Texas Vernon's Texas Civil Statutes - Article 6550c. Rural Rail Transportation Districts
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Art. 6550c. RURAL RAIL TRANSPORTATION DISTRICTS.
Findings
Sec. 1. The legislature finds that:
(1) the state contains many rural areas that are heavily
dependent on agriculture for economic survival;
(2) transportation of agricultural and industrial products
is essential to the continued economic vitality of rural areas;
(3) the rail transportation systems in some rural areas are
threatened by railroad bankruptcies and abandonment proceedings
that would cause the cessation of rail services to the areas;
(4) it is in the interest of all citizens of the state that
existing rail systems be maintained for the most efficient and
economical movement of essential agricultural products from the
areas of production to the local, national, and export markets;
(5) rural rail transportation districts are appropriate
political subdivisions to provide for the continued operation of
railroads, which are declared by Article X, Section 2, of the Texas
Constitution to be public highways;
(6) the creation, re-creation, financing, maintenance, and
operation of rural rail transportation districts and facilities
acquired by the districts under this Act will help develop,
maintain, and diversify the economy of the state, eliminate
unemployment or underemployment, foster the growth of enterprises
based on agriculture, and serve to develop and expand
transportation and commerce within the state under the authority
granted by Article III, Section 52-a, of the Texas Constitution;
and
(7) financing by rural rail transportation districts for
the purposes provided by this Act is a lawful and valid public
purpose.
Definitions
Sec. 2. In this Act:
(1) "Board" means the board of directors of a rural rail
transportation district.
(2) "Bonds" means bonds; notes, including bond
anticipation notes, revenue anticipation notes, and grant
anticipation notes; warrants; certificates of obligation;
interest-bearing contracts; interest-bearing leases of property;
equipment trust certificates; commercial paper; and any
obligation issued to refund any type of bond.
(3) "Concurrent orders" means the orders adopted by
eligible counties that contain identical provisions regarding the
creation or re-creation of a district.
(4) "District" means a rural rail transportation district
created under this Act.
(5) "Earthworks and structures" includes the clearing and
grubbing of right-of-way; demolition of structures; relocation of
utilities, pipelines, and any other obstacles in right-of-way;
stripping and stockpiling; removal of subsoils for embankment or
spoil; borrow pits; dressing and seeding of slopes; construction
of culverts; road crossings; bridges; restoration of roadway;
drainage within a right-of-way or along road networks; and
restoration of a hydrologic system.
(6) "Eligible counties" means two or more counties that meet
the requirements of Sections 3(a) and (b) of this Act.
(7) "Operating contract" means a professional services
contract executed by a district and another person under which the
person agrees to provide:
(A) all or part of the rolling stock required for operation
as a common carrier over all or a part of the rail facilities of the
district; and
(B) all or part of the personnel required for the operation
of the rolling stock owned or leased by the district or for the
operation of the rail facilities of the district.
(8) "Maintenance and operating expenses" means all expenses
of operating and maintaining a district and its rail facilities,
including all compensation, labor, materials, repairs, and
extensions necessary, required, or convenient in the discretion of
the board to render efficient service or to maintain and operate the
district, and taxes or other amounts paid, payable, or to be paid to
the United States pursuant to Section 148(f) of the Internal
Revenue Code of 1986 (26 U.S.C. Section 148), or any similar law.
(9) "Maintenance facility" includes a workshop, a service,
storage, security, or personnel facility, temporary or transient
lodging for district employees, and equipment for any type of
facility.
(10) "Person" has the meaning assigned by Section 311.005,
Government Code.
(11) "Rail facilities" means any real, personal, or mixed
property, or any interest in that property that is determined by the
board to be necessary or convenient for the provision of a rural
rail transportation system and all property or interests necessary
or convenient for the acquiring, providing, constructing,
enlarging, remodeling, renovating, improving, furnishing, using,
or equipping of the system, including rights-of-way, earthworks and
structures, trackwork, train controls, stations, rolling stock,
and maintenance facilities.
(12) "Revenues" means all income, receipts, and collections
received by, to be received by, or pledged to the district from or
by any source, except a restricted gift or a grant in aid of
construction.
(13) "Right-of-way" means a right of passage over property;
a strip of land in length and width determined required, necessary,
or convenient by the board over, on, or under which trackwork is or
is to be constructed or acquired; or a right of precedential
passing.
(14) "Rolling stock" means locomotives, engines, rail cars,
repair construction cars, or other cars designed to operate on
trackwork.
