Sec. 370.031.  CREATION OF A REGIONAL MOBILITY AUTHORITY. 

          (a)  At the request of one or more counties, the commission by order may authorize the creation of a regional mobility authority for the purposes of constructing, maintaining, and operating transportation projects in a region of this state.  An authority is governed in accordance with Subchapter F.
          (b)  An authority may not be created without the approval of the commission under Subsection (a) and the approval of the commissioners court of each county that will be a part of the authority.

Sec. 370.0315.  ADDITION AND WITHDRAWAL OF COUNTIES. 

          (a)  One or more counties may petition the commission for approval to become part of an existing
authority.  The commission may approve the petition only if:
                    (1)  the board has agreed to the addition; and                        
                    (2)  the commission finds that the affected political subdivisions in the county or counties will be adequately represented on the board.
          (b)  One or more counties may petition the commission for approval to withdraw from an authority.  The commission may approve the petition only if:
                    (1)  the authority has no bonded indebtedness; or                     
                    (2)  the authority has debt other than bonded indebtedness, but the board has agreed to the withdrawal.
          (c)  A county may not become part of an authority or withdraw from an authority without the approval of the commission.

Sec. 370.032.  NATURE OF REGIONAL MOBILITY AUTHORITY. 

          (a)  An authority 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 Section 101.001, 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 transportation 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.

Sec. 370.033.  GENERAL POWERS. 

          (a)  An authority, through its board, 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, finance, acquire, construct, maintain, repair, and operate transportation projects, individually or as one or more systems, provided that a transportation project that is subject to Subpart C, 23 C.F.R. Part 450, is:
                              (A)  included in the plan approved by the applicable metropolitan planning organization; and
                              (B)  consistent with the statewide transportation plan and the statewide transportation improvement program;
                    (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 a similar authority, another governmental entity, or an agency 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 powers and duties under this chapter;
                    (7)  cooperate and work directly with property owners and governmental entities and officials to support an activity required to promote or develop a transportation project;
                    (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 other persons as the authority considers necessary or useful;
                    (9)  notwithstanding Sections 221.003 and 222.031 and subject to Subsections (j) and (m), apply for, directly or indirectly receive and spend loans, gifts, grants, and other contributions for any purpose of this chapter, including the construction of a transportation project, and receive and spend 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, a subdivision of this state, or a governmental entity or private entity, to be used for the purposes for which the grants, loans, or contributions are made, and enter into any agreement
necessary for the grants, loans, or contributions;
                    (10)  install, construct, or contract for the construction of public utility facilities, direct the time and manner of construction of a public utility facility in, on, along, over, or under a transportation project, or request the removal or relocation of a public utility facility in, on, along, over, or under a transportation project;
                    (11)  organize a corporation under Chapter 431 for the promotion and development of transportation projects;
                    (12)  adopt and enforce rules not inconsistent with this chapter for the use of any transportation project, including tolls, fares, or other user fees, speed and weight limits, and traffic and other public safety rules, provided that an authority must consider the same factors that the Texas Turnpike Authority division of the department must consider in altering a prima facie speed limit under Section 545.354;
                    (13)  enter into leases, operating agreements, service agreements, licenses, franchises, and similar agreements with a public or private party governing the party's use of all or any portion of a transportation project and the rights and obligations of the authority with respect to a transportation project;
                    (14)  borrow money from or enter into a loan agreement or other arrangement with the state infrastructure bank; and
                    (15)  do all things necessary or appropriate to carry out the powers and duties expressly granted or imposed by this chapter.
          (b)  Except as provided by this subsection, property that is a part of a transportation project of an authority is not subject to condemnation or the exercise of the power of eminent domain by any person, including a governmental entity.  The department may condemn property that is a part of a transportation project of an authority if the property is needed for the construction, reconstruction, or expansion
of a state highway or rail facility.
          (c)  An authority may, if requested by the commission, perform any function not specified by this chapter to promote or develop a transportation project in the authority's area of jurisdiction.
          (d)  An authority may sue and be sued and plead and be impleaded in its own name.
          (e)  An authority may rent, lease, franchise, license, or make portions of its properties available for use by others in furtherance of its powers under this chapter by increasing the feasibility or the revenue of a transportation project.  If the transportation project is a project other than a public utility facility an authority may rent, lease, franchise or make property available only to the extent that the renting, lease or franchise benefits the users of the project.
          (f)  An authority and a governmental entity may enter into a contract, agreement, interlocal agreement, or other similar arrangement under which the authority may plan, design, construct, or operate a transportation project on behalf of the governmental entity.  An authority may enter into a contract with the department under which the authority will plan, develop, operate, or maintain a transportation project on behalf of the department, subject to the transportation project being in the authority's area of jurisdiction.
          (g)  Payments to be made to an authority under a contract described by Subsection (f) constitute operating expenses of the transportation project or system that is to be operated under the contract.  The contract may extend for the number of years as agreed to by the parties.
          (h)  An authority shall adopt a written drug and alcohol policy restricting the use of controlled substances by officers and 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 a controlled substance 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.
          (i)  An authority shall adopt written procedures governing its procurement of goods and services that are consistent with general laws applicable to the authority.
          (j)  An authority may not apply for federal highway or rail funds without the approval of the department.
          (k)  An authority may not directly provide water, wastewater, natural gas, petroleum pipeline, electric transmission, electric distribution, telecommunications, information, or cable television services.
          (l)  If an authority establishes an airport in Central Texas, the authority may not establish the airport at a location prohibited to the department by Section 21.069(c).
          (m)  If an authority receives money from the general revenue fund or the state highway fund it may use the money only to acquire, design, finance, construct, operate, or maintain a turnpike project under Section 370.003(14)(A) or (D).
          (n)  Nothing in this chapter or any contractual right obtained under a contract with an authority under this chapter supersedes or renders ineffective any provision of another law applicable to the owner or operator of a public utility facility, including any provision of the utilities code regarding licensing, certification, or regulatory jurisdiction of the Public Utility Commission of Texas or the Railroad Commission of Texas.

