361.256.
 AUTOMATED ENFORCEMENT TECHNOLOGY.  (a)  To aid in
the collection of tolls and in the enforcement of toll
violations, the department may use automated enforcement
technology that it determines is necessary, including
automatic vehicle license plate identification photography
and video surveillance, by electronic imaging or photographic
copying.


(b)  Automated enforcement
technology approved by the department under Subsection
(a) may be used only for the purpose of producing,
depicting, photographing, or recording an image of
a license plate attached to the front or rear of a
vehicle.


(c)  This section does not
authorize the use of automated enforcement technology
for any other purpose.


(d)  Evidence obtained from
technology approved by the department under Subsection
(a) may not be used in the prosecution of an offense
other than under Section 228.054 361.252
or 228.055 or in the prosecution of a capital offense
361.253.


SECTION 2.42.  Sections 361.004,
361.171, 361.172, 361.173, 361.174, 361.1751, 361.1752,
361.1753, 361.176, 361.177, 361.178, 361.183, 361.185,
361.186, 361.187, and 361.188, Transportation Code,
are transferred to Chapter 228, Transportation Code,
designated as Subchapter C, and amended to read as
follows:



SUBCHAPTER
C.  TOLL REVENUE BONDS



Sec. 228.101 361.004.
 CONSTRUCTION COSTS.  (a)  The cost of acquisition,
construction, improvement, extension, or expansion
of a toll turnpike project
or system under this chapter includes the cost
of:


(1)  the actual acquisition,
design, development, planning, financing, construction,
improvement, extension, or expansion of the project
or system;


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


(3)  the acquisition of
machinery, and equipment,
software, and intellectual property;


(4)  interest before, during,
and for one year after construction, improvement, extension,
or expansion;


(5)  traffic estimates, engineering,
and legal and other advisory
services, plans, specifications, surveys, appraisals,
cost and revenue estimates, and other expenses necessary
or incident to determining the feasibility of the construction,
improvement, extension, or expansion;


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


(7)  financing; and


(8)  placement of the project
or system in operation and expenses related
to the initial operation of the turnpike
project or system.


(b)  Costs attributable to
a toll turnpike project or
system for which bonds are issued that are incurred
before the issuance of the bonds may be reimbursed
from the proceeds of the sale of the bonds.


Sec. 228.102 361.171.
 ISSUANCE OF TURNPIKE REVENUE
BONDS.  (a)  The commission by order may authorize
the issuance of toll turnpike
revenue bonds to pay all or part of the cost of a toll
turnpike project or system.
 Each project shall be financed and built
by a separate bond issue. The proceeds of
a bond issue may be used solely for the payment of
the project or system for which the bonds were
issued and may not be divided between or among two
or more projects.  Each project is a separate undertaking,
the cost of which shall be determined separately.


(b)  As determined in the
order authorizing the issuance, the bonds of each issue
shall:


(1)  be dated;


(2)  bear interest at the
rate or rates provided by the order and beginning on
the dates provided by the order and as authorized by
law, or bear no interest;


(3)  mature at the time or
times provided by the order, not exceeding 40 years
from their date or dates; and


(4)  be made redeemable before
maturity, at the price or prices and under the terms
provided by the order.


(c)  The commission may sell
the bonds at public or private sale in the manner and
for the price it determines to be in the best interest
of the department.


(d)  The proceeds of each
bond issue shall be disbursed in the manner and under
the restrictions, if any, the commission provides in
the order authorizing the issuance of the bonds or
in the trust agreement securing the bonds.


(e)  If the proceeds of a
bond issue are less than the toll turnpike
project or system cost, additional bonds may
be issued in the same manner to pay the costs of a
turnpike project or system.
 Unless otherwise provided in the order authorizing
the issuance of the bonds or in the trust agreement
securing the bonds, the additional bonds are on a parity
with and are payable, without preference or priority,
from the same fund as the bonds first issued.  In addition,
the commission may issue bonds for a turnpike
project or system secured by a lien on the revenue
of the turnpike project or system
subordinate to the lien on the revenue securing other
bonds issued for the turnpike project
or system.


(f)  If the proceeds of a
bond issue exceed the cost of the toll turnpike
project or system for which the bonds were issued,
the surplus shall be segregated from the other money
of the commission and used only for the purposes specified
in the order authorizing the issuance.


(g)  In addition to other
permitted uses, the proceeds of a bond issue may be
used to pay costs incurred before the issuance of the
bonds, including costs of environmental review, design,
planning, acquisition of property, relocation assistance,
construction, and operation.


(h)  Bonds issued and delivered
under this subchapter chapter
and interest coupons on the bonds are a security under
Chapter 8, Business & Commerce Code.


(i)  Bonds issued under this
subchapter chapter and income
from the bonds, including any profit made on the sale
or transfer of the bonds, are exempt from taxation
in this state.


Sec. 228.103 361.172.
 APPLICABILITY OF OTHER LAW; CONFLICTS.  All laws affecting
the issuance of bonds by governmental entities, including
Chapters 1201, 1202, 1204, 1207, and 1371, Government
Code, apply to bonds issued under this subchapter
chapter.  To the extent of a conflict
between those laws and this subchapter chapter,
the provisions of this subchapter chapter
prevail.


Sec. 228.104 361.173.
 PAYMENT OF BONDS; CREDIT OF STATE NOT PLEDGED.  (a)
 The principal of, interest on, and any redemption
premium on bonds issued by the commission under this
subchapter chapter are payable
solely from:


(1)  the revenue of the toll
turnpike project or system
for which the bonds are issued, including tolls pledged
to pay the bonds;


(2)  the proceeds of bonds
issued for the turnpike project
or system;


(3)  the amounts deposited
in a debt service reserve fund as required by the trust
agreement securing bonds issued for the turnpike
project or system; and


(4)  amounts received under
a credit agreement relating to the turnpike
project or system for which the bonds are issued;


(5)  surplus revenue of
another project or system as authorized by Section
228.006; and


(6)  amounts received by
the department:


(A)  as pass-through tolls
under Section 222.104;


(B)  under an agreement
with a local governmental entity entered into under
Section 228.254;


(C)  under other agreements
with a local governmental entity relating to the project
or system for which the bonds are issued; and


(D)  under a comprehensive
development agreement entered into under Section 223.201.


(b)  Bonds issued under this
subchapter chapter do not
constitute a debt of the state or a pledge of the faith
and credit of the state.  Each bond must contain on
its face a statement to the effect that:


(1)  the state, the commission,
and the department are not obligated to pay the bond
or the interest on the bond from a source other than
the amount pledged to pay the bond and the interest
on the bond; and


(2)  the faith and credit
and the taxing power of the state are not pledged to
the payment of the principal of or interest on the
bond.


(c)  The commission and the
department may not incur financial obligations that
cannot be paid from tolls or revenue derived from owning
or operating toll turnpike
projects or systems or from money provided by
law.


Sec. 228.105 361.174.
 SOURCES OF PAYMENT OF AND SECURITY FOR TOLL REVENUE
TURNPIKE PROJECT BONDS.  Notwithstanding
any other provisions of this subchapter, toll revenue
chapter, turnpike project bonds
issued by the commission may:


(1)  be payable from and secured
by:


(A)  payments made under an
agreement with a local governmental entity as provided
by Section 228.254 Subchapter A, Chapter
362;


(B)  the proceeds of bonds
issued for the toll turnpike
project or system; or


(C)  amounts deposited in
a debt service reserve fund as required by the trust
agreement securing bonds issued for the turnpike
project or system; or


(D)  surplus revenue of
another toll project or system as authorized by Section
228.006; and


(2)  state on their faces
any pledge of revenue or taxes and any security for
the bonds under the agreement.


Sec. 228.106 361.1751.
 INTERIM BONDS.  (a)  The commission may, before issuing
definitive bonds, issue interim bonds, with or without
coupons, exchangeable for definitive bonds.


(b)  An order authorizing
interim bonds may provide that the interim bonds recite
that the bonds are issued under this subchapter
chapter.  The recital is conclusive
evidence of the validity and the regularity of the
bonds' issuance.


Sec. 228.107 361.1752.
 EFFECT OF LIEN.  (a)  A lien on or a pledge of revenue,
a contract payment, or a pledge of money to the payment
of bonds issued under this subchapter is valid and
effective in accordance with Chapter 1208, Government
Code, and from a turnpike project or on
a reserve, replacement, or other fund established in
connection with a bond issued under this chapter:


(1)  is enforceable in
any court at the time of payment for and delivery
of the bond;


(2)  applies to each item
on hand or subsequently received;


(3)  applies without physical
delivery of an item or other act; and


(4)  is enforceable in
any court against any person having a claim, in
tort, contract, or other remedy, against the commission
or the department without regard to whether the person
has notice of the lien or pledge.


(b)  An order authorizing
the issuance of bonds is not required to be recorded
except in the regular records of the department.


Sec. 228.108 361.1753.
 APPROVAL OF BONDS BY ATTORNEY GENERAL.  (a)  The commission
shall submit to the attorney general for examination
the record of proceedings relating to bonds authorized
under this subchapter chapter.
 The record shall include the bond proceedings and
any contract securing or providing revenue for the
payment of the bonds.


(b)  If the attorney general
determines that the bonds, the bond proceedings, and
any supporting contract are authorized by law, the
attorney general shall approve the bonds and deliver
to the comptroller:


(1)  a copy of the legal opinion
of the attorney general stating the approval; and


(2)  the record of proceedings
relating to the authorization of the bonds.


(c)  On receipt of the legal
opinion of the attorney general and the record of proceedings
relating to the authorization of the bonds, the comptroller
shall register the record of proceedings.


(d)  After approval by the
attorney general, the bonds, the bond proceedings,
and any supporting contract are valid, enforceable,
and incontestable in any court or other forum for any
reason and are binding obligations according to their
terms for all purposes.


Sec. 228.109 361.176.
 TRUST AGREEMENT.  (a)  Bonds issued under this subchapter
chapter may be secured by a trust
agreement between the commission and a corporate trustee
that is a trust company or a bank that has the powers
of a trust company.


(b)  A trust agreement may
pledge or assign the tolls and other revenue to be
received but may not convey or mortgage any part of
a toll turnpike project or
system.


(c)  A trust agreement may
not evidence a pledge of the revenue of a toll
turnpike project or system
except:


(1)  to pay the cost of maintaining,
repairing, and operating the project or system;


(2)  to pay the principal
of, interest on, and any redemption premium on the
bonds as they become due and payable;


(3)  to create and maintain
reserves for the purposes described by Subdivisions
(1) and (2), as prescribed by Section 228.053
361.179; and


(4)  as otherwise provided
by law.


(d)  Notwithstanding Subsection
(c), surplus revenue may be used for a transportation
or air quality another turnpike
project as authorized by Section 228.006 361.189.


(e)  A trust agreement may:


(1)  set forth the rights
and remedies of the bondholders and the trustee;


(2)  restrict the individual
right of action by bondholders as is customary in trust
agreements or trust indentures securing corporate bonds
and debentures; and


(3)  contain provisions the
commission determines reasonable and proper for the
security of the bondholders.


(f)  The expenses incurred
in carrying out a trust agreement may be treated as
part of the cost of operating the toll turnpike
project or system.


Sec. 228.110 361.177.
 PROVISIONS PROTECTING AND ENFORCING RIGHTS AND REMEDIES
OF BONDHOLDERS.  A trust agreement or order providing
for the issuance of bonds may contain provisions to
protect and enforce the rights and remedies of the
bondholders, including:


(1)  covenants establishing
the commission's duties relating to:


(A)  the acquisition of property;


(B)  the design, development,
financing, construction, improvement, expansion,
maintenance, repair, operation, and insurance of the
toll turnpike project or
system in connection with which the bonds were
authorized; and


(C)  the custody, safeguarding,
and application of money;


(2)  covenants prescribing
events that constitute default;


(3)  covenants prescribing
terms on which any or all of the bonds become or may
be declared due before maturity;


(4)  covenants
relating to the rights, powers, liabilities, or duties
that arise on the breach of a duty of the commission,
including the right of the trustee to bring actions
against the commission or the department in any state
court to enforce the covenants in the agreement, and
the sovereign immunity of the state is waived for that
purpose; and


(4) (5)
 provisions for the employment of consulting engineers
in connection with the construction or operation of
the turnpike project or system.


Sec. 228.111 361.178.
 FURNISHING OF INDEMNIFYING BONDS OR PLEDGE OF SECURITIES.
 A bank or trust company incorporated under the laws
of this state that acts as depository of the proceeds
of bonds or of revenue may furnish indemnifying bonds
or pledge securities that the department requires.


Sec. 228.112 361.183.
 FEASIBILITY STUDY BY MUNICIPALITY, COUNTY, OR PRIVATE
GROUP.  (a)  One or more municipalities, one or more
counties, a combination of municipalities and counties,
or a private group or combination of individuals in
this state may pay all or part of the expenses of studying
the cost and feasibility and any other expenses relating
to:


(1)  the preparation and issuance
of toll turnpike revenue
bonds for the construction of a proposed toll
turnpike project or system;


(2)  the improvement, extension,
or expansion of an existing project or system;
or


(3)  the use of private participation
under Subchapter E, Chapter 223 I.


