CHAPTER 366. REGIONAL TOLLWAY AUTHORITIES

TRANSPORTATION CODE

TITLE 6. ROADWAYS

SUBTITLE G. TURNPIKES AND TOLL PROJECTS

CHAPTER 366. REGIONAL TOLLWAY AUTHORITIES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 366.001. SHORT TITLE. This chapter may be cited as the

Regional Tollway Authority Act.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.002. PURPOSES; LIBERAL CONSTRUCTION. (a) The purposes

of this chapter are:

(1) the expansion and improvement of transportation facilities

and systems in this state;

(2) the creation of regional tollway authorities to secure and

acquire rights-of-way for urgently needed transportation systems

and to plan, design, construct, operate, expand, extend, and

modify those systems; and

(3) the reduction of burdens and demands on the limited money

available to the commission and an increase in the effectiveness

and efficiency of the commission.

(b) This chapter shall be liberally construed to effect its

purposes.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.003. DEFINITIONS. In this chapter:

(1) "Authority" means a regional tollway authority organized

under this chapter.

(2) "Board" means the board of directors of an authority

organized under this chapter.

(3) "Bond" means all bonds, certificates, notes, and other

obligations of an authority authorized by this chapter, any other

statute, or the Texas Constitution.

(4) "Bond proceedings" means a bond resolution and any bond

indenture authorized by the bond resolution, any credit agreement

entered into in connection with the bonds or the payments to be

made under the agreement, and any other agreement between an

authority and another person providing security for the payment

of bonds.

(5) "Bond resolution" means an order or resolution of an

authority's board authorizing the issuance of bonds.

(6) "Bondholder" means the owner of bonds and includes a trustee

acting on behalf of an owner of bonds under the terms of a bond

indenture.

(7) "Highway" means a road, highway, farm-to-market road, or

street under the supervision of the state or a political

subdivision of the state.

(8) "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

district organized or operating under Section 52, Article III, or

Section 59, Article XVI, Texas Constitution, or a nonprofit

corporation, including a transportation corporation created under

Chapter 431.

(9) "Revenue" means the tolls, rents, and other money received

by an authority from the ownership or operation of a turnpike

project.

(9-a) "Surplus revenue" means the revenue of a turnpike project

or system remaining at the end of any fiscal year after all

required payments and deposits have been made in accordance with

all bond resolutions, trust agreements, indentures, credit

agreements, or other instruments and contractual obligations of

the authority payable from the revenue of the turnpike project or

system.

(10) "System" means a turnpike project or any combination of

turnpike projects designated as a system by the board under

Section 366.034.

(11) "Turnpike project" means a highway of any number of lanes,

with or without grade separations, owned or operated by an

authority under this chapter and any improvement, extension, or

expansion to that highway, including:

(A) an improvement to relieve traffic congestion and promote

safety;

(B) a bridge, tunnel, overpass, underpass, interchange, service

road, ramp, entrance plaza, approach, or tollhouse;

(C) an administration, storage, or other building the authority

considers necessary to operate the turnpike project;

(D) a parking area or structure, rest stop, park, and other

improvement or amenity the authority considers necessary, useful,

or beneficial for the operation of a turnpike project; and

(E) property rights, easements, and interests the authority

acquires to construct or operate the turnpike project.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Amended by:

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

264, Sec. 9.01, eff. June 11, 2007.

Sec. 366.004. CONSTRUCTION COSTS DEFINED. (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;

(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) expenses related to the initial operation of the turnpike

project or system.

(b) Costs attributable to a turnpike project or system and

incurred before the issuance of bonds to finance the turnpike

project or system may be reimbursed from the proceeds of sale of

the bonds.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Amended by:

Acts 2005, 79th Leg., Ch.

281, Sec. 2.57, eff. June 14, 2005.

SUBCHAPTER B. CREATION AND POWERS OF REGIONAL TOLLWAY AUTHORITIES

Sec. 366.031. CREATION AND EXPANSION OF A REGIONAL TOLLWAY

AUTHORITY. (a) Two or more counties, acting through their

respective commissioners courts, may by order passed by each

commissioners court create a regional tollway authority under

this chapter if:

(1) one of the counties has a population of not less than

300,000;

(2) the counties form a contiguous territory; and

(3) unless one of the counties has a population of 1.5 million

or more, the commission approves the creation.

(b) The commission shall adopt rules to implement the provisions

of this section by March 1, 1998.

(c) A commissioners court may by resolution petition an

established authority for inclusion in the authority if the

county is contiguous to a county that initially created the

authority.

(d) On approval of the board of an authority receiving a

petition under Subsection (c), the county becomes part of the

authority.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.032. NATURE OF REGIONAL TOLLWAY AUTHORITY. (a) An

authority created under this chapter is a body politic and

corporate and a political subdivision of this state.