Sec. 370.034.  ESTABLISHMENT OF TRANSPORTATION 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 transportation projects as one operational and financial enterprise, it may create a system made up of those transportation 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 transportation projects as additions to or expansions of a system if the authority determines that the transportation project could most efficiently and economically be acquired or 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 transportation project that is not a part of the system or with the revenue of another system.

Sec. 370.035.  CONVERSION AND TRANSFER OF STATE HIGHWAY SYSTEM PROJECTS. 

          (a)  The commission by order may convert a segment of the free state highway system to a turnpike project and transfer that segment to an authority, or may transfer an existing turnpike project that is part of the state highway system, whether previously tolled or not, to an authority if:
                    (1)  the commission determines that the proposed transfer is an integral part of the region's overall plan to improve mobility in the region;
                    (2)  the commission determines that the public has a reasonable alternative route on nontoll roads;
                    (3)  the authority agrees to assume all liability and responsibility for the maintenance and operation of the turnpike project on its transfer; and
                    (4)  approved by the governor.  
          (b)  An authority shall reimburse the commission for the cost of a transferred turnpike project unless the commission determines that the transfer will result in a substantial net benefit to the state, the department, and the traveling public that equals or exceeds that cost.
          (c)  In computing the cost of the turnpike project, the commission shall:
                    (1)  include the total amount spent by the department for the original construction of the turnpike project, including the costs associated with the preliminary engineering and design engineering for plans, specifications, and estimates, the acquisition of necessary rights-of-way, and actual construction of the turnpike project and all necessary appurtenant facilities; and
                    (2)  consider the anticipated future costs of expanding, improving, maintaining, operating, or extending the turnpike project to be incurred by the authority and not by the department if the turnpike project is transferred.
          (d)  The commission may, at the time a turnpike project is transferred, remove the turnpike project from the state highway system.  After a transfer, the commission has no liability, responsibility, or duty for the maintenance or operation of the turnpike project.
          (e)  Before transferring a turnpike project that is part of the state highway system under this section, the commission shall conduct a public hearing at which interested persons shall be allowed to speak on the proposed transfer.  Notice of the hearing must be published in the Texas Register, one or more newspapers of general circulation in the counties in which the turnpike project is located, and a newspaper, if any, published in the counties of the applicable authority.
          (f)  The commission shall adopt rules to implement this section.  The rules shall include criteria and guidelines for the approval of a transfer of a segment of a highway.
          (g)  An authority shall adopt rules providing criteria and guidelines for approval of the transfer of a turnpike project under this section.
          (h)  The commission may not transfer the Queen Isabella Causeway in Cameron County to an authority under this section.