(b)  Money spent under Subsection
(a) for a proposed toll project or system turnpike
is reimbursable, with the consent of the commission,
to the person paying the expenses out of the proceeds
from toll turnpike revenue
bonds issued for or other proceeds that may be used
for the financing, design, development, construction,
improvement, extension, expansion, or operation of
the project.


Sec. 228.113 361.185.
 TRUST FUND.  (a)  All money received under this subchapter
chapter, whether as proceeds from
the sale of bonds or as revenue, is a trust fund to
be held and applied as provided by this subchapter
chapter.  Notwithstanding any other
law, including Section 9, Chapter 1123, Acts of the
75th Legislature, Regular Session, 1997, and without
the prior approval of the comptroller, funds held under
this subchapter chapter shall
be held in trust by a banking institution chosen by
the department or, at the discretion of the department,
in trust in the state treasury outside the general
revenue fund.


(b)  The order authorizing
the issuance of bonds or the trust agreement securing
the bonds shall provide that an officer to whom or
a bank or trust company to which the money is paid
shall act as trustee of the money and shall hold and
apply the money for the purpose of the order or trust
agreement, subject to this subchapter chapter
and the order or trust agreement.


Sec. 228.114 361.186.
 REMEDIES.  Except to the extent restricted by a trust
agreement, a holder of a bond issued under this subchapter
chapter and a trustee under a trust
agreement may:


(1)  protect and enforce by
a legal proceeding in any court a right under:


(A)  this subchapter
chapter or another law of this state;


(B)  the trust agreement;
or


(C)  the order authorizing
the issuance of the bond; and


(2)  compel the performance
of a duty this subchapter chapter,
the trust agreement, or the order requires the commission
or the department or an officer of the commission or
the department to perform, including the imposing of
tolls.


Sec. 228.115 361.187.
 EXEMPTION FROM TAXATION OR ASSESSMENT.  (a)  The commission
is exempt from taxation of or assessments on:


(1)  a toll turnpike
project or system;


(2)  property the department
acquires or uses under this subchapter chapter;
or


(3)  income from property
described by Subdivision (1) or (2).


(b)  Bonds issued under this
subchapter chapter and income
from the bonds, including any profit made on the sale
or transfer of the bonds, are exempt from taxation
in this state.


Sec. 228.116 361.188.
 VALUATION OF BONDS SECURING DEPOSIT OF PUBLIC FUNDS.
 Bonds of the commission may secure the deposit of
public funds of the state or a political subdivision
of the state to the extent of the lesser of the face
value of the bonds or their market value.


SECTION 2.43.  Subchapter
C, Chapter 228, Transportation Code, is amended by
adding Section 228.117 to read as follows:


Sec. 228.117.  FUNDING
FOR DEPARTMENT DISTRICT.  The commission may not revise
the formula as provided in the department's unified
transportation program, or its successor document,
in a manner that results in a decrease of a district's
allocation because revenue bonds are issued for a toll
project located within the department district.


SECTION 2.44.  Subchapter
H, Chapter 361, Transportation Code, is transferred
to Chapter 228, Transportation Code, redesignated as
Subchapter D, and amended to read as follows:



SUBCHAPTER
D H.  TRANSFER OF TOLL
TURNPIKE PROJECT



Sec. 361.281.  APPLICABILITY
OF SUBCHAPTER.  This subchapter applies only to:


(1)  a county with
a population of more than 1.5 million;


(2)  a local government
corporation serving a county with a population of more
than 1.5 million;


(3)  an adjacent
county in a joint turnpike authority with a county
with a population of more than 1.5 million;


(4)  a municipality
with a population of more than 170,000 that is adjacent
to the United Mexican States;


(5)  a regional tollway
authority created under Chapter 366; or


(6)  a regional mobility
authority organized under Chapter 370 or Section 361.003,
as that section existed before June 22, 2003.


Sec. 228.151 361.282.
 LEASE, SALE, OR TRANSFER CONVEYANCE
OF TOLL TURNPIKE PROJECT
OR SYSTEM.  (a)  The department may lease, sell,
or transfer convey in another
manner a toll turnpike project
or system, including a nontolled state highway or
a segment of a nontolled state highway converted to
a toll project under Subchapter E, to a governmental
entity that has the authority to operate a tolled highway
county, a municipality, regional tollway authority,
regional mobility authority, or a local government
corporation created under Chapter 431.


(b)  The commission and the
governor must approve the transfer of the toll
turnpike project or system
as being in the best interests of the state and the
entity receiving the turnpike project
or system.


Sec. 228.152 361.283.
 DISCHARGE OF OUTSTANDING BONDED INDEBTEDNESS.  An
agreement to lease, sell, or convey a toll turnpike
project or system under Section 228.151
361.282 must provide for the discharge
and final payment or redemption of the department's
outstanding bonded indebtedness for the project or
system.


Sec. 228.153 361.284.
 REPAYMENT OF DEPARTMENT'S EXPENDITURES.  (a)  Except
as provided by Subsection (b), an agreement to lease,
sell, or convey a toll turnpike
project or system under Section 228.151
361.282 must provide for the repayment
of any expenditures of the department for the financing,
design, development, construction, operation,
or and maintenance of the
highway project that have
not been reimbursed with the proceeds of bonds issued
for the highway project.


(b)  The commission may waive
repayment of all or a portion of the expenditures if
it finds that the transfer will result in substantial
net benefits to the state, the department, and the
public that equal or exceed the amount of repayment
waived.


Sec. 228.154 361.285.
 APPROVAL OF AGREEMENT BY ATTORNEY GENERAL.  (a)  An
agreement for the lease, sale, or conveyance of a toll
turnpike project or system
under this subchapter shall be submitted to the attorney
general for approval as part of the records of proceedings
relating to the issuance of bonds of the governmental
entity county, municipality, regional
tollway authority, regional mobility authority, or
local government corporation.


(b)  If the attorney general
determines that the agreement is in accordance with
law, the attorney general shall approve the agreement
and deliver to the commission a copy of the legal opinion
of the attorney general stating that approval.


SECTION 2.45.  Chapter 228,
Transportation Code, is amended by adding Subchapter
E to read as follows:



SUBCHAPTER
E.  LIMITATION ON TOLL FACILITY DETERMINATION; CONVERSION
OF NONTOLLED STATE HIGHWAY



Sec. 228.201.  LIMITATION
ON TOLL FACILITY DESIGNATION.  (a)  Except as provided
by Section 228.2015, the department may not operate
a nontolled state highway or a segment of a nontolled
state highway as a toll project, and may not transfer
a highway or segment to another entity for operation
as a toll project, unless:


(1)  the commission by
order designated the highway or segment as a toll project
before the contract to construct the highway or segment
was awarded;


(2)  the highway or segment
was open to traffic as a turnpike project on or before
September 1, 2005;


(3)  the project was designated
as a toll project in a plan or program of a metropolitan
planning organization on or before September 1, 2005;


(4)  the highway or segment
is reconstructed so that the number of nontolled lanes
on the highway or segment is greater than or equal
to the number in existence before the reconstruction;


(5)  a facility is constructed
adjacent to the highway or segment so that the number
of nontolled lanes on the converted highway or segment
and the adjacent facility together is greater than
or equal to the number in existence on the converted
highway or segment before the conversion;


(6)  subject to Subsection
(b), the highway or segment was open to traffic as
a high-occupancy vehicle lane on May 1, 2005; or


(7)  the commission converts
the highway or segment to a toll facility by:


(A)  making the determination
required by Section 228.202;


(B)  conducting the hearing
required by Section 228.203; and


(C)  obtaining county and
voter approval as required by Sections 228.207 and
228.208.


(b)  The department may
operate or transfer a high-occupancy vehicle lane under
Subsection (a)(6) as a tolled lane only if the department
or other entity operating the lane allows vehicles
occupied by a specified number of passengers to use
the lane without paying a toll.


Sec. 228.2015.  LIMITATION
TRANSITION.  (a)  Notwithstanding Section 228.201,
the department may operate a nontolled state highway
or a segment of a nontolled state highway as a toll
project if:


(1)  a construction contract
was awarded for the highway or segment before September
1, 2005;


(2)  the highway or segment
had not at any time before September 1, 2005, been
open to traffic; and


(3)  the commission designated
the highway or segment as a toll project before the
earlier of:


(A)  the date the highway
or segment is opened to traffic; or


(B)  September 1, 2005.


(b)  This section expires
September 1, 2006.


SECTION 2.46.  Section 362.0041,
Transportation Code, is transferred to Subchapter E,
Chapter 228, Transportation Code, redesignated as Sections
228.202-228.208, and amended to read as follows:


Sec. 228.202 362.0041.
 COMMISSION DETERMINATION CONVERSION
OF PROJECTS.  The (a)  Except
as provided in Subsections (d) and (g), the
commission may by order convert a nontolled state
highway or a segment of a nontolled state highway
the free state highway system to
a toll project facility if
it determines that the conversion will improve overall
mobility in the region or is the most feasible and
economic means to accomplish necessary expansion, improvements,
or extensions to that segment of the state highway
system.


Sec. 228.203.  PUBLIC HEARING.
 (b)  Prior to converting a state
highway or a segment of a the
state highway system under this
subchapter section, the commission
shall conduct a public hearing for the purpose of receiving
comments from interested persons concerning the proposed
conversion transfer.  Notice
of the hearing shall be published in the Texas Register,
one or more newspapers of general circulation, and
a newspaper, if any, published in the county or counties
in which the involved highway is located.


Sec. 228.204.  RULES.
 (c)  The commission shall adopt
rules implementing this subchapter section,
including criteria and guidelines for the approval
of a conversion of a highway.


Sec. 228.205.  QUEEN ISABELLA
CAUSEWAY.  (d)  The commission
may not convert the Queen Isabella Causeway in Cameron
County to a toll project facility.


Sec. 228.206.  TOLL REVENUE.
 (e)  Subchapter G, Chapter 361, applies to
a highway converted to a toll facility under this section.


(f)  Toll
revenue collected under this section:


(1)  shall be deposited in
the state highway fund;


(2)  may be used by the department
to finance the improvement, extension, expansion, or
operation of the converted segment of highway and may
not be collected except for those purposes; and


(3)  is exempt from the application
of Section 403.095, Government Code.


Sec. 228.207.  COUNTY AND
VOTER APPROVAL.  (g)  The commission
may only convert a state highway or a segment
of a the state highway system
under this subchapter section
if the conversion is approved by:


(1)  the commissioners
court of each county within which the highway or
segment is located; and


(2)  the qualified voters
who vote in an election under Section 228.208 and who
reside in the limits of:


(A)  a county if any part
of the highway or segment to be converted is located
in an unincorporated area of the county; or


(B)  a municipality in
which the highway or segment to be converted is wholly
located.


Sec. 228.208.  ELECTION
TO APPROVE CONVERSION.  (a)  If notified by the department
of the proposed conversion of a highway or segment
under this subchapter, and after approval of the conversion
by the appropriate commissioners courts as required
by Section 228.207(1), the commissioners court of each
county described by Section 228.207(2)(A) or the governing
body of a municipality described by Section 228.207(2)(B),
as applicable, shall call an election for the approval
or disapproval of the conversion.


(b)  If a county or municipality
orders an election, the county or municipality shall
publish notice of the election in a newspaper of general
circulation published in the county or municipality
at least once each week for three consecutive weeks,
with the first publication occurring at least 21 days
before the date of the election.


(c)  An order or resolution
ordering an election and the election notice required
by Subsection (b) must show, in addition to the requirements
of the Election Code, the location of each polling
place and the hours that the polls will be open.


(d)  The proposition submitted
in the election must distinctly state the highway or
segment proposed to be converted and the limits of
that highway or segment.


(e)  At an election ordered
under this section, the ballots shall be printed to
permit voting for or against the proposition: "The
conversion of (highway) from (beginning location) to
(ending location) to a toll project."


(f)  A proposed conversion
is approved only if it is approved by a majority of
the votes cast.


(g)  A notice of the election
and a certified copy of the order canvassing the election
results shall be sent to the commission.


SECTION 2.47.  Sections 362.001,
362.003, 362.006, and 362.007, Transportation Code,
are transferred to Chapter 228, Transportation Code,
designated as Subchapter F, and amended to read as
follows:



SUBCHAPTER
F.  JOINT TOLL PROJECTS



Sec. 228.251 362.001.
 DEFINITIONS.  In this subchapter:


(1) (2)
 "Bonds" includes certificates, notes, and other obligations
of an issuer authorized by statute, municipal home-rule
charter, or the Texas Constitution.


(2) (3)  "Cost"
means those costs included under Section 361.004.


(4)  "Local
governmental entity" means a political subdivision
of the state, including a municipality or a county,
a political subdivision of a county, a group of adjoining
counties, a defined district, or a nonprofit corporation,
including a transportation corporation created under
Chapter 431.


(5)  "Turnpike project"
has the meaning assigned by Section 361.001.


