"It is questionable whether, as the session winds down, lawmakers are ready to make sweeping changes in transportation policy."
by Christine DeLoma
Volume 11, Issue 34
The Lone Star Report
Sen. John Carona's (R-Dallas) omnibus transportation reform bill would limit the size and scope of private toll road contracts, give greater local authority over transportation projects and prohibit diversions of highway fund money.
The legislation is a compromise package involving Carona, Rep. Mike Krusee (R-Round Rock) and Transportation Commissioner Ric Williamson.
The purpose: getting lawmakers to move beyond their recent vote for a two-year moratorium on private toll road contracts and to consider needed transportation policy changes.
In unveiling committee substitute SB 1929 at the April 18 Transportation & Homeland Security committee meeting, Carona said he hopes to "reform the excesses of prior legislation and to fine tune the various tools that are to be available to us in the years ahead."
It is questionable whether, as the session winds down, lawmakers are ready to make sweeping changes in transportation policy.
The Senate and House have already passed their respective versions of the private toll road moratorium. SB 1267 by Sen. Robert Nichols (R-Jacksonville) and HB 1892 by Rep. Wayne Smith (R-Baytown) and Lois Kolkhorst (R-Brenham) allows for a study commission to wade through the controversial issues and recommend changes to the 81st Legislature.
Many of the provisions in CSSB 1929 include legislation that has been already either heard or passed in committee. This includes a two-year moratorium on comprehensive development agreements between TxDOT and private developers for toll roads.
Twenty-five mini TxDOTs?
The bill allows TxDOT to delegate its toll road responsibilities to any of the state's 25 metropolitan planning organizations (MPO's).
"It is clear to us," said Williamson, "that House and Senate leadership are interested in changing the relationship between what's perceived as a very strong, some would say, overbearing, imperialist TxDOT to one of more collegiality and cooperation…We've made an effort to weigh an organized approach out."
Still, many senators looked skeptically at the concept.
"I'm not sure under the current scenario that what we're looking for is to devolve the responsibility of TxDOT into mini-TxDOT's around the state," said Sen. Florence Shapiro (R-Plano). "I don't know the ramifications of what that might be in the future. That's my concern."
While MPO's are largely responsible for planning and prioritizing the transportation priorities within a region, the quasi-public organizations currently do not implement projects.
Sen. Jeff Wentworth (R-San Antonio), a former chairman of an MPO in Bexar County, questioned whether MPO's have the capability and resources to handle the duties proposed. "MPOs currently aren't staffed anywhere near they would have to be staffed to become implementing agencies," Wentworth said.
Williamson said TxDOT would assign some of its employees to the MPOs.
Sen. Eliot Shapleigh (D-El Paso) asked Williamson if he would make the same recommendation to delegate responsibility to MPOs if TxDOT had the money it says it needs to build roads.
"It seems to me like you're punting," Shapleigh said.
"My suspicion," replied Williamson, "is that had we known the 80 billion [dollars] was coming, we certainly would have brought you a different plan and a different set of strategies. So maybe the answer is yes - that this is the reason we're doing this."
The bill also gives MPO's, with help of independent financial advisors, authority to approve or reject any toll project, including the business terms of a comprehensive development agreement (CDA). CSSB 1929 also requires MPO approval for tolls to be charged when the project is fully paid off.
Williamson said TxDOT would provide MPO's assistance, analysis, oversight, and interface with the federal government, as well as make sure the laws are followed.
Reforming comprehensive development agreements
By way of restricting the terms of CDA's, the bill:
- Prohibits non-compete clauses that penalize the state for building ancillary roads near a private toll road. The legislation, however, allows private contracts to require TxDOT to compensate developers for lost revenue if the agency builds a new limited access highway within four miles of the toll road or if construction increases traffic on the toll road.
- Requires contract review by the Attorney General's office, the State Auditor's office, and the Legislative Budget Board. It also requires a public hearing on a CDA's terms and provisions.