Sec. 370.036.  TRANSFER OF BONDED TURNPIKE PROJECT TO DEPARTMENT. 

          (a)  An authority may transfer to the department a turnpike project of the authority that has outstanding bonded indebtedness if the commission:
                    (1)  agrees to the transfer; and                                      
                    (2)  agrees to assume the outstanding bonded indebtedness.          
          (b)  The commission may assume the outstanding bonded indebtedness only if the assumption:
                    (1)  is not prohibited under the terms of an existing trust agreement or indenture securing bonds or other obligations issued by the commission for another project;
                    (2)  does not prevent the commission from complying with covenants of the commission under an existing trust agreement or indenture; and
                    (3)  does not cause a rating agency maintaining a rating on outstanding obligations of the commission to lower the existing rating.
          (c)  If the commission agrees to the transfer under Subsection (a), the authority shall convey the turnpike project and any real property acquired to construct or operate the turnpike project to the department.
          (d)  At the time of a conveyance under this section, the commission shall designate the turnpike project as part of the state highway system. After the designation, the authority has no liability, responsibility, or duty to maintain or operate the transferred turnpike project.

Sec. 370.037.  TRANSFER OF FERRY CONNECTING STATE HIGHWAYS. 

          (a)  The commission by order may transfer a ferry operated under Section 342.001 to an authority if:
                    (1)  the commission determines that the proposed transfer is an integral part of the region's overall plan to improve mobility in the region; and
                    (2)  the authority:                                                   
                              (A)  agrees to the transfer; and                                     
                              (B)  agrees to assume all liability and responsibility for the maintenance and operation of the ferry on its transfer.
          (b)  An authority shall reimburse the commission for the cost of a transferred ferry unless the commission determines that the transfer will result in a substantial net benefit to the state, the department, and the traveling public that equals or exceeds that cost.
          (c)  In computing the cost of the ferry, the commission shall:       
                    (1)  include the total amount spent by the department for the original construction of the ferry, including the costs associated with the preliminary engineering and design engineering for plans, specifications, and estimates, the acquisition of necessary rights-of-way, and actual construction of the
ferry and all necessary appurtenant facilities; and
                    (2)  consider the anticipated future costs of expanding, improving, maintaining, or operating the ferry to be incurred by the authority and not by the department if the ferry is transferred.
          (d)  The commission shall, at the time the ferry is transferred, remove the ferry from the state highway system.  After a transfer, the commission has no liability, responsibility, or duty for the maintenance or operation of the ferry.
          (e)  Before transferring a ferry that is a part of the state highway system under this section, the commission shall conduct a public hearing at which interested persons shall be allowed to speak on the proposed transfer.  Notice of the hearing must be published in the Texas Register, one or more newspapers of general circulation in the counties in which the ferry is located, and a newspaper, if any, published in the counties of the applicable authority.
          (f)  The commission shall adopt rules to implement this section.  The rules must include criteria and guidelines for the approval of a transfer of a ferry.
          (g)  An authority shall adopt rules establishing criteria and guidelines for approval of the transfer of a ferry under this section.
          (h)  An authority may temporarily charge a toll for use of a ferry transferred under this section to pay the costs necessary for an expansion of the ferry.  An authority may permanently charge a toll for use of ferry facilities that are an expansion of the ferry transferred under this section.
          (i)  The commission may not transfer a ferry under this section if the ferry is located in a municipality with a population of 5,000 or less unless the city council of the municipality approves the transfer.