Sec. 228.252 362.003.
 APPLICABILITY OF OTHER LAW; CONFLICTS.  (a)  This
subchapter chapter is cumulative
of all laws affecting the issuance of bonds by local
governmental entities, particularly, but not by way
of limitation, provisions of Chapters 1201 and 1371,
Government Code, and Subchapters A-C, Chapter 1207,
Government Code, are applicable to and apply to all
bonds issued under this subchapter chapter,
regardless of any classification of any such local
governmental entities thereunder; provided, however,
in the event of any conflict between such laws and
this subchapter chapter,
the provisions of this subchapter chapter
prevail.


(b)  This subchapter
chapter is cumulative of all laws
affecting the commission, the department, and the local
governmental entities, except that in the event any
other law conflicts with this subchapter chapter,
the provisions of this subchapter chapter
prevail.  Chapters 1201 and 1371, Government Code,
and Subchapters A, B, and C, Chapter 1207, Government
Code, apply to bonds issued by the commission under
this subchapter chapter.


(c)  The department may enter
into all agreements necessary or convenient to effectuate
the purposes of this subchapter chapter.


Sec. 228.253 362.006.
 USE OF FEDERAL FUNDS.  The department may use federal
funds for any purpose described by this subchapter.


Sec. 228.254 362.007.
 AGREEMENTS BETWEEN AUTHORITY AND LOCAL GOVERNMENTAL
ENTITIES.  (a)  Under authority of Section 52, Article
III, Texas Constitution, a local governmental entity
other than a nonprofit corporation may, upon the required
vote of the qualified voters, in addition to all other
debts, issue bonds or enter into and make payments
under agreements with the department, not to exceed
40 years in term, in any amount not to exceed one-fourth
of the assessed valuation of real property within the
local governmental entity, except that the total indebtedness
of any municipality shall never exceed the limits imposed
by other provisions of the constitution, and levy and
collect taxes to pay the interest thereon and provide
a sinking fund for the redemption thereof, for the
purposes of construction, maintenance, and operation
of toll turnpike projects
or systems of the department, or in aid thereof.


(b)  In addition to Subsection
(a), a local governmental entity may, within any applicable
constitutional limitations, agree with the department
to issue bonds or enter into and make payments under
an agreement to construct, maintain, or operate any
portion of a toll turnpike
project or system of the department.


(c)  To make payments under
an agreement under Subsection (b) or pay the interest
on bonds issued under Subsection (b) and to provide
a sinking fund for the bonds or the contract, a local
governmental entity may:


(1)  pledge revenue from any
available source, including annual appropriations;


(2)  levy and collect taxes;
or


(3)  provide for a combination
of Subdivisions (1) and (2).


(d)  The term of an agreement
under this section may not exceed 40 years.


(e)  Any election required
to permit action under this subchapter must be held
in conformance with Chapter 1251, Government Code,
or other law applicable to the local governmental entity.


SECTION 2.48.  Section 284.001(3),
Transportation Code, is amended to read as follows:


(3)  "Project" means a causeway,
bridge, tunnel, turnpike, highway, or any combination
of those facilities, including:


(A)  a necessary overpass,
underpass, interchange, entrance plaza, toll house,
service station, approach, fixture, and accessory and
necessary equipment that has been designated as
part of the project by order of a county;


(B)  necessary administration,
storage, and other buildings that have been designated
as part of the project by order of a county; and


(C)  all property rights,
easements, and related interests acquired.


SECTION 2.49.  Section 284.008,
Transportation Code, is amended by amending Subsection
(c) and adding Subsection (d) to read as follows:


(c)  Except as provided
by Subsection (d), a A project
becomes a part of the state highway system and the
commission shall maintain the project without tolls
when:


(1)  all of the bonds and
interest on the bonds that are payable from or secured
by revenues of the project have been paid; or


(2)  a sufficient amount for
the payment of all bonds and the interest on the bonds
to maturity has been set aside in a trust fund held
for the benefit of the bondholders.


(d)  Before construction
on a project under this chapter begins, a county may
request that the commission adopt an order stating
that the project will not become part of the state
highway system under Subsection (c).  If the commission
adopts the order:


(1)  Section 362.051 does
not apply to the project;


(2)  the project must be
maintained by the county; and


(3)  the project will not
become part of the state highway system unless the
county transfers the project under Section 284.011.


SECTION 2.50.  Subchapter
A, Chapter 284, Transportation Code, is amended by
adding Section 284.011 to read as follows:


Sec. 284.011.  TRANSFER
OF PROJECT TO DEPARTMENT.  (a)  A county may transfer
to the department a project under this chapter that
has outstanding bonded indebtedness if the commission:


(1)  agrees to the transfer;
and


(2)  agrees to assume the
outstanding bonded indebtedness.


(b)  The commission may
assume the outstanding bonded indebtedness only if
the assumption:


(1)  is not prohibited
under the terms of an existing trust agreement or indenture
securing bonds or other obligations issued by the commission
for another project;


(2)  does not prevent the
commission from complying with covenants of the commission
under an existing trust agreement or indenture; and


(3)  does not cause a rating
agency maintaining a rating on outstanding obligations
of the commission to lower the existing rating.


(c)  If the commission
agrees to the transfer under Subsection (a), the county
shall convey the project and any real property acquired
to construct or operate the project to the department.


(d)  At the time of a conveyance
under this section, the commission shall designate
the project as part of the state highway system. After
the designation, the county has no liability, responsibility,
or duty to maintain or operate the project.


SECTION 2.51.  Subchapter
A, Chapter 284, Transportation Code, is amended by
adding Section 284.012 to read as follows:


Sec. 284.012.  TRANSFER
OF ASSETS.  (a)  A county, acting through the commissioners
court of the county, may submit a request to the commission
for authorization to create a regional mobility authority
under Chapter 370 and to transfer all projects under
this chapter to the regional mobility authority if:


(1)  the creation of the
regional mobility authority and transfer of projects
is not prohibited under the bond proceedings applicable
to the projects;


(2)  adequate provision
has been made for the assumption by the regional mobility
authority of all debts, obligations, and liabilities
of the county arising out of the transferred projects;
and


(3)  the commissioners
courts of any additional counties to be part of the
regional mobility authority have approved the request.


(b)  The county may submit
to the commission a proposed structure for the initial
board of directors of the regional mobility authority
and a method for appointment to the board of directors
at the creation of the regional mobility authority.
 Subsequent appointments to the board of directors
are subject to the requirements of Subchapter F, Chapter
370.


(c)  After commission authorization,
the county may transfer each of its projects under
this chapter to the regional mobility authority to
the extent authorized by the Texas Constitution if
property and contract rights in the projects and bonds
issued for the projects are not affected unfavorably.


(d)  The commission shall
adopt rules governing the creation of a regional mobility
authority and the transfer of projects under this section.


SECTION 2.52.  Section 284.061(c),
Transportation Code, is amended to read as follows:


(c)  Except as provided by
Section 284.0615 361.1375,
if applicable, the county is entitled to immediate
possession of property subject to a condemnation proceeding
brought by the county after:


(1)  a tender of a bond or
other security in an amount sufficient to secure the
owner for damages; and


(2)  the approval of the bond
or security by the court.


SECTION 2.53.  Subchapter
C, Chapter 284, Transportation Code, is amended by
adding Section 284.0615 to read as follows:


Sec. 284.0615.  DECLARATION
OF TAKING BY CERTAIN COUNTIES.  (a)  This section applies
only to a county with a population of 3.3 million or
more.


(b)  If, in connection
with a project under this chapter, the commissioners
court of the county authorizes the county to proceed
in the manner provided by Section 203.066:


(1)  the county may file
a declaration of taking and proceed in the manner provided
by that section on the project; and


(2)  a reference to the
department in that section means the county.


SECTION 2.54.  Section 284.064,
Transportation Code, is amended by adding Subsections
(d) and (e) to read as follows:


(d)  If a county enters
into an agreement with a person that includes the collection
by the person of tolls for the use of a project, the
person shall submit to the county for approval:


(1)  the methodology for:


(A)  the setting of tolls;
and


(B)  increasing the amount
of the tolls;


(2)  a plan outlining methods
the person will use to collect the tolls, including:


(A)  any charge to be imposed
as a penalty for late payment of a toll; and


(B)  any charge to be imposed
to recover the cost of collecting a delinquent toll;
and


(3)  any proposed change
in an approved methodology for the setting of a toll
or a plan for collecting the toll.


(e)  An agreement with
a person that includes the collection by the person
of tolls for the use of a project may not be for a
term longer than 50 years.


SECTION 2.55.  Subchapter
C, Chapter 284, Transportation Code, is amended by
adding Section 284.0665 to read as follows:


Sec. 284.0665.  COMPENSATION
OF OPERATING BOARD MEMBERS.  (a)  In this section,
"performing the duties of the operating board" means
substantive performance of the management or business
of a project:


(1)  including participation
in:


(A)  board and committee
meetings;


(B)  other activities involving
the substantive deliberation of business; and


(C)  pertinent educational
programs related to a project; and


(2)  not including routine
or ministerial activities such as the execution of
documents, self-preparation for meetings, or other
activities requiring a minimal amount of time.


(b)  This section applies
only to an operating board:


(1)  appointed by a local
government corporation; or


(2)  that is a local government
corporation.


(c)  A member of an operating
board is entitled to receive as compensation not more
than $150 a day for each day the member actually spends
performing the duties of the operating board.


(d)  The operating board
shall set a limit on the amount of compensation a member
of the operating board may receive in a year under
this section not to exceed $7,200.


(e)  In addition to Subsection
(c), a member of the operating board is entitled to
reimbursement of actual and necessary expenses incurred
in performing duties of the operating board.


(f)  To receive compensation
or reimbursement under this section, a member of the
operating board must file a verified statement with
the local government corporation:


(1)  showing the number
of days the member actually spent performing duties
of the operating board; and


(2)  including a general
description of the duties performed for each day of
service.


SECTION 2.56.  Section 284.067(c),
Transportation Code, is amended to read as follows:


(c)  Any Each
county into which the project extends, by condemnation
or another method under general law, may acquire the
property necessary for the project, except that
a county may not condemn property in another county
until after the resolution required by Subsection (a)
is adopted.  The county issuing the bonds may use
the bond proceeds to acquire property necessary for
the project in any county into which the project extends.


SECTION 2.57.  Section 366.004(a),
Transportation Code, is amended to read as follows:


(a)  The cost of acquisition,
construction, improvement, extension, or expansion
of a turnpike project or system under this chapter
includes the cost of:


(1)  the actual acquisition,
construction, improvement, extension, or expansion
of the turnpike 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, revenue
estimates, engineering and legal services, plans, specifications,
surveys, appraisals, construction cost estimates, and
other expenses necessary or incidental to determining
the feasibility of 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)  the assumption of
debts, obligations, and liabilities of an entity relating
to a turnpike project or system transferred to an authority
by that entity; and


(10) (9)
 expenses related to the initial operation of the turnpike
project or system.


SECTION 2.58.  Section 366.033,
Transportation Code, is amended by amending Subsection
(b) and adding Subsections (k) and (l) to read as follows:


(b)  Rules adopted by the
authority must be published in a newspaper with
general circulation in the area in which the authority
is located once each week for two consecutive weeks
after adoption of the rule.  The notice must contain
a condensed statement of the substance of the rule
and must advise that a copy of the complete text of
the rule is filed in the principal office of the authority
where the text may be read by any person.  A rule takes
effect 10 days after the date of the second publication
of the notice under this subsection comply
with the procedures in Subchapter B, Chapter 2001,
Government Code, and are subject to Section 2001.038,
Government Code, except that the action may be brought
only in a district court of a county located in the
authority.


(k)  If an authority enters
into a contract or agreement to design, finance, construct,
operate, maintain, or perform any other function for
a turnpike project, system, or improvement authorized
by law on behalf of a local governmental entity, the
commission, the department, a regional mobility authority,
or any other entity, the contract or agreement may
provide that the authority, in performing the function,
is governed by the applicable provisions of this chapter
and the rules and procedures adopted by the authority
under this chapter, in lieu of the laws, rules, or
procedures applicable to the other party for the performance
of the same function.


(l)  An authority, acting
through its board, may agree with another entity to
acquire a turnpike project or system from that entity
and to assume any debts, obligations, and liabilities
of the entity relating to a turnpike project or system
transferred to the authority.


SECTION 2.59.  Subchapter
B, Chapter 366, Transportation Code, is amended by
adding Section 366.036 to read as follows:


Sec. 366.036.  TRANSFER
OF TURNPIKE PROJECT OR SYSTEM.  (a)  An authority may
transfer any of its turnpike projects or systems to
one or more local governmental entities if:


(1)  the authority has
commitments from the governing bodies of the local
governmental entities to assume jurisdiction over the
transferred projects or systems;


(2)  property and contract
rights in the transferred projects or systems and bonds
issued for the projects or systems are not affected
unfavorably;


(3)  the transfer is not
prohibited under the bond proceedings applicable to
the transferred projects or systems;


(4)  adequate provision
has been made for the assumption of all debts, obligations,
and liabilities of the authority relating to the transferred
projects or systems by the local governmental entities
assuming jurisdiction over the transferred projects
or systems;


(5)  the local governmental
entities are authorized to assume jurisdiction over
the transferred projects or systems and to assume the
debts, obligations, and liabilities of the authority
relating to the transferred projects or systems; and


(6)  the transfer has been
approved by the commissioners court of each county
that is part of the authority.


