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Statutes > Texas > Transportation-code > Title-6-roadways > Chapter-431-texas-transportation-corporation-act

TRANSPORTATION CODE

TITLE 6. ROADWAYS

SUBTITLE I. TRANSPORTATION CORPORATIONS

CHAPTER 431. TEXAS TRANSPORTATION CORPORATION ACT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 431.001. SHORT TITLE. This chapter may be cited as the

Texas Transportation Corporation Act.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.002. PURPOSES; LIBERAL CONSTRUCTION. (a) The purposes

of this chapter are:

(1) the promotion and development of public transportation

facilities and systems by new and alternative means;

(2) the expansion and improvement of transportation facilities

and systems;

(3) the creation of corporations to secure and obtain

rights-of-way for urgently needed transportation systems and to

assist in the planning and design of those systems;

(4) the reduction of burdens and demands on the limited funds

available to the commission and an increase in the effectiveness

and efficiency of the commission; and

(5) the promotion and development of transportation facilities

and systems that are public, not private, in nature, although

these facilities and systems may benefit private interests as

well as the public.

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

the purposes of this chapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.003. DEFINITIONS. In this chapter:

(1) "Board" means the board of directors of a corporation

organized under this chapter.

(2) "Corporation" means a corporation organized under this

chapter and includes a local government corporation.

(3) "Local government" means:

(A) a municipality;

(B) a county; or

(C) for purposes of Subchapter D, a navigation district,

hospital district, or hospital authority.

(4) "Local government corporation" means a corporation

incorporated as provided by Subchapter D to act on behalf of a

local government.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 2001, 77th Leg., ch. 1370, Sec. 1, eff. June 16,

2001.

Amended by:

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

241, Sec. 1, eff. May 25, 2007.

Sec. 431.004. OPEN MEETINGS. (a) A corporation is subject to

Chapter 551, Government Code.

(b) Except as provided by Subsection (c) or (d), the board shall

file notice of each meeting of the board in the same manner and

in the same location as is required of a state governmental body

under Chapter 551, Government Code.

(c) If the commission designates an area of the state in which a

corporation may act on behalf of the commission, the board shall

file notice of each meeting of the board in the same manner and

in the same location as is required of a governmental body under

Section 551.053, Government Code.

(d) The board of a local government corporation shall file

notice of each meeting of the board in the same manner and in the

same location as is required of the governing body under Chapter

551, Government Code, of the one or more local governments that

created the local government corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.005. OPEN RECORDS. The board is subject to Chapter

552, Government Code.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.006. APPLICATION OF TEXAS NON-PROFIT CORPORATION ACT.

The Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,

Vernon's Texas Civil Statutes) applies to a corporation to the

extent that the provisions of that Act are not inconsistent with

this chapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

SUBCHAPTER B. CREATION AND OPERATION OF CORPORATION

Sec. 431.021. PURPOSE OF CORPORATION. The purpose of a

corporation is limited to the promotion and development of public

transportation facilities and systems.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.022. APPLICATION. (a) Three or more individuals may

file with the commission an application for the creation of a

corporation within a designated area.

(b) Each of the individuals must be a qualified voter.

(c) The application must be in writing.

(d) The application must contain the articles of incorporation

proposed to be used in organizing the corporation.

(e) The commission may not charge a filing fee for the

application.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.023. ADOPTION OF RESOLUTION. (a) A corporation may be

created only if the commission adopts a resolution authorizing

the creation of a corporation to act on behalf of the commission.

(b) A resolution must state that the commission:

(1) determines that creation of the corporation is advisable;

and

(2) approves the articles of incorporation proposed to be used

in organizing the corporation.

(c) The commission may designate the area of the state in which

the corporation may act on behalf of the commission. The

designated area may include the territory of more than one

political subdivision of the state.

(d) The commission may authorize the creation of more than one

corporation to act within the same designated area. The

resolution authorizing each corporation must specify the public

purpose of that corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 17.04, eff. Sept.

1, 1999.

Sec. 431.024. FORM OF CORPORATION. (a) A corporation is a

nonmember, nonstock corporation.

(b) A corporation is nonprofit, and its earnings may not benefit

a private interest.

(c) A corporation may be created as a perpetual corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.025. ARTICLES OF INCORPORATION. The articles of

incorporation must state:

(1) the name of the corporation;

(2) that the corporation is a nonprofit corporation;

(3) the duration of the corporation;

(4) the specific purpose for which the corporation is organized

on behalf of the commission;

(5) that the corporation does not have any members and is a

nonstock corporation;

(6) the street address of the corporation's initial registered

office and the name of its initial registered agent at that

address;

(7) the number of directors of the initial board and the name

and address of each director;

(8) the name and street address of each incorporator;

(9) any provision for the regulation of the internal affairs of

the corporation, including any provision required or permitted by

this chapter to be in the bylaws; and

(10) that the commission has:

(A) by resolution specifically authorized the corporation to act

on its behalf to further the public purpose stated in the

resolution and in the articles of incorporation; and

(B) approved the articles of incorporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.026. DELIVERY AND FILING OF CERTIFICATE OF

INCORPORATION. (a) After the commission adopts a resolution

under Section 431.023, three originals of the articles of

incorporation shall be delivered to the secretary of state.

(b) The secretary of state shall determine whether the articles

of incorporation conform to this chapter. On determination that

the articles conform to this chapter and on receipt of a $25 fee,

the secretary of state shall:

(1) endorse on each original the word "filed" and the date of

the filing;

(2) file one of the originals in the secretary's office;

(3) issue two certificates of incorporation;

(4) attach to each certificate an original of the articles of

incorporation; and

(5) deliver a certificate of incorporation and the attached

articles of incorporation to:

(A) each incorporator or its representative; and

(B) the commission.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.027. EFFECT OF ISSUANCE OF CERTIFICATE OF

INCORPORATION. (a) A corporation's existence begins when its

certificate of incorporation is issued.

(b) After the issuance of the certificate of incorporation, the

incorporation may not be contested for any reason.

(c) A certificate of incorporation is conclusive evidence that:

(1) all conditions for incorporation required of the

incorporators and the commission are satisfied; and

(2) the corporation is incorporated under this chapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.028. BOARD. (a) A corporation must have a board in

which the powers of the corporation reside.

(b) The board consists of three or more directors.

(c) The commission shall appoint each director for a term that

may not exceed six years.

(d) The commission may remove a director for or without cause.

(e) A director serves without compensation but is entitled to

reimbursement from the corporation for expenses incurred in the

performance of the director's duties.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.029. ADVISORY DIRECTORS. (a) The board may appoint

any number of advisory directors.

(b) An advisory director advises and assists the directors in

promoting and developing new and expanded transportation

facilities and systems.

(c) An advisory director serves until the completion of a

particular project or at the will of the directors.

(d) An advisory director does not have a vote in the affairs of

the corporation.

(e) An advisory director serves without compensation. The

corporation may not reimburse an advisory director for expenses

incurred in the performance of the director's duties.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.030. BYLAWS. (a) The board shall adopt the initial

bylaws of a corporation. The commission, by resolution, must

approve the initial bylaws.

(b) A corporation may change its bylaws only with the approval

of the commission.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.031. QUORUM. (a) A quorum of a board is the lesser

of:

(1) a majority of:

(A) the membership of the board under the bylaws; or

(B) if the bylaws do not provide the membership of the board,

the membership of the board under the articles of incorporation;

or

(2) the number, which must be more than two, set as the quorum

by the articles of incorporation or the bylaws.

(b) An act of the majority of the directors present at a meeting

at which there is a quorum is an act of the board, unless the act

of a greater number is required by the articles of incorporation

or the bylaws.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.032. INDEMNIFICATION. (a) A corporation may indemnify

a director or officer of the corporation for necessary expenses

and costs, including attorney's fees, incurred by the director or

officer in connection with any claim asserted against the

director or officer in a court action or otherwise for negligence

or misconduct.

(b) If a corporation does not fully indemnify a director or

officer as provided by Subsection (a), the court in a proceeding

in which any claim against the director or officer is asserted or

any court with jurisdiction of an action instituted by the

director or officer on a claim for indemnity may assess indemnity

against the corporation, its receiver, or trustee for the amount

paid by the director or officer, including attorney's fees, to

pay any judgment or settlement of the claim necessarily incurred

by the director or officer in connection with the claim in an

amount the court considers reasonable and equitable only if the

court finds that, in connection with the claim, the director or

officer is not guilty of negligence or misconduct.

(c) A court may not assess indemnity under Subsection (b) for an

amount paid by the director or officer to the corporation.

(d) In this section, "director or officer" includes a former

director or officer.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.033. EXEMPTION FROM TAXATION. A corporation affects

all the people in its area by assuming to a material extent what

otherwise might be an obligation or duty of the commission and is

a purely public charity under Section 2, Article VIII, Texas

Constitution. However, a corporation is exempt from the franchise

tax under Chapter 171, Tax Code, only if the corporation is

exempted by that chapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.034. INCOME OF TRANSPORTATION CORPORATION. The

commission has the unrestricted right at any time to receive any

income earned by a corporation other than a local government

corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

SUBCHAPTER C. CORPORATE POWERS

Sec. 431.061. DEFINITIONS. In this subchapter:

(1) "Construction" includes improvement and landscaping.

(2) "Highway" includes an improvement to a highway.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.062. GENERAL POWERS. (a) A corporation has the powers

and privileges of a nonprofit corporation incorporated under the

Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,

Vernon's Texas Civil Statutes).

(b) A corporation has the powers provided by this subchapter to

promote and develop new and expanded transportation facilities

and systems on behalf of the commission and powers incidental to

or necessary for the performance of that purpose.

(c) A corporation may, at the request of the commission, perform

any function not specified by this chapter to promote and develop

transportation facilities and systems.

(d) A corporation has the powers necessary to construct or

improve transportation facilities and systems approved by the

commission.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.063. PROMOTION AND DEVELOPMENT OF TRANSPORTATION

FACILITIES AND SYSTEMS. A corporation may work directly with

property owners, local and state governmental agencies, and

elected officials to support an activity required to promote and

develop a transportation facility or system.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.064. ALIGNMENT STUDIES. A corporation may perform a

preliminary or final alignment study.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.065. CONTRIBUTIONS; EXPENSES. (a) A corporation may

receive:

(1) a contribution of real property for a right-of-way; and

(2) a cash donation for:

(A) the purchase of a right-of-way; or

(B) the design or construction of a transportation facility or

system.

(b) A corporation may establish a formula to determine the

amount of cash donations from affected property owners and others

necessary to cover the cost of a service to be performed by the

corporation or its consultants.

(c) A corporation may borrow money to meet any expense or need

associated with the regular operation of the corporation or a

particular transportation project.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.066. EMPLOYEES AND CONSULTANTS. (a) A corporation may

employ an administrative staff.

(b) A corporation may retain legal, public relations, and

engineering services required to develop a transportation

facility or system.

(c) Through its staff and retained consultants, a corporation

may prepare an exhibit, right-of-way document, environmental

report, schematic, or preliminary or final engineering plan

necessary to develop a transportation facility or system.

(d) A corporation may pay an employee or consultant from money

donated to develop a transportation facility or system.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.067. PROMOTIONAL ACTIVITIES. (a) A corporation may

make official presentations to the state and other affected

agencies or groups concerning the development of a transportation

project.

