Saturday, June 16, 2007

The Texas Farm Bureau drank Rick Perry's Kool Aid. Now rural landowners pay the price.

Veto Of Property Rights Bill Leaves Farm Bureau “Dumbfounded”

June 16, 2007

Copyright 2007

Kenneith Dierschke, president of the Waco-based Texas Farm Bureau, issued a statement Saturday expressing disappointment over Gov. Rick Perry’s decision to veto House Bill 2006, a bureau-backed measure intended to restore certain protections for property owners involved in eminent domain proceedings.

“The property owners of Texas are dumbfounded that a governor from Paint Creek, Texas could veto the most important property rights legislation in more than a decade,” Dierschke said.

“When the Texas Farm Bureau Board of directors met with him earlier in the session, the governor agreed that eminent domain needed to be fixed,” Dierschke said.

“The taking of private property has become far too easy in this state. Obviously, there are many powerful interests that prefer it stay that way,” he said.

Perry, however, said the bill lawmakers sent to him included two amendments that “would provide a financial windfall for condemnation lawyers at taxpayers’ expense.”

“The state and local government would be over-paying to acquire land through eminent domain in order to enrich a finite number of condemnation lawyers at the expense of Texas taxpayers,” Perry said.

“This bill will slow down and shut down needed construction projects through the creation of a new category of damages that are beyond the pale of reason.”

He said he received letters from “almost ever fast-growth city and county asking him to veto the bill.”

“As someone who grew up in rural Texas, and farmed our family’s piece of land, I am a strong proponent of protecting private property rights,” Perry said.

“But the issue is one of fairness to taxpayers, who will get fleeced in order to benefit condemnation lawyers.”

© 2007 Gray Television Group, Inc. :

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"TxDOT officials said they favored Cintra's bid, based primarily on contract issues already worked out with Cintra and not NTTA."

At odds over asphalt


For Worth Star-Telegram
Copyright 2007

The fight over a contract to build a 24-mile toll project on Texas 121 in Denton and Collin counties has developed with the intensity of bare-knuckles boxing. There won't be blood on the floor when this fight is over (fortunately), but tempers are flaring, and billions of dollars are at stake.

With the 40-member Regional Transportation Council scheduled to pick a winner on Monday, no clear favorite has yet emerged between the two bidders.

The North Texas Tollway Authority offers $2.5 billion upfront and $833 million worth of annual lease payments for the contract to build the road and collect the tolls for 50 years. The Spanish company Cintra, in partnership with JPMorgan Investment Management, is offering $2.15 billion upfront and $717 million over the life of the contract.

The two sides are fighting so hard because the Texas 121 project, in the booming-growth area from north of Grapevine to U.S. 75 in Collin County, is expected to offer especially lucrative toll revenues for the winning bidder.

Cintra seemed to have the deal locked up until state legislators stepped in with a law. A law painfully crafted in the just-ended legislative session says that local public entities like NTTA must be given a shot on toll road projects, tilting the odds in their favor if private offers aren't clearly superior.

That's the way it should be. NTTA is saddled with the responsibility of helping the North Texas region build its transportation network. If plum projects like Texas 121 are snatched away by private bidders and NTTA is left only with the pits, the agency can hardly be expected to succeed.

So far, Cintra has not landed a knockout punch.

At an RTC meeting on Thursday, Texas Department of Transportation officials said they favored the Cintra bid, basing their reasoning primarily on contract issues that already have been worked out with Cintra and not NTTA.

The RTC's financial adviser, Price Waterhouse Coopers, came down marginally in favor of Cintra's bid, but with numbers that NTTA and some RTC members reasonably questioned. Discounting for various elements of risk over time, the number-crunchers valued NTTA's bid at $3.2 billion to $3.4 billion. They put a value of $3.8 billion on Cintra's bid, noting that its downside risks are limited by the already-negotiated contract. But that analysis boosted the Cintra bid's value by $200 million because of federal taxes. How is that a benefit to the state or the region?

And Price Waterhouse Coopers also gave Cintra credit for $700 million worth of "interoperability payments," a complicated system of fees that amount to revenue sharing between the state's major tollway systems. The sharing results when a driver from one area uses an electronic toll payment system (TollTag in North Texas) to drive on a tollway in another part of the state. NTTA officials said the analysis was based on a flawed understanding of how the system works and how much financial benefit it provides.

Under RTC members' questioning, Price Waterhouse Coopers representatives estimated that Cintra and its investors would take home $700 million in profits from the Texas 121 project. That's money that would stay in North Texas and be invested in other roads if NTTA wins the bid.