(b) An authority is a governmental unit as that term is defined

in Chapter 101, Civil Practice and Remedies Code.

(c) The exercise by an authority of the powers conferred by this

chapter in the acquisition, design, financing, construction,

operation, and maintenance of a turnpike project or system is:

(1) in all respects for the benefit of the people of the

counties in which an authority operates and of the people of this

state, for the increase of their commerce and prosperity, and for

the improvement of their health, living conditions, and public

safety; and

(2) an essential governmental function of the state.

(d) The operations of an authority are governmental, not

proprietary, functions.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.033. GENERAL POWERS. (a) An authority, acting through

its board, without state approval, supervision, or regulation,

may:

(1) adopt rules for the regulation of its affairs and the

conduct of its business;

(2) adopt an official seal;

(3) study, evaluate, design, acquire, construct, maintain,

repair, and operate turnpike projects, individually or as one or

more systems;

(4) acquire, hold, and dispose of property in the exercise of

its powers and the performance of its duties under this chapter;

(5) enter into contracts or operating agreements with similar

authorities or agencies of the United States, a state of the

United States, the United Mexican States, or a state of the

United Mexican States;

(6) enter into contracts or agreements necessary or incidental

to its duties and powers under this chapter;

(7) cooperate and work directly with property owners and

governmental agencies and officials to support an activity

required to promote or develop a turnpike project or system;

(8) employ and set the compensation and benefits of

administrators, consulting engineers, attorneys, accountants,

construction and financial experts, superintendents, managers,

full-time and part-time employees, agents, consultants, and such

other persons as the authority considers necessary or useful;

(9) receive loans, gifts, grants, and other contributions for

the construction of a turnpike project or system and receive

contributions of money, property, labor, or other things of value

from any source, including the United States, a state of the

United States, the United Mexican States, a state of the United

Mexican States, the commission, the department, any subdivision

of the state, or any other local governmental or private entity,

to be used for the purposes for which the grants or contributions

are made, and enter into any agreement necessary for the grants

or contributions;

(10) install, construct, maintain, repair, renew, relocate, and

remove public utility facilities in, on, along, over, or under a

turnpike project;

(11) organize a corporation under Chapter 431 for the promotion

and development of turnpike projects and systems;

(12) adopt and enforce rules not inconsistent with this chapter

for the use of any turnpike project or system, including traffic

and other public safety rules;

(13) enter into leases, operating agreements, service

agreements, licenses, franchises, and similar agreements with

public or private parties governing the parties' use of all or

any portion of a turnpike project and the rights and obligations

of the authority with respect to a turnpike project; and

(14) do all things necessary or appropriate to carry out the

powers expressly granted by this chapter.

(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.

(c) Property comprising a part of a turnpike project or a system

is not subject to condemnation or the power of eminent domain by

any person, including a governmental entity.

(d) An authority may, if requested by the commission, perform

any function not specified by this chapter to promote or develop

turnpike projects and systems in this state.

(e) An authority may sue and be sued and plead and be impleaded

in its own name.

(f) An authority may rent, lease, franchise, license, or

otherwise make portions of any property of the authority,

including tangible or intangible property, available for use by

others in furtherance of its powers under this chapter by

increasing:

(1) the feasibility or efficient operation of a turnpike project

or system; or

(2) the revenue of the authority.

(g) An authority and any local governmental entity may enter

into a contract under which the authority will operate a turnpike

project or system on behalf of the local governmental entity. An

authority may enter into a contract with the department under

which the authority will operate a turnpike project or system on

behalf of the department.

(h) The payments to be made to an authority under a contract

described by Subsection (g) shall constitute operating expenses

of the facility or system that is to be operated under the

contract, and the contract may extend for a number of years as

the parties agree.

(i) An authority shall adopt a written drug and alcohol policy

restricting the use of controlled substances by employees of the

authority, prohibiting the consumption of alcoholic beverages by

employees while on duty, and prohibiting employees from working

for the authority while under the influence of controlled

substances or alcohol. An authority may adopt policies regarding

the testing of employees suspected of being in violation of the

authority's drug and alcohol policy. The policy shall provide

that, unless required by court order or permitted by the person

who is the subject of the testing, the authority shall keep the

results of the test confidential.

(j) An authority shall adopt written procedures governing its

procurement of goods and services that are consistent with

general laws applicable to 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.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Amended by:

Acts 2005, 79th Leg., Ch.

281, Sec. 2.58, eff. June 14, 2005.

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

264, Sec. 9.04, eff. June 11, 2007.