(15) "Station" means a passenger or freight service
building, terminal, or station, ticketing facility, waiting area,
platform, concession, elevator, escalator, facility for
handicapped access, access road, parking facility for passengers,
baggage handling facility, local maintenance facility, and offices
for district purposes, together with any interest in real property
necessary or convenient for any of the listed items.
(16) "Trackwork" means track, track beds, track bed
preparation, ties, rail fasteners, slabs, rails, emergency
crossovers, setout tracks, storage track, and switches.
(17) "Train controls" includes signalling, interlocking
equipment, speed monitoring equipment, emergency braking systems,
central traffic control facilities, and communication systems.
Creation, Re-Creation, or Dissolution of District Located in More
Than One County.
Sec. 3. (a) The commissioners courts of two or more eligible
counties that, taken together, constitute a contiguous geographic
area may by order create or re-create a rural rail transportation
district consisting of the territory of the counties whose
commissioners courts adopt the order.
(b) A county eligible to create or re-create a district is
one in which is located a rail line that is in the process of being
or has been abandoned through a bankruptcy court or Interstate
Commerce Commission proceeding, or any line carrying 3 million
gross tons per mile per year or less.
(c) The commissioners courts of two or more eligible
counties that create a district or provide for the re-creation of a
district by the addition of one or more counties shall by concurrent
order at the time of creation or re-creation:
(1) declare the boundaries of the district as the boundaries
of the counties included;
(2) designate the name of the district; and
(3) designate the number of board members, which may not be
less than four, and the manner of their appointment by a
commissioners court.
(d) The commissioners courts of all counties included
within a district by order may provide for the dissolution of the
district if:
(1) the commissioners courts determine that the dissolution
will not impair an obligation of any contract of the district; and
(2) the dissolution order will become effective only on the
creation or re-creation of another district in which each county
included within the dissolving district is included.
(e) A district created or re-created under this section
automatically assumes any obligation of a contract executed by the
district or a predecessor district and in force on the date of the
creation or re-creation unless the contract expressly expires on
the date of dissolution or re-creation of the district that
executed the contract.
(f) The board of directors of each newly created district
shall provide notice to the Texas Transportation Institute of the
creation of the district. On being notified by the board, the Texas
Transportation Institute shall make available to the board a guide
to the services and information that the institute provides.
Creation or Dissolution of District Located Wholly in One County
Sec. 3A. (a) In addition to eligible counties, the
commissioners court of a county that meets the requirements of
Section 3(b) of this Act by order may create a rural rail
transportation district for purposes of developing, financing,
maintaining, and operating a new rail system under this Act and for
other purposes of this Act.
(b) The boundaries of a district created under this section
are the boundaries of the county in which the district is created.
(c) At the time the district is created, the commissioners
court shall:
(1) designate the name of the district; and
(2) appoint at least four residents of the county to serve
as directors of the district.
(d) A member of the board of directors serves for a two-year
term. An initial director serves for a term ending on the second
anniversary of the date on which the order creating the district was
adopted.
(e) Section 4 of this Act applies to a board member
appointed under this section.
(f) The commissioners court of the county by order may
provide for the dissolution of the district if:
(1) the commissioners court determines that the dissolution
will not impair an obligation of any contract of the district; and
(2) the dissolution order will become effective only on the
creation of another district under this Act that includes the
county and meets the requirements of Sections 3(a) and (b) of this
Act.
Board of Directors; Employees
Sec. 4. (a) The board of directors is responsible for the
management, operation, and control of the district.
(b) To be eligible for appointment to the board, a person
must be a resident of the county governed by the commissioners court
that appoints the person. A board member serves for a term of two
years ending on the second anniversary of the latest date a
concurrent order was adopted creating or re-creating the district.
A vacancy on the board shall be filled for the remainder of the term
by the commissioners court that appointed the member who vacated
the position. A board member may be removed from office for neglect
of duty or malfeasance in office by the commissioners court that
appointed the member, after at least 10 days' written notice to the
member and a hearing before the commissioners court. At a hearing
on the question of removal of a board member, the board member is
entitled to be heard in person or through counsel.
(c) Members of the board shall select a president,
vice-president, treasurer, and secretary. The secretary is not
required to be a board member. The board shall hold at least one
regular meeting each month for the purpose of transacting business
of the district. The president may call special meetings of the
board. A majority of the members is a quorum.
(d) The board shall adopt rules for its proceedings and may
employ and compensate persons to carry out the powers and duties of
the district. The right to control and regulate the affairs of the
district is vested exclusively in the board except as specifically
otherwise provided by this Act.