Sec. 370.038.  COMMISSION RULES. 

          (a)  The commission shall adopt rules that:
                    (1)  govern the creation of an authority;                             
                    (2)  govern the commission's approval of a project under Section 370.187 and other commission approvals required by this chapter;
                    (3)  establish design and construction standards for a transportation project that will connect with a highway in the state highway system or a department rail facility;
                    (4)  establish minimum audit and reporting requirements and standards;
                    (5)  establish minimum ethical standards for authority directors and employees; and
                    (6)  govern the authority of an authority to contract with the United Mexican States or a state of the United Mexican States.
          (b)  The commission shall appoint a rules advisory committee to advise the department and the commission on the development of the commission's initial rules required by this section.  The committee must include one or more members representing an existing authority, if applicable.  Chapter 2110, Government Code, does not apply to the committee.  This subsection expires on the date the commission adopts initial rules under this section.

Sec. 370.071.  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 transportation project by:
                    (1)  using legally available revenue derived from an existing transportation project;
                    (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 transportation project; or
                    (3)  pledging to the payment of the bonds or a loan agreement legally available revenue anticipated to be derived from the operation of transportation projects or revenue legally available to the authority from another source.
          (b)  Money spent under this section for a proposed transportation project must be reimbursed to the transportation project from which the money was spent from the proceeds of bonds issued for the acquisition and construction of the proposed transportation project.
          (c)  The use of any money of a transportation project to study the feasibility of another transportation project or used to repay any money used for that purpose does not constitute an operating expense of the transportation project producing the revenue and may be paid only from the surplus money of the transportation project as determined by the authority.

Sec. 370.072.  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 a transportation project.
          (b)  An authority may transfer an amount from a surplus fund established for a transportation project to the authority's feasibility study fund if the remainder of the surplus fund after the transfer is not less than any minimum amount required by the bond proceedings to be retained for that transportation project.
          (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 transportation project;
                    (2)  the financing of the improvement, extension, or expansion of an existing transportation project; and
                    (3)  private participation, as authorized by law, in the financing of a proposed transportation project, the refinancing of an existing transportation project or system, or the improvement, extension, or expansion of a transportation project.
          (d)  Money spent under Subsection (c) for a proposed transportation project must be reimbursed from the proceeds of revenue bonds issued for, or other proceeds that may be used for, the acquisition, construction, improvement, extension, expansion, or operation of the transportation project.
          (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.

Sec. 370.073.  FEASIBILITY STUDY BY MUNICIPALITY, COUNTY, OTHER GOVERNMENTAL ENTITY, OR PRIVATE GROUP. 

          (a)  One or more municipalities, counties, or other governmental entities, a combination of municipalities, counties, and other 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 or construction of a proposed transportation project by an authority;
                    (2)  the improvement, extension, or expansion of an existing transportation project of the authority; 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 transportation project by an authority.
          (b)  Money spent under Subsection (a) for a proposed transportation project 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 revenue bonds issued for or other proceeds that may be used for the acquisition, construction, improvement, extension, expansion, maintenance, repair, or operation of the transportation project.

Sec. 370.111.  TRANSPORTATION REVENUE BONDS. 