Sec. 366.034. ESTABLISHMENT OF TURNPIKE SYSTEMS. (a) If an

authority determines that the traffic needs of the counties in

which it operates and the traffic needs of the surrounding region

could be most efficiently and economically met by jointly

operating two or more turnpike projects as one operational and

financial enterprise, it may create a system comprised of those

turnpike projects. An authority may create more than one system

and may combine two or more systems into one system. An authority

may finance, acquire, construct, and operate additional turnpike

projects as additions to and expansions of a system if the

authority determines that the turnpike project could most

efficiently and economically be acquired and constructed if it

were a 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 turnpike project

that is not a part of the system or with the revenue of another

system.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

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.

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

281, Sec. 2.59, eff. June 14, 2005.

Sec. 366.037. OTHER HIGHWAY PROJECTS. (a) In addition to the

powers granted under this chapter and without supervision or

regulation by any state agency or local governmental entity, but

subject to an agreement entered into under Subsection (c), the

board of an authority may by resolution, and on making the

findings set forth in this subsection, authorize the use of

surplus revenue of a turnpike project or system for the study,

design, construction, maintenance, repair, and operation of a

highway or similar facility that is not a turnpike project if the

highway or similar facility is:

(1) situated in a county in which the authority is authorized to

design, construct, and operate a turnpike project;

(2) anticipated to either:

(A) enhance the operation or revenue of an existing, or the

feasibility of a proposed, turnpike project by bringing traffic

to that turnpike project or enhancing the flow of traffic either

on that turnpike project or to or from that turnpike project to

another facility; or

(B) ameliorate the impact of an existing or proposed turnpike

project by enhancing the capability of another facility to handle

traffic traveling, or anticipated to travel, to or from that

turnpike project; and

(3) not anticipated to result in an overall reduction of revenue

of any turnpike project or system.

(b) The board in the resolution may prescribe terms for the use

of the surplus revenue, including the manner in which the highway

or related facility shall be studied, designed, constructed,

maintained, repaired, or operated.

(c) An authority shall enter into an agreement to implement this

section with the department, the commission, a local governmental

entity, or another political subdivision that owns a street,

road, alley, or highway that is directly affected by the

authority's turnpike project or related facility.

(d) An authority may not:

(1) take an action under this section that violates, impairs, or

is inconsistent with a bond resolution, trust agreement, or

indenture governing the use of the revenue of a turnpike project

or system; or

(2) commit in any fiscal year expenditures under this section

exceeding 10 percent of its surplus revenue from the preceding

fiscal year.

(e) In authorizing expenditures under this section, the board

shall consider:

(1) balancing throughout the counties of the authority the

application of funds generated by its turnpike projects and

systems, taking into account where those amounts are already

committed or programmed as a result of this section or otherwise;

and

(2) connectivity to an existing or proposed turnpike project or

system.

(f) Except as provided by this section, an authority has the

same powers and may use the same procedures with respect to the

study, financing, design, construction, maintenance, repair, and

operation of a highway or similar facility under this section as

are available to the authority with respect to a turnpike project

or system.

(g) Notwithstanding other provisions of this section:

(1) any work on a highway in the state highway system must be

approved by the department; and

(2) the department shall supervise and regulate any work on a

highway in the state highway system.

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

264, Sec. 9.05, eff. June 11, 2007.

Sec. 366.038. TOLL COLLECTION. An authority shall provide, for

reasonable compensation, customer service and other toll

collection and enforcement services for a toll project in the

boundaries of the authority, regardless of whether the toll

project is developed, financed, constructed, and operated under

an agreement, including a comprehensive development agreement,

with the authority or another entity.

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

264, Sec. 9.05, eff. June 11, 2007.

SUBCHAPTER C. FEASIBILITY OF REGIONAL TURNPIKE PROJECTS

Sec. 366.071. EXPENDITURES FOR FEASIBILITY STUDIES. (a) An

authority may pay the expenses of studying the cost and

feasibility and any other expenses relating to the preparation

and issuance of bonds for a proposed turnpike project or system

by:

(1) using legally available revenue derived from an existing

turnpike project or system;

(2) borrowing money and issuing bonds or entering into a loan

agreement payable out of legally available revenue anticipated to

be derived from the operation of an existing turnpike project or

system; or

(3) pledging to the payment of the bonds or loan agreements

legally available revenue anticipated to be derived from the

operation of an existing turnpike project or system or revenue

legally available to the authority from another source.

(b) Money spent under this section for a proposed turnpike

project or system must be reimbursed to the turnpike project or

system from which the money was spent from the proceeds of bonds

issued for the acquisition and construction of the proposed

turnpike project or system.

(c) The use of any money of a turnpike project or system to

study the feasibility of another turnpike project or system or

used to repay any money used for that purpose does not constitute

an operating expense of the turnpike project or system producing

the revenue and may only be paid from the surplus money of the

turnpike project or system.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.072. FEASIBILITY STUDY FUND. (a) An authority may

maintain a feasibility study fund. The fund is a revolving fund

held in trust by a banking institution chosen by the authority

and shall be kept separate from the money for any turnpike

project or system.