And North Texas drivers? Congestion has grown enough that earlier objections to toll roads have faded to something more akin to "Just give me a way to get from here to there."

That's the RTC's job. Come Monday, after being presented with a final round of informational briefs from the bidders, the consultants and the RTC staff, the council members must decide this contest. It's not an easy decision, but it is time to make it and get the road built.

© 2007 Fort Worth Star-Telegram:

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"It is not the responsibility of individual property owners to bear all of the costs of these public projects."


Staples: Protecting our property rights

June 16, 2007

Austin American-Statesman
Copyright 2007

Eminent domain is one of the most hotly debated issues in recent memory. Though most Texans agree government must occasionally take property to build roads, water lines, power lines and other public projects, many would likewise agree property owners should be fairly compensated for their loss. In the past few decades, the courts have eroded the right of property owners to be fairly compensated when their property is seized through eminent domain. The Texas Legislature has passed a measure that would restore and protect some of those rights. Every Texan can be proud of House Bill 2006.

The U.S. Supreme Court created much controversy when it said in the Kelo v. City of New London case that property could be condemned for economic development purposes. The Legislature restricted such actions in 2005 and has added more protections in HB 2006. According to the bill, "public use" in Texas means use by "the state, a political subdivision of the state, or the general public." No longer will the government be able to condemn a mom-and-pop business to make way for a high-rise hotel.

Texans have been concerned that their properties were targeted for condemnation before they were given the opportunity to be heard. HB 2006 increases accountability by requiring condemning authorities to hold public meetings and record votes before condemning private property.

A key part of the legislation restricts water and sewer companies from condemning property to gain access to the water rights beneath it. This is an issue of growing concern to Texans as groundwater supplies become increasingly scarce.

Until now, Texans whose land had been taken for a public use, only to see the use abandoned within 10 years, were offered the chance to buy the land back — at fair market value. In most cases, that was much higher than the amount the landowners were originally paid. HB 2006 amends this law to require land to be resold to its former owner for the price paid at the time it was condemned.

For decades, condemning authorities have been required to make a landowner an offer to purchase his or her property before filing suit to get title to the property. The law used to require this offer be made in "good faith." Recently, however, courts have held that any offer will do and that a condemnor has satisfied this obligation with the bare minimum of diligence.

If HB 2006 becomes law, those days are over. It would require condemnors to make offers based on a "thorough investigation and honest assessment" of the land's value. This will reduce litigation and save taxpayers and property owners money.

The bill also addresses the taking of access rights. Texas courts have let condemning authorities escape paying for loss in market value as a result of diminished access as long as the property has access to a public right-of-way. HB 2006 requires compensation be paid for "any diminished access to the highway and to or from the remaining property to the extent it affects the fair market value."

Critics say HB 2006 will cost the government too much money. But it is not the responsibility of individual property owners to bear all of the costs of these public projects. HB 2006 will not open the public treasury up to huge damage awards to landowners; it simply restores some of the protections that have been eroded. We all benefit from improvements to the public infrastructure. HB 2006 ensures the Texans who sacrifice property to build it are treated fairly.

© 2007 Austin American-Statesman:

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Gov. Perry on SB 792: “Under this legislation, every planned road construction project will move forward as scheduled."

TxDOT responds to private toll road ban


by Christine DeLoma
Volume 11, Issue 42
The Lone Star Report
Copyright 2007

With or without the private toll road moratorium, private financing to build the state’s roads still remains on the table, said chairman Texas Transportation Chairman Ric Williamson at the June 14 commission meeting.

Earlier this week, Gov. Rick Perry signed SB 792, a two-year moratorium on comprehensive development agreements between the Texas Department of Transportation (TxDOT) and private developers to build and operate toll roads. (Many urban projects already in the planning stages are exempted from the moratorium).

Private financing

Despite the ban, Williamson said the new law does not preclude the state’s obtaining financing from private developers.

“The Legislature said it’s OK for the private sector to finance these assets,” Williamson said. “It’s OK for them to take the construction. But it’s not OK for them to take the traffic risk and to collect the money from the citizens.” In other words, SB 792 does not allow the private developer of the project to collect toll revenue.

Amadeo Saenz, assistant executive director for TxDOT, said under the “availability payments” method, private developers would put up the entire cost of the project and the state would pay the developer back over a specified period of time.

For example, he said, if the state had a $300 million project, it could pay it off over 10 years. “Once the project is built, [the state would] collect the toll from that toll road and from the tolls [and] pay the developer his $30 million a year,” Saenz said.

“If the tolls are only $20 million a year, because we are keeping the traffic risk, we would have to make up the difference from other sources of money, Fund 6, for example. But if the tolls bring in $40 million a year that would result in $10 million a year in surplus of additional money a year to develop other projects.”