(b)  An authority may transfer
to one or more local governmental entities any traffic
estimates, revenue estimates, plans, specifications,
surveys, appraisals, and other work product developed
by the authority in determining the feasibility of
the construction, improvement, extension, or expansion
of a turnpike project or system, and the authority's
rights and obligations under any related agreements,
if the requirements of Subsections (a)(1) and (6) are
met.


(c)  A local governmental
entity shall, using any lawfully available funds, reimburse
any expenditures made by an authority from its feasibility
study fund or otherwise to pay the costs of work product
transferred to the local governmental entity under
Subsection (b) and any other amounts expended under
related agreements transferred to the local governmental
entity.  The reimbursement may be made over time, as
determined by the local governmental entity and the
authority.


SECTION 2.60.  Section 366.169(c),
Transportation Code, is amended to read as follows:


(c)  Except as provided by
Section 228.201 366.035,
the state or a local governmental entity may convey,
grant, or lease to an authority real property, including
highways and other real property already devoted to
public use and rights or easements in real property,
that may be necessary or convenient to accomplish the
authority's purposes, including the construction or
operation of a turnpike project.  A conveyance, grant,
or lease under this section may be made without advertising,
court order, or other action other than the normal
action of the state or local governmental entity necessary
for a conveyance, grant, or lease.


SECTION 2.61.  Section 366.179,
Transportation Code, is amended by adding Subsection
(d) to read as follows:


(d)  Transponder customer
account information, including contact and payment
information and trip data, is confidential and not
subject to disclosure under Chapter 552, Government
Code.


SECTION 2.62.  Section 370.003,
Transportation Code, is amended by amending Subdivision
(14) and adding Subdivisions (16)-(19) to read as follows:


(14)  "Transportation project"
means:


(A)  a turnpike project;


(B)  a system;


(C)  a passenger or freight
rail facility, including:


(i)  tracks;


(ii)  a rail line;


(iii)  switching, signaling,
or other operating equipment;


(iv)  a depot;


(v)  a locomotive;


(vi)  rolling stock;


(vii)  a maintenance facility;
and


(viii)  other real and personal
property associated with a rail operation;


(D)  a roadway with a functional
classification greater than a local road or rural minor
collector;


(E)  a ferry;


(F)  an airport, other
than an airport that on September 1, 2005, was served
by one or more air carriers engaged in scheduled interstate
transportation, as those terms were defined by 14 C.F.R.
Section 1.1 on that date;


(G)  a pedestrian or bicycle
facility;


(H)  an intermodel hub;


(I)  an automated conveyor
belt for the movement of freight;


(J)  a border crossing inspection
station;


(K)  an air quality improvement
initiative;


(L)  a public utility facility;
and


(M)  a transit system;
and


(N)  if applicable,
projects and programs listed in the most recently approved
state implementation plan for the area covered by the
authority, including an early action compact.


(16)  "Mass transit" means
the transportation of passengers and hand-carried packages
or baggage of a passenger by any means of surface,
overhead, or underground transportation, other than
an aircraft or taxicab.


(17)  "Service area" means
the county or counties in which an authority or transit
provider has established a transit system.


(18)  "Transit provider"
means an entity that provides mass transit for the
public and that was created under Chapter 451, 452,
453, 454, 457, 458, or 460.


(19)  "Transit system"
means:


(A)  property owned or
held by an authority for mass transit purposes; and


(B)  facilities necessary,
convenient, or useful for:


(i)  the use of or access
to mass transit by persons or vehicles; or


(ii)  the protection or
environmental enhancement of mass transit.


SECTION 2.63.  Section 370.004(a),
Transportation Code, is amended to read as follows:


(a)  The cost of acquisition,
construction, improvement, extension, or expansion
of a transportation project under this chapter includes
the cost of:


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


(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 for not more than three years after acquisition,
construction, improvement, extension, or expansion
as provided in the bond proceedings;


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


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


(7)  compliance with laws,
regulations, and administrative rulings, including
any costs associated with necessary environmental mitigation
measures;


(8)  financing; and


(9)  the assumption of
debts, obligations, and liabilities of an entity relating
to a transportation project transferred to an authority
by that entity; and


(10)  expenses related
to the initial operation of the transportation project.


SECTION 2.64.  Section 370.031,
Transportation Code, is amended by adding Subsection
(c) to read as follows:


(c)  A municipality that
borders the United Mexican States and has a population
of 105,000 or more has the same authority as a county,
within its municipal boundaries, to create and participate
in an authority.  A municipality creating or participating
in an authority has the same powers and duties as a
county participating in an authority, the governing
body of the municipality has the same powers and duties
as the commissioners court of a county participating
in an authority, and an elected member of the municipality's
governing body has the same powers and duties as a
commissioner of a county that is participating in an
authority.


SECTION 2.65.  Section 370.033,
Transportation Code, is amended by amending Subsection
(m) and adding Subsections (o), (p), and (q) to read
as follows:


(m)  If an authority receives
money from the general revenue fund, the Texas Mobility
Fund, or the state highway fund it may use the
money only to acquire, design, finance, construct,
operate, or maintain a turnpike project under Section
370.003(14)(A) or (D) or a transit system under
Section 370.351.


(o)  Except as provided
in Subchapter J, an authority may not provide mass
transit services in the service area of another transit
provider that has taxing authority and has implemented
it anywhere in the service area unless the service
is provided under a written agreement with the transit
provider or under Section 370.186.


(p)  Before providing public
transportation or mass transit services in the service
area of any other existing transit provider, including
a transit provider operating under Chapter 458, an
authority must first consult with that transit provider.
 An authority shall ensure there is coordination of
services provided by the authority and an existing
transit provider, including a transit provider operating
under Chapter 458. An authority is ineligible to participate
in the formula or discretionary program under Chapter
456 unless there is no other transit provider, including
a transit provider operating under Chapter 458, providing
public transportation or mass transit services in the
service area of the authority.


(q)  An authority, acting
through its board, may agree with another entity to
acquire a transportation project or system from that
entity and to assume any debts, obligations, and liabilities
of the entity relating to a transportation project
or system transferred to the authority.


SECTION 2.66.  Subchapter
B, Chapter 370, Transportation Code, is amended by
adding Section 370.039 to read as follows:


Sec. 370.039.  TRANSFER
OF TRANSPORTATION PROJECT OR SYSTEM.  (a)  An authority
may transfer any of its transportation projects or
systems to one or more governmental entities if:


(1)  the authority has
commitments from the governing bodies of the governmental
entities to assume jurisdiction over the transferred
projects or systems;


(2)  property and contract
rights in the transferred projects or systems and bonds
issued for the projects or systems are not affected
unfavorably;


(3)  the transfer is not
prohibited under the bond proceedings applicable to
the transferred projects or systems;


(4)  adequate provision
has been made for the assumption of all debts, obligations,
and liabilities of the authority relating to the transferred
projects or systems by the governmental entities assuming
jurisdiction over the transferred projects or systems;


(5)  the governmental entities
are authorized to assume jurisdiction over the transferred
projects or systems and to assume the debts, obligations,
and liabilities of the authority relating to the transferred
projects or systems; and


(6)  the transfer has been
approved by the commissioners court of each county
that is part of the authority.


(b)  An authority may transfer
to one or more governmental entities any traffic estimates,
revenue estimates, plans, specifications, surveys,
appraisals, and other work product developed by the
authority in determining the feasibility of the construction,
improvement, extension, or expansion of a transportation
project or system, and the authority's rights and obligations
under any related agreements, if the requirements of
Subsections (a)(1) and (6) are met.


(c)  A governmental entity
shall, using any lawfully available funds, reimburse
any expenditures made by an authority from its feasibility
study fund or otherwise to pay the costs of work product
transferred to the governmental entity under Subsection
(b) and any other amounts expended under related agreements
transferred to the governmental entity.  The reimbursement
may be made over time, as determined by the governmental
entity and the authority.


SECTION 2.67.  Section 366.302,
Transportation Code, is amended by adding Subsections
(f) and (g) to read as follows:


(f)  If an authority enters
into an agreement with a private entity that includes
the collection by the private entity of tolls for the
use of a turnpike project or system, the private entity
shall submit to the authority for approval:


(1)  the methodology for:


(A)  the setting of tolls;
and


(B)  increasing the amount
of the tolls;


(2)  a plan outlining methods
the entity will use to collect the tolls, including:


(A)  any charge to be imposed
as a penalty for late payment of a toll; and


(B)  any charge to be imposed
to recover the cost of collecting a delinquent toll;
and


(3)  any proposed change
in an approved methodology for the setting of a toll
or a plan for collecting the toll.


(g)  An agreement with
a private entity that includes the collection by the
private entity of tolls for the use of a turnpike project
or system may not be for a term longer than 50 years.


SECTION 2.68.  Section 370.163(a),
Transportation Code, is amended to read as follows:


(a)  Except as otherwise provided
by this subchapter, the governing body of an authority
has the same powers and duties relating to the condemnation
and acquisition of real property for a transportation
project that the commission and the department have
under Subchapter D, Chapter 203, 361,
and Section 361.233 relating to the condemnation
or purchase of real property for a toll turnpike
project.  Notwithstanding Section 361.135(a),
the concurrence of the commission is not a prerequisite
to the exercise of the power of condemnation by the
governing body of the authority.


SECTION 2.69.  Section 370.168(c),
Transportation Code, is amended to read as follows:


(c)  Except as provided by
Section 228.201 370.035,
this state or a local government may convey, grant,
or lease to an authority real property, including highways
and other real property devoted to public use and rights
or easements in real property, that may be necessary
or convenient to accomplish a purpose of the authority,
including the construction or operation of a transportation
project.  A conveyance, grant, or lease under this
section may be made without advertising, court order,
or other action other than the normal action of this
state or local government necessary for a conveyance,
grant, or lease.


SECTION 2.70.  Section 370.177(i),
Transportation Code, is amended to read as follows:


(i)  In the prosecution of
an offense under this section, proof that the vehicle
passed through a toll collection facility without payment
of the proper toll together with proof that the defendant
was the registered owner or the driver of the vehicle
when the failure to pay occurred, establishes the nonpayment
of the registered owner.  The proof may be by testimony
of a peace officer or authority employee, video surveillance,
or any other reasonable evidence, including evidence
obtained by automated enforcement technology that the
authority determines is necessary, including automated
enforcement technology described by Sections 228.058(a)
and (b).


SECTION 2.71.  Section 370.178,
Transportation Code, is amended by adding Subsection
(d) to read as follows:


(d)  Transponder customer
account information, including contact and payment
information and trip data, is confidential and not
subject to disclosure under Chapter 552, Government
Code.


SECTION 2.72.  Section 370.186,
Transportation Code, is amended by amending Subsection
(a) and adding Subsections (c) and (d) to read as follows:


(a)  Except as provided
by Subsection (c), an An authority
may not construct, maintain, or operate a turnpike
or toll project in an area having a governmental entity
established under Chapter 284 or 366 unless the governmental
entity and the authority enter into a written agreement
specifying the terms and conditions under which the
project shall be undertaken.  An authority may not
construct, maintain, or operate a transportation project
that another governmental entity has determined to
be a project under Chapter 451, 452, or 460 unless
the governmental entity and the authority enter into
a written agreement specifying the terms and conditions
under which the project shall be undertaken.


(c)  Subsection (a) does
not apply to a turnpike or toll project located in
a county in which a regional tollway authority has
transferred under Section 366.036 or 366.172:


(1)  all turnpike projects
of the regional tollway authority that are located
in the county; and


(2)  all work product developed
by the regional tollway authority in determining the
feasibility of the construction, improvement, extension,
or expansion of a turnpike project to be located in
the county.


(d)  An authority may not
construct, maintain, or operate a passenger rail facility
within the boundaries of an intermunicipal commuter
rail district created under Article 6550c-1, Vernon's
Texas Civil Statutes, as those boundaries existed on
September 1, 2005, unless the district and the authority
enter into a written agreement specifying the terms
and conditions under which the project will be undertaken.


SECTION 2.73.  Sections 370.251(c)
and (d), Transportation Code, are amended to read as
follows:


(c)  If permitted under
the constitution of this state, directors Directors
serve staggered six-year terms, with the terms of no
more than one-third of the directors expiring on February
1 of each odd-numbered year. If six-year terms are
not permitted under the constitution, directors serve
two-year terms, with the terms of not more than one-half
of the directors expiring on February 1 of each year.


(d)  If six-year terms
are permitted under the constitution of this state,
one One director appointed to
the initial board of an authority by the commissioners
court of a county shall be designated by the court
to serve a term of two years and one director designated
to serve a term of four years.  If six-year terms
are not permitted under the constitution, one director
appointed to the initial board of an authority by the
commissioners court of a county shall be designated
by the court to serve a term of one year and one director
designated to serve a term of two years. If one
or more directors are subsequently appointed to the
board, the directors other than the subsequent appointees
shall determine the length of the appointees' terms,
to comply with Subsection (c).