(b) An authority may transfer an amount from a surplus fund

established for a turnpike project or system to the authority's

feasibility study fund if the remainder of the surplus fund is

not less than any minimum amount required by the bond proceedings

to be retained for that turnpike project or system.

(c) Money in the feasibility study fund may be used only to pay

the expenses of studying the cost and feasibility and any other

expenses relating to:

(1) the preparation and issuance of bonds for the acquisition

and construction of a proposed turnpike project or system;

(2) the financing of the improvement, extension, or expansion of

an existing turnpike project or system; and

(3) private participation, as authorized by law, in the

financing of a proposed turnpike project or system, the

refinancing of an existing turnpike project or system, or the

improvement, extension, or expansion of a turnpike project or

system.

(d) Money spent under Subsection (c) for a proposed turnpike

project or system must be reimbursed from the proceeds of

turnpike revenue bonds issued for, or other proceeds that may be

used for, the acquisition, construction, improvement, extension,

expansion, or operation of the turnpike project or system.

(e) For a purpose described by Subsection (c), an authority may

borrow money and issue promissory notes or other interest-bearing

evidences of indebtedness payable out of its feasibility study

fund, pledging money in the fund or to be placed in the fund.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.073. FEASIBILITY STUDY BY MUNICIPALITY, COUNTY, OTHER

LOCAL GOVERNMENTAL ENTITY, OR PRIVATE GROUP. (a) One or more

municipalities, counties, or local governmental entities, a

combination of municipalities, counties, and local governmental

entities, 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 bonds for the acquisition

and construction of a proposed turnpike project or system by an

authority;

(2) the improvement, extension, or expansion of an authority's

existing turnpike project or system; or

(3) the use of private participation under applicable law in

connection with the acquisition, construction, improvement,

expansion, extension, maintenance, repair, or operation of a

turnpike project or system by an authority.

(b) Money spent under Subsection (a) for an authority's proposed

turnpike project or system is reimbursable without interest and

with the consent of the authority to the person paying the

expenses described in Subsection (a) out of the proceeds from

turnpike revenue bonds issued for or other proceeds that may be

used for the acquisition, construction, improvement, extension,

expansion, or operation of the turnpike project or system.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

SUBCHAPTER D. TURNPIKE FINANCING

Sec. 366.111. TURNPIKE REVENUE BONDS. (a) An authority, by

adoption of a bond resolution, may authorize the issuance of

bonds to pay all or part of the cost of a turnpike project or

system, to refund any bonds previously issued for the turnpike

project or system, or to pay for all or part of the cost of a

turnpike project or system that will become a part of another

system.

(b) As determined in the bond resolution, the bonds of each

issue shall:

(1) be dated;

(2) bear interest at the rate or rates and beginning on the

dates, as authorized by law, or bear no interest;

(3) mature at the time or times, 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 bond resolution.

(c) An authority 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 authority.

(d) The proceeds of each bond issue shall be disbursed in the

manner and under the restrictions, if any, the authority provides

in the bond resolution.

(e) Additional bonds may be issued in the same manner to pay the

costs of a turnpike project or system. Unless otherwise provided

in the bond resolution, the additional bonds shall be on a

parity, without preference or priority, with bonds previously

issued and payable from the revenue of the turnpike project or

system. In addition, an authority 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

turnpike project or system for which the bonds were issued, the

surplus shall be segregated from the other money of the authority

and used only for the purposes specified in the bond resolution.

(g) Bonds issued and delivered under this chapter and interest

coupons on the bonds are a security under Chapter 8, Business

& Commerce Code.

(h) Bonds issued under this 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.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.112. INTERIM BONDS. (a) An authority may, before

issuing definitive bonds, issue interim bonds, with or without

coupons, exchangeable for definitive bonds.

(b) The interim bonds may be authorized and issued in accordance

with this chapter, without regard to the requirements,

restrictions, or procedural provisions contained in any other

law.

(c) A bond resolution authorizing interim bonds may provide that

the interim bonds recite that the bonds are issued under this

chapter. The recital is conclusive evidence of the validity and

the regularity of the bonds' issuance.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.113. PAYMENT OF BONDS; STATE AND COUNTY CREDIT NOT

PLEDGED. (a) The principal of, interest on, and any redemption

premium on bonds issued by an authority are payable solely from:

(1) the revenue of the turnpike project or system for which the

bonds are issued, including tolls pledged to pay the bonds;

(2) payments made under an agreement with the commission or a

local governmental entity as provided by Subchapter G;

(3) money derived from any other source available to the

authority, other than money derived from a turnpike project that

is not part of the same system or money derived from a different

system, except to the extent that the surplus revenue of a

turnpike project or system has been pledged for that purpose; and

(4) amounts received under a credit agreement relating to the

turnpike project or system for which the bonds are issued.