(e) A board member or employee of a district may not be
pecuniarily interested, directly or indirectly, in any contract or
agreement to which the district is a party.
(f) Notice of a meeting of the board shall be posted at the
administrative office of the district and at the courthouse in the
county in which that office is located. In all other respects
Chapter 271, Acts of the 60th Legislature, Regular Session, 1967
(Article 6252-17, Vernon's Texas Civil Statutes), applies to
meetings of the board.
(g) An elected officer of the state or a political
subdivision of the state who is not prohibited by the Texas
Constitution from serving on the board is eligible to serve on the
board.
Powers and Duties of District
Sec. 5. (a) A rural rail transportation district is a public
body and a political subdivision of the state exercising public and
essential governmental functions and having all the powers
necessary or convenient to carry out the purposes of this Act,
including the powers granted in this section. A district, in the
exercise of powers under this Act, is performing only governmental
functions and is a "governmental unit" within the meaning of
Chapter 101, Civil Practice and Remedies Code. A district is a
"local government" under Chapter 1084, Acts of the 70th
Legislature, Regular Session, 1987 (Article 715c, Vernon's Texas
Civil Statutes); an "issuer" under Chapter 503, Acts of the 54th
Legislature, 1955 (Article 717k, Vernon's Texas Civil Statutes),
Chapter 784, Acts of the 61st Legislature, Regular Session, 1969
(Article 717k-3, Vernon's Texas Civil Statutes), the Bond
Procedures Act of 1981 (Article 717k-6, Vernon's Texas Civil
Statutes), Chapter 53, Acts of the 70th Legislature, 2nd Called
Session, 1987 (Article 717k-8, Vernon's Texas Civil Statutes), and
Chapter 656, Acts of the 68th Legislature, Regular Session, 1983
(Article 717q, Vernon's Texas Civil Statutes); and a "public
agency" under Chapter 3, Acts of the 61st Legislature, Regular
Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes), and
Chapter 400, Acts of the 66th Legislature, 1979 (Article 717m-1,
Vernon's Texas Civil Statutes). The acquisition, improvement, or
repair of rail facilities by a district is an "eligible project"
under Chapter 656, Acts of the 68th Legislature, Regular Session,
1983 (Article 717q, Vernon's Texas Civil Statutes).
(b) A district has perpetual succession.
(c) A district may sue and be sued in all courts of competent
jurisdiction, may institute and prosecute suits without giving
security for costs, and may appeal from a judgment without giving
supersedeas or cost bond. An action at law or in equity against the
district shall be brought in the county in which the principal
office of the district is located, except that in eminent domain
proceedings suit shall be brought in the county in which the land is
located.
(d) A district may acquire by grant, purchase, gift, devise,
lease, or otherwise and may hold, use, sell, lease, or dispose of
real and personal property, licenses, patents, rights, and
interests necessary, convenient, or useful for the full exercise of
any of its powers under this Act.
(e) A district may plan, acquire, construct, complete,
develop, own, operate, and maintain rail facilities inside or
outside the district, and for those purposes subject to a grant
previously secured or with the consent of any municipality, county,
or other political subdivision may use streets, alleys, roads,
highways, and other public ways of any municipality, county, or
other political subdivision and may relocate, raise, reroute,
change the grade of, or alter, at the expense of the district, the
construction of any street, alley, highway, road, railroad,
electric lines and facilities, telegraph and telephone properties
and facilities, pipelines and facilities, conduits and facilities,
and other properties, whether publicly or privately owned, as
necessary or useful in the construction, reconstruction, repair,
maintenance, and operation of rail facilities. A district may
acquire by purchase, whenever it considers the purchase expedient,
any land, property rights, right-of-way, franchises, easements,
and other interests in land as it considers necessary for the
acquisition, construction, or operation of any rail facility on
such terms and at such price as agreed to between the district and
the owner and may take title in the name of the district. The
governing body of every municipality, county, other political
subdivision, or public agency is authorized without any form of
advertisement to make conveyance of title or rights and easements
to any property needed by the district to effect its purposes in
connection with the acquisition, construction, or operation of rail
facilities.
(f) A district has the right of eminent domain to acquire
lands in fee simple and any interest less than fee simple in, on,
under, or above lands, including, without limitation, easements,
rights-of-way, rights of use of airspace or subsurface space. The
right may not be exercised in a manner that would unduly interfere
with interstate commerce. Eminent domain proceedings brought by a
district are governed by Title 52, Revised Statutes, except as it is
inconsistent with this Act. Proceedings for the exercise of the
power of eminent domain are commenced by the adoption by the board
of a resolution declaring the public necessity for the acquisition
by the district of the property or interest described in the
resolution, and that the acquisition is necessary and proper for
the construction, extension, improvement, or development of rail
facilities and is in the public interest. The resolution of the
district is conclusive evidence of the public necessity of the
proposed acquisition and that the real or personal property or
interest in property is necessary for public use.