SECTION 2.74.  Section 370.252,
Transportation Code, is amended by adding Subsection
(f) to read as follows:


(f)  In addition to the
prohibitions and restrictions of this section, directors
are subject to Chapter 171, Local Government Code.


SECTION 2.75.  Section 370.262(a),
Transportation Code, is amended to read as follows:


(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. The board may
hold an open or closed meeting by telephone conference
call subject to the requirements of Sections 551.125(c)-(f),
Government Code, but is not subject to the requirements
of Subsection (b) of that section.


SECTION 2.76.  Chapter 370,
Transportation Code, is amended by adding Subchapters
I and J to read as follows:



SUBCHAPTER
I.  TRANSIT SYSTEMS



Sec. 370.351.  TRANSIT
SYSTEMS.  (a)  An authority may construct, own, operate,
and maintain a transit system.


(b)  An authority shall
determine each transit route, including transit route
changes.


(c)  This chapter does
not prohibit an authority, municipality, or transit
provider from providing any service that complements
a transit system, including providing parking garages,
special transportation for persons who are disabled
or elderly, or medical transportation services.


Sec. 370.352.  PUBLIC HEARING
ON FARE AND SERVICE CHANGES.  (a)  In this section:


(1)  "Service change" means
any addition or deletion resulting in the physical
realignment of a transit route or a change in the type
or frequency of service provided in a specific, regularly
scheduled transit route.


(2)  "Transit revenue vehicle
mile" means one mile traveled by a transit vehicle
while the vehicle is available to public passengers.


(3)  "Transit route" means
a route over which a transit vehicle travels that is
specifically labeled or numbered for the purpose of
picking up or discharging passengers at regularly scheduled
stops and intervals.


(4)  "Transit route mile"
means one mile along a transit route regularly traveled
by transit vehicles while available to public passengers.


(b)  Except as provided
by Section 370.353, an authority shall hold a public
hearing on:


(1)  a fare change;


(2)  a service change involving:


(A)  25 percent or more
of the number of transit route miles of a transit route;
or


(B)  25 percent or more
of the number of transit revenue vehicle miles of a
transit route, computed daily, for the day of the week
for which the change is made; or


(3)  the establishment
of a new transit route.


(c)  An authority shall
hold the public hearing required by Subsection (b)
before the cumulative amount of service changes in
a fiscal year equals a percentage amount described
in Subsection (b)(2)(A) or (B).


Sec. 370.353.  PUBLIC HEARING
ON FARE AND SERVICE CHANGES:  EXCEPTIONS.  (a)  In
this section, "experimental service change" means an
addition of service to an existing transit route or
the establishment of a new transit route.


(b)  A public hearing under
Section 370.352 is not required for:


(1)  a reduced or free
promotional fare that is instituted daily or periodically
over a period of not more than 180 days;


(2)  a headway adjustment
of not more than five minutes during peak-hour service
and not more than 15 minutes during nonpeak-hour service;


(3)  a standard seasonal
variation unless the number, timing, or type of the
standard seasonal variation changes; or


(4)  an emergency or experimental
service change in effect for 180 days or less.


(c)  A hearing on an experimental
service change in effect for more than 180 days may
be held before or while the experimental service change
is in effect and satisfies the requirement for a public
hearing if the hearing notice required by Section 370.354
states that the change may become permanent at the
end of the effective period.  If a hearing is not held
before or while the experimental service change is
in effect, the service that existed before the change
must be reinstituted at the end of the 180th day after
the change became effective and a public hearing must
be held in accordance with Section 370.352 before the
experimental service change may be continued.


Sec. 370.354.  NOTICE OF
HEARING ON FARE OR SERVICE CHANGE.  (a)  After calling
a public hearing required by Section 370.352, the authority
shall:


(1)  at least 30 days before
the date of the hearing, publish notice of the hearing
at  least once in a newspaper of general circulation
in the territory of the authority; and


(2)  post notice in each
transit vehicle in service on any transit route affected
by the proposed change for at least two weeks within
30 days before the date of the hearing.


(b)  The notice must contain:


(1)  a description of each
proposed fare or service change, as appropriate;


(2)  the time and place
of the hearing; and


(3)  if the hearing is
required under Section 370.352(c), a description of
the latest proposed change and the previous changes.


(c)  The requirement for
a public hearing under Section 370.352 is satisfied
at a public hearing required by federal law if:


(1)  the notice requirements
of this section are met; and


(2)  the proposed fare
or service change is addressed at the meeting.


Sec. 370.355.  CRIMINAL
PENALTIES.  (a)  An authority by resolution may prohibit
the use of the transit system by a person who fails
to possess evidence showing that the appropriate fare
for the use of the system has been paid and may establish
reasonable and appropriate methods, including using
peace officers under Section 370.181(c), to ensure
that persons using the transit system pay the appropriate
fare for that use.


(b)  An authority by resolution
may provide that a fare for or charge for the use of
the transit system that is not paid incurs a penalty,
not to exceed $100.


(c)  The authority shall
post signs designating each area in which a person
is prohibited from using the transit system without
possession of evidence showing that the appropriate
fare has been paid.


(d)  A person commits an
offense if:


(1)  the person or another
for whom the person is criminally responsible under
Section 7.02, Penal Code, uses the transit system and
does not possess evidence showing that the appropriate
fare has been paid; and


(2)  the person fails to
pay the appropriate fare or other charge for the use
of the transit system and any penalty on the fare on
or before the 30th day after the date the authority
notifies the person that the person is required to
pay the amount of the fare or charge and the penalty.


(e)  The notice required
by Subsection (d)(2) may be included in a citation
issued to the person by a peace officer under Article
14.06, Code of Criminal Procedure, in connection with
an offense relating to the nonpayment of the appropriate
fare or charge for the use of the transit system.


(f)  An offense under Subsection
(d) is a Class C misdemeanor.


(g)  An offense under Subsection
(d) is not a crime of moral turpitude.



SUBCHAPTER
J.  ACQUIRING TRANSIT SYSTEMS



Sec. 370.361.  TRANSFER
OF TRANSIT SYSTEMS.  (a)  In this section, "unit of
election" means a political subdivision that previously
voted to join the service area of a transit provider.


(b)  An authority may request
in writing a transit provider to transfer the provider's
transit system and taxing authority to the authority
if the board determines that the traffic needs of the
counties in which the authority operates could be most
efficiently and economically met by the transfer.


(c)  On receipt of a written
request under Subsection (b), the governing body of
the transit provider may authorize the authority to
solicit public comment and conduct at least one public
hearing on the proposed transfer in each unit of election
in the transit provider's service area.  Notice of
a hearing must be published in the Texas Register,
one or more newspapers of general circulation in the
transit provider's service area, and a newspaper, if
any, published in the counties of the requesting authority.
 The notice shall also solicit written comments on
the proposed transfer.  The transit provider may participate
fully with the authority in conducting a public hearing.


(d)  A board may approve
the acquisition of the transit provider if the governing
body of the transit provider approves transfer of its
operations to the authority and dissolution of the
transit provider is approved in an election ordered
under Subsection (e).  Before approving the acquisition,
the board shall consider public comments received under
Subsection (c).


(e)  After considering
public comments received under Subsection (c), the
governing body of the transit provider may order an
election to dissolve the transit provider and transfer
all services, property, funds, assets, employees, debts,
and obligations to the authority.  The governing body
of the transit provider shall submit to the qualified
voters in the units of election in the transit provider's
service area a proposition that reads substantially
as follows: "Shall (name of transit provider) be dissolved
and its services, property, funds, assets, employees,
debts, and obligations be transferred to (name of regional
mobility authority)?"


(f)  An election under
Subsection (e) shall be conducted so that votes are
separately tabulated and canvassed in each participating
unit of election in the transit provider's service
area.


(g)  The governing body
of the transit provider shall canvass the returns and
declare the results of the election separately with
respect to each unit of election.  If a majority of
the votes received in a unit of election are in favor
of the proposition, the proposition is approved in
that unit of election.  The transit provider is dissolved
and its services, property, funds, assets, employees,
debts, and obligations are transferred to the authority
only if the proposition is approved in every unit of
election.  If the proposition is not approved in every
unit of election, the proposition does not pass and
the transit provider is not dissolved.


(h)  A certified copy of
the order or resolution recording the results of the
election shall be filed with the department, the comptroller,
and the governing body of each unit of election in
the transit provider's service area.


(i)  The authority shall
assume all debts or other obligations of the transferred
transit provider in connection with the acquisition
of property under Subsection (g).  The authority may
not use revenue from sales and use tax collected under
this subchapter or other revenue of the transit system
in a manner inconsistent with any pledge of that revenue
for the payment of any outstanding bonds, unless provisions
have been made for a full discharge of the bonds.


Sec. 370.362.  SALES AND
USE TAX.  (a)  If an authority acquires a transit provider
that has taxing authority, the authority may impose
a sales and use tax at a permissible rate that does
not exceed the rate approved by the voters residing
in the service area of the transit provider's transit
system at an election under this subchapter.


(b)  The authority by resolution
may:


(1)  decrease the rate
of the sales and use tax to a permissible rate; or


(2)  call an election for
the increase or decrease of the sales and use tax to
a permissible rate.


(c)  If an authority orders
an election, the authority shall publish notice of
the election in a newspaper of general circulation
in the territory of the authority at least once each
week for three consecutive weeks, with the first publication
occurring at least 21 days before the date of the election.


(d)  A resolution ordering
an election and the election notice required by Subsection
(c) must show, in addition to the requirements of the
Election Code, the hours of the election and polling
places in election precincts.


(e)  A copy of the election
notice required by Subsection (c) shall be furnished
to the commission and the comptroller.


(f)  The permissible rates
for a sales and use tax imposed under this subchapter
are:


(1)  one-quarter of one
percent;


(2)  one-half of one percent;


(3)  three-quarters of
one percent; or


(4)  one percent.


(g)  Chapter 322, Tax Code,
applies to a sales and use tax imposed under this subchapter.


Sec. 370.363.  MAXIMUM
TAX RATE.  (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 all political subdivisions of this state
having territory in the service area of the transferred
transit system exceeds two percent in any location
in the service area.


(b)  An election to approve
a sales and use tax or increase the rate of an authority's
sales and use tax has no effect if:


(1)  the voters in the
service area approve the authority's sales and use
tax rate or rate increase at an election held on the
same day on which a municipality or county having territory
in the jurisdiction of the service area adopts a sales
and use tax or an additional sales and use tax; and


(2)  the combined rates
of all sales and use taxes imposed by the authority
and all political subdivisions of this state would
exceed two percent in any part of the territory in
the service area.


Sec. 370.364.  ELECTION
TO CHANGE TAX RATE.  (a)  At an election ordered under
Section 370.362(b)(2), the ballots shall be printed
to permit voting for or against the proposition: "The
increase (decrease) of the local sales and use tax
rate for mass transit to (percentage)."


(b)  The increase or decrease
in the tax rate becomes effective only if it is approved
by a majority of the votes cast.


(c)  A notice of the election
and a certified copy of the order canvassing the election
results shall be:


(1)  sent to the commission
and the comptroller; and


(2)  filed in the deed
records of the county.


Sec. 370.365.  SALES TAX:
 EFFECTIVE DATES.  (a)  A sales and use tax implemented
under this subchapter takes effect on the first day
of the second calendar quarter that begins after the
date the comptroller receives a copy of the order required
to be sent under Section 370.364(c).


(b)  An increase or decrease
in the rate of a sales and use tax implemented under
this subchapter takes effect on:


(1)  the first day of the
first calendar quarter that begins after the date the
comptroller receives the notice provided under Section
370.364(c); or


(2)  the first day of the
second calendar quarter that begins after the date
the comptroller receives the notice, if within 10 days
after the date of receipt of the notice the comptroller
gives written notice to the board that the comptroller
requires more time to implement tax collection and
reporting procedures.


SECTION 2.77.  Section 370.302,
Transportation Code, is amended by adding Subsections
(h) and (i) to read as follows:


(h)  If an authority enters
into an agreement with a private entity that includes
the collection by the private entity of tolls for the
use of a transportation project, the private entity
shall submit to the authority for approval:


(1)  the methodology for:


(A)  the setting of tolls;
and


(B)  increasing the amount
of the tolls;


(2)  a plan outlining methods
the entity will use to collect the tolls, including:


(A)  any charge to be imposed
as a penalty for late payment of a toll; and


(B)  any charge to be imposed
to recover the cost of collecting a delinquent toll;
and


(3)  any proposed change
in an approved methodology for the setting of a toll
or a plan for collecting the toll.


(i)  An agreement with
a private entity that includes the collection by the
private entity of tolls for the use of a transportation
project may not be for a term longer than 50 years.