(b) Bonds issued under this chapter do not constitute a debt of

the state or any of the counties of an authority or a pledge of

the faith and credit of the state or any of the counties. Each

bond must contain on its face a statement to the effect that the

state, the authority, and the counties of the authority 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 neither the faith and credit and taxing

power of the state or the counties of the authority are pledged

to the payment of the principal of or interest on the bond.

(c) An authority may not incur financial obligations that cannot

be paid from revenue derived from owning or operating the

authority's turnpike projects and systems or from other revenue

provided by law.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.114. EFFECT OF LIEN. (a) A lien on or a pledge of

revenue from a turnpike project or system under this chapter or

on a reserve, replacement, or other fund established in

connection with a bond issued under this chapter:

(1) is enforceable at the time of payment for and delivery of

the bond;

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

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

and

(4) is enforceable against any person having any claim, in tort,

contract, or other remedy, against the applicable authority

without regard to whether the person has notice of the lien or

pledge.

(b) A bond resolution is not required to be recorded except in

the regular records of the authority.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.115. BOND INDENTURE. (a) Bonds issued under this

chapter may be secured by a bond indenture between the authority

and a corporate trustee that is a trust company or a bank that

has the powers of a trust company.

(b) A bond indenture may pledge or assign the tolls and other

revenue to be received but may not convey or mortgage any part of

a turnpike project or system.

(c) A bond indenture 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 indentures of trust securing

corporate bonds and debentures; and

(3) contain provisions the authority determines reasonable and

proper for the security of the bondholders, including covenants:

(A) establishing the authority's duties relating to:

(i) the acquisition of property;

(ii) the construction, maintenance, operation, and repair of and

insurance for a turnpike project or system; and

(iii) custody, safeguarding, and application of money;

(B) prescribing events that constitute default;

(C) prescribing terms on which any or all of the bonds become or

may be declared due before maturity; and

(D) relating to the rights, powers, liabilities, or duties that

arise on the breach of an authority's duty.

(d) The expenses incurred in carrying out a trust agreement may

be treated as part of the cost of operating the turnpike project.

(e) In addition to all other rights by mandamus or other court

proceeding, an owner or trustee of a bond issued under this

chapter may enforce the owner's rights against an issuing

authority, the authority's employees, the authority's board, or

an agent or employee of the authority's board and is entitled to:

(1) require the authority and the board to impose and collect

tolls, charges, and other revenue sufficient to carry out any

agreement contained in the bond proceedings; and

(2) apply for and obtain the appointment of a receiver for the

turnpike project or system.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.116. APPROVAL OF BONDS BY ATTORNEY GENERAL. (a) An

authority shall submit to the attorney general for examination a

transcript of proceedings relating to bonds authorized under this

chapter. The transcript 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.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.117. FURNISHING OF INDEMNIFYING BONDS OR PLEDGES OF

SECURITIES. (a) 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 an authority requires.

(b) Bonds of an authority may secure the deposit of public money

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.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.118. APPLICABILITY OF OTHER LAW; CONFLICTS. All laws

affecting the issuance of bonds by local governmental entities,

including Chapters 1201, 1202, 1204, and 1371, Government Code,

apply to bonds issued under this chapter. To the extent of a

conflict between those laws and this chapter, the provisions of

this chapter prevail.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.392, eff.

Sept. 1, 2001.

SUBCHAPTER E. ACQUISITION, CONSTRUCTION, AND OPERATION OF

TURNPIKE PROJECTS

Sec. 366.161. TURNPIKE PROJECTS EXTENDING INTO OTHER COUNTIES.

An authority may acquire, construct, operate, maintain, expand,

or extend a turnpike project in:

(1) a county that is a part of the authority; or

(2) a county in which the authority operates or is constructing

a turnpike project if the turnpike project in the affected county

is a continuation of the authority's turnpike project or system

extending from an adjacent county.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.162. POWERS AND PROCEDURES OF AUTHORITY IN ACQUIRING

PROPERTY. (a) An authority may construct or improve a turnpike

project on real property, including a right-of-way acquired by

the authority or provided to the authority for that purpose by

the commission, a political subdivision of this state, or any

other local governmental entity.

(b) Except as provided by this chapter, an authority has the

same powers and may use the same procedures as the commission in

acquiring property.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.163. ACQUISITION OF PROPERTY. (a) An authority may

acquire in the name of the authority public or private real and

other property it determines necessary or convenient for the

construction, operation, maintenance, expansion, or extension of

a turnpike project or for otherwise carrying out this chapter.