(b) A corporation may issue a press release or other material to

promote the activities of a transportation project.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.068. CONSTRUCTION OR IMPROVEMENT CONTRACTS. (a) A

corporation may contract with the commission to:

(1) construct or improve a transportation project designated by

the commission; and

(2) sell the project or improvement to the commission.

(b) For a transportation project constructed by a corporation,

the corporation may contract with the commission for the

commission to:

(1) supervise the construction; or

(2) provide construction management services.

(c) A corporation and a county, a home-rule municipality, a

county road district created under Chapter 257, or a road utility

district created under Chapter 441 may contract to pay jointly

the cost of a transportation project designated by the

commission. The contract may obligate the corporation to design,

construct, or improve the transportation project.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.069. LOCATION OF TRANSPORTATION PROJECTS. A

corporation may construct or improve a transportation project on

real property, including a right-of-way acquired by the

corporation, provided to the corporation for that purpose by the

commission or a political subdivision of this state.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.070. BONDS AND NOTES. (a) A corporation may issue

bonds and notes to carry out its purpose.

(b) The bonds and notes may be issued under any power or

authority available to the corporation, including Chapter 1201,

Government Code.

(c) A bond or note must state on its face that it is not an

obligation of the State of Texas.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.394, eff. Sept.

1, 2001.

Sec. 431.071. APPROVAL OF BONDS AND NOTES BY ATTORNEY GENERAL.

(a) A corporation shall submit a bond or note authorized under

Section 431.070 and a contract supporting its issuance to the

attorney general for examination.

(b) If the attorney general finds that the bond or note, and any

supporting contract are authorized under this chapter, the

attorney general shall approve them.

(c) After approval by the attorney general, a bond, note, or

contract may not be contested for any reason.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.072. LIMITATION TO FEDERAL OR STATE HIGHWAY SYSTEM. A

corporation may plan, design, acquire, construct, improve,

extend, or maintain a transportation project only if the project:

(1) is intended by the commission to become part of the federal

or state highway system; and

(2) is not intended to:

(A) become a county road or municipal street; or

(B) be owned by a county road district or by a road utility

district.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.073. PROJECT IN COUNTY OF 500,000 OR MORE OR ADJACENT

COUNTY. (a) This section applies only to a corporation that was

created by the state or one or more counties or municipalities to

implement a transportation project in:

(1) a county with a population of 500,000 or more; or

(2) a county adjacent to a county described by Subdivision (1).

(b) If approved and authorized by the commission, a corporation

created by the state has the rights, powers, privileges,

authority, and functions given the department under this title

to:

(1) construct, improve, operate, and maintain high occupancy

vehicle lanes; and

(2) charge a toll for the use of one or more high occupancy

vehicle lanes for the purpose of congestion mitigation.

(c) A corporation in existence on August 31, 1991, has the

powers, rights, and privileges of a corporation created under

Chapter 11, Title 32, Revised Statutes, as that law existed on

August 31, 1991, except that the required right-of-way of any

highway, road, street, or turnpike may be of the width required

or approved by the commission or each governing body creating the

corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1997, 75th Leg., ch. 1171, Sec. 1.25, eff. Sept.

1, 1997; Acts 2001, 77th Leg., ch. 967, Sec. 6, eff. Sept. 1,

2001.

SUBCHAPTER D. LOCAL GOVERNMENT CORPORATIONS

Sec. 431.101. CREATION OF LOCAL GOVERNMENT CORPORATION. (a) A

local government corporation may be created to aid and act on

behalf of one or more local governments to accomplish any

governmental purpose of those local governments. To be effective,

the articles of incorporation and the bylaws of a local

government corporation must be approved by ordinance, resolution,

or order adopted by the governing body of each local government

that the corporation is created to aid and act on behalf of.

(b) A local government corporation has the powers of a

corporation authorized for creation by the commission under this

chapter.

(c) The provisions of the Texas Non-Profit Corporation Act

(Article 1396-1.01 et seq., Vernon's Texas Civil Statutes)

relating to powers, standards of conduct, and interests in

contracts apply to the directors and officers of the local

government corporation.

(d) A provision of this chapter relating to the creation,

dissolution, administration, or supervision of a corporation by

the commission does not apply to a local government corporation.

(e) Section 394.904(a), Local Government Code, applies to

property and improvements owned by a local government

corporation. Section 394.904(b) of that code applies to each

contract awarded by the local government corporation.

(f) A member of the board of directors of a local government

corporation:

(1) is not a public official by virtue of that position; and

(2) unless otherwise ineligible, may be appointed to serve

concurrently on the board of directors of a reinvestment zone

created under Chapter 311, Tax Code.

(g) A local government corporation must comply with all state

law related to the design and construction of projects, including

the procurement of design and construction services, that applies

to the local government that created the corporation.

(h) A local government corporation formed by a navigation

district shall not condemn a right-of-way through any part of a

municipality without the consent of the municipality's governing

body.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.24, eff. Sept.

1, 1997; Acts 1999, 76th Leg., ch. 983, Sec. 12, eff. June 18,

1999; Acts 2001, 77th Leg., ch. 1370, Sec. 2, 3, eff. June 16,

2001.

Amended by:

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

1213, Sec. 15, eff. September 1, 2007.

Sec. 431.102. APPLICATION OF CHAPTER 394, LOCAL GOVERNMENT CODE.

(a) In the manner in which Chapter 394, Local Government Code,

applies to a corporation created under that chapter, that chapter

applies to:

(1) the manner in which a local government corporation is

created and dissolved;

(2) the appointment of the board of a local government

corporation and the members' terms of service;

(3) the manner and the conditions under which the board serves;

and

(4) the form, execution, approval, filing, and amending of the

articles of incorporation and bylaws of a local government

corporation.

(b) The property of a local government corporation and a

transaction to acquire the property is exempt from taxation in

the same manner as a corporation created under Chapter 394, Local

Government Code.

(c) The requirement of Section 394.021(a), Local Government

Code, that all directors must be residents of the local

government shall not be applicable to directors of a local

government corporation except that a person may not be appointed

to the board of a local government corporation if the appointment

of that person would result in less than a majority of the board

members being residents of the local government.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1999, 76th Leg., ch. 983, Sec. 13, eff. June 18,

1999.

Sec. 431.103. CONTRACTS WITH POLITICAL SUBDIVISIONS. A local

government corporation may contract with a political subdivision

of this state in the manner and to the same extent as any other

corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.104. ASSUMPTION OF POWERS AND DUTIES. (a) The

governing body of a local government may assume for the local

government the powers and duties of a local government

corporation created by the local government.

(b) A local government that assumes the powers and duties of a

local government corporation assumes the assets and liabilities

of the corporation.

(c) The powers and duties of a local government corporation

created by more than one local government may be assumed only if

each local government that created the corporation agrees to the

assumption.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.105. CONTRACTUAL AUTHORITY. (a) A state agency,

including the commission, or a political subdivision may contract

with a local government corporation to accomplish a governmental

purpose of the sponsoring local government in the same manner and

to the same extent that it:

(1) may contract with any other corporation created under this

chapter; and

(2) is authorized to contract under Subchapter A, Chapter 472.

(b) A local government may contract with a corporation to

accomplish the purposes of the sponsoring local government in the

manner provided under Subchapter C, Chapter 224.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.106. PUBLIC SAFETY RULES. A local government that

creates a local government corporation may establish and enforce

traffic and other public safety rules on a toll road, toll

bridge, or turnpike of the corporation. Local governments that

jointly create a local government corporation may jointly

establish and enforce those rules.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.107. INCOME OF LOCAL GOVERNMENT CORPORATION. (a) A

local government creating a local government corporation is

entitled at any time to receive any income earned by the local

government corporation that is not needed to pay the

corporation's expenses or obligations.

(b) The earnings of a local government corporation may not

benefit a private interest.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.108. GOVERNMENTAL FUNCTIONS. (a) A local government

corporation is a governmental unit as that term is used in

Chapter 101, Civil Practice and Remedies Code.

(b) The operations of a local government corporation are

governmental, not proprietary, functions.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.109. CONTRACTS FOR HISTORICALLY UNDERUTILIZED

BUSINESSES. (a) This section applies only to a local government

corporation serving a county with a population of more than 2.4

million.

(b) A local government corporation shall set and make a good

faith effort to meet or exceed goals for awarding contracts or

subcontracts associated with a project it operates, maintains, or

constructs to historically underutilized businesses.

(c) The goals must equal or exceed:

(1) the federal requirement on federal money used in highway

construction and maintenance; and

(2) the goals adopted by the department under Section 201.702.

(d) The goals apply to the total value of all contracts and

subcontracts awarded, including contracts and subcontracts for

construction, maintenance, operations, supplies, services,

materials, equipment, professional services, the issuance of

bonds, and bond counsel.

(e) In this section, "historically underutilized business"

means:

(1) a corporation formed for the purpose of making a profit in

which at least 51 percent of all classes of the shares of stock

or other equitable securities is owned, managed, and in daily

operations controlled by one or more persons who have been

historically underutilized because of their identification as

members of certain groups, including African Americans, Hispanic

Americans, women, Asian Pacific Americans, and Native Americans,

who have suffered the effects of discriminatory practices or

similar invidious circumstances over which they have no control;

(2) a sole proprietorship formed for the purpose of making a

profit that is 100 percent owned and in daily operation is

controlled by a person described by Subdivision (1);

(3) a partnership formed for the purpose of making a profit in

which at least 51 percent of the assets and interest in the

partnership are owned by one or more persons described by

Subdivision (1) and who also have proportionate interest in the

control, daily operation, and management of the partnership's

affairs;

(4) a joint venture in which each entity in the joint venture is

a historically underutilized business; or

(5) a supplier contract between a historically underutilized

business and a prime contractor under which the historically

underutilized business is directly involved in the manufacture or

distribution of the supplies or materials or otherwise warehouses

and ships the supplies or materials.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.110. COMPETITIVE BIDDING EXCEPTION FOR CERTAIN

IMPROVEMENTS. Any competitive bidding requirement or restriction

on a local government that created a local government corporation

does not apply to an expenditure by the local government

corporation for:

(1) an improvement:

(A) that is constructed in a reinvestment zone; and

(B) the construction of which is managed by a private venture

participant; or

(2) an improvement constructed by the corporation for which more

than 50 percent of the construction is funded by a private

entity.

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

1213, Sec. 16, eff. September 1, 2007.

SUBCHAPTER E. AMENDMENT OR RESTATEMENT OF ARTICLES OF

INCORPORATION

Sec. 431.141. AMENDMENT. The articles of incorporation of a

corporation created under this chapter may be amended only as

provided by this subchapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.142. AMENDMENT BY BOARD OF DIRECTORS. (a) The board

at any time may file with the commission a written application

requesting that the commission approve an amendment to the

articles of incorporation.

(b) The application must specify the proposed amendment.