SECTION 2.78.  Section 391.252(a),
Transportation Code, is amended to read as follows:


(a)  A Subsequent
to the effective date of this subchapter, a
person may not erect an off-premise sign that is adjacent
to and visible from:


(1)  U.S. Highway 290 between
the western city limits of the city of Austin and the
eastern city limits of the city of Fredericksburg;


(2)  State Highway 317 between
the northern city limits of the city of Belton to the
southern city limits of the city of Valley Mills;


(3)  State Highway 16 between
the northern city limits of the city of Kerrville and
Interstate Highway 20;


(4)  U.S. Highway 77 between
State Highway 186 and State Highway 44;


(5)  U.S. Highway 281 between
State Highway 186 and Interstate Highway 37;


(6)  State Highway 17 between
State Highway 118 and U.S. Highway 90;


(7)  State Highway 67 between
U.S. Highway 90 and Farm-to-Market Road 170;


(8)  Farm-to-Market Road 170
between State Highway 67 and State Highway 118;


(9)  State Highway 118 between
Farm-to-Market Road 170 and State Highway 17;


(10)  State Highway 105 between
the western city limits of the city of Sour Lake to
the eastern city limits of the city of Cleveland;


(11)  State Highway 73 between
the eastern city limits of the city of Winnie to the
western city limits of the city of Port Arthur;


(12)  State Highway 21 between
the southern city limits of the city of College Station
and U.S. Highway 290; or


(13)  a highway located in:


(A)  the Sabine National Forest;


(B)  the Davy Crockett National
Forest; or


(C)  the Sam Houston National
Forest; or


(14)  Segments 1 through
4 of State Highway 130.


SECTION 2.79.  Section 395.001(a),
Transportation Code, is amended to read as follows:


(a)  This subchapter applies
only to:


(1)  the governing body of
a toll road authority:


(A)  in which a county
with a population of 3.3 2.4
million or more is located; or


(B)  that is adjacent to
a county with a population of 3.3 million or more and
in which a municipality with a population of more than
60,000 is located; and


(2)  an outdoor sign.


SECTION 2.80.  Section 395.051(a),
Transportation Code, is amended to read as follows:


(a)  This subchapter applies
only to a county with a population of more than 3.3
million or a county adjacent to a county with a
population of more than 3.3 million in which a municipality
with a population of more than 60,000 is located.


SECTION 2.81.  Section 451.554,
Transportation Code, is amended to read as follows:


Sec. 451.554.  BOARD APPROVAL
OF ANNEXATION: EFFECTIVE DATE.  (a)  The addition of
territory annexed under Section 451.551, or
approved under Section 451.552 or 451.553, does
not take effect if, before the effective date of the
addition under Subsection (b), the board of the authority
gives written notice to the governing body of the
municipality that added new territory to the authority
by virtue of annexation, or to the governing body
of the municipality or the commissioners court of the
county that held the election, that the addition
would create a financial hardship on the authority
because:


(1)  the territory to be added
is not contiguous to the territory of the existing
authority;  or


(2)  the addition of the territory
would impair the imposition of the sales and use tax
authorized by this chapter.


(b)  In the absence of a notice
under Subsection (a), the addition of territory takes
effect on the 31st day after the date of the:


(1)  municipal ordinance,
if annexed by a municipality under Section 451.551;
or


(2)  election, if approved
under Section 451.552 or 451.553 approved
under Section 451.552 or 451.553 takes effect on the
31st day after the date of the election.


SECTION 2.82.  Section 472.031,
Transportation Code, is amended by adding Subsection
(c) to read as follows:


(c)  A legislative member
of a policy board may not be counted as absent at a
meeting of the policy board during a legislative session.


[SECTION 2.83 reserved]


SECTION 2.84.  Section 451.071,
Transportation Code, is amended by adding Subsection
(f) to read as follows:


(f)  A referendum on a
proposal to expand a system approved under this section
may be held on any date specified in Section 41.001,
Election Code, or a date chosen by order of the board
of the authority, provided that:


(1)  the referendum is
held no earlier than the 62nd day after the date of
the order; and


(2)  the proposed expansion
involves the addition of not more than 12 miles of
track to the system.


SECTION 2.85.  Subchapter
D, Chapter 502, Transportation Code, is amended by
adding Section 502.1515 to read as follows:


Sec. 502.1515.  OUTSOURCING
PRODUCTION OF RENEWAL NOTICES; PAID ADVERTISING.  The
commission may authorize the department to enter into
a contract with a private vendor to produce and distribute
motor vehicle registration renewal notices.  The contract
may provide for the inclusion of paid advertising in
the registration renewal notice packet.


SECTION 2.86.  Section 551.301,
Transportation Code, is amended by amending Subdivision
(2) and adding Subdivision (3) to read as follows:


(2)  "Motor assisted scooter":


(A)  means a self-propelled
device with:


(i) (A)
 at least two wheels in contact with the ground during
operation;


(ii) (B)
 a braking system capable of stopping the device under
typical operating conditions;


(iii) (C)
 a gas or electric motor not exceeding 40 cubic centimeters;


(iv) (D)
 a deck designed to allow a person to stand or sit
while operating the device; and


(v) (E)
 the ability to be propelled by human power alone;
and


(B)  does not include a
pocket bike or minimotorbike.


(3)  "Pocket bike or minimotorbike"
means a self-propelled vehicle that is equipped with
an electric motor or internal combustion engine having
a piston displacement of less than 50 cubic centimeters,
is designed to propel itself with not more than two
wheels in contact with the ground, has a seat or saddle
for the use of the operator, is not designed for use
on a highway, and is ineligible for a certificate of
title under Chapter 501.  The term does not include:


(A)  a moped or motorcycle;


(B)  an electric bicycle
or motor-driven cycle, as defined by Section 541.201;


(C)  a motorized mobility
device, as defined by Section 542.009;


(D)  an electric personal
assistive mobility device, as defined by Section 551.201;
or


(E)  a neighborhood electric
vehicle.


SECTION 2.87.  Subchapter
D, Chapter 551, Transportation Code, is amended by
adding Section 551.304 to read as follows:


Sec. 551.304.  APPLICATION
OF SUBCHAPTER TO POCKET BIKE OR MINIMOTORBIKE.  This
subchapter may not be construed to authorize the operation
of a pocket bike or minimotorbike on any:


(1)  highway, road, or
street;


(2)  path set aside for
the exclusive operation of bicycles; or


(3)  sidewalk.


SECTION 2.88.  Section 101.022,
Civil Practice and Remedies Code, is amended to read
as follows:


Sec. 101.022.  DUTY OWED:
 PREMISE AND SPECIAL DEFECTS.  (a)  Except as provided
in Subsection (c), if If a claim
arises from a premise defect, the governmental unit
owes to the claimant only the duty that a private person
owes to a licensee on private property, unless the
claimant pays for the use of the premises.


(b)  The limitation of duty
in this section does not apply to the duty to warn
of special defects such as excavations or obstructions
on highways, roads, or streets or to the duty to warn
of the absence, condition, or malfunction of traffic
signs, signals, or warning devices as is required by
Section 101.060.


(c)  If a claim arises
from a premise defect on a toll highway, road, or street,
the governmental unit owes to the claimant only the
duty that a private person owes to a licensee on private
property.


SECTION 2.89.  Subchapter
C, Chapter 791, Government Code, is amended by adding
Section 791.033 to read as follows:


Sec. 791.033.  CONTRACTS
TO CONSTRUCT, MAINTAIN, OR OPERATE FACILITIES ON STATE
HIGHWAY SYSTEM.  (a)  In this section, "state highway
system" means the highways in this state included in
the plan providing for a system of state highways prepared
under Section 201.103, Transportation Code.


(b)  A local government
may enter into and make payments under an agreement
with another local government for the design, development,
financing, construction, maintenance, operation, extension,
expansion, or improvement of a toll or nontoll project
or facility on the state highway system located within
the boundaries of the local government or, as a continuation
of the project or facility, within the boundaries of
an adjacent local government.


(c)  An agreement under
this section must be approved by the Texas Department
of Transportation.


(d)  Notwithstanding Section
791.011(d), to make payments under an agreement under
this section, a local government may:


(1)  pledge revenue from
any available source, including payments received under
an agreement with the Texas Department of Transportation
under Section 222.104, Transportation Code;


(2)  pledge, levy, and
collect taxes to the extent permitted by law; or


(3)  provide for a combination
of Subdivisions (1) and (2).


(e)  The term of an agreement
under this section may not exceed 40 years.


(f)  Any election required
to permit action under this section must be held in
conformance with the Election Code or other law applicable
to the local government.


(g)  In connection with
an agreement under this section, a county or municipality
may exercise any of the rights and powers granted to
the governing body of an issuer under Chapter 1371.


(h)  This section is wholly
sufficient authority for the execution of agreements,
the pledge of revenues, taxes, or any combination of
revenues and taxes, and the performance of other acts
and procedures authorized by this section by a local
government without reference to any other provision
of law or any restriction or limitation contained in
those provisions, except as specifically provided by
this section.  To the extent of any conflict or inconsistency
between this section and any other law, this section
shall prevail and control.  A local government may
use any law not in conflict with this section to the
extent convenient or necessary to carry out any power
or authority, expressed or implied, granted by this
section.


SECTION 2.90.  Subchapter
C, Chapter 1232, Government Code, is amended by adding
Section 1232.111 to read as follows:


Sec. 1232.111.  CERTAIN
PROJECTS BY TEXAS DEPARTMENT OF TRANSPORTATION.  (a)
 The authority may issue and sell obligations to finance
one or more projects described by Section 201.1055(a),
Transportation Code.  Notwithstanding Section 1232.108(2),
the estimated cost of the project must be specified
in the General Appropriations Act or other law.


(b)  Any provision of this
chapter that relates to the issuance or sale of obligations
to finance the acquisition or construction of a building,
including provisions relating to form, procedure, repayment,
actions that may be taken to ensure that the payment
of the principal of and interest on the obligations
is continued without interruption, and other relevant
matters, applies to the issuance or sale of obligations
under this section to the extent that the provision
may be appropriately made applicable.


(c)  The legislature may
appropriate money from any available source, including
the state highway fund, to the Texas Department of
Transportation to make lease payments to the authority
for space occupied by the department in a building
acquired or constructed under Section 201.1055(a),
Transportation Code.


SECTION 2.91.  Subtitle I,
Title 9, Government Code, is amended by adding Chapter
1479 to read as follows:



CHAPTER
1479.  COUNTY BONDS FOR FACILITIES ON




STATE
HIGHWAY SYSTEM



Sec. 1479.001.  DEFINITION.
 In this chapter, "state highway system" means the
highways in this state included in the plan providing
for a system of state highways prepared under Section
201.103, Transportation Code.


Sec. 1479.002.  AUTHORITY
TO ISSUE BONDS.  (a)  A county may issue bonds to provide
funds for the design, development, financing, construction,
maintenance, operation, extension, expansion, or improvement
of a toll or nontoll project or facility on the state
highway system located in the county or, as a continuation
of the project or facility, in an adjacent county.


(b)  To provide for the
payment of bonds issued under this section, a county
may:


(1)  pledge revenue from
any available source, including payments received under
an agreement with the Texas Department of Transportation
under Section 222.104, Transportation Code;


(2)  pledge, levy, and
collect taxes subject to any  constitutional limitation;
or


(3)  provide for a combination
of Subdivisions (1) and (2).


(c)  Any election required
to permit action under Subsection (b) must be held
in conformance with the Election Code or other law
applicable to the county.


(d)  A county that issues
bonds under this section may exercise any of the rights
and powers granted to the governing body of an issuer
under Chapter 1371.


(e)  A bond issued under
this section must mature not later than 40 years after
its date of issuance.


(f)  This section is wholly
sufficient authority for the issuance of bonds, the
pledge of revenues, taxes, or any combination of revenues
and taxes, and the performance of other acts and procedures
authorized by this section by a county without reference
to any other provision of law or any restriction or
limitation contained in those provisions, except as
specifically provided by this section.  To the extent
of any conflict or inconsistency between this section
and any other law, this section shall prevail and control.
 A county may use any law not in conflict with this
section to the extent convenient or necessary to carry
out any power or authority, expressed or implied, granted
by this section.


SECTION 2.92.  Section 2166.302,
Government Code, is amended by amending Subsection
(a) and adding Subsection (c) to read as follows:


(a)  Except as provided by
Subsections Subsection (b)
and (c), the commission shall adopt uniform
general conditions to be incorporated into all building
construction contracts made by the state, including
a contract for a project excluded from this chapter
by Section 2166.003, but not including a contract for
a project excluded from this chapter by Section 2166.004.


(c)  Subsection (a) does
not apply to a project constructed by and for the Texas
Department of Transportation.


SECTION 2.93.  Section 2262.002(b),
Government Code, is amended to read as follows:


(b)  This chapter does not
apply to contracts of the Texas Department of Transportation
that:


(1)  relate to highway
construction or highway engineering; or


(2)  are subject to Section
201.112, Transportation Code.


SECTION 2.94.  Section 21.042,
Property Code, is amended by adding Subsection (g)
to read as follows:


(g)  Notwithstanding Subsection
(d), if a portion of a tract or parcel of real property
that, for the then current tax year was appraised for
ad valorem tax purposes under a law enacted under Section
1-d or 1-d-1, Article VIII, Texas Constitution, and
is outside the municipal limits or the extraterritorial
jurisdiction of a municipality with a population of
5,000 or more is condemned for state highway purposes,
the special commissioners shall consider the loss of
reasonable access to or from the remaining property
in determining the damage to the property owner.