(b) The property an authority may acquire under this subchapter

includes all or any portion of, and rights in and to:

(1) public or private land, streets, alleys, rights-of-way,

parks, playgrounds, and reservations;

(2) franchises;

(3) easements;

(4) licenses; and

(5) other interests in real and other property.

(c) An authority may acquire real property by any method,

including purchase and condemnation. An authority may purchase

public or private real property on the terms and at the price the

authority and the property owner consider reasonable.

(d) Covenants, conditions, restrictions, or limitations

affecting property acquired in any manner by the authority are

not binding against the authority and do not impair the

authority'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

authority from using the property for a purpose authorized under

this chapter, but this section does not affect the right of a

person to seek compensation for damages to the person's property

under Section 17, Article I, Texas Constitution.

(e) Subsection (d) does not affect the obligation of the

authority under other state law to compensate the state for

acquiring or using property owned by or on behalf of the state.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.164. RIGHT OF ENTRY. (a) To acquire property

necessary or useful in connection with a turnpike project, an

authority may enter any real property, water, or premises to make

a survey, geotechnical evaluation, sounding, or examination.

(b) An entry under Subsection (a) is not:

(1) a trespass; or

(2) an entry under a pending condemnation proceeding.

(c) The authority shall make reimbursements for any actual

damages to real property, water, or premises that result from an

activity described by Subsection (a).

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.165. CONDEMNATION OF REAL PROPERTY. (a) Subject to

Subsection (c), an authority may acquire public or private real

property in the name of the authority by the exercise of the

power of condemnation under the laws applicable to the exercise

of that power on property for public use if:

(1) the authority and the property owner cannot agree on a

reasonable price for the property; or

(2) the property owner is legally incapacitated, absent,

unknown, or unable to convey title.

(b) An authority may condemn real property that the authority

determines is:

(1) necessary or appropriate to construct or to efficiently

operate a turnpike project;

(2) necessary to restore public or private property damaged or

destroyed, including property necessary or convenient to mitigate

an environmental effect that directly results from the

construction, operation, or maintenance of a turnpike project;

(3) necessary for access, approach, and interchange roads;

(4) necessary to provide proper drainage and ground slope for a

turnpike project; or

(5) necessary otherwise to implement this chapter.

(c) An authority may construct a supplemental facility only on

real property the authority purchases.

(d) Repealed by Acts 2005, 79th Leg., Ch. 281, Sec. 2.101(16),

eff. June 14, 2005.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Amended by:

Acts 2005, 79th Leg., Ch.

281, Sec. 2.101(16), eff. June 14, 2005.

Sec. 366.166. DECLARATION OF TAKING. (a) An authority may file

a declaration of taking with the clerk of the court:

(1) in which the authority files a condemnation petition under

Chapter 21, Property Code; or

(2) to which the case is assigned.

(b) An authority may file the declaration of taking concurrently

with or subsequent to the filing of the condemnation petition but

may not file the declaration after the special commissioners have

made an award in the condemnation proceeding.

(c) 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

authority 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 turnpike project.

(d) A deposit to the registry of the court of an amount equal to

the appraised fair market value, as determined by the authority,

of the property to be condemned and any damages to the remainder

must accompany the declaration of taking.

(e) Instead of the deposit under Subsection (d), at its option,

the authority may, concurrently with the declaration of a taking,

tender in favor of the owner of the subject property a bond or

other security in an amount sufficient to secure the owner for

the value of the property taken and damages to remaining

property, if the authority obtains the court's approval.

(f) The date on which the declaration is filed is the date of

taking for the purpose of assessing the value of the property

taken and damages to any remaining property to which an owner is

entitled.

(g) An owner may draw upon the deposit held by the court under

Subsection (d) on the same terms and conditions as are applicable

under state law to a property owner's withdrawal of a

commissioners' award deposited under Section 21.021(a)(1),

Property Code.

(h) A property owner that is a defendant in an eminent domain

action filed by an authority under this chapter has 20 days after

the date of service of process of both a condemnation petition

and a notice of declaration of taking to give notice to the court

in which the action is pending of the defendant's desire to have

the condemnation petition placed on the court's docket in the

same manner as other cases pending in the court. On receipt of

timely notice from the defendant, the court in which the eminent

domain action is pending shall place the case on its docket in

the same manner as other cases pending in the court.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.167. POSSESSION OF PROPERTY. (a) Immediately on the

filing of a declaration of taking, an authority 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 authority shall file evidence of

the service with the clerk of the court. On filing of that

evidence, the authority may take possession of the property on

the same terms as if a commissioners hearing had been conducted,

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, an

authority may not take possession before the 31st 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.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.168. SEVERANCE OF REAL PROPERTY. (a) If an

authority's turnpike project severs a property owner's real

property, the authority shall pay:

(1) the value of the property acquired; and

(2) the damages, if any, to the remainder of the owner's

property caused by the severance, including damages caused by the

inaccessibility of one tract from the other.