(c) The board shall amend the articles if the commission by

resolution:

(1) determines that it is advisable to adopt the proposed

amendment;

(2) authorizes the adoption of the amendment; and

(3) approves the form of the amendment.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.143. AMENDMENT BY COMMISSION. The commission, at its

sole discretion, may amend the articles of incorporation at any

time by:

(1) adopting the amendment by resolution; and

(2) delivering the articles of amendment to the secretary of

state.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.144. CONTENTS OF ARTICLES OF AMENDMENT. The articles

of amendment must:

(1) state the name of the corporation;

(2) if the amendment alters a provision of the articles of

incorporation, identify by reference or describe the altered

provision and include its text as it is amended;

(3) if the amendment is an addition to the articles of

incorporation, state that fact and include the text of each

provision added; and

(4) state that the amendment was adopted or was approved by the

commission and give the date the commission adopted or approved

the amendment.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.145. EXECUTION AND VERIFICATION OF ARTICLES OF

AMENDMENT. (a) Articles of amendment adopted by the board shall

be executed by:

(1) the president or vice-president of the corporation; and

(2) the secretary or assistant secretary of the corporation.

(b) Articles of amendment adopted by the commission shall be

executed by:

(1) the presiding officer of the commission; and

(2) the secretary or clerk of the commission.

(c) One of the officers signing the articles shall verify each

of the articles of amendment.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.146. DELIVERY AND FILING OF ARTICLES OF AMENDMENT. (a)

Three originals of the articles of amendment shall be delivered

to the secretary of state.

(b) The secretary of state shall determine whether the articles

of amendment conform to this chapter. On determination that the

articles conform to this chapter and on receipt of a $25 fee, the

secretary of state shall:

(1) endorse on each original the word "filed" and the date of

the filing;

(2) file one of the originals in the secretary's office;

(3) issue two certificates of amendment;

(4) attach to each certificate one of the originals; and

(5) deliver a certificate of amendment and the attached articles

of amendment to:

(A) the corporation or its representative; and

(B) the commission.

(c) On the issuance of the certificate of amendment, the

amendment is effective and the articles of incorporation are

amended accordingly.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.147. SUITS NOT AFFECTED. (a) An amendment to the

articles of incorporation does not affect:

(1) any existing cause of action in favor of or against the

corporation;

(2) any pending suit to which the corporation is a party; or

(3) the existing rights of any person.

(b) If an amendment to the articles of incorporation changes the

name of the corporation, a suit brought by or against the

corporation under its former name does not abate for that reason.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.148. RESTATEMENT OF ARTICLES. A corporation, by

following the procedure to amend the articles of incorporation in

this subchapter, including obtaining the approval of the

commission, may authorize, execute, and file restated articles of

incorporation as provided by this subchapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.149. RESTATEMENT WITHOUT ADDITIONAL AMENDMENT. (a) A

corporation may, without making any additional amendment, restate

the entire text of the articles of incorporation as amended or

supplemented by all certificates of amendment previously issued

by the secretary of state.

(b) The introductory paragraph of a restatement under this

section must contain a statement that the restatement:

(1) accurately copies the articles of incorporation and all

amendments to the articles that are in effect; and

(2) does not contain any additional amendments to the articles.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.150. RESTATEMENT WITH ADDITIONAL AMENDMENT. (a) A

corporation may:

(1) restate the entire text of the articles of incorporation as

amended or supplemented by all certificates of amendment

previously issued by the secretary of state; and

(2) as part of the restatement, make additional amendments to

the articles.

(b) A restatement under this section must:

(1) state that any additional amendment to the articles of

incorporation conforms to this chapter;

(2) contain any statement required by this subchapter for

articles of amendment except that the full text of any additional

amendment is not required to be presented other than in the

restatement itself;

(3) contain a statement that:

(A) the restatement is an accurate copy of the articles of

incorporation and all amendments to the articles that are in

effect and all additional amendments made to the articles; and

(B) the restatement does not contain any other change; and

(4) restate the text of the entire articles of incorporation as

amended or supplemented by all certificates of amendment

previously issued by the secretary of state and as additionally

amended by the restated articles of incorporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.151. CHANGE IN BOARD INFORMATION NOT AMENDMENT. For

the purposes of Sections 431.149 and 431.150, substituting in the

restated articles of incorporation the number, names, and

addresses of the directors for the initial board or omitting the

name and address of each incorporator is not an amendment or

change in the articles of incorporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.152. EXECUTION AND VERIFICATION OF RESTATEMENT OF

ARTICLES. (a) Originals of the restated articles of

incorporation shall be executed by:

(1) the president or vice-president of the corporation; and

(2) the secretary or assistant secretary of the corporation.

(b) One of the officers signing the restated articles shall

verify each of the restated articles.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.153. DELIVERY AND FILING OF RESTATEMENT OF ARTICLES.

(a) Three originals of the restated articles of incorporation

shall be delivered to the secretary of state.

(b) The secretary of state shall determine whether the restated

articles conform to this chapter. On a determination that the

restated articles conform to law and on receipt of a $50 fee, the

secretary of state shall:

(1) endorse on each original the word "filed" and the date of

the filing;

(2) file one of the originals in the secretary's office;

(3) issue two restated certificates of incorporation;

(4) attach to each certificate one of the original restated

articles; and

(5) deliver a restated certificate of incorporation and the

attached restated articles to:

(A) the corporation or its representative; and

(B) the governing body of the entity that created the

corporation.

(c) On the issuance of the restated certificate of

incorporation, the original articles of incorporation and all

amendments to the original articles are superseded. The restated

articles of incorporation become the articles of incorporation of

the corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

SUBCHAPTER F. ALTERATION OR DISSOLUTION OF CORPORATION

Sec. 431.181. ALTERATION OR DISSOLUTION BY COMMISSION. (a) At

any time the commission in its sole discretion may:

(1) alter the structure, organization, programs, or activities

of a corporation; or

(2) dissolve a corporation.

(b) The authority of the commission under this section is

limited only by:

(1) any law of this state prohibiting the impairment of a

contract entered into by a corporation; and

(2) any provision of this subchapter relating to alteration or

dissolution.

(c) The commission must make an alteration or dissolution under

this section by a written resolution.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.182. DISSOLUTION BY BOARD ON COMPLETION OF PURPOSE.

The board, with the approval by written resolution of the

commission, shall dissolve the corporation as provided by this

subchapter if the board by resolution determines that:

(1) the purposes for which the corporation was formed have been

substantially fulfilled; and

(2) all obligations of the corporation have been fully paid.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.183. EXECUTION OF ARTICLES OF DISSOLUTION. Articles of

dissolution shall be executed by:

(1) the president or vice-president of the corporation and the

secretary or assistant secretary of the corporation; or

(2) any two members of the commission.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.184. DELIVERY AND FILING OF ARTICLES OF DISSOLUTION.

(a) Three originals of the articles of dissolution shall be

delivered to the secretary of state.

(b) The secretary of state shall determine whether the articles

of dissolution conform to this chapter. On a determination that

the articles conform and on receipt of a $50 fee, the secretary

of state shall:

(1) endorse on each original the word "filed" and the date of

the filing;

(2) file one of the originals in the secretary's office;

(3) issue two certificates of dissolution;

(4) attach to each certificate an original of the articles of

dissolution; and

(5) deliver a certificate and the attached articles of

dissolution to:

(A) the representative of the dissolved corporation; and

(B) the commission.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.185. EFFECT OF ISSUANCE OF CERTIFICATE OF DISSOLUTION.

The corporate existence ends on the issuance of the certificate

of dissolution except for:

(1) the purpose of any ongoing suit or other proceeding; and

(2) corporate action by a director or officer under this

chapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.186. ASSETS ON DISSOLUTION. On dissolution or

liquidation of a corporation, the title to all assets, including

funds and property, shall be transferred to the commission unless

the corporation is a local government corporation, in which case

the title shall be transferred to the local governments that

created the corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

State Codes and Statutes

Statutes > Texas > Transportation-code > Title-6-roadways > Chapter-431-texas-transportation-corporation-act

TRANSPORTATION CODE

TITLE 6. ROADWAYS

SUBTITLE I. TRANSPORTATION CORPORATIONS

CHAPTER 431. TEXAS TRANSPORTATION CORPORATION ACT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 431.001. SHORT TITLE. This chapter may be cited as the

Texas Transportation Corporation Act.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.002. PURPOSES; LIBERAL CONSTRUCTION. (a) The purposes

of this chapter are:

(1) the promotion and development of public transportation

facilities and systems by new and alternative means;

(2) the expansion and improvement of transportation facilities

and systems;

(3) the creation of corporations to secure and obtain

rights-of-way for urgently needed transportation systems and to

assist in the planning and design of those systems;

(4) the reduction of burdens and demands on the limited funds

available to the commission and an increase in the effectiveness

and efficiency of the commission; and

(5) the promotion and development of transportation facilities

and systems that are public, not private, in nature, although

these facilities and systems may benefit private interests as

well as the public.

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

the purposes of this chapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.003. DEFINITIONS. In this chapter:

(1) "Board" means the board of directors of a corporation

organized under this chapter.

(2) "Corporation" means a corporation organized under this

chapter and includes a local government corporation.

(3) "Local government" means:

(A) a municipality;

(B) a county; or

(C) for purposes of Subchapter D, a navigation district,

hospital district, or hospital authority.

(4) "Local government corporation" means a corporation

incorporated as provided by Subchapter D to act on behalf of a

local government.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 2001, 77th Leg., ch. 1370, Sec. 1, eff. June 16,

2001.

Amended by:

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

241, Sec. 1, eff. May 25, 2007.

Sec. 431.004. OPEN MEETINGS. (a) A corporation is subject to

Chapter 551, Government Code.

(b) Except as provided by Subsection (c) or (d), the board shall

file notice of each meeting of the board in the same manner and

in the same location as is required of a state governmental body

under Chapter 551, Government Code.

(c) If the commission designates an area of the state in which a

corporation may act on behalf of the commission, the board shall

file notice of each meeting of the board in the same manner and

in the same location as is required of a governmental body under

Section 551.053, Government Code.

(d) The board of a local government corporation shall file

notice of each meeting of the board in the same manner and in the

same location as is required of the governing body under Chapter

551, Government Code, of the one or more local governments that

created the local government corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.005. OPEN RECORDS. The board is subject to Chapter

552, Government Code.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.006. APPLICATION OF TEXAS NON-PROFIT CORPORATION ACT.

The Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,

Vernon's Texas Civil Statutes) applies to a corporation to the

extent that the provisions of that Act are not inconsistent with

this chapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

SUBCHAPTER B. CREATION AND OPERATION OF CORPORATION

Sec. 431.021. PURPOSE OF CORPORATION. The purpose of a

corporation is limited to the promotion and development of public

transportation facilities and systems.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.022. APPLICATION. (a) Three or more individuals may

file with the commission an application for the creation of a

corporation within a designated area.

(b) Each of the individuals must be a qualified voter.

(c) The application must be in writing.

(d) The application must contain the articles of incorporation

proposed to be used in organizing the corporation.

(e) The commission may not charge a filing fee for the

application.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.023. ADOPTION OF RESOLUTION. (a) A corporation may be

created only if the commission adopts a resolution authorizing

the creation of a corporation to act on behalf of the commission.

(b) A resolution must state that the commission:

(1) determines that creation of the corporation is advisable;

and

(2) approves the articles of incorporation proposed to be used

in organizing the corporation.

(c) The commission may designate the area of the state in which

the corporation may act on behalf of the commission. The

designated area may include the territory of more than one

political subdivision of the state.

