relating to the creation of freight rail districts; granting
authority to issue bonds or other similar obligations to create
public debt; granting the power of eminent domain.
SECTION 1.  Title 5, Transportation Code, is amended by
adding Subtitle I to read as follows:
SUBTITLE I.  SPECIAL DISTRICTS
CHAPTER 171.  FREIGHT RAIL DISTRICTS
SUBCHAPTER A.  GENERAL PROVISIONS
(1)  "Board" means the district's board of directors.
(2)  "Bonds" has the meaning assigned by Chapter 623,
Acts of the 67th Legislature, Regular Session, 1981 (Article 6550c,
Vernon's Texas Civil Statutes).
(3)  "District" means a freight rail district created
under this chapter.
(4)  "Rail facilities" has the meaning assigned by
Chapter 623, Acts of the 67th Legislature, Regular Session, 1981
(Article 6550c, Vernon's Texas Civil Statutes), except that the
term includes property and interests necessary or convenient for
the provision of a nonrural rail transportation system.
(5)  "Revenues" has the meaning assigned by Chapter
623, Acts of the 67th Legislature, Regular Session, 1981 (Article
6550c, Vernon's Texas Civil Statutes).
Sec. 171.002.  APPLICABILITY OF RURAL RAIL TRANSPORTATION
DISTRICTS LAW.  (a)  Except as provided by this chapter, Sections
2-9, Chapter 623, Acts of the 67th Legislature, Regular Session,
1981 (Article 6550c, Vernon's Texas Civil Statutes), apply to a
district as if the district were created under that chapter.
(b)  For purposes of applying Chapter 623, Acts of the 67th
Legislature, Regular Session, 1981 (Article 6550c, Vernon's Texas
Civil Statutes), to a district created under this chapter, a
reference to "rail facilities" in Chapter 623 means "rail
facilities" as defined by Section 171.001.
(c)  For purposes of applying Chapter 623, Acts of the 67th
reference in Chapter 623 to "eligible county" means a county that
created the district.
[Sections 171.003-171.050 reserved for expansion]
SUBCHAPTER B.  CREATION
Sec. 171.051.  APPLICABILITY TO CERTAIN COUNTIES.  A
district may be created only in a county with a population of 3.3
million or more and counties adjacent to such a county.
Sec. 171.052.  CREATION BY COUNTIES AND MUNICIPALITIES.  (a)
The governing body of one or more counties and the most populous
municipality in the most populous county may by concurrent order or
ordinance create a district.  At the time of creation, a district
(1)  a county with a population of 3.3 million or more;
(2)  that municipality.
(b)  The order or ordinance creating the district:
(1)  must specify:
(A)  the number of district directors and who
appoints the directors; and
(B)  the method of selecting the board's presiding
officer; and
(2)  may specify terms and conditions that are not
expressly inconsistent with this chapter.
(c)  If the most populous county in the district contains a
countywide navigation district and the presiding officer of the
navigation district is jointly appointed by that county and the
most populous municipality in that county, the order or ordinance
creating the district must specify that:
(1)  the presiding officer of the navigation district
is a director of the freight rail district; and
(2)  at least one director must be jointly appointed by
the mayors of the municipalities in the district, except for the
mayor of the most populous municipality in the most populous
county.
(d)  The common law doctrine of incompatibility does not
apply to a director serving under Subsection (c)(1) with regard to
the director's service for the freight rail district or for the
navigation district.
Sec. 171.053.  INTERMUNICIPAL COMMUTER RAIL DISTRICT
POWERS.  The governing bodies of the county or counties and of the
most populous municipality in the most populous county may provide
that the district may exercise the powers of an intermunicipal
commuter rail district created under Article 6550c-1, Revised
Statutes, by specifying in the concurrent order or ordinance
creating the district that those powers may be exercised by the
Sec. 171.054.  DISTRICT TERRITORY.   The district consists
of the territory of each county that created the district and the
territory of the most populous municipality in the most populous
county if that municipality's territory is located in more than one
SUBCHAPTER C.  BOARD OF DIRECTORS
Sec. 171.101.  COMPOSITION OF BOARD; PRESIDING OFFICER.  The
board consists of directors, including a presiding officer, as
provided in the order or ordinance creating the district under
Section 171.052(b).
Sec. 171.102.  EX OFFICIO NONVOTING DIRECTOR; TEXAS
TRANSPORTATION COMMISSION.  The Texas Transportation Commission
may appoint to the board a representative to serve as a nonvoting ex
officio director.
Sec. 171.103.  CONFLICT OF INTEREST.  Chapter 171, Local
Government Code, governs conflicts of interest for directors.
SUBCHAPTER D.  POWERS AND DUTIES
Sec. 171.151.  REGIONAL MOBILITY AUTHORITY POWERS.  A
district may exercise the transportation project powers of a
regional mobility authority under Chapter 370 for a transportation
project that is a freight rail facility.
Sec. 171.152.  GENERAL CONTRACT POWERS.  A district may
contract with any person, including:
(1)  a county or municipality, including a county or
municipality that created the district;
(2)  this state or any political subdivision of this
(3)  the United States; or
(4)  a railroad.
Sec. 171.153.  EXERCISE OF POWERS IN OTHER COUNTIES.  The
commissioners court of a county that is not in the district may
authorize the district to exercise its powers in that county if that
county is adjacent to a county that is in the district.