Traditional financing of public toll roads requires local toll entities to secure financing through the bond market.

Market valuation timeline

The new law requires TxDOT and local planning organizations to work together in setting the terms and conditions of new road projects. It also requires them to agree to a market valuation or price of each project. To help facilitate this, the agency developed a timeline in which to work with local tollway authorities and metropolitan planning organizations to implement the planning process.

TxDOT released a list of 87 candidate toll projects throughout the state estimated to cost nearly $60 billion. Agency officials will be meeting with local tolling entities and planning organizations over the next 60 days to develop terms and conditions for each road project.

Once terms and conditions are agreed to, an independent market valuation would be conducted.

Each party would have up to 90 days either to accept or reject the market valuation. If it was accepted, the local tolling entity would have the first option to commit to proceed with the road project within the six months. If the entity declined, TxDOT would have two months to consider building the project.

“These are projects that local officials have said are needed to reduce congestion but are waiting in line for funding,” Williamson said. That’s why all of the projects of the list are slated as toll projects.

Several controversial Trans-Texas Corridor projects appear on the priority list stretch through various counties as far as the Oklahoma state line to Laredo. TxDOT may face an uphill challenge getting agreement from rural communities under the new cooperative arrangement laid out under SB 792.

Exempted projects

The signed legislation is the product of a compromise between the Legislature and the governor. It exempts 12 projects, mostly in urban areas, from the moratorium.

“Under this legislation,” said Perry upon signing the bill, “every planned road construction project will move forward as scheduled, local leaders will have more authority to build new toll roads, and all toll revenue will be used for transportation projects in the area it was raised.”

Exemptions include:

* Trinity Parkway, Dallas

* North Tarrant Expressway

* DFW Connector

* IH-635

* Loop 1604

* SH 121, Dallas area

* SH 161

* Loop 9

* Grand Parkway, Houston

* I-69 South of Refugio County

*Certain CDAs in the county of El Paso, Cameron, or Hildalgo before May 1, 2007.

* Any CDA in Grayson County

Other provisions

* Rights-of-way. SB 792 establishes a statewide method of determining how local tollway authorities can use and acquire state rights-of-way. Under the bill, counties can purchase the right-of-way at actual or historical cost from TxDOT.

* Sunset of CDAs. The CDA process will sunset Sept. 1, 2009, except for certain projects like managed lanes, which sunset in 2011. At that time the Legislature can decide if it wishes to let TxDOT continue using CDAs to build private toll roads.

* Oversight and legislative review. SB 792 sets up a legislative study committee to look at the public policy implications of selling a toll road project to a private vendor. The committee will hold quarterly public meetings and recommend its findings to the Legislature by Dec. 1, 2008.

The bill also requires the attorney general, the Legislative Budget Board, and the state auditor to review certain provisions in a comprehensive development agreement before the contract is signed.

* Public disclosure required. When a CDA can be entered into, TxDOT must make public the terms and conditions of the contract, including how toll rates will be set and the amount of the concession payment. A public hearing must be held after the contract is signed.

* Local primacy. Local tollway authorities are given the first option to build a toll road project. But TxDOT can proceed with a project if a local tollway authority declines to bid. O

© 2007 The Lone Star Report:

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"Unfortunately, this veto exposes property owners ... to the very real threat of eminent domain."

Perry kills bills on property rights, Trans-Texas Corridor

Legislature: Perry vetoes 49 measures, protects his favorite initiatives

June 15, 2007

The Dallas Morning News
Copyright 2007

AUSTIN – A property rights bill that went awry and a mandate for the Trans-Texas Corridor to follow the state's existing highway system were among the 49 bills that fell victim to Gov. Rick Perry's veto pen on Friday.

Mr. Perry targeted at least two bills that he believed would open the courthouse doors to more litigation, including a bill that would have provided a greater balance in eminent domain proceedings. The bill spelled out what public land uses were acceptable in order to take private land and provided more recourse for land owners.

But a provision tacked onto the bill late in the session would have allowed landowners to recover damages for access problems brought by road construction and changes in traffic patterns. The provision would have cost taxpayers potentially many millions of dollars, the governor said.

Officials from Dallas, Denton, Plano, Fort Worth and Frisco were among the dozens of public entities writing the governor urging him to veto the bill, said Mr. Perry's press secretary, Robert Black.

"This bill will slow down and shut down needed construction projects through the creation of a new category of damages that are beyond the pale of reason," Mr. Perry said in a written statement.

Property rights groups were disappointed in the bill's demise.