(d) The commission may authorize the creation of more than one

corporation to act within the same designated area. The

resolution authorizing each corporation must specify the public

purpose of that corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 17.04, eff. Sept.

1, 1999.

Sec. 431.024. FORM OF CORPORATION. (a) A corporation is a

nonmember, nonstock corporation.

(b) A corporation is nonprofit, and its earnings may not benefit

a private interest.

(c) A corporation may be created as a perpetual corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.025. ARTICLES OF INCORPORATION. The articles of

incorporation must state:

(1) the name of the corporation;

(2) that the corporation is a nonprofit corporation;

(3) the duration of the corporation;

(4) the specific purpose for which the corporation is organized

on behalf of the commission;

(5) that the corporation does not have any members and is a

nonstock corporation;

(6) the street address of the corporation's initial registered

office and the name of its initial registered agent at that

address;

(7) the number of directors of the initial board and the name

and address of each director;

(8) the name and street address of each incorporator;

(9) any provision for the regulation of the internal affairs of

the corporation, including any provision required or permitted by

this chapter to be in the bylaws; and

(10) that the commission has:

(A) by resolution specifically authorized the corporation to act

on its behalf to further the public purpose stated in the

resolution and in the articles of incorporation; and

(B) approved the articles of incorporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.026. DELIVERY AND FILING OF CERTIFICATE OF

INCORPORATION. (a) After the commission adopts a resolution

under Section 431.023, three originals of the articles of

incorporation shall be delivered to the secretary of state.

(b) The secretary of state shall determine whether the articles

of incorporation conform to this chapter. On determination that

the articles conform to this chapter and on receipt of a $25 fee,

the secretary of state shall:

(1) endorse on each original the word "filed" and the date of

the filing;

(2) file one of the originals in the secretary's office;

(3) issue two certificates of incorporation;

(4) attach to each certificate an original of the articles of

incorporation; and

(5) deliver a certificate of incorporation and the attached

articles of incorporation to:

(A) each incorporator or its representative; and

(B) the commission.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.027. EFFECT OF ISSUANCE OF CERTIFICATE OF

INCORPORATION. (a) A corporation's existence begins when its

certificate of incorporation is issued.

(b) After the issuance of the certificate of incorporation, the

incorporation may not be contested for any reason.

(c) A certificate of incorporation is conclusive evidence that:

(1) all conditions for incorporation required of the

incorporators and the commission are satisfied; and

(2) the corporation is incorporated under this chapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.028. BOARD. (a) A corporation must have a board in

which the powers of the corporation reside.

(b) The board consists of three or more directors.

(c) The commission shall appoint each director for a term that

may not exceed six years.

(d) The commission may remove a director for or without cause.

(e) A director serves without compensation but is entitled to

reimbursement from the corporation for expenses incurred in the

performance of the director's duties.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.029. ADVISORY DIRECTORS. (a) The board may appoint

any number of advisory directors.

(b) An advisory director advises and assists the directors in

promoting and developing new and expanded transportation

facilities and systems.

(c) An advisory director serves until the completion of a

particular project or at the will of the directors.

(d) An advisory director does not have a vote in the affairs of

the corporation.

(e) An advisory director serves without compensation. The

corporation may not reimburse an advisory director for expenses

incurred in the performance of the director's duties.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.030. BYLAWS. (a) The board shall adopt the initial

bylaws of a corporation. The commission, by resolution, must

approve the initial bylaws.

(b) A corporation may change its bylaws only with the approval

of the commission.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.031. QUORUM. (a) A quorum of a board is the lesser

of:

(1) a majority of:

(A) the membership of the board under the bylaws; or

(B) if the bylaws do not provide the membership of the board,

the membership of the board under the articles of incorporation;

or

(2) the number, which must be more than two, set as the quorum

by the articles of incorporation or the bylaws.

(b) An act of the majority of the directors present at a meeting

at which there is a quorum is an act of the board, unless the act

of a greater number is required by the articles of incorporation

or the bylaws.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.032. INDEMNIFICATION. (a) A corporation may indemnify

a director or officer of the corporation for necessary expenses

and costs, including attorney's fees, incurred by the director or

officer in connection with any claim asserted against the

director or officer in a court action or otherwise for negligence

or misconduct.

(b) If a corporation does not fully indemnify a director or

officer as provided by Subsection (a), the court in a proceeding

in which any claim against the director or officer is asserted or

any court with jurisdiction of an action instituted by the

director or officer on a claim for indemnity may assess indemnity

against the corporation, its receiver, or trustee for the amount

paid by the director or officer, including attorney's fees, to

pay any judgment or settlement of the claim necessarily incurred

by the director or officer in connection with the claim in an

amount the court considers reasonable and equitable only if the

court finds that, in connection with the claim, the director or

officer is not guilty of negligence or misconduct.

(c) A court may not assess indemnity under Subsection (b) for an

amount paid by the director or officer to the corporation.

(d) In this section, "director or officer" includes a former

director or officer.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.033. EXEMPTION FROM TAXATION. A corporation affects

all the people in its area by assuming to a material extent what

otherwise might be an obligation or duty of the commission and is

a purely public charity under Section 2, Article VIII, Texas

Constitution. However, a corporation is exempt from the franchise

tax under Chapter 171, Tax Code, only if the corporation is

exempted by that chapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.034. INCOME OF TRANSPORTATION CORPORATION. The

commission has the unrestricted right at any time to receive any

income earned by a corporation other than a local government

corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

SUBCHAPTER C. CORPORATE POWERS

Sec. 431.061. DEFINITIONS. In this subchapter:

(1) "Construction" includes improvement and landscaping.

(2) "Highway" includes an improvement to a highway.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.062. GENERAL POWERS. (a) A corporation has the powers

and privileges of a nonprofit corporation incorporated under the

Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,

Vernon's Texas Civil Statutes).

(b) A corporation has the powers provided by this subchapter to

promote and develop new and expanded transportation facilities

and systems on behalf of the commission and powers incidental to

or necessary for the performance of that purpose.

(c) A corporation may, at the request of the commission, perform

any function not specified by this chapter to promote and develop

transportation facilities and systems.

(d) A corporation has the powers necessary to construct or

improve transportation facilities and systems approved by the

commission.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.063. PROMOTION AND DEVELOPMENT OF TRANSPORTATION

FACILITIES AND SYSTEMS. A corporation may work directly with

property owners, local and state governmental agencies, and

elected officials to support an activity required to promote and

develop a transportation facility or system.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.064. ALIGNMENT STUDIES. A corporation may perform a

preliminary or final alignment study.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.065. CONTRIBUTIONS; EXPENSES. (a) A corporation may

receive:

(1) a contribution of real property for a right-of-way; and

(2) a cash donation for:

(A) the purchase of a right-of-way; or

(B) the design or construction of a transportation facility or

system.

(b) A corporation may establish a formula to determine the

amount of cash donations from affected property owners and others

necessary to cover the cost of a service to be performed by the

corporation or its consultants.

(c) A corporation may borrow money to meet any expense or need

associated with the regular operation of the corporation or a

particular transportation project.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.066. EMPLOYEES AND CONSULTANTS. (a) A corporation may

employ an administrative staff.

(b) A corporation may retain legal, public relations, and

engineering services required to develop a transportation

facility or system.

(c) Through its staff and retained consultants, a corporation

may prepare an exhibit, right-of-way document, environmental

report, schematic, or preliminary or final engineering plan

necessary to develop a transportation facility or system.

(d) A corporation may pay an employee or consultant from money

donated to develop a transportation facility or system.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.067. PROMOTIONAL ACTIVITIES. (a) A corporation may

make official presentations to the state and other affected

agencies or groups concerning the development of a transportation

project.

(b) A corporation may issue a press release or other material to

promote the activities of a transportation project.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.068. CONSTRUCTION OR IMPROVEMENT CONTRACTS. (a) A

corporation may contract with the commission to:

(1) construct or improve a transportation project designated by

the commission; and

(2) sell the project or improvement to the commission.

(b) For a transportation project constructed by a corporation,

the corporation may contract with the commission for the

commission to:

(1) supervise the construction; or

(2) provide construction management services.

(c) A corporation and a county, a home-rule municipality, a

county road district created under Chapter 257, or a road utility

district created under Chapter 441 may contract to pay jointly

the cost of a transportation project designated by the

commission. The contract may obligate the corporation to design,

construct, or improve the transportation project.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.069. LOCATION OF TRANSPORTATION PROJECTS. A

corporation may construct or improve a transportation project on

real property, including a right-of-way acquired by the

corporation, provided to the corporation for that purpose by the

commission or a political subdivision of this state.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.070. BONDS AND NOTES. (a) A corporation may issue

bonds and notes to carry out its purpose.

(b) The bonds and notes may be issued under any power or

authority available to the corporation, including Chapter 1201,

Government Code.

(c) A bond or note must state on its face that it is not an

obligation of the State of Texas.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.394, eff. Sept.

1, 2001.

Sec. 431.071. APPROVAL OF BONDS AND NOTES BY ATTORNEY GENERAL.

(a) A corporation shall submit a bond or note authorized under

Section 431.070 and a contract supporting its issuance to the

attorney general for examination.

(b) If the attorney general finds that the bond or note, and any

supporting contract are authorized under this chapter, the

attorney general shall approve them.

(c) After approval by the attorney general, a bond, note, or

contract may not be contested for any reason.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.072. LIMITATION TO FEDERAL OR STATE HIGHWAY SYSTEM. A

corporation may plan, design, acquire, construct, improve,

extend, or maintain a transportation project only if the project:

(1) is intended by the commission to become part of the federal

or state highway system; and

(2) is not intended to:

(A) become a county road or municipal street; or

(B) be owned by a county road district or by a road utility

district.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.073. PROJECT IN COUNTY OF 500,000 OR MORE OR ADJACENT

COUNTY. (a) This section applies only to a corporation that was

created by the state or one or more counties or municipalities to

implement a transportation project in:

(1) a county with a population of 500,000 or more; or

(2) a county adjacent to a county described by Subdivision (1).

(b) If approved and authorized by the commission, a corporation

created by the state has the rights, powers, privileges,

authority, and functions given the department under this title

to:

(1) construct, improve, operate, and maintain high occupancy

vehicle lanes; and

(2) charge a toll for the use of one or more high occupancy

vehicle lanes for the purpose of congestion mitigation.

(c) A corporation in existence on August 31, 1991, has the

powers, rights, and privileges of a corporation created under

Chapter 11, Title 32, Revised Statutes, as that law existed on

August 31, 1991, except that the required right-of-way of any

highway, road, street, or turnpike may be of the width required

or approved by the commission or each governing body creating the

corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1997, 75th Leg., ch. 1171, Sec. 1.25, eff. Sept.

1, 1997; Acts 2001, 77th Leg., ch. 967, Sec. 6, eff. Sept. 1,

2001.

SUBCHAPTER D. LOCAL GOVERNMENT CORPORATIONS

Sec. 431.101. CREATION OF LOCAL GOVERNMENT CORPORATION. (a) A

local government corporation may be created to aid and act on

behalf of one or more local governments to accomplish any

governmental purpose of those local governments. To be effective,

the articles of incorporation and the bylaws of a local

government corporation must be approved by ordinance, resolution,

or order adopted by the governing body of each local government

that the corporation is created to aid and act on behalf of.