SECTION 2.95.  Section 11.11,
Tax Code, is amended by adding Subsection (j) to read
as follows:


(j)  For purposes of this
section, any portion of a facility owned by the Texas
Department of Transportation that is part of the Trans-Texas
Corridor, is a rail facility or system, or is a highway
in the state highway system, and that is licensed or
leased to a private entity by that department under
Chapter 91, 223, or 227, Transportation Code, is public
property used for a public purpose if the rail facility
or system, highway, or facility is operated by the
private entity to provide transportation or utility
services.  Any part of a facility, rail facility or
system, or state highway that is licensed or leased
to a private entity for a commercial purpose is not
exempt from taxation.


SECTION 2.96.  Section 25.06,
Tax Code, is amended by adding Subsection (c) to read
as follows:


(c)  This section does
not apply to:


(1)  any portion of a facility
owned by the Texas Department of Transportation that
is part of the Trans-Texas Corridor, is a rail facility
or system, or is a highway in the state highway system
and that is licensed or leased to a private entity
by that department under Chapter 91, 227, or 361, Transportation
Code; or


(2)  a leasehold or other
possessory interest granted by the Texas Department
of Transportation in a facility owned by that department
that is part of the Trans-Texas Corridor, is a rail
facility or system, or is a highway in the state highway
system.


SECTION 2.97.  Section 25.07,
Tax Code, is amended by adding Subsection (c) to read
as follows:


(c)  Subsection (a) does
not apply to:


(1)  any portion of a facility
owned by the Texas Department of Transportation that
is part of the Trans-Texas Corridor, is a rail facility
or system, or is a highway in the state highway system
and that is licensed or leased to a private entity
by that department under Chapter 91, 227, or 361, Transportation
Code; or


(2)  a leasehold or other
possessory interest granted by the Texas Department
of Transportation in a facility owned by that department
that is part of the Trans-Texas Corridor, is a rail
facility or system, or is a highway in the state highway
system.


SECTION 2.98.  (a)  The Texas
Department of Transportation shall conduct a study
to determine how to maximize the use of highway rights-of-way
by public utilities.  The department shall submit a
written report of its findings to the appropriate legislative
committees not later than December 31, 2006.


(b)  This section expires
January 1, 2007.


[SECTION 2.99 reserved]


SECTION 2.100.  Notwithstanding
any law to the contrary, neither the Texas Department
of Transportation nor a regional mobility authority
may acquire property, enter into a contract, grant
a franchise, or lease or license property for the purpose
of constructing or operating an ancillary facility
to be used for a commercial purpose under Chapter 228
or 370, Transportation Code.  This section does not
apply to a segment of highway under the jurisdiction
of a regional mobility authority if the regional mobility
authority awarded a comprehensive development agreement
for the improvement of that segment before September
1, 2005.  This section does not apply to a segment
of the state highway system in Travis or Williamson
County if the Texas Department of Transportation awarded
an exclusive development agreement for the improvement
of that segment before September 1, 2005.  This section
expires September 1, 2007.


SECTION 2.101.  The following
provisions of the Transportation Code are repealed:


(1)  Section 201.6061;


(2)  Section 222.102;


(3)  Sections 224.155-224.158
and 224.160;


(4)  Section 284.009, as added
by Chapter 953, Acts of the 78th Legislature, Regular
Session, 2003;


(5)  Section 284.009, as added
by Chapter 1325, Acts of the 78th Legislature, Regular
Session, 2003;


(6)  Section 361.002;


(7)  Sections 361.031 and
361.050;


(8)  Subchapter C, Chapter
361;


(9)  Sections 361.131-361.136,
361.1375, 361.140, and 361.141;


(10)  Sections 361.175, 361.180,
and 361.191;


(11)  Sections 361.231, 361.232,
and 361.234-361.238;


(12)  Section 361.251;


(13)  Sections 361.302-361.306;


(14)  Subchapter J, Chapter
361;


(15)  Sections 362.002 and
362.008;


(16)  Sections 366.035 and
366.165(d); and


(17)  Sections 370.035 and
370.163(b).


SECTION 2.102.  Section 370.161(b),
Transportation Code, is repealed.


SECTION 2.103.  The changes
in law made by this Act to Chapter 370, Transportation
Code, apply to a regional mobility authority created
or participated in by a municipality described by Section
370.031(c), Transportation Code, as added by this Act,
or Section 370.161(b), Transportation Code, as it existed
before the effective date of this Act, in the same
manner as they apply to any other entity that creates
or participates in a regional mobility authority.



ARTICLE
3.  VEHICLES



SECTION 3.01.  (a)  Article
45.051(f), Code of Criminal Procedure, is amended to
read as follows:


(f)  This article does not
apply to:


(1)  an offense to which Section
542.404 or 729.004(b), Transportation Code, applies;
or


(2)  a violation of a state
law or local ordinance relating to motor vehicle control,
other than a parking violation, traffic
offense committed by a person who holds a
commercial driver's license.


(b)  The change in law made
by this section applies only to an offense committed
on or after September 1, 2005.


(c)  An offense committed
before September 1, 2005, is covered by the law in
effect when the offense was committed, and the former
law is continued in effect for that purpose.  For purposes
of this section, an offense was committed before September
1, 2005, if any element of the offense was committed
before that date.


SECTION 3.02.  Section 382.133,
Health and Safety Code, is amended by adding Subsection
(d) to read as follows:


(d)  A mass transit hydrogen-fueled
fleet vehicle may be used to satisfy the percentage
requirement under this section.


SECTION 3.03.  Subchapter
H, Chapter 201, Transportation Code, is amended by
adding Section 201.618 to read as follows:


Sec. 201.618.  HYDROGEN-FUELED
VEHICLES AND REFUELING STATIONS.  (a)  The department
may seek funding from public and private sources to
acquire and operate hydrogen-fueled vehicles and to
establish and operate hydrogen refueling stations as
provided by this section.


(b)  If the department
secures funding under Subsection (a), the department
may establish and operate at least five hydrogen refueling
stations.  A refueling station established under this
subsection must be located in an urbanized area along
a major state highway and be accessible to the public.


(c)  If the department
secures funding under Subsection (a), the department
may purchase to operate in an area in which a refueling
station is established under Subsection (b) vehicles
capable of operating using hydrogen, including, at
a minimum:


(1)  four vehicles with
internal combustion engines that run on hydrogen; and


(2)  three fuel-cell vehicles,
one internal combustion engine bus that runs on hydrogen,
or one fuel-cell bus.


(d)  A vehicle purchased
to meet the requirements of Subsection (c) may be used
to satisfy the alternative fuels percentage requirement
under Subchapter A, Chapter 2158, Government Code.


(e)  The department may
establish hydrogen refueling stations on the Trans-Texas
Corridor under Chapter 227.


(f)  The department shall:


(1)  ensure that data on
emissions from the vehicles and refueling stations
purchased under this section and from the production
of hydrogen for the vehicles and refueling stations
are monitored and analyzed and compared with data on
emissions from control vehicles with internal combustion
engines that operate on fuels other than hydrogen;
and


(2)  report the results
of the monitoring, analysis, and comparison to the
Texas Commission on Environmental Quality.


(g)  The department may
charge the public a reasonable fee to use a hydrogen
refueling station operated under Subsection (b).  The
amount of the fee shall be based on the department's
estimate of the number of customers that will use the
refueling stations and the direct and indirect costs
that will be incurred by the department to operate
the refueling stations.  Fees collected by the department
under this section shall be deposited in the state
highway fund, may be appropriated only to the department
to implement this section, and are exempt from the
application of Section 403.095, Government Code.


SECTION 3.04.  (a)  The Study
Commission on Availability of Pre-Owned Heavy Duty
Commercial Motor Vehicles is created as provided by
this section.


(b)  The commission is composed
of three members as follows:


(1)  one member appointed
by the governor;


(2)  one member appointed
by the lieutenant governor; and


(3)  one member appointed
by the speaker of the house of representatives.


(c)  Each member of the commission
serves at the will of the person who appointed the
member.


(d)  The members of the commission
shall select the presiding officer.


(e)  A member of the commission
is not entitled to receive compensation for service
on the commission but is entitled to reimbursement
of the travel expenses incurred by the member while
conducting the business of the commission, as provided
by the General Appropriations Act.


(f)  The commission may accept
gifts and grants from any source to be used to carry
out a function of the commission.


(g)  The commission shall
conduct public hearings and study public policy implications
relating to any act by the Texas Department of Transportation
that would close existing businesses in this state
because of the ownership structure of businesses that
sell pre-owned heavy duty trucks that weigh in excess
of 11,000 pounds.  The commission shall determine whether
such actions by the department could impact the use
and operation of rail and highway transportation facilities
in this state by heavy duty trucks.


(h)  The study shall include:


(1)  a review of the laws
of other states regarding whether there are restrictions
on ownership structure of businesses that sell heavy
duty commercial trucks;


(2)  a review of whether safety
of pre-owned heavy duty trucks on highways in this
state could be compromised if the Texas Department
of Transportation closes businesses that currently
sell such trucks;


(3)  a review of whether the
Texas Department of Transportation's application of
Section 2301.476, Occupations Code, could negatively
impact competition in the pre-owned heavy duty truck
market as well as the impact that such a decision could
have on small, independent pre-owned truck dealerships
and independent owner/operators of trucking businesses
in this state; and


(4)  other issues that the
commission considers relevant to protecting the public
interest regarding safety and availability of pre-owned
heavy duty trucks that operate on the highways of this
state.


(i)  Not later than December
1, 2006, the commission shall issue a report to the
governor, lieutenant governor, speaker of the house
of representatives, and chair of the committee in the
house and senate with jurisdiction of transportation
issues.  The report shall summarize the following:


(1)  any hearings conducted
by the commission;


(2)  any studies conducted
by the commission;


(3)  any legislation proposed
by the commission; and


(4)  any other findings and
recommendations of the commission.


SECTION 3.05.  (a)  In order
to ensure the safety of persons and transportation
in this state, the Texas Department of Transportation
shall conduct a study of systems for issuing temporary
tags for use on unregistered motor vehicles.  In studying
the systems, the department shall:


(1)  compare the current system
to other potential systems, including systems used
in other states;


(2)  seek input from interested
parties, including members of the public, dealers,
converters, and law enforcement; and


(3)  consider issues of public
and transportation safety, homeland security, costs,
efficiency, and reliability.


(b)  The department shall
report its findings and recommendations to the governor,
lieutenant governor, and speaker of the house of representatives
not later than November 1, 2006.







HUMAN
SERVICES PROGRAMS



SECTION 4.01.  Sections 455.004(a)
and (b), Transportation Code, are amended to read as
follows:


(a)  A public transportation
advisory committee consisting of 11 nine
members shall:


(1)  advise the commission
on the needs and problems of the state's public transportation
providers, including the methods for allocating state
public transportation money;


(2)  comment on rules involving
public transportation during development of the rules
and before the commission finally adopts the rules
unless an emergency requires immediate commission action;


(3)  advise the commission
on the implementation of Chapter 461; and


(4)  perform any other duty
determined by the commission.


(b)  The commission shall
appoint members of the advisory committee.  The membership
of the committee shall include:


(1)  four members who represent
a diverse cross-section of public transportation providers;


(2)  three members who represent
a diverse cross-section of transportation users; and


(3)  three two
members who represent the general public; and


(4)  one member with experience
in the administration of health and human services
programs.


SECTION 4.02.  Section 461.012(g),
Health and Safety Code, is amended to read as follows:


(g)  The commission shall
contract with the Texas Department of Transportation
for the Texas Department of Transportation to deliver
public transportation services to assume
all responsibilities of the commission relating to
the provision of transportation services for
clients of eligible programs, except that the Texas
Department of Transportation may not assume responsibility
for client case review, case management, or coordination
or authorization of benefits.


SECTION 4.03.  Section 533.012(b),
Health and Safety Code, is amended to read as follows:


(b)  The department shall
contract with the Texas Department of Transportation
for the Texas Department of Transportation to deliver
public transportation services to assume
all responsibilities of the department relating to
the provision of transportation services for
clients of eligible programs, except that the Texas
Department of Transportation may not assume responsibility
for client case review, case management, or coordination
or authorization of benefits.


SECTION 4.04.  Section 22.001(e),
Human Resources Code, as added by Section 2.129, Chapter
198, and Section 13.06, Chapter 1325, Acts of the 78th
Legislature, Regular Session, 2003, is amended to read
as follows:


(e)  The department shall
contract with the Texas Department of Transportation
for the Texas Department of Transportation to deliver
public transportation services to assume
all responsibilities of the department relating to
the provision of transportation services for
clients of eligible programs, except that the Texas
Department of Transportation may not assume responsibility
for client case review, case management, or coordination
or authorization of benefits.