"Unfortunately, this veto exposes property owners from Freeport to El Paso to the very real threat of eminent domain," said Bill Peacock of the conservative think-tank Texas Public Policy Foundation, who described the bill as one of the most significant landowner rights initiatives in more than a decade.

Mr. Perry also vetoed a bill that would have fine-tuned the sweeping lawsuit limits that were passed in 2003 by allowing injured people to recover more in medical costs. Mr. Perry said those hurt should be allowed to collect only actual medical expenses and not broader estimates of the expense.

The governor also used vetoes to protect some of his favorite initiatives – the Texas Enterprise Fund, in which he doles out money for business relocation incentives, and the Trans-Texas Corridor, a giant swath of tollways and highways.

A bill that would have diverted $13 million from the Enterprise Fund for employment and training was killed, as was a mandate that the highway corridor should tap into the existing free roadway system as much as possible.

In his veto message, Mr. Perry said that selecting the route for the Trans-Texas Corridor could undercut the selection of the environmentally best route for the highway.

Among the bills also axed by the governor were two by Rep. Lois Kolkhorst, R-Brennan, who fought for a moratorium on tollways, and another two by Rep. Dennis Bonnen, R-Angleton, who reversed the governor's mandate for a human papillomavirus vaccine for teenage girls.

Among the losses: a scholarship program for prison correctional officers by Ms. Kolkhorst and a study touted by Mr. Bonnen as the state's first energy plan, outlining the needs and environmental costs of producing electricity over the next five years.

Mr. Black said the vetoes were in no way retaliation for challenging the governor.

"Every bill stands on its own, and in this case they were just bad bills," he said. "I think the governor looked at every bill on its merit. He generally has a philosophy that government should do a few things but do them very well."

Others who didn't fare well with the governor were offenders. Mr. Perry vetoed bills that would have provided ways for inmates to win back prison "good time" credits and that would have allowed education programs in prison segregation areas. Another bill vetoed by the governor could have relieved some county jail crowding by allowing offenders held on minor probation violations to be released on bail.

In all, Mr. Perry vetoed 52 bills and resolutions. Last month, he vetoed a transportation bill and a bill that would have notified former convicts if their right to vote had been restored.

© 2007 The Dallas Morning News Co

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"Given Price Waterhouse's business relationship with Cintra, it's hard to believe the firm could render an objective analysis of the two bids"

Cintra's auditor assessed 121 bids

Price Waterhouse's ties to firm it endorsed for toll road not disclosed

June 15, 2007

The Dallas Morning News
Copyright 2007

An accounting firm's evaluation of rival bids to build and operate the lucrative State Highway 121 toll road may not have been as independent as first billed, according to some public officials who will vote on the bids.

Corporate records show that Price Waterhouse Coopers, which was hired to evaluate the bids, has served as outside auditor to the Spanish firm Cintra since 2003. Cintra also paid the accounting firm $100,000 to develop financial models for the controversial Trans-Texas Corridor highway project in 2004.

Mike Eastland, executive director of the North Central Texas Council of Governments, defended his agency's hiring of Price Waterhouse. He said many council members knew about Price Waterhouse's work as Cintra's auditor but acknowledged that he or his staff should have informed the 39-member Regional Transportation Council about the accounting firm's work with Cintra on the Trans-Texas Corridor.
"We did fail, apparently, to convey that to the board, and I'll take responsibility for that," Mr. Eastland said. "It's an oversight on our part. I can see nothing in the [Price Waterhouse] analysis or their way of presenting it that would say we're trying to slant this one way or the other."

Executives at the North Texas Tollway Authority, Cintra's rival for the Highway 121 contract, said Price Waterhouse's assessment, delivered to the transportation council on Thursday, was biased.

"Our point is incredibly obvious," NTTA board chairman Paul Wageman said. "The judge of a competition should not be in business with one of the contestants. How can Price Waterhouse Coopers possibly be unbiased and fair in evaluating its partner's proposal against a competitor's?

"What the NTTA, the RTC members and the region didn't know is that Price Waterhouse Coopers is part of Cintra's team on a [Trans-Texas Corridor] project worth billions of dollars," Mr. Wageman said.

"That's sour grapes," said Cintra's Jose Lopez, president of the company's North American operations.

Cintra's proposal came out looking better simply because it is, Mr. Lopez said. He said Cintra's partnership with Price Waterhouse on the Trans-Texas Corridor was minor and concluded in 2005.

The council of governments paid Price Waterhouse about $200,000 for its report, which was highly critical of NTTA's proposal.

Many members of the Regional Transportation Council had considered the report's conclusions essential. It was to be their only chance to have an independent firm assess the bidders' billion-dollar claims.