          (a)  An authority, by bond resolution, may authorize the issuance of bonds to pay all or part of the cost of a transportation project, to refund any bonds previously issued for the transportation project, or to pay for all or part of the cost of a transportation project 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 provided by the bond resolution and beginning on the dates provided by the bond resolution and as authorized by law, or bear no interest;
                    (3)  mature at the time or times provided by the bond resolution, 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 any restrictions provided in the bond resolution.
          (e)  Additional bonds may be issued in the same manner to pay the costs of a transportation project.  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 transportation project.  In addition, an authority may issue bonds for a transportation project secured by a lien on the revenue of the transportation project subordinate to the lien on the revenue securing other bonds issued for the transportation project.
          (f)  If the proceeds of a bond issue exceed the cost of the transportation project 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.
          (i)  Bonds issued under this chapter shall be considered authorized investments under Chapter 2256, Government Code, for this state, any governmental entity, and any other public entity proposing to invest in the bonds.

Sec. 370.112.  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 a requirement, restriction, or procedural provision 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.

Sec. 370.113.  PAYMENT OF BONDS; STATE AND COUNTY CREDIT. 

          (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 transportation project for which the bonds are issued;
                    (2)  payments made under an agreement with the commission, the department, or other governmental entity as provided by Subchapter G;
                    (3)  money derived from any other source available to the authority, other than money derived from a transportation 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 transportation project or system has been pledged for that purpose; and
                    (4)  amounts received under a credit agreement relating to the transportation project for which the bonds are issued.
          (b)  Bonds issued under this chapter do not constitute a debt of this state or of a governmental entity, or a pledge of the faith and credit of this state or of a governmental entity.  Each bond must contain on its face a statement to the effect that the state, the authority, or any governmental entity is 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 this state or of any governmental entity are pledged to the payment of the principal of or interest on the bond.  This subsection does not apply to a governmental entity that has entered into an agreement under Section 370.303.
          (c)  An authority may not incur a financial obligation that cannot be paid from revenue derived from owning or operating the authority's transportation projects or from other revenue provided by law.

Sec. 370.114.  EFFECT OF LIEN. 

          (a)  A lien on or a pledge of revenue from a transportation project 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 each 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 a 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.

Sec. 370.115.  BOND INDENTURE. 

          (a)  Bonds issued by an authority 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 revenues to be received but may not convey or mortgage any part of a transportation project.
          (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 transportation project; 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 a duty of the authority.
          (d)  An expense incurred in carrying out a trust agreement may be treated as part of the cost of operating the transportation 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 or the board to impose and collect tolls, fares, fees, 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 transportation project or system.

Sec. 370.116.  APPROVAL OF BONDS BY ATTORNEY GENERAL. 

          (a)  An authority shall submit to the attorney general for examination the record of proceedings relating to bonds authorized under this chapter.  The record shall include the bond proceedings and any contract securing or providing revenue for the payment of the bonds.
          (b)  If the attorney general determines that the bonds, the bond proceedings, and any supporting contract are authorized by law, the attorney general shall approve the bonds and deliver to the comptroller:
                    (1)  a copy of the legal opinion of the attorney general stating the approval; and
                    (2)  the record of proceedings relating to the authorization of the bonds.
          (c)  On receipt of the legal opinion of the attorney general and the record of proceedings relating to the authorization of the bonds, the comptroller shall register the record of proceedings.
          (d)  After approval by the attorney general, the bonds, the bond proceedings, and any supporting contract are valid, enforceable, and incontestable in any court or other forum for any reason and are binding obligations according to their terms for all purposes.

Sec. 370.117.  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 this state or a political subdivision of this state to the extent of the lesser of the face value of the bonds or their market value.

Sec. 370.118.  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.

Sec. 370.161.  TRANSPORTATION PROJECTS EXTENDING INTO OTHER COUNTIES. 