(b) A local government corporation has the powers of a

corporation authorized for creation by the commission under this

chapter.

(c) The provisions of the Texas Non-Profit Corporation Act

(Article 1396-1.01 et seq., Vernon's Texas Civil Statutes)

relating to powers, standards of conduct, and interests in

contracts apply to the directors and officers of the local

government corporation.

(d) A provision of this chapter relating to the creation,

dissolution, administration, or supervision of a corporation by

the commission does not apply to a local government corporation.

(e) Section 394.904(a), Local Government Code, applies to

property and improvements owned by a local government

corporation. Section 394.904(b) of that code applies to each

contract awarded by the local government corporation.

(f) A member of the board of directors of a local government

corporation:

(1) is not a public official by virtue of that position; and

(2) unless otherwise ineligible, may be appointed to serve

concurrently on the board of directors of a reinvestment zone

created under Chapter 311, Tax Code.

(g) A local government corporation must comply with all state

law related to the design and construction of projects, including

the procurement of design and construction services, that applies

to the local government that created the corporation.

(h) A local government corporation formed by a navigation

district shall not condemn a right-of-way through any part of a

municipality without the consent of the municipality's governing

body.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.24, eff. Sept.

1, 1997; Acts 1999, 76th Leg., ch. 983, Sec. 12, eff. June 18,

1999; Acts 2001, 77th Leg., ch. 1370, Sec. 2, 3, eff. June 16,

2001.

Amended by:

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

1213, Sec. 15, eff. September 1, 2007.

Sec. 431.102. APPLICATION OF CHAPTER 394, LOCAL GOVERNMENT CODE.

(a) In the manner in which Chapter 394, Local Government Code,

applies to a corporation created under that chapter, that chapter

applies to:

(1) the manner in which a local government corporation is

created and dissolved;

(2) the appointment of the board of a local government

corporation and the members' terms of service;

(3) the manner and the conditions under which the board serves;

and

(4) the form, execution, approval, filing, and amending of the

articles of incorporation and bylaws of a local government

corporation.

(b) The property of a local government corporation and a

transaction to acquire the property is exempt from taxation in

the same manner as a corporation created under Chapter 394, Local

Government Code.

(c) The requirement of Section 394.021(a), Local Government

Code, that all directors must be residents of the local

government shall not be applicable to directors of a local

government corporation except that a person may not be appointed

to the board of a local government corporation if the appointment

of that person would result in less than a majority of the board

members being residents of the local government.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1999, 76th Leg., ch. 983, Sec. 13, eff. June 18,

1999.

Sec. 431.103. CONTRACTS WITH POLITICAL SUBDIVISIONS. A local

government corporation may contract with a political subdivision

of this state in the manner and to the same extent as any other

corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.104. ASSUMPTION OF POWERS AND DUTIES. (a) The

governing body of a local government may assume for the local

government the powers and duties of a local government

corporation created by the local government.

(b) A local government that assumes the powers and duties of a

local government corporation assumes the assets and liabilities

of the corporation.

(c) The powers and duties of a local government corporation

created by more than one local government may be assumed only if

each local government that created the corporation agrees to the

assumption.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.105. CONTRACTUAL AUTHORITY. (a) A state agency,

including the commission, or a political subdivision may contract

with a local government corporation to accomplish a governmental

purpose of the sponsoring local government in the same manner and

to the same extent that it:

(1) may contract with any other corporation created under this

chapter; and

(2) is authorized to contract under Subchapter A, Chapter 472.

(b) A local government may contract with a corporation to

accomplish the purposes of the sponsoring local government in the

manner provided under Subchapter C, Chapter 224.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.106. PUBLIC SAFETY RULES. A local government that

creates a local government corporation may establish and enforce

traffic and other public safety rules on a toll road, toll

bridge, or turnpike of the corporation. Local governments that

jointly create a local government corporation may jointly

establish and enforce those rules.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.107. INCOME OF LOCAL GOVERNMENT CORPORATION. (a) A

local government creating a local government corporation is

entitled at any time to receive any income earned by the local

government corporation that is not needed to pay the

corporation's expenses or obligations.

(b) The earnings of a local government corporation may not

benefit a private interest.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.108. GOVERNMENTAL FUNCTIONS. (a) A local government

corporation is a governmental unit as that term is used in

Chapter 101, Civil Practice and Remedies Code.

(b) The operations of a local government corporation are

governmental, not proprietary, functions.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.109. CONTRACTS FOR HISTORICALLY UNDERUTILIZED

BUSINESSES. (a) This section applies only to a local government

corporation serving a county with a population of more than 2.4

million.

(b) A local government corporation shall set and make a good

faith effort to meet or exceed goals for awarding contracts or

subcontracts associated with a project it operates, maintains, or

constructs to historically underutilized businesses.

(c) The goals must equal or exceed:

(1) the federal requirement on federal money used in highway

construction and maintenance; and

(2) the goals adopted by the department under Section 201.702.

(d) The goals apply to the total value of all contracts and

subcontracts awarded, including contracts and subcontracts for

construction, maintenance, operations, supplies, services,

materials, equipment, professional services, the issuance of

bonds, and bond counsel.

(e) In this section, "historically underutilized business"

means:

(1) a corporation formed for the purpose of making a profit in

which at least 51 percent of all classes of the shares of stock

or other equitable securities is owned, managed, and in daily

operations controlled by one or more persons who have been

historically underutilized because of their identification as

members of certain groups, including African Americans, Hispanic

Americans, women, Asian Pacific Americans, and Native Americans,

who have suffered the effects of discriminatory practices or

similar invidious circumstances over which they have no control;

(2) a sole proprietorship formed for the purpose of making a

profit that is 100 percent owned and in daily operation is

controlled by a person described by Subdivision (1);

(3) a partnership formed for the purpose of making a profit in

which at least 51 percent of the assets and interest in the

partnership are owned by one or more persons described by

Subdivision (1) and who also have proportionate interest in the

control, daily operation, and management of the partnership's

affairs;

(4) a joint venture in which each entity in the joint venture is

a historically underutilized business; or

(5) a supplier contract between a historically underutilized

business and a prime contractor under which the historically

underutilized business is directly involved in the manufacture or

distribution of the supplies or materials or otherwise warehouses

and ships the supplies or materials.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.110. COMPETITIVE BIDDING EXCEPTION FOR CERTAIN

IMPROVEMENTS. Any competitive bidding requirement or restriction

on a local government that created a local government corporation

does not apply to an expenditure by the local government

corporation for:

(1) an improvement:

(A) that is constructed in a reinvestment zone; and

(B) the construction of which is managed by a private venture

participant; or

(2) an improvement constructed by the corporation for which more

than 50 percent of the construction is funded by a private

entity.

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

1213, Sec. 16, eff. September 1, 2007.

SUBCHAPTER E. AMENDMENT OR RESTATEMENT OF ARTICLES OF

INCORPORATION

Sec. 431.141. AMENDMENT. The articles of incorporation of a

corporation created under this chapter may be amended only as

provided by this subchapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.142. AMENDMENT BY BOARD OF DIRECTORS. (a) The board

at any time may file with the commission a written application

requesting that the commission approve an amendment to the

articles of incorporation.

(b) The application must specify the proposed amendment.

(c) The board shall amend the articles if the commission by

resolution:

(1) determines that it is advisable to adopt the proposed

amendment;

(2) authorizes the adoption of the amendment; and

(3) approves the form of the amendment.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.143. AMENDMENT BY COMMISSION. The commission, at its

sole discretion, may amend the articles of incorporation at any

time by:

(1) adopting the amendment by resolution; and

(2) delivering the articles of amendment to the secretary of

state.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.144. CONTENTS OF ARTICLES OF AMENDMENT. The articles

of amendment must:

(1) state the name of the corporation;

(2) if the amendment alters a provision of the articles of

incorporation, identify by reference or describe the altered

provision and include its text as it is amended;

(3) if the amendment is an addition to the articles of

incorporation, state that fact and include the text of each

provision added; and

(4) state that the amendment was adopted or was approved by the

commission and give the date the commission adopted or approved

the amendment.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.145. EXECUTION AND VERIFICATION OF ARTICLES OF

AMENDMENT. (a) Articles of amendment adopted by the board shall

be executed by:

(1) the president or vice-president of the corporation; and

(2) the secretary or assistant secretary of the corporation.

(b) Articles of amendment adopted by the commission shall be

executed by:

(1) the presiding officer of the commission; and

(2) the secretary or clerk of the commission.

(c) One of the officers signing the articles shall verify each

of the articles of amendment.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.146. DELIVERY AND FILING OF ARTICLES OF AMENDMENT. (a)

Three originals of the articles of amendment shall be delivered

to the secretary of state.

(b) The secretary of state shall determine whether the articles

of amendment conform to this chapter. On determination that the

articles conform to this chapter and on receipt of a $25 fee, the

secretary of state shall:

(1) endorse on each original the word "filed" and the date of

the filing;

(2) file one of the originals in the secretary's office;

(3) issue two certificates of amendment;

(4) attach to each certificate one of the originals; and

(5) deliver a certificate of amendment and the attached articles

of amendment to:

(A) the corporation or its representative; and

(B) the commission.

(c) On the issuance of the certificate of amendment, the

amendment is effective and the articles of incorporation are

amended accordingly.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.147. SUITS NOT AFFECTED. (a) An amendment to the

articles of incorporation does not affect:

(1) any existing cause of action in favor of or against the

corporation;

(2) any pending suit to which the corporation is a party; or

(3) the existing rights of any person.

(b) If an amendment to the articles of incorporation changes the

name of the corporation, a suit brought by or against the

corporation under its former name does not abate for that reason.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.148. RESTATEMENT OF ARTICLES. A corporation, by

following the procedure to amend the articles of incorporation in

this subchapter, including obtaining the approval of the

commission, may authorize, execute, and file restated articles of

incorporation as provided by this subchapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.149. RESTATEMENT WITHOUT ADDITIONAL AMENDMENT. (a) A

corporation may, without making any additional amendment, restate

the entire text of the articles of incorporation as amended or

supplemented by all certificates of amendment previously issued

by the secretary of state.

(b) The introductory paragraph of a restatement under this

section must contain a statement that the restatement:

(1) accurately copies the articles of incorporation and all

amendments to the articles that are in effect; and

(2) does not contain any additional amendments to the articles.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.150. RESTATEMENT WITH ADDITIONAL AMENDMENT. (a) A

corporation may:

(1) restate the entire text of the articles of incorporation as

amended or supplemented by all certificates of amendment

previously issued by the secretary of state; and

(2) as part of the restatement, make additional amendments to

the articles.

(b) A restatement under this section must:

(1) state that any additional amendment to the articles of

incorporation conforms to this chapter;

(2) contain any statement required by this subchapter for

articles of amendment except that the full text of any additional

amendment is not required to be presented other than in the

restatement itself;

(3) contain a statement that:

(A) the restatement is an accurate copy of the articles of

incorporation and all amendments to the articles that are in

effect and all additional amendments made to the articles; and

(B) the restatement does not contain any other change; and

(4) restate the text of the entire articles of incorporation as

amended or supplemented by all certificates of amendment

previously issued by the secretary of state and as additionally

amended by the restated articles of incorporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.151. CHANGE IN BOARD INFORMATION NOT AMENDMENT. For

the purposes of Sections 431.149 and 431.150, substituting in the

restated articles of incorporation the number, names, and

addresses of the directors for the initial board or omitting the

name and address of each incorporator is not an amendment or

change in the articles of incorporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.152. EXECUTION AND VERIFICATION OF RESTATEMENT OF

ARTICLES. (a) Originals of the restated articles of

incorporation shall be executed by:

(1) the president or vice-president of the corporation; and

(2) the secretary or assistant secretary of the corporation.