- Specifies buy-back provisions if the state wants to buyback a road from a private developer. The bill would prohibit buyback provisions based on estimated future project revenues. Provisions would have to be based on investments, expenditures, and rate of return.
- Restricts total TxDOT CDA's to $10 billion in construction and limits the duration of each contract for 40 years.
New planning organizations created
The bill creates corridor planning organizations (CPO) before a Trans-Texas Corridor segment is designated. Members of CPO's would include appointees from MPO's and regional planning organizations.
"With regard to something as massive as the corridor," Williamson explained, "whenever we identify any piece of the corridor [we would] immediately set up a CPO of all the counties impacted by that corridor. Let them be the ones that decide the terms and conditions, the width, what goes into the corridor, who owns it, who pays for it. In other words, giving them the responsibility and until they all agree… the corridor doesn't advance."
The CPO would be responsible for recommending the segment route to TxDOT. It would have approval power over the corridor project and the method of contracting.
The bill also creates rural planning organizations (RPO) comprising and governed by locally elected officials and a TxDOT district engineer in a rural area not served by a metropolitan planning organization. The RPO may be funded by the State Highway Fund.
Financing toll roads
Since 1985, the state has diverted a portion of the state highway fund to support operations of the Department of Public Safety (DPS). CSSB 1929 would prohibit DPS use and receipt of money from the gas tax and would limit expenditures of the fund to highway improvements. The bill also directs certain fees and fines collected by DPS to be deposited into the Texas Mobility Fund instead of General Revenue.
The legislation creates the Toll Project Equity Fund in General Revenue to provide loans to local toll road entities for toll projects. It would be funded by general obligation or revenue bonds issued by the Texas Public Finance Authority.
Shapleigh asked why the bill didn't contain a provision to index the gasoline tax to inflation. Carona said the measure must originate in the House.
A Krusee bill to do that hasn't gotten any traction in the Ways & Means Committee. "The House doesn't wish to pass a stand-alone increase in the gas tax of any kind," said Krusee, who sat in on the Senate meeting. "If you put some sugar on with it in a bill like Mr. Carona's that provides some oversight for CDAs and other things that TxDOT's doing, then that might help it go down… I think House members would really like to see more oversight of TxDOT, and if you gave that to them they might stomach an index. That's my hope."
Committee passes its version of HB 1892
Meanwhile the Senate Transportation and Homeland Security committee took up HB 1892, the two-year moratorium on CDA's by Kolkhorst and Smith. Sen. Tommy Williams (R-The Woodlands), who carried the bill in the Senate, introduced committee substitute HB 1892. Despite minor differences between the two measures, the intent of the bill remains generally the same. Provisions include:
- Freezing private toll road contracts for two years.
- Exempting certain projects in the North Texas area and El Paso County from the moratorium.
- Allowing regional mobility authorities and local tollway authorities to enter into CDA's to develop toll road projects. This includes the North Texas Tollway Authority and the Harris County Toll Road Authority.
- Giving local tollway authorities primacy or first option in building toll projects within a region. If a tollway invokes the primacy rule, it would have to decide within 90 days whether to go forward with a project.
- Clarifying that county toll authorities must pledge a portion of their surplus revenues to pay for non-tolled projects.
- Creating a study commission on the use of comprehensive development agreements.
- Exempting managed lane projects in which a portion of an existing controlled-access highway is converted into a toll lane.
CSHB 1892 unanimously passed the committee.
Nichols' moratorium bill passes Senate
SB 1267 by Nichols unanimously passed the Senate April 19. The bill puts a 2-year freeze on comprehensive development agreements for private toll road projects.
"We are now one step closer to protecting Texans from private toll deals that would cripple our transportation system for the next half century," Nichols said after the bill's passage.
The bill as amended excludes the North Texas State Highway 121 and 161 project as well as Loop 9 in the Dallas Metroplex. It also excludes managed toll lane projects. However, Sen. Jeff Wenthworth (R-San Antonio) amended the bill to keep San Antonio in the moratorium.
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