          (a)  An authority may acquire, construct, operate, maintain, expand, or extend a transportation project only in:
                    (1)  a county that is a part of the authority;                        
                    (2)  a county in this state that is not a part of the authority if: 
                              (A)  the transportation project in that county is a continuation of a transportation project of the authority extending from a county adjacent to that county;
                              (B)  the county is given an opportunity to become part of the authority on terms and conditions acceptable to the authority and that county; and
                              (C)  the commissioners court of the county agrees to the proposed acquisition, construction, operation, maintenance, expansion, or extension of the transportation project in that county; or
                    (3)  a county in another state or the United Mexican States if:     
                              (A)  each governing body of a political subdivision in which the project will be located agrees to the proposed acquisition, construction, operation, maintenance, expansion, or extension;
                              (B)  the project will bring significant benefits to the counties in this state that are part of the authority;
                              (C)  the county in the other state is adjacent to a county that is:
                                        (i)  part of the authority constructing, operating, maintaining, expanding, or extending the transportation project; and
                                        (ii)  has a municipality with a population of 500,000 or more; and
                              (D)  the governor approves the proposed construction, operation, maintenance, expansion, or extension.
          (b)  A municipality that borders the United Mexican States and has a population of 500,000 or more has the same authority as a county to create and participate in an authority.  A municipality creating or participating in an authority has the same powers and duties as a county participating in an authority, the governing body of the municipality has the same powers and duties as the commissioners court of a county participating in an authority, and an elected member of the municipality's governing body has the same powers and duties as a commissioner of a county that is participating in an authority.

Sec. 370.162.  POWERS AND PROCEDURES OF AUTHORITY IN ACQUIRING PROPERTY. 

          (a)  An authority may construct or improve a transportation 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 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.

Sec. 370.163.  ACQUISITION OF PROPERTY. 

          (a)  Except as otherwise provided by this subchapter, the governing body of an authority has the same powers and duties relating to the condemnation and acquisition of real property for a transportation project that the commission and the department have under Subchapter D, Chapter 361, and Section 361.233 relating to the condemnation or purchase of real property for a turnpike project.  Notwithstanding Section 361.135(a), the concurrence of the commission is not a prerequisite to the exercise of the power of condemnation by the governing body of the authority.
          (b)  An authority's acquisition of any property of the commission under this or another section of this chapter or an authority's relocation, rerouting, disruption, or alteration of a facility of the commission is considered a conversion of a state highway system under Section 370.035 and is subject to each requirement, condition, or limitation provided by that section.
          (c)  The authority granted under this section does not include the authority to condemn a bridge connecting this state to the United Mexican States that is owned by a county or municipality.

Sec. 370.164.  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)  An authority may not file a declaration of taking before the completion of all:
                    (1)  environmental documentation, including a final environmental impact statement or a record of decision, that is required by federal or state law;
                    (2)  public hearings and meetings, including those held in connection with the environmental rules adopted by the authority under Section 370.188, that are required by federal or state law; and
                    (3)  notifications required by the rules adopted by the authority under Section 370.188.
          (d)  The declaration of taking must include:                           
                    (1)  a specific reference to the legislative authority for the condemnation;
                    (2)  a description and plot plan of the real property to be condemned, including the following information if applicable:
                              (A)  the municipality in which the property is located; 
                              (B)  the street address of the property; and                         
                              (C)  the lot and block number of the property;                       
                    (3)  a statement of the property interest to be condemned;          
                    (4)  the name and address of each property owner that the 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 transportation project.
          (e)  A deposit to the registry of the court of an amount equal to the appraised value as determined by the authority of the property to be condemned must accompany the declaration of taking.
          (f)  The date on which the declaration is filed is the date of taking for the purpose of assessing damages to which a property owner is entitled.
          (g)  After a declaration of taking is filed, the case shall proceed as any other case in eminent domain under Chapter 21, Property Code.

Sec. 370.165.  POSSESSION OF PROPERTY. 

          (a)  Immediately on the filing of a declaration of taking, the 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 pending the litigation.
          (b)  If the condemned property is a homestead or a portion of a homestead as defined by Section 41.002, Property Code, the authority may not take possession before the 91st day after the date of service under Subsection (a).
          (c)  A property owner or tenant who refuses to vacate the property or yield possession is subject to forcible entry and detainer under Chapter 24, Property Code.

Sec. 370.166.  PARTICIPATION PAYMENT FOR REAL PROPERTY. 