SECTION 4.05.  Section 40.002(f),
Human Resources Code, is amended to read as follows:


(f)  The department may contract
with the Texas Department of Transportation for the
Texas Department of Transportation to deliver public
transportation services to assume all
responsibilities of the department relating to the
provision of transportation services for
clients of eligible programs, except that the Texas
Department of Transportation may not assume responsibility
for client case review, case management, or coordination
or authorization of benefits.


SECTION 4.06.  Section 91.021(g),
Human Resources Code, is amended to read as follows:


(g)  The commission shall
contract with the Texas Department of Transportation
for the Texas Department of Transportation to deliver
public transportation services to assume
all responsibilities of the commission relating to
the provision of transportation services for
clients of eligible programs, except that the Texas
Department of Transportation may not assume responsibility
for client case review, case management, or coordination
or authorization of benefits.


SECTION 4.07.  Section 101.0256(b),
Human Resources Code, is amended to read as follows:


(b)  The department shall
contract with the Texas Department of Transportation
for the Texas Department of Transportation to deliver
public transportation services to assume
all responsibilities of the department relating to
the provision of transportation services for
clients of eligible programs, except that the Texas
Department of Transportation may not assume responsibility
for client case review, case management, or coordination
or authorization of benefits.


SECTION 4.08.  Section 111.0525(d),
Human Resources Code, is amended to read as follows:


(d)  The commission shall
contract with the Texas Department of Transportation
for the Texas Department of Transportation to deliver
public transportation services to assume
all responsibilities of the commission relating to
the provision of transportation services for
clients of eligible programs, except that the Texas
Department of Transportation may not assume responsibility
for client case review, case management, or coordination
or authorization of benefits.


SECTION 4.09.  Section 301.063(f),
Labor Code, is amended to read as follows:


(f)  The commission shall
contract with the Texas Department of Transportation
for the Texas Department of Transportation to deliver
public transportation services to assume
all responsibilities of the commission relating to
the provision of transportation services for
clients of eligible programs, except that the Texas
Department of Transportation may not assume responsibility
for client case review, case management, or coordination
or authorization of benefits.


SECTION 4.10.  Chapter 459,
Transportation Code, is repealed.






SECTION 5.01.  (a)  In this
section, "region" means the region formed by two contiguous
counties each containing a municipality having a population
of at least 530,000 and the counties adjacent to one
or both of those counties.


(b)  The Regional Transit
System Review Committee is created to conduct public
hearings regarding, and study the implications of,
implementing regional transit service in the region.


(c)  The committee consists
of:


(1)  each member of the legislature
who represents a district that contains territory in
the region;


(2)  each mayor of a municipality
in the region;


(3)  each county judge and
commissioner in the region; and


(4)  the executive director
of each transportation authority in the region.


(d)  In conducting hearings
and studies the committee shall:


(1)  examine whether a seamless
system of transit systems should be offered throughout
the region;


(2)  examine whether there
should be a mechanism for additional counties to participate
in the regional transit system; and


(3)  perform a review of funding
and financing options.


(e)  The initial meeting of
the committee shall take place before September 30,
2005.  At the initial meeting the committee shall adopt
rules governing the committee and establish a work
plan and schedule for future meetings.


(f)  The committee may accept
gifts, grants, technical support, or any other resources
from any source to carry out the functions of the committee.


(g)  Not later than September
1, 2006, the committee shall issue a report summarizing:


(1)  hearings conducted by
the committee;


(2)  studies conducted by
the committee;


(3)  any legislation proposed
by the committee; and


(4)  any other findings or
recommendations of the committee.


(h)  This section expires
September 1, 2007.



ARTICLE
6.  CARRIERS TRANSPORTING HOUSEHOLD GOODS



SECTION 6.01.  Section 643.051,
Transportation Code, is amended to read as follows:


Sec. 643.051.  REGISTRATION
REQUIRED.  (a) A motor carrier may not operate
a commercial motor vehicle, as defined by Section 548.001,
or a tow truck on a road or highway of this state unless
the carrier registers with the department under this
subchapter.


(b)  A motor carrier may
not operate a vehicle, regardless of size of the vehicle,
to transport household goods for compensation unless
the carrier registers with the department under this
subchapter.


SECTION 6.02.  Section 643.153(b),
Transportation Code, is amended to read as follows:


(b)  The department may adopt
rules necessary to ensure that a customer of a motor
carrier transporting household goods is protected from
deceptive or unfair practices and unreasonably hazardous
activities.  The rules must:


(1)  establish a formal process
for resolving a dispute over a fee or damage;


(2)  require a motor carrier
to indicate clearly to a customer whether an estimate
is binding or nonbinding and disclose the maximum price
a customer could be required to pay;


(3)  create a centralized
process for making complaints about a motor carrier
that also allows a customer to inquire about a carrier's
complaint record; and


(4)  require a motor carrier
transporting household goods to list a place of business
with a street address in this state and the carrier's
registration number issued under this article in any
print advertising published in this state;


(5)  require motor
carriers that are required to register under Subsection
(c) to file proof of cargo insurance in amounts to
be determined by the department that do not exceed
the amount required for a motor carrier transporting
household goods under federal law and allow alternative
evidence of financial responsibility, through surety
bonds, letters of credit, or other means satisfactory
to the department, for contractual obligations to customers
that do not exceed $5,000 aggregate loss or damage
to total cargo shipped at any one time;


(6)  require motor
carriers that are required to register under Subsection
(c) to conspicuously advise consumers concerning limitation
of any carrier liability for loss or damage as determined
under Subdivision (7); and


(7)  determine reasonable
provisions governing limitation of liability for loss
or damage of motor carriers required to register under
Subsection (c), not to exceed 60 cents per pound per
article.


SECTION 6.03.  Section 643.155(c),
Transportation Code, is amended to read as follows:


(c)  The committee shall:


(1)  examine
the rules adopted by the department under Sections
643.153(a) and (b) and make recommendations to the
department on modernizing and streamlining the rules;


(2)  conduct a study
of the feasibility and necessity of requiring any vehicle
liability insurance for household goods carriers required
to register under Section 643.153(c); and


(3)  recommend a
maximum level of liability limitation under Section
643.153(b)(7) that does not exceed 60 cents per pound.


SECTION 6.04.  Section 643.252(a),
Transportation Code, is amended to read as follows:


(a)  The department may suspend
or revoke a registration issued under this chapter
or place on probation a motor carrier whose registration
is suspended if a motor carrier:


(1)  fails to maintain insurance
or evidence of financial responsibility as required
by Section 643.101(a), (b), (c), or (d) or
643.153(b);


(2)  fails to keep evidence
of insurance in the cab of each vehicle as required
by Section 643.103(b);


(3)  fails to register a vehicle
requiring registration;


(4)  knowingly provides false
information on any form filed with the department under
this chapter; or


(5)  violates a rule adopted
under Section 643.063.


SECTION 6.05.  Sections 643.253(a),
(b), and (e), Transportation Code, are amended to read
as follows:


(a)  A person commits an offense
if the person fails to:


(1)  register as required
by Subchapter B or Section 643.153(c);


(2)  maintain insurance or
evidence of financial responsibility as required by
Subchapter C or Section 643.153;
or


(3)  keep a cab card in the
cab of a vehicle as required by Section 643.059.


(b)  A person commits an offense
if the person solicits the transportation of household
goods for compensation and is not registered as required
by Subchapter B or Section 643.153.


(e)  An offense under Subsection
(b) or (d) is a misdemeanor punishable by a
fine of not less than $200 or more than $1,000 per
violation.


SECTION 6.06.  Section 643.153(c),
Transportation Code, is repealed.



ARTICLE
7.  TEXAS DEPARTMENT OF TRANSPORTATION MOTOR VEHICLE




DIVISION



SECTION 7.01.  Sections 2301.002(2)
and (10), Occupations Code, are amended to read as
follows:


(2)  "Board" has the meaning
assigned by Section 2301.005 means the
Motor Vehicle Board of the Texas Department of Transportation.


(10)  "Director" means the
director of the board and of the
division.


SECTION 7.02.  Section 2301.005,
Occupations Code, is amended by amending Subsection
(a) and adding Subsection (e) to read as follows:


(a)  A reference in law, including
a rule, to the Texas Motor Vehicle Commission or
to the board means the director, except that
a reference to the board means the commission if it
is related to the adoption of rules board.


(e)  A reference in this
chapter to a rule or to a board rule means a rule adopted
by the commission, except that all board rules that
were in effect on June 1, 2005, remain in effect until
amended or repealed by the commission.


SECTION 7.03.  Section 2301.101(c),
Occupations Code, is amended to read as follows:


(c)  The director serves at
the will of the executive director board.


SECTION 7.04.  Section 2301.103,
Occupations Code, is amended to read as follows:


Sec. 2301.103.  PERSONNEL.
 (a)  The director shall appoint and employ
personnel necessary to carry out the duties and functions
of the director and the board under this chapter.


(b)  A division employee
is an employee of the department and is subject to
the human resource rules and policies of the department
and the transportation commission, except that, as
applied to a division employee, any powers granted
to the executive director by those rules and policies
shall be exercised by the director.


(c)  A
division employee is subject to dismissal if the employee
has an interest in or is related within the first degree
by consanguinity or affinity, as determined under Chapter
573, Government Code, to a person who has an interest
in a business that manufactures, distributes, converts,
sells, or leases motor vehicles.


SECTION 7.05.  Section 2301.154,
Occupations Code, is amended to read as follows:


Sec. 2301.154.  DELEGATION
OF POWERS.  The director board
may delegate any of the director's its
powers to:


(1)  one or more
of its members;


(2)  the director;
or


(3)  one
or more of the division's its
employees.


SECTION 7.06.  The following
provisions of the Occupations Code are repealed:


(1)  Subchapter B, Chapter
2301; and


(2)  Sections 2301.102, 2301.104,
2301.158, and 2301.159.



ARTICLE
8.  TRANSITION PROVISIONS; EFFECTIVE DATE



SECTION 8.01.  Section 101.022,
Civil Practice and Remedies Code, as amended by this
Act, applies only to a cause of action that accrues
on or after the effective date of this Act.  A cause
of action that accrued before the effective date of
this Act is governed by the law in effect at the time
the cause of action accrued, and that law is continued
in effect for that purpose.


SECTION 8.02.  (a)  On the
effective date of this Act:


(1)  the State Aircraft Pooling
Board is abolished, and all powers, duties, obligations,
rights, contracts, bonds, appropriations, records,
and real or personal property of the State Aircraft
Pooling Board are transferred to the Texas Department
of Transportation;


(2)  a rule, policy, procedure,
or decision of the State Aircraft Pooling Board continues
in effect as a rule, policy, procedure, or decision
of the Texas Department of Transportation until superseded
by an act of the Texas Department of Transportation;


(3)  a reference in law to
the State Aircraft Pooling Board means the Texas Department
of Transportation;


(4)  all temporary employees
of the Texas Department of Transportation who were
previously employed by the State Aircraft Pooling Board
on August 31, 2003, become regular full-time employees
of the Texas Department of Transportation; and


(5)  notwithstanding Section
31.01, Chapter 3, Acts of the 78th Legislature, 3rd
Called Session, 2003, any memorandum of understanding
or interagency contract entered into between the Texas
Department of Transportation and the State Aircraft
Pooling Board for the operation of state aircraft expires.


(b)  Before the executive
director of the Texas Department of Transportation
or the director's designee may authorize a person to
use a state-operated aircraft, the person must sign
an affidavit stating that the person is traveling on
official state business.  On filing of the affidavit,
the person may be authorized to use state-operated
aircraft for official state business for a period of
one year.  A member of the legislature is not required
to receive any other additional authorization to use
a state-operated aircraft.


SECTION 8.03.  This Act takes
effect immediately if it receives a vote of two-thirds
of all the members elected to each house, as provided
by Section 39, Article III, Texas Constitution.  If
this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2005.




______________________________	______________________________


   President of the Senate	Speaker
of the House      


I certify that H.B. No. 2702
was passed by the House on May 12, 2005, by a non-record
vote; that the House refused to concur in Senate amendments
to H.B. No. 2702 on May 23, 2005, and requested the
appointment of a conference committee to consider the
differences between the two houses; and that the House
adopted the conference committee report on H.B. No.
2702 on May 29, 2005, by the following vote:  Yeas
120, Nays 9, 2 present, not voting; and that the House
adopted H.C.R. No. 245 authorizing certain corrections
in H.B. No. 2702 on May 30, 2005, by a non-record vote.



______________________________




Chief
Clerk of the House   





I certify that H.B. No. 2702
was passed by the Senate, with amendments, on May 21,
2005, by the following vote:  Yeas 30, Nays 0; at the
request of the House, the Senate appointed a conference
committee to consider the differences between the two
houses; and that the Senate adopted the conference
committee report on H.B. No. 2702 on May 29, 2005,
by the following vote:  Yeas 31, Nays 0; and that the
Senate adopted H.C.R. No. 245 authorizing certain corrections
in H.B. No. 2702 on May 30, 2005, by a viva-voce vote.



______________________________




Secretary
of the Senate   



APPROVED: __________________


                 Date    
  


          __________________


               Governor