(g) A district may enter into agreements with any other
public utility, private utility, communication system, common
carrier, or transportation system for the joint use of its
facilities, installations, or properties within or outside the
district and establish through routes, joint fares, and, subject to
approval of any tariff-regulating body having jurisdiction,
divisions of tariffs.
(h) A district may adopt rules to govern the operation of
the district, its employees, the rail facilities, service provided
by the district, and any other necessary matter concerning its
purposes, including rules regarding health, safety, alcohol or
beverage service, food service, and telephone and utility services,
to protect the health, safety, and general welfare of the state.
(i) A district may enter into joint ownership agreements
with any person.
(j) A district shall establish and maintain rents or other
compensation for the use of the facilities of the system acquired,
constructed, operated, regulated, or maintained by the district
that are reasonable and nondiscriminatory and, together with grants
received by the district, are sufficient to produce revenues
adequate:
(1) to pay all expenses necessary to the operation and
maintenance of the properties and facilities of the district;
(2) to pay the interest on and principal of all bonds issued
by the district under this Act payable in whole or in part from the
revenues, as they become due and payable; and
(3) to fulfill the terms of any agreements made with the
holders of bonds or with any person in their behalf.
(k) A district may make contracts, leases, and agreements
with, and accept grants and loans from the United States of America,
its departments and agencies, the state, its agencies, and
political subdivisions, and public or private corporations and
persons, and may generally perform all acts necessary for the full
exercise of the powers vested in it. A district may acquire rolling
stock or other property under conditional sales contracts, leases,
equipment trust certificates, or any other form of contract or
trust agreement. Any revenue bond indenture may provide
limitations on the exercise of the powers granted by this section,
and the limitations apply so long as any of the revenue bonds issued
pursuant to the indenture are outstanding and unpaid.
(l) A district may sell, lease, convey, or otherwise dispose
of any of its rights, interests, or properties not needed for or, in
the case of leases, not inconsistent with the efficient operation
and maintenance of the system. It may, on adoption of an order by
the board, sell, lease, or otherwise dispose of, at any time, any
surplus materials or personal or real property not needed for its
requirements or for the purpose of carrying out its power under this
Act.
(m) A district by resolution may adopt rules and regulations
governing the use, operation, and maintenance of the system and
shall determine all routings and change them whenever the board
considers it advisable.
(n) A district may lease the rail facilities or any part to,
or contract for the use or operation of the rail facilities or any
part by, any operator. A district shall encourage to the maximum
extent practicable the participation of private enterprise in the
operation of rail facilities. The term of an operating contract
under this subsection may not exceed 20 years.
(o) A district may contract with any county or other
political subdivision of the state for the district to provide rail
transportation services to any area outside the boundaries of the
district on such terms and conditions as may be agreed to by the
parties.
(p) Before beginning the operation of rail facilities the
board of a district shall adopt an annual operating budget
specifying the anticipated revenues and expenses of the district
for the remainder of the fiscal year, and the district shall adopt
an operating budget for each succeeding fiscal year. The fiscal
year of the district ends September 30 unless changed by the board
not more than once in any three-year period. The board shall hold a
public hearing before adopting each budget except the initial
budget. Notice of each hearing must be published at least seven
days before the date of the hearing in a newspaper of general
circulation in the district. A budget may be amended at any time if
notice of the proposed amendment is given in the notice of meeting.
An expenditure that is not budgeted may not be made.
(q) The board of a district shall by resolution name one or
more banks for the deposit of district funds. District funds are
public funds and may be invested in securities permitted by the
Public Funds Investment Act of 1987 (Article 842a-2, Vernon's Texas
Civil Statutes). To the extent funds of the district are not insured
by the Federal Deposit Insurance Corporation or its successor, they
shall be collateralized in the manner provided for county funds.
(r) A district may not abandon a rail line of the district
with respect to which state funds have been loaned or granted unless
the abandonment is approved by the Texas Transportation Commission
as being consistent with the policies of this Act. The commission
by rule shall adopt procedures for applying for and obtaining
approval under this subsection.