          (a)  As an alternative to paying for an interest in real property or a real property right with a single fixed payment, the authority may, with the owner's consent, pay the owner by means of a participation payment.
          (b)  A right to receive a participation payment under this section is subordinate to any right to receive a fee as payment on the principal of or interest on a bond that is issued for the construction of the applicable segment.
          (c)  In this section, "participation payment" means an intangible legal right to receive a percentage of one or more identified fees related to a segment constructed by the authority.

Sec. 370.167.  SEVERANCE OF REAL PROPERTY. 

          (a)  If a transportation project of an authority 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 the authority.

Sec. 370.168.  ACQUISITION OF RIGHTS IN PUBLIC REAL PROPERTY. 

          (a)  An authority may use real property, including submerged land, streets, alleys, and easements, owned by this state or a local government that the authority considers necessary for the construction or operation of a transportation project.
          (b)  This state or a local government having charge of public real property may consent to the use of the property for a transportation project.
          (c)  Except as provided by Section 370.035, this state or a local government may convey, grant, or lease to an authority real property, including highways and other real property devoted to public use and rights or easements in real property, that may be necessary or convenient to accomplish a purpose of the authority, including the construction or operation of a transportation project.  A conveyance, grant, or lease under this section may be made without advertising, court order, or other action other than the normal action of this state or local government necessary for a conveyance, grant, or lease.
          (d)  This section does not deprive the School Land Board of the power to execute a lease for the development of oil, gas, and other minerals on state-owned real property adjoining a transportation project or in tidewater limits.  A lease may provide for directional drilling from the adjoining property or tidewater area.
          (e)  This section does not affect the obligation of the authority under another law to compensate this state for acquiring or using property owned by or on behalf of this state.  An authority's use of property owned by or on behalf of this state is subject to any covenants, conditions, restrictions, or limitations affecting that property.

Sec. 370.169.  COMPENSATION FOR AND RESTORATION OF PUBLIC PROPERTY. 

          (a)  Except as provided by Section 370.035, an authority may not pay compensation for public real property, parkways, streets, highways, alleys, or reservations it takes, other than:
                    (1)  a park, playground, or designated environmental preserve;      
                    (2)  property owned by or on behalf of this state that under law requires compensation to this state for the use or acquisition of the property; or
                    (3)  as provided by this chapter.                                     
          (b)  Public property damaged in the exercise of a power 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 government that are necessary or convenient to construct, acquire, or efficiently operate a transportation project or system under this chapter.  This subsection does not affect the obligation of the authority under other law to compensate this state for the use or acquisition of an easement or right-of-way on property owned by or on behalf of this state.  An authority's use of property owned by or on behalf of this state is subject to any covenants, conditions, restrictions, or limitations affecting that property.

Sec. 370.170.  PUBLIC UTILITY FACILITIES. 

          (a)  An authority may adopt rules for the authority's approval of the installation, construction, relocation, and removal of a public utility facility in, on, along, over, or under a transportation project.
          (b)  If the authority determines that a public utility facility located in, on, along, over, or under a transportation project must be relocated, the utility and the authority shall negotiate in good faith to establish reasonable terms and conditions concerning the responsibilities of the parties with regard to sharing of information about the project and the planning and implementation of any necessary relocation of the public utility facility.
          (c)  The authority shall use its best efforts to provide an affected utility with plans and drawings of the project that are sufficient to enable the utility to develop plans for, and determine the cost of, the necessary relocation of a public utility facility.  If the authority and the affected utility enter into an agreement
after negotiations under Subsection (b), the terms and conditions of the agreement govern the relocation of each public utility facility covered by the agreement.
          (d)  If the authority and an affected utility do not enter into an agreement under Subsection (b), the authority shall provide to the affected utility:
                    (1)  written notice of the authority's determination that the public utility facility must be removed;
                    (2)  a final plan for relocation of the public utility facility; and
                    (3)  reasonable terms and conditions for an agreement with the utility for the relocation of the public utility facility.
          (e)  Not lat