Sec. 171.154.  INTERMUNICIPAL COMMUTER RAIL POWERS.  (a)
The district may exercise the powers of an intermunicipal commuter
rail district created under Article 6550c-1, Revised Statutes, only
if the concurrent order or ordinance creating the district
specifies that the district may exercise those powers.  The order or
ordinance may not grant the district the power to impose a tax.
(b)  In the event of a conflict between this chapter and a
power granted by Article 6550c-1, Revised Statutes, this chapter
controls.  In the event of a conflict between Article 6550c-1 and
(Article 6550c, Vernon's Texas Civil Statutes), Article 6550c
controls over Article 6550c-1.
Sec. 171.155.  MUNICIPAL LIMIT ON DISTRICT'S POWER OF
EMINENT DOMAIN.  If the property to be condemned is located in the
corporate limits of one or more municipalities, the district may
exercise the power of eminent domain to condemn the property only if
each municipality in which the property is located consents to the
exercise of that power.
SUBCHAPTER E.  RELATIONSHIP BETWEEN DISTRICT AND AFFECTED RAILROADS
Sec. 171.201.  AGREEMENT WITH RAILROAD.  (a)  Before a
district may undertake a freight or commuter rail project that
materially affects the tracks, facilities, or other property of a
railroad that owns track in the district, the district and railroad
must enter into a written agreement regarding the scope,
operational impact, financing, and other elements of the project.
The district may not undertake the project unless the district and
the railroad agree on these terms.
(b)  The agreement may include provisions for the railroad's
financial participation in the project according to the benefits
the railroad derives from the project.
Sec. 171.202.  PRESERVATION OF REGULATORY STRUCTURE AND
OWNERSHIP RIGHTS.  A district project may be conducted only in a
manner that preserves the existing rail industry regulatory
structure and railroad ownership rights.
Sec. 171.203.  COMPETITIVE RELATIONSHIPS.  The district may
not undertake a project that changes the existing competitive
relationships between and among railroads.
Sec. 171.204.  SERVICE TO CUSTOMERS.  The district may not
undertake a project that negatively affects a railroad's present or
future ability to provide consistent service to its customers.
Sec. 171.205.  USE OF DISTRICT RAIL FACILITIES.  This
chapter does not prohibit the district from authorizing multiple
freight railroads to operate on district rail facilities.
Sec. 171.206.  LIMITATION ON EMINENT DOMAIN.  The power of
eminent domain may not be exercised under this chapter to condemn a
right-of-way owned by a railroad.
Sec. 171.207.  EXCEPTION; GRADE SEPARATION PROJECTS.  This
subchapter does not apply to a rail-roadway or rail-rail grade
separation project.
SUBCHAPTER F.  FINANCIAL PROVISIONS
Sec. 171.251.  PLEDGE OF REVENUES.  A district may secure and
pledge revenues derived from any source to secure the payment of
district bonds.
Sec. 171.252.  PURCHASE CONTRACTS.  Subchapter O, Chapter
60, Water Code, as added by Chapter 307, Acts of the 78th
Legislature, Regular Session, 2003, applies to the district as if
the district were a navigation district under that subchapter.  For
the purposes of applying that subchapter to the district under this
section, "commission" means the board.
Sec. 171.253.  AD VALOREM AND SALES AND USE TAXES
PROHIBITED.  A district may not impose an ad valorem tax or a sales
and use tax.
Sec. 171.254.  FEES CHARGED TO RAILROADS.  (a)  A district
may not impose a fee or other charge on a railroad unless the
railroad agrees to the fee or other charge.
(b)  This section does not prohibit a railroad from
voluntarily contributing to the cost of rail facilities or prohibit
the district from charging for the use of a rail facility by a
railroad or other person.
Sec. 171.255.  PORT TERMINAL RAILROAD ASSOCIATION RAIL
FACILITIES.  The district may not spend money, including money from
state or federal grants, to purchase a rail facility operated by a
port terminal railroad.
SUBCHAPTER G.  WITHDRAWAL; DISSOLUTION
Sec. 171.301.  WITHDRAWAL.  (a)  A county or municipality
that created the district may petition the board for approval to
withdraw from the district.  The board may approve the petition only
(1)  the district has no outstanding bonds; or
(2)  the district has debt other than bonds and the
board finds that the withdrawal of the county or municipality will
not materially affect the ability of the district to repay the debt.
(b)  If the board approves the petition, the county or
municipality that withdrew from the district is not entitled to
appoint directors to the board.  The remaining counties or
municipality by concurrent order or ordinance shall allocate among
themselves the authority of the withdrawing county or municipality
to appoint directors to the board.
Sec. 171.302.  DISSOLUTION.  In addition to the dissolution
procedures provided by Chapter 623, Acts of the 67th Legislature,
Regular Session, 1981 (Article 6550c, Vernon's Texas Civil
Statutes), the board may dissolve a district if:
(1)  all district liabilities have been paid or
adequate provision has been made for the payment of all
liabilities;
(2)  the district is not a party to any lawsuits or
adequate provision has been made for the satisfaction of any
judgment or order that may be entered against the district in a
lawsuit to which the district is a party; and
(3)  the district has commitments from other
governmental entities to assume jurisdiction of all district rail
facilities.
SECTION 2.  This Act takes effect immediately if it receives
provided by Section 39, Article III, Texas Constitution.  If this
______________________________              ______________________________
President of the Senate                               Speaker of the House
20, 2005, by the following vote:  Yeas 145, Nays 0, 1 present, not
No. 2958 on May 26, 2005, by the following vote:  Yeas 143, Nays 0,
amendments, on May 24, 2005, by the following vote:  Yeas 31, Nays