(b) One of the officers signing the restated articles shall

verify each of the restated articles.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.153. DELIVERY AND FILING OF RESTATEMENT OF ARTICLES.

(a) Three originals of the restated articles of incorporation

shall be delivered to the secretary of state.

(b) The secretary of state shall determine whether the restated

articles conform to this chapter. On a determination that the

restated articles conform to law and on receipt of a $50 fee, the

secretary of state shall:

(1) endorse on each original the word "filed" and the date of

the filing;

(2) file one of the originals in the secretary's office;

(3) issue two restated certificates of incorporation;

(4) attach to each certificate one of the original restated

articles; and

(5) deliver a restated certificate of incorporation and the

attached restated articles to:

(A) the corporation or its representative; and

(B) the governing body of the entity that created the

corporation.

(c) On the issuance of the restated certificate of

incorporation, the original articles of incorporation and all

amendments to the original articles are superseded. The restated

articles of incorporation become the articles of incorporation of

the corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

SUBCHAPTER F. ALTERATION OR DISSOLUTION OF CORPORATION

Sec. 431.181. ALTERATION OR DISSOLUTION BY COMMISSION. (a) At

any time the commission in its sole discretion may:

(1) alter the structure, organization, programs, or activities

of a corporation; or

(2) dissolve a corporation.

(b) The authority of the commission under this section is

limited only by:

(1) any law of this state prohibiting the impairment of a

contract entered into by a corporation; and

(2) any provision of this subchapter relating to alteration or

dissolution.

(c) The commission must make an alteration or dissolution under

this section by a written resolution.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.182. DISSOLUTION BY BOARD ON COMPLETION OF PURPOSE.

The board, with the approval by written resolution of the

commission, shall dissolve the corporation as provided by this

subchapter if the board by resolution determines that:

(1) the purposes for which the corporation was formed have been

substantially fulfilled; and

(2) all obligations of the corporation have been fully paid.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.183. EXECUTION OF ARTICLES OF DISSOLUTION. Articles of

dissolution shall be executed by:

(1) the president or vice-president of the corporation and the

secretary or assistant secretary of the corporation; or

(2) any two members of the commission.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.184. DELIVERY AND FILING OF ARTICLES OF DISSOLUTION.

(a) Three originals of the articles of dissolution shall be

delivered to the secretary of state.

(b) The secretary of state shall determine whether the articles

of dissolution conform to this chapter. On a determination that

the articles conform and on receipt of a $50 fee, the secretary

of state shall:

(1) endorse on each original the word "filed" and the date of

the filing;

(2) file one of the originals in the secretary's office;

(3) issue two certificates of dissolution;

(4) attach to each certificate an original of the articles of

dissolution; and

(5) deliver a certificate and the attached articles of

dissolution to:

(A) the representative of the dissolved corporation; and

(B) the commission.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.185. EFFECT OF ISSUANCE OF CERTIFICATE OF DISSOLUTION.

The corporate existence ends on the issuance of the certificate

of dissolution except for:

(1) the purpose of any ongoing suit or other proceeding; and

(2) corporate action by a director or officer under this

chapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.186. ASSETS ON DISSOLUTION. On dissolution or

liquidation of a corporation, the title to all assets, including

funds and property, shall be transferred to the commission unless

the corporation is a local government corporation, in which case

the title shall be transferred to the local governments that

created the corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.


State Codes and Statutes

State Codes and Statutes

Statutes > Texas > Transportation-code > Title-6-roadways > Chapter-431-texas-transportation-corporation-act

TRANSPORTATION CODE

TITLE 6. ROADWAYS

SUBTITLE I. TRANSPORTATION CORPORATIONS

CHAPTER 431. TEXAS TRANSPORTATION CORPORATION ACT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 431.001. SHORT TITLE. This chapter may be cited as the

Texas Transportation Corporation Act.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.002. PURPOSES; LIBERAL CONSTRUCTION. (a) The purposes

of this chapter are:

(1) the promotion and development of public transportation

facilities and systems by new and alternative means;

(2) the expansion and improvement of transportation facilities

and systems;

(3) the creation of corporations to secure and obtain

rights-of-way for urgently needed transportation systems and to

assist in the planning and design of those systems;

(4) the reduction of burdens and demands on the limited funds

available to the commission and an increase in the effectiveness

and efficiency of the commission; and

(5) the promotion and development of transportation facilities

and systems that are public, not private, in nature, although

these facilities and systems may benefit private interests as

well as the public.

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

the purposes of this chapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.003. DEFINITIONS. In this chapter:

(1) "Board" means the board of directors of a corporation

organized under this chapter.

(2) "Corporation" means a corporation organized under this

chapter and includes a local government corporation.

(3) "Local government" means:

(A) a municipality;

(B) a county; or

(C) for purposes of Subchapter D, a navigation district,

hospital district, or hospital authority.

(4) "Local government corporation" means a corporation

incorporated as provided by Subchapter D to act on behalf of a

local government.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 2001, 77th Leg., ch. 1370, Sec. 1, eff. June 16,

2001.

Amended by:

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

241, Sec. 1, eff. May 25, 2007.

Sec. 431.004. OPEN MEETINGS. (a) A corporation is subject to

Chapter 551, Government Code.

(b) Except as provided by Subsection (c) or (d), the board shall

file notice of each meeting of the board in the same manner and

in the same location as is required of a state governmental body

under Chapter 551, Government Code.

(c) If the commission designates an area of the state in which a

corporation may act on behalf of the commission, the board shall

file notice of each meeting of the board in the same manner and

in the same location as is required of a governmental body under

Section 551.053, Government Code.

(d) The board of a local government corporation shall file

notice of each meeting of the board in the same manner and in the

same location as is required of the governing body under Chapter

551, Government Code, of the one or more local governments that

created the local government corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.005. OPEN RECORDS. The board is subject to Chapter

552, Government Code.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.006. APPLICATION OF TEXAS NON-PROFIT CORPORATION ACT.

The Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,

Vernon's Texas Civil Statutes) applies to a corporation to the

extent that the provisions of that Act are not inconsistent with

this chapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

SUBCHAPTER B. CREATION AND OPERATION OF CORPORATION

Sec. 431.021. PURPOSE OF CORPORATION. The purpose of a

corporation is limited to the promotion and development of public

transportation facilities and systems.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.022. APPLICATION. (a) Three or more individuals may

file with the commission an application for the creation of a

corporation within a designated area.

(b) Each of the individuals must be a qualified voter.

(c) The application must be in writing.

(d) The application must contain the articles of incorporation

proposed to be used in organizing the corporation.

(e) The commission may not charge a filing fee for the

application.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.023. ADOPTION OF RESOLUTION. (a) A corporation may be

created only if the commission adopts a resolution authorizing

the creation of a corporation to act on behalf of the commission.

(b) A resolution must state that the commission:

(1) determines that creation of the corporation is advisable;

and

(2) approves the articles of incorporation proposed to be used

in organizing the corporation.

(c) The commission may designate the area of the state in which

the corporation may act on behalf of the commission. The

designated area may include the territory of more than one

political subdivision of the state.

(d) The commission may authorize the creation of more than one

corporation to act within the same designated area. The

resolution authorizing each corporation must specify the public

purpose of that corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 17.04, eff. Sept.

1, 1999.

Sec. 431.024. FORM OF CORPORATION. (a) A corporation is a

nonmember, nonstock corporation.

(b) A corporation is nonprofit, and its earnings may not benefit

a private interest.

(c) A corporation may be created as a perpetual corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.025. ARTICLES OF INCORPORATION. The articles of

incorporation must state:

(1) the name of the corporation;

(2) that the corporation is a nonprofit corporation;

(3) the duration of the corporation;

(4) the specific purpose for which the corporation is organized

on behalf of the commission;

(5) that the corporation does not have any members and is a

nonstock corporation;

(6) the street address of the corporation's initial registered

office and the name of its initial registered agent at that

address;

(7) the number of directors of the initial board and the name

and address of each director;

(8) the name and street address of each incorporator;

(9) any provision for the regulation of the internal affairs of

the corporation, including any provision required or permitted by

this chapter to be in the bylaws; and

(10) that the commission has:

(A) by resolution specifically authorized the corporation to act

on its behalf to further the public purpose stated in the

resolution and in the articles of incorporation; and

(B) approved the articles of incorporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.026. DELIVERY AND FILING OF CERTIFICATE OF

INCORPORATION. (a) After the commission adopts a resolution

under Section 431.023, three originals of the articles of

incorporation shall be delivered to the secretary of state.

(b) The secretary of state shall determine whether the articles

of incorporation conform to this chapter. On determination that

the articles conform to this chapter and on receipt of a $25 fee,

the secretary of state shall:

(1) endorse on each original the word "filed" and the date of

the filing;

(2) file one of the originals in the secretary's office;

(3) issue two certificates of incorporation;

(4) attach to each certificate an original of the articles of

incorporation; and

(5) deliver a certificate of incorporation and the attached

articles of incorporation to:

(A) each incorporator or its representative; and

(B) the commission.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.027. EFFECT OF ISSUANCE OF CERTIFICATE OF

INCORPORATION. (a) A corporation's existence begins when its

certificate of incorporation is issued.

(b) After the issuance of the certificate of incorporation, the

incorporation may not be contested for any reason.

(c) A certificate of incorporation is conclusive evidence that:

(1) all conditions for incorporation required of the

incorporators and the commission are satisfied; and

(2) the corporation is incorporated under this chapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.028. BOARD. (a) A corporation must have a board in

which the powers of the corporation reside.

(b) The board consists of three or more directors.

(c) The commission shall appoint each director for a term that

may not exceed six years.

(d) The commission may remove a director for or without cause.

(e) A director serves without compensation but is entitled to

reimbursement from the corporation for expenses incurred in the

performance of the director's duties.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.029. ADVISORY DIRECTORS. (a) The board may appoint

any number of advisory directors.

(b) An advisory director advises and assists the directors in

promoting and developing new and expanded transportation

facilities and systems.

(c) An advisory director serves until the completion of a

particular project or at the will of the directors.

(d) An advisory director does not have a vote in the affairs of

the corporation.

(e) An advisory director serves without compensation. The

corporation may not reimburse an advisory director for expenses

incurred in the performance of the director's duties.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.030. BYLAWS. (a) The board shall adopt the initial

bylaws of a corporation. The commission, by resolution, must

approve the initial bylaws.

(b) A corporation may change its bylaws only with the approval

of the commission.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.031. QUORUM. (a) A quorum of a board is the lesser

of:

(1) a majority of:

(A) the membership of the board under the bylaws; or

(B) if the bylaws do not provide the membership of the board,

the membership of the board under the articles of incorporation;

or

(2) the number, which must be more than two, set as the quorum

by the articles of incorporation or the bylaws.