(b) At its option, an authority may negotiate for and purchase

the severed real property or any part of the severed real

property if the authority and the property owner agree on terms

for the purchase. An authority may sell and dispose of severed

real property that it determines is not necessary or useful to

the authority. Severed property must be appraised before being

offered for sale by an authority.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.169. ACQUISITION OF RIGHTS IN PUBLIC REAL PROPERTY.

(a) An authority may use real property, including submerged

land, streets, alleys, and easements, owned by the state or a

local governmental entity that the authority considers necessary

for the construction or operation of a turnpike project.

(b) The state or a local governmental entity having charge of

public real property may consent to the use of the property for a

turnpike project.

(c) Except as provided by Section 228.201, 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.

(d) This section does not deprive the School Land Board of the

power to execute leases for the development of oil, gas, and

other minerals on state-owned real property adjoining a turnpike

project or in tidewater limits. The leases may provide for

directional drilling from the adjoining property or tidewater

area.

(e) This section does not affect the obligation of the authority

under other state law to compensate the state for acquiring or

using property owned by or on behalf of the state. An authority's

use of property owned by or on behalf of the state is subject to

any covenants, conditions, restrictions, or limitations affecting

that property.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Amended by:

Acts 2005, 79th Leg., Ch.

281, Sec. 2.60, eff. June 14, 2005.

Sec. 366.170. COMPENSATION FOR AND RESTORATION OF PUBLIC

PROPERTY. (a) Except as provided by Section 366.035 or Section

366.165(c), an authority may not pay compensation for public real

property, parkways, streets, highways, alleys, or reservations it

takes, except for:

(1) parks and playgrounds;

(2) property owned by or on behalf of the state that under state

law requires compensation to the state for the use or acquisition

of the property; or

(3) as provided by this chapter.

(b) Public property damaged in the exercise of powers granted by

this chapter shall be restored or repaired and placed in its

original condition as nearly as practicable.

(c) An authority has full easements and rights-of-way through,

across, under, and over any property owned by the state or any

local governmental entity that are necessary or convenient to

construct, acquire, or efficiently operate a turnpike project or

system under this chapter. This subsection does not affect the

obligation of the authority under other state law to compensate

the state for the use or acquisition of an easement or

right-of-way on property owned by or on behalf of the state. An

authority's use of property owned by or on behalf of the state is

subject to any covenants, conditions, restrictions, or

limitations affecting that property.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.171. PUBLIC UTILITY FACILITIES. (a) An authority may

adopt rules for the installation, construction, operation,

maintenance, repair, renewal, relocation, and removal of a public

utility facility in, on, along, over, or under a turnpike

project.

(b) If an authority determines it is necessary that a public

utility facility located in, on, along, over, or under a turnpike

project be relocated in the turnpike project, removed from the

turnpike project, or carried along or across the turnpike project

by grade separation, the owner or operator of the utility

facility shall relocate or remove the facility in accordance with

the requirements of the authority and in a manner that does not

impede the design, financing, construction, operation, or

maintenance of the turnpike project. The authority, as a part of

the cost of the turnpike project or the cost of operating the

turnpike project, shall pay the cost of the relocation, removal,

or grade separation, including the cost of:

(1) installation of the facility in a new location;

(2) damages incurred by the utility to its facilities and

services;

(3) interests in real property and other rights acquired to

accomplish the relocation or removal; and

(4) maintenance of grade separation structures.

(c) The authority may reduce the total costs to be paid by the

authority under Subsection (b) by 10 percent for each 30-day

period or portion of a 30-day period by which the relocation

exceeds the limit specified by the authority. If an owner or

operator of a public utility facility does not timely remove or

relocate as required under Subsection (b), the authority may do

so at the expense of the public utility. If the authority

determines that a delay in relocation is the result of

circumstances beyond the control of the utility, full costs shall

be paid by the authority.

(d) Subchapter C, Chapter 181, Utilities Code, applies to the

erection, construction, maintenance, and operation of lines and

poles owned by an electric utility, as that term is defined by

Section 181.041, Utilities Code, over, under, across, on, and

along a turnpike project or system constructed by an authority.

An authority has the powers and duties delegated to the

commissioners court by that subchapter, and an authority has

exclusive jurisdiction and control of utilities located in its

rights-of-way.

(e) Subchapter B, Chapter 181, Utilities Code, applies to the

laying and maintenance of facilities used for conducting gas by a

gas utility, as that term is defined by Section 181.021,

Utilities Code, through, under, along, across, and over a

turnpike project or system constructed by an authority except as

otherwise provided by this section. An authority has the power

and duties delegated to the commissioners court by that

subchapter and an authority has exclusive jurisdiction and

control of utilities located in its right-of-way.