Bonds and Notes
Sec. 6. (a) A district may issue revenue bonds and notes from
time to time and in such amounts as its board considers necessary or
appropriate for the acquisition, purchase, construction,
reconstruction, repair, equipping, improvement, or extension of
its rail facilities. All bonds and notes are fully negotiable and
may be made redeemable before maturity, at the option of the issuing
district, at such price or prices and under such terms and
conditions as may be fixed by the issuing district in the resolution
authorizing the bonds or notes, and may be sold at public or private
sale, as determined by the board.
(b) Before delivery, all bonds and notes authorized to be
issued, except notes issued to an agency of the federal or state
government, and the records relating to their issuance shall be
submitted to the attorney general for examination. If the attorney
general finds that they have been issued in accordance with the
constitution and this Act, and that they will be binding
obligations of the district issuing them, the attorney general
shall approve them, and they shall be registered by the state
comptroller of public accounts. After approval, registration, and
sale and delivery of the bonds to the purchaser, they are
incontestable.
(c) In order to secure the payment of the bonds or notes, the
district may encumber and pledge all or any part of the revenues of
its rail facilities, may mortgage and encumber all or any part of
the properties of the rail facilities, and everything pertaining to
them acquired or to be acquired, and may prescribe the terms and
provisions of the bonds and notes in any manner not inconsistent
with this Act. If not prohibited by the resolution or indenture
relating to outstanding bonds or notes, any district may encumber
separately any item or items of real estate or personalty.
(d) All bonds and notes are legal and authorized investments
for banks, trust companies, savings and loan associations, and
insurance companies. The bonds and notes are eligible to secure the
deposit of public funds of the state, cities, towns, villages,
counties, school districts, or other political corporations or
subdivisions of the state. The bonds and notes are lawful and
sufficient security for the deposits to the extent of the bonds'
principal amount or market value, whichever is less.
(e) Bonds payable solely from revenues may be issued by
resolution of the board.
Alternative Financing
Sec. 6A. (a) A district may use the procedures provided by
Chapter 271, Local Government Code, to finance rail facilities of
the district, except to the extent of conflict with this Act and
except that the district may not levy or collect ad valorem taxes.
(b) A district may issue nonnegotiable purchase money
notes, payable in installments and secured by the property being
acquired or constructed, to acquire or construct rail facilities.
A district may also secure the obligation of the notes by a pledge
or undertaking to issue bonds or bond anticipation notes. A
district may covenant with the purchaser of bond anticipation notes
that the proceeds of one or more particular series of bonds will be
used for the ultimate payment of the purchase money notes or bond
anticipation notes.
Competitive Bids
Sec. 7. A contract in the amount of more than $15,000 for the
construction of improvements or the purchase of material,
machinery, equipment, supplies, or any other property except real
property may only be let on competitive bids after notice
published, at least 15 days before the date set for receiving bids,
in a newspaper of general circulation in the district. A board may
adopt rules governing the taking of bids and the awarding of
contracts. This section does not apply to personal or professional
services or the acquisition of existing rail transportation
systems.
Exemptions From Taxes
Sec. 8. The property, revenues, and income of a district and
the interest on bonds and notes issued by a district are exempt from
all taxes levied by the state or a political subdivision of the
state.
Effect on Other Law
Sec. 9. The powers and duties provided by this Act are in
addition to the powers and duties provided by other law for counties
regarding rail transportation.
Acts 1981, 67th Leg., p. 2434, ch. 623, eff. June 15, 1981. Secs. 1
to 6 amended by and Sec. 6A added by Acts 1993, 73rd Leg., ch. 332,
Sec. 1, eff. Aug. 30, 1993; Sec. 7 amended by Acts 1993, 73rd Leg.,
ch. 757, Sec. 35, eff. Sept. 1, 1993; Sec. 3 head amended by Acts
1997, 75th Leg., ch. 1105, Sec. 2, eff. June 19, 1997; Sec. 3(f)
added by Acts 1997, 75th Leg., ch. 580, Sec. 2, eff. Sept. 1, 1997;
Sec. 3A added by Acts 1997, 75th Leg., ch. 1105, Sec. 1, eff. June
19, 1997; Sec. 4(g) added by Acts 1997, 75th Leg., ch. 580, Sec. 1,
eff. Sept. 1, 1997; Sec. 5(r) added by Acts 2001, 77th Leg., ch.
1244, Sec. 3, eff. Sept. 1, 2001.
Article: 6546 6547 6548 6548a 6549 6550 6550a1 6550c 6550c-1 6550d 6551 6552 6553 6554 6555
Last modified: August 10, 2007
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