(b) An act of the majority of the directors present at a meeting

at which there is a quorum is an act of the board, unless the act

of a greater number is required by the articles of incorporation

or the bylaws.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.032. INDEMNIFICATION. (a) A corporation may indemnify

a director or officer of the corporation for necessary expenses

and costs, including attorney's fees, incurred by the director or

officer in connection with any claim asserted against the

director or officer in a court action or otherwise for negligence

or misconduct.

(b) If a corporation does not fully indemnify a director or

officer as provided by Subsection (a), the court in a proceeding

in which any claim against the director or officer is asserted or

any court with jurisdiction of an action instituted by the

director or officer on a claim for indemnity may assess indemnity

against the corporation, its receiver, or trustee for the amount

paid by the director or officer, including attorney's fees, to

pay any judgment or settlement of the claim necessarily incurred

by the director or officer in connection with the claim in an

amount the court considers reasonable and equitable only if the

court finds that, in connection with the claim, the director or

officer is not guilty of negligence or misconduct.

(c) A court may not assess indemnity under Subsection (b) for an

amount paid by the director or officer to the corporation.

(d) In this section, "director or officer" includes a former

director or officer.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.033. EXEMPTION FROM TAXATION. A corporation affects

all the people in its area by assuming to a material extent what

otherwise might be an obligation or duty of the commission and is

a purely public charity under Section 2, Article VIII, Texas

Constitution. However, a corporation is exempt from the franchise

tax under Chapter 171, Tax Code, only if the corporation is

exempted by that chapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.034. INCOME OF TRANSPORTATION CORPORATION. The

commission has the unrestricted right at any time to receive any

income earned by a corporation other than a local government

corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

SUBCHAPTER C. CORPORATE POWERS

Sec. 431.061. DEFINITIONS. In this subchapter:

(1) "Construction" includes improvement and landscaping.

(2) "Highway" includes an improvement to a highway.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.062. GENERAL POWERS. (a) A corporation has the powers

and privileges of a nonprofit corporation incorporated under the

Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,

Vernon's Texas Civil Statutes).

(b) A corporation has the powers provided by this subchapter to

promote and develop new and expanded transportation facilities

and systems on behalf of the commission and powers incidental to

or necessary for the performance of that purpose.

(c) A corporation may, at the request of the commission, perform

any function not specified by this chapter to promote and develop

transportation facilities and systems.

(d) A corporation has the powers necessary to construct or

improve transportation facilities and systems approved by the

commission.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.063. PROMOTION AND DEVELOPMENT OF TRANSPORTATION

FACILITIES AND SYSTEMS. A corporation may work directly with

property owners, local and state governmental agencies, and

elected officials to support an activity required to promote and

develop a transportation facility or system.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.064. ALIGNMENT STUDIES. A corporation may perform a

preliminary or final alignment study.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.065. CONTRIBUTIONS; EXPENSES. (a) A corporation may

receive:

(1) a contribution of real property for a right-of-way; and

(2) a cash donation for:

(A) the purchase of a right-of-way; or

(B) the design or construction of a transportation facility or

system.

(b) A corporation may establish a formula to determine the

amount of cash donations from affected property owners and others

necessary to cover the cost of a service to be performed by the

corporation or its consultants.

(c) A corporation may borrow money to meet any expense or need

associated with the regular operation of the corporation or a

particular transportation project.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.066. EMPLOYEES AND CONSULTANTS. (a) A corporation may

employ an administrative staff.

(b) A corporation may retain legal, public relations, and

engineering services required to develop a transportation

facility or system.

(c) Through its staff and retained consultants, a corporation

may prepare an exhibit, right-of-way document, environmental

report, schematic, or preliminary or final engineering plan

necessary to develop a transportation facility or system.

(d) A corporation may pay an employee or consultant from money

donated to develop a transportation facility or system.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.067. PROMOTIONAL ACTIVITIES. (a) A corporation may

make official presentations to the state and other affected

agencies or groups concerning the development of a transportation

project.

(b) A corporation may issue a press release or other material to

promote the activities of a transportation project.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.068. CONSTRUCTION OR IMPROVEMENT CONTRACTS. (a) A

corporation may contract with the commission to:

(1) construct or improve a transportation project designated by

the commission; and

(2) sell the project or improvement to the commission.

(b) For a transportation project constructed by a corporation,

the corporation may contract with the commission for the

commission to:

(1) supervise the construction; or

(2) provide construction management services.

(c) A corporation and a county, a home-rule municipality, a

county road district created under Chapter 257, or a road utility

district created under Chapter 441 may contract to pay jointly

the cost of a transportation project designated by the

commission. The contract may obligate the corporation to design,

construct, or improve the transportation project.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.069. LOCATION OF TRANSPORTATION PROJECTS. A

corporation may construct or improve a transportation project on

real property, including a right-of-way acquired by the

corporation, provided to the corporation for that purpose by the

commission or a political subdivision of this state.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.070. BONDS AND NOTES. (a) A corporation may issue

bonds and notes to carry out its purpose.

(b) The bonds and notes may be issued under any power or

authority available to the corporation, including Chapter 1201,

Government Code.

(c) A bond or note must state on its face that it is not an

obligation of the State of Texas.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.394, eff. Sept.

1, 2001.

Sec. 431.071. APPROVAL OF BONDS AND NOTES BY ATTORNEY GENERAL.

(a) A corporation shall submit a bond or note authorized under

Section 431.070 and a contract supporting its issuance to the

attorney general for examination.

(b) If the attorney general finds that the bond or note, and any

supporting contract are authorized under this chapter, the

attorney general shall approve them.

(c) After approval by the attorney general, a bond, note, or

contract may not be contested for any reason.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.072. LIMITATION TO FEDERAL OR STATE HIGHWAY SYSTEM. A

corporation may plan, design, acquire, construct, improve,

extend, or maintain a transportation project only if the project:

(1) is intended by the commission to become part of the federal

or state highway system; and

(2) is not intended to:

(A) become a county road or municipal street; or

(B) be owned by a county road district or by a road utility

district.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.073. PROJECT IN COUNTY OF 500,000 OR MORE OR ADJACENT

COUNTY. (a) This section applies only to a corporation that was

created by the state or one or more counties or municipalities to

implement a transportation project in:

(1) a county with a population of 500,000 or more; or

(2) a county adjacent to a county described by Subdivision (1).

(b) If approved and authorized by the commission, a corporation

created by the state has the rights, powers, privileges,

authority, and functions given the department under this title

to:

(1) construct, improve, operate, and maintain high occupancy

vehicle lanes; and

(2) charge a toll for the use of one or more high occupancy

vehicle lanes for the purpose of congestion mitigation.

(c) A corporation in existence on August 31, 1991, has the

powers, rights, and privileges of a corporation created under

Chapter 11, Title 32, Revised Statutes, as that law existed on

August 31, 1991, except that the required right-of-way of any

highway, road, street, or turnpike may be of the width required

or approved by the commission or each governing body creating the

corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1997, 75th Leg., ch. 1171, Sec. 1.25, eff. Sept.

1, 1997; Acts 2001, 77th Leg., ch. 967, Sec. 6, eff. Sept. 1,

2001.

SUBCHAPTER D. LOCAL GOVERNMENT CORPORATIONS

Sec. 431.101. CREATION OF LOCAL GOVERNMENT CORPORATION. (a) A

local government corporation may be created to aid and act on

behalf of one or more local governments to accomplish any

governmental purpose of those local governments. To be effective,

the articles of incorporation and the bylaws of a local

government corporation must be approved by ordinance, resolution,

or order adopted by the governing body of each local government

that the corporation is created to aid and act on behalf of.

(b) A local government corporation has the powers of a

corporation authorized for creation by the commission under this

chapter.

(c) The provisions of the Texas Non-Profit Corporation Act

(Article 1396-1.01 et seq., Vernon's Texas Civil Statutes)

relating to powers, standards of conduct, and interests in

contracts apply to the directors and officers of the local

government corporation.

(d) A provision of this chapter relating to the creation,

dissolution, administration, or supervision of a corporation by

the commission does not apply to a local government corporation.

(e) Section 394.904(a), Local Government Code, applies to

property and improvements owned by a local government

corporation. Section 394.904(b) of that code applies to each

contract awarded by the local government corporation.

(f) A member of the board of directors of a local government

corporation:

(1) is not a public official by virtue of that position; and

(2) unless otherwise ineligible, may be appointed to serve

concurrently on the board of directors of a reinvestment zone

created under Chapter 311, Tax Code.

(g) A local government corporation must comply with all state

law related to the design and construction of projects, including

the procurement of design and construction services, that applies

to the local government that created the corporation.

(h) A local government corporation formed by a navigation

district shall not condemn a right-of-way through any part of a

municipality without the consent of the municipality's governing

body.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.24, eff. Sept.

1, 1997; Acts 1999, 76th Leg., ch. 983, Sec. 12, eff. June 18,

1999; Acts 2001, 77th Leg., ch. 1370, Sec. 2, 3, eff. June 16,

2001.

Amended by:

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

1213, Sec. 15, eff. September 1, 2007.

Sec. 431.102. APPLICATION OF CHAPTER 394, LOCAL GOVERNMENT CODE.

(a) In the manner in which Chapter 394, Local Government Code,

applies to a corporation created under that chapter, that chapter

applies to:

(1) the manner in which a local government corporation is

created and dissolved;

(2) the appointment of the board of a local government

corporation and the members' terms of service;

(3) the manner and the conditions under which the board serves;

and

(4) the form, execution, approval, filing, and amending of the

articles of incorporation and bylaws of a local government

corporation.

(b) The property of a local government corporation and a

transaction to acquire the property is exempt from taxation in

the same manner as a corporation created under Chapter 394, Local

Government Code.

(c) The requirement of Section 394.021(a), Local Government

Code, that all directors must be residents of the local

government shall not be applicable to directors of a local

government corporation except that a person may not be appointed

to the board of a local government corporation if the appointment

of that person would result in less than a majority of the board

members being residents of the local government.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1999, 76th Leg., ch. 983, Sec. 13, eff. June 18,

1999.

Sec. 431.103. CONTRACTS WITH POLITICAL SUBDIVISIONS. A local

government corporation may contract with a political subdivision

of this state in the manner and to the same extent as any other

corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.104. ASSUMPTION OF POWERS AND DUTIES. (a) The

governing body of a local government may assume for the local

government the powers and duties of a local government

corporation created by the local government.

(b) A local government that assumes the powers and duties of a

local government corporation assumes the assets and liabilities

of the corporation.

(c) The powers and duties of a local government corporation

created by more than one local government may be assumed only if

each local government that created the corporation agrees to the

assumption.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.105. CONTRACTUAL AUTHORITY. (a) A state agency,

including the commission, or a political subdivision may contract

with a local government corporation to accomplish a governmental

purpose of the sponsoring local government in the same manner and

to the same extent that it:

(1) may contract with any other corporation created under this

chapter; and

(2) is authorized to contract under Subchapter A, Chapter 472.

(b) A local government may contract with a corporation to

accomplish the purposes of the sponsoring local government in the

manner provided under Subchapter C, Chapter 224.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.106. PUBLIC SAFETY RULES. A local government that

creates a local government corporation may establish and enforce

traffic and other public safety rules on a toll road, toll

bridge, or turnpike of the corporation. Local governments that

jointly create a local government corporation may jointly

establish and enforce those rules.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.107. INCOME OF LOCAL GOVERNMENT CORPORATION. (a) A

local government creating a local government corporation is

entitled at any time to receive any income earned by the local

government corporation that is not needed to pay the

corporation's expenses or obligations.