(f) The laws of this state applicable to the use of public

roads, streets, and waters by a telephone and telegraph

corporation apply to the erection, construction, maintenance,

location, and operation of a line, pole, or other fixture by a

telephone and telegraph corporation over, under, across, on, and

along a turnpike project or system constructed by an authority

under this chapter.

(g) In this section "public utility facility" means a track,

pipe, main, conduit, cable, wire, tower, pole, or other item of

plant or equipment or an appliance of a public utility or other

person.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.51, eff.

Sept. 1, 1999.

Sec. 366.172. LEASE, SALE, OR CONVEYANCE OF TURNPIKE PROJECT.

(a) An authority may lease, sell, or convey in another manner a

turnpike project to the department, a county, or a local

government corporation created under Chapter 431 only with the

approval of the governing body of the entity to which the project

is transferred.

(b) An agreement to lease, sell, or convey a turnpike project

under this section must provide for the discharge and final

payment or redemption of the authority's outstanding bonded

indebtedness for the turnpike project and must not be prohibited

under the bond proceedings applicable to the system, if any, of

which the turnpike project is a part.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.173. REVENUE. (a) An authority may:

(1) impose tolls for the use of each of its turnpike projects

and systems and the different parts or sections of each of its

turnpike projects and systems; and

(2) contract with a person for the use of part of a turnpike

project or system or lease or sell part of a turnpike project or

system, including the right-of-way adjoining the paved portion,

for any purpose, including placing on the adjoining right-of-way

a gas station, garage, store, hotel, restaurant, parking

facility, railroad track, billboard, livestock pasturage,

telephone line or facility, telecommunication line or facility,

data transmission line or facility, and electric line or

facility, under terms set by the authority.

(b) Tolls must be set so that the aggregate of tolls from an

authority's turnpike project or system, together with other

revenue of the turnpike project or system:

(1) provides revenue sufficient to pay:

(A) the cost of maintaining, repairing, and operating the

turnpike project or system; and

(B) the principal of and interest on the bonds issued for the

turnpike project or system as those bonds become due and payable;

and

(2) creates reserves for a purpose listed under Subdivision (1).

(c) Tolls are not subject to supervision or regulation by any

state agency or other local governmental entity.

(d) Tolls and other revenue derived from a turnpike project or

system for which bonds are 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 bond

proceedings, shall be set aside at regular intervals as may be

provided in the bond resolution 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 bond proceedings.

(e) Use and disposition of money to the credit of the sinking

fund is subject to the bond proceedings.

(f) To the extent permitted under the applicable bond

proceedings, revenue from one turnpike project of an authority

may be used to pay the cost of other turnpike projects of the

authority.

(g) An authority may not use revenue from its turnpike projects

in a manner not authorized by this chapter. Revenue generated

from a turnpike project may not be applied for a purpose or to

pay a cost other than a cost or purpose that is reasonably

related to or anticipated to be for the benefit of a turnpike

project.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.24, eff. Sept. 1,

1997.

Sec. 366.174. AUTHORITY REVOLVING FUND. (a) An authority may

maintain a revolving fund to be held in trust by a banking

institution chosen by the authority separate from any other funds

and administered by the authority's board.

(b) An authority may transfer into its revolving fund money from

any permissible source, including:

(1) money from a turnpike project if the transfer does not

diminish the money available for the project or the system, if

any, of which it is a part to less than an amount required to be

retained by the bond proceedings pertaining to the project or

system;

(2) money received by the authority from any source and not

otherwise committed, including money from the transfer of a

turnpike project or system or sale of authority assets;

(3) money received from the state highway fund; and

(4) contributions, loans, grants, or assistance from the United

States, another state, a political subdivision of this state, a

foreign governmental entity, including the United Mexican States

or a state of the United Mexican States, a local governmental

entity, any private enterprise, or any person.

(c) The authority may use money in the revolving fund to:

(1) finance the acquisition, construction, maintenance, or

operation of a turnpike project or system, including the

extension, expansion, or improvement of a project or system;

(2) provide matching money required in connection with any

federal, state, local, or private aid, grant, or other funding,

including aid or funding by or with public-private partnerships;

(3) provide credit enhancement either directly or indirectly for

bonds issued to acquire, construct, extend, expand, or improve a

turnpike project or system;

(4) provide security for or payment of future or existing debt

for the design, acquisition, construction, operation,

maintenance, extension, expansion, or improvement of a turnpike

project or system;

(5) borrow money and issue promissory notes or other

indebtedness payable out of the revolving fund for any purpose

authorized by this chapter; and

(6) provide for any other reasonable purpose that assists in the

financing of an authority as authorized by this chapter.

(d) Money spent or advanced from the revolving fund for a

turnpike project or system must be reimbursed from the money of

that turnpike project or system, and there must be a reasonable

expectation of