(b) The earnings of a local government corporation may not

benefit a private interest.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.108. GOVERNMENTAL FUNCTIONS. (a) A local government

corporation is a governmental unit as that term is used in

Chapter 101, Civil Practice and Remedies Code.

(b) The operations of a local government corporation are

governmental, not proprietary, functions.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.109. CONTRACTS FOR HISTORICALLY UNDERUTILIZED

BUSINESSES. (a) This section applies only to a local government

corporation serving a county with a population of more than 2.4

million.

(b) A local government corporation shall set and make a good

faith effort to meet or exceed goals for awarding contracts or

subcontracts associated with a project it operates, maintains, or

constructs to historically underutilized businesses.

(c) The goals must equal or exceed:

(1) the federal requirement on federal money used in highway

construction and maintenance; and

(2) the goals adopted by the department under Section 201.702.

(d) The goals apply to the total value of all contracts and

subcontracts awarded, including contracts and subcontracts for

construction, maintenance, operations, supplies, services,

materials, equipment, professional services, the issuance of

bonds, and bond counsel.

(e) In this section, "historically underutilized business"

means:

(1) a corporation formed for the purpose of making a profit in

which at least 51 percent of all classes of the shares of stock

or other equitable securities is owned, managed, and in daily

operations controlled by one or more persons who have been

historically underutilized because of their identification as

members of certain groups, including African Americans, Hispanic

Americans, women, Asian Pacific Americans, and Native Americans,

who have suffered the effects of discriminatory practices or

similar invidious circumstances over which they have no control;

(2) a sole proprietorship formed for the purpose of making a

profit that is 100 percent owned and in daily operation is

controlled by a person described by Subdivision (1);

(3) a partnership formed for the purpose of making a profit in

which at least 51 percent of the assets and interest in the

partnership are owned by one or more persons described by

Subdivision (1) and who also have proportionate interest in the

control, daily operation, and management of the partnership's

affairs;

(4) a joint venture in which each entity in the joint venture is

a historically underutilized business; or

(5) a supplier contract between a historically underutilized

business and a prime contractor under which the historically

underutilized business is directly involved in the manufacture or

distribution of the supplies or materials or otherwise warehouses

and ships the supplies or materials.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.110. COMPETITIVE BIDDING EXCEPTION FOR CERTAIN

IMPROVEMENTS. Any competitive bidding requirement or restriction

on a local government that created a local government corporation

does not apply to an expenditure by the local government

corporation for:

(1) an improvement:

(A) that is constructed in a reinvestment zone; and

(B) the construction of which is managed by a private venture

participant; or

(2) an improvement constructed by the corporation for which more

than 50 percent of the construction is funded by a private

entity.

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

1213, Sec. 16, eff. September 1, 2007.

SUBCHAPTER E. AMENDMENT OR RESTATEMENT OF ARTICLES OF

INCORPORATION

Sec. 431.141. AMENDMENT. The articles of incorporation of a

corporation created under this chapter may be amended only as

provided by this subchapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.142. AMENDMENT BY BOARD OF DIRECTORS. (a) The board

at any time may file with the commission a written application

requesting that the commission approve an amendment to the

articles of incorporation.

(b) The application must specify the proposed amendment.

(c) The board shall amend the articles if the commission by

resolution:

(1) determines that it is advisable to adopt the proposed

amendment;

(2) authorizes the adoption of the amendment; and

(3) approves the form of the amendment.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.143. AMENDMENT BY COMMISSION. The commission, at its

sole discretion, may amend the articles of incorporation at any

time by:

(1) adopting the amendment by resolution; and

(2) delivering the articles of amendment to the secretary of

state.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.144. CONTENTS OF ARTICLES OF AMENDMENT. The articles

of amendment must:

(1) state the name of the corporation;

(2) if the amendment alters a provision of the articles of

incorporation, identify by reference or describe the altered

provision and include its text as it is amended;

(3) if the amendment is an addition to the articles of

incorporation, state that fact and include the text of each

provision added; and

(4) state that the amendment was adopted or was approved by the

commission and give the date the commission adopted or approved

the amendment.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.145. EXECUTION AND VERIFICATION OF ARTICLES OF

AMENDMENT. (a) Articles of amendment adopted by the board shall

be executed by:

(1) the president or vice-president of the corporation; and

(2) the secretary or assistant secretary of the corporation.

(b) Articles of amendment adopted by the commission shall be

executed by:

(1) the presiding officer of the commission; and

(2) the secretary or clerk of the commission.

(c) One of the officers signing the articles shall verify each

of the articles of amendment.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.146. DELIVERY AND FILING OF ARTICLES OF AMENDMENT. (a)

Three originals of the articles of amendment shall be delivered

to the secretary of state.

(b) The secretary of state shall determine whether the articles

of amendment conform to this chapter. On determination that the

articles conform to this chapter and on receipt of a $25 fee, the

secretary of state shall:

(1) endorse on each original the word "filed" and the date of

the filing;

(2) file one of the originals in the secretary's office;

(3) issue two certificates of amendment;

(4) attach to each certificate one of the originals; and

(5) deliver a certificate of amendment and the attached articles

of amendment to:

(A) the corporation or its representative; and

(B) the commission.

(c) On the issuance of the certificate of amendment, the

amendment is effective and the articles of incorporation are

amended accordingly.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.147. SUITS NOT AFFECTED. (a) An amendment to the

articles of incorporation does not affect:

(1) any existing cause of action in favor of or against the

corporation;

(2) any pending suit to which the corporation is a party; or

(3) the existing rights of any person.

(b) If an amendment to the articles of incorporation changes the

name of the corporation, a suit brought by or against the

corporation under its former name does not abate for that reason.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.148. RESTATEMENT OF ARTICLES. A corporation, by

following the procedure to amend the articles of incorporation in

this subchapter, including obtaining the approval of the

commission, may authorize, execute, and file restated articles of

incorporation as provided by this subchapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.149. RESTATEMENT WITHOUT ADDITIONAL AMENDMENT. (a) A

corporation may, without making any additional amendment, restate

the entire text of the articles of incorporation as amended or

supplemented by all certificates of amendment previously issued

by the secretary of state.

(b) The introductory paragraph of a restatement under this

section must contain a statement that the restatement:

(1) accurately copies the articles of incorporation and all

amendments to the articles that are in effect; and

(2) does not contain any additional amendments to the articles.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.150. RESTATEMENT WITH ADDITIONAL AMENDMENT. (a) A

corporation may:

(1) restate the entire text of the articles of incorporation as

amended or supplemented by all certificates of amendment

previously issued by the secretary of state; and

(2) as part of the restatement, make additional amendments to

the articles.

(b) A restatement under this section must:

(1) state that any additional amendment to the articles of

incorporation conforms to this chapter;

(2) contain any statement required by this subchapter for

articles of amendment except that the full text of any additional

amendment is not required to be presented other than in the

restatement itself;

(3) contain a statement that:

(A) the restatement is an accurate copy of the articles of

incorporation and all amendments to the articles that are in

effect and all additional amendments made to the articles; and

(B) the restatement does not contain any other change; and

(4) restate the text of the entire articles of incorporation as

amended or supplemented by all certificates of amendment

previously issued by the secretary of state and as additionally

amended by the restated articles of incorporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.151. CHANGE IN BOARD INFORMATION NOT AMENDMENT. For

the purposes of Sections 431.149 and 431.150, substituting in the

restated articles of incorporation the number, names, and

addresses of the directors for the initial board or omitting the

name and address of each incorporator is not an amendment or

change in the articles of incorporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.152. EXECUTION AND VERIFICATION OF RESTATEMENT OF

ARTICLES. (a) Originals of the restated articles of

incorporation shall be executed by:

(1) the president or vice-president of the corporation; and

(2) the secretary or assistant secretary of the corporation.

(b) One of the officers signing the restated articles shall

verify each of the restated articles.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.153. DELIVERY AND FILING OF RESTATEMENT OF ARTICLES.

(a) Three originals of the restated articles of incorporation

shall be delivered to the secretary of state.

(b) The secretary of state shall determine whether the restated

articles conform to this chapter. On a determination that the

restated articles conform to law and on receipt of a $50 fee, the

secretary of state shall:

(1) endorse on each original the word "filed" and the date of

the filing;

(2) file one of the originals in the secretary's office;

(3) issue two restated certificates of incorporation;

(4) attach to each certificate one of the original restated

articles; and

(5) deliver a restated certificate of incorporation and the

attached restated articles to:

(A) the corporation or its representative; and

(B) the governing body of the entity that created the

corporation.

(c) On the issuance of the restated certificate of

incorporation, the original articles of incorporation and all

amendments to the original articles are superseded. The restated

articles of incorporation become the articles of incorporation of

the corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

SUBCHAPTER F. ALTERATION OR DISSOLUTION OF CORPORATION

Sec. 431.181. ALTERATION OR DISSOLUTION BY COMMISSION. (a) At

any time the commission in its sole discretion may:

(1) alter the structure, organization, programs, or activities

of a corporation; or

(2) dissolve a corporation.

(b) The authority of the commission under this section is

limited only by:

(1) any law of this state prohibiting the impairment of a

contract entered into by a corporation; and

(2) any provision of this subchapter relating to alteration or

dissolution.

(c) The commission must make an alteration or dissolution under

this section by a written resolution.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.182. DISSOLUTION BY BOARD ON COMPLETION OF PURPOSE.

The board, with the approval by written resolution of the

commission, shall dissolve the corporation as provided by this

subchapter if the board by resolution determines that:

(1) the purposes for which the corporation was formed have been

substantially fulfilled; and

(2) all obligations of the corporation have been fully paid.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.183. EXECUTION OF ARTICLES OF DISSOLUTION. Articles of

dissolution shall be executed by:

(1) the president or vice-president of the corporation and the

secretary or assistant secretary of the corporation; or

(2) any two members of the commission.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.184. DELIVERY AND FILING OF ARTICLES OF DISSOLUTION.

(a) Three originals of the articles of dissolution shall be

delivered to the secretary of state.

(b) The secretary of state shall determine whether the articles

of dissolution conform to this chapter. On a determination that

the articles conform and on receipt of a $50 fee, the secretary

of state shall:

(1) endorse on each original the word "filed" and the date of

the filing;

(2) file one of the originals in the secretary's office;

(3) issue two certificates of dissolution;

(4) attach to each certificate an original of the articles of

dissolution; and

(5) deliver a certificate and the attached articles of

dissolution to:

(A) the representative of the dissolved corporation; and

(B) the commission.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.185. EFFECT OF ISSUANCE OF CERTIFICATE OF DISSOLUTION.

The corporate existence ends on the issuance of the certificate

of dissolution except for:

(1) the purpose of any ongoing suit or other proceeding; and

(2) corporate action by a director or officer under this

chapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 431.186. ASSETS ON DISSOLUTION. On dissolution or

liquidation of a corporation, the title to all assets, including

funds and property, shall be transferred to the commission unless

the corporation is a local government corporation, in which case

the title shall be transferred to the local governments that

created the corporation.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.