By Friday, however, word of the potential conflict had circulated among council members who had gathered in Arlington for an annual luncheon. Some members said they were aware of at least some of Price Waterhouse's ties to Cintra. Others said they learned about them only Friday.

"I just found it out as we were sitting down to lunch here today," said John Murphy, a Richardson City Council member who sits on the RTC. "I'm very disappointed, quite frankly, that we did not have that disclosure made to us, because it does change the perception, and it may change our feelings regarding what is the right picture of the Cintra and NTTA bids."

Given Price Waterhouse's business relationship with Cintra, it's hard to believe the firm could render an objective analysis of the two bids, Mr. Murphy said.

The discussion about Cintra's business relationships with Price Waterhouse comes at a critical time.

The Regional Transportation Council is scheduled to vote Monday on whether to endorse Cintra or NTTA. The Texas Transportation Commission, which sets policy for Texas highways, will meet on June 28 in Austin and is scheduled to make a final decision on the Highway 121 project.

Limited choices

Mr. Eastland said the North Central Texas Council of Governments selected the best accounting firm it could on short notice. The job entailed reviewing highly complex proposals that are hundreds of pages long. The firm had about two weeks to complete its review.

"The fact was we weren't going to get anybody that didn't have a conflict that was capable of doing the work. And then it got down to degree of conflicts. Do we do the study, or do we not do it? ... Were we better off not to have any analysis work done?" Mr. Eastland said. "Or do we take the best that we can get, the most distant from the process?"

Council of Governments transportation director Michael Morris said in an interview earlier this week that the agency had difficulty finding qualified bidders for the analysis the RTC wanted done. Mr. Morris said seven of the nine accounting firms invited to bid on the work declined.

But Barry J. Epstein, an expert in accounting standards of conduct and a lawyer specializing in cases about accounting practices, said Price Waterhouse should never have bid on the contract since it is Cintra's auditor.

"This is beyond the pale," Mr. Epstein said. "They should not have bid for the job, given that one of their clients was a candidate [for the road contract]."

Rigorous protocols

Price Waterhouse defended its decision to evaluate the bids for the RTC, insisting that the Spanish office that audits Cintra's books is separate from the U.S. firm.

"The Spanish audit relationship was fully disclosed to the North Central Texas Council of Governments," said Steven Silber, a spokesman for Price Waterhouse in New York. "In accordance with our independence standards, at no time was there any sharing, or mutuality, of personnel or project information between the teams conducting the bid analysis in Texas and the team auditing Cintra."

Mr. Silber also said the firm rigorously evaluated its relationships with Cintra before submitting its bid.

Some NCTCOG members who agreed to hire Price Waterhouse without knowing about its work in Texas for Cintra said Friday that they might have hired the firm anyway.

"What decision would we have made had we known about the advisory services? I don't know," Tarrant County Judge Glen Whitley said. "That's water under the bridge. I can't tell you what we would have done at that point."

Mr. Whitley said the fact that Price Waterhouse audits Cintra doesn't concern him.

"When you talk about the separateness of that office in Madrid versus this office in this particular area, I do not think that would in any way cause there to be that conflict. The size of the fee that we're talking about here, Price Waterhouse is not going to risk their reputation over a couple hundred thousand dollars' worth of fees."

Mr. Wageman said Thursday's meeting left him and the NTTA "concerned" about the likelihood of getting a fair vote on Monday.


Price Waterhouse Coopers wasn't the first consultant to assess the complex proposals submitted by Cintra, a company based in Spain, and the North Texas Tollway Authority, a tax-exempt operation. Were the evaluations independent and objective? Draw your own conclusions:

• The North Central Texas Council of Governments hired Price Waterhouse to evaluate the State Highway 121 bids. Price Waterhouse is Cintra's outside auditor and has provided financial advice to Cintra, which was awarded a state contract in 2004 for preliminary development work on the Trans Texas Corridor. Price Waterhouse found Cintra's bid superior to NTTA.

• NTTA hired Bernard Weinstein, a University of North Texas economist, to evaluate the proposals. He concluded that NTTA's bid is better for North Texas. He said Cintra would return Highway 121 toll profits to shareholders. By comparison, he said, NTTA would keep its excess revenue to build future roads in the region. The eight-page study did not address whether NTTA's decision to borrow heavily to finance the 121 project would reduce its ability to borrow more money to finance future projects.

• Cintra hired Nobel Prize-nominated economist Ray Perryman of Waco. His company concluded that the region would gain almost twice as large an economic benefit if Cintra wins the contract. He argues that fewer roads ultimately will be built in North Texas if NTTA wins the 121 contract. The reason, he said, is that NTTA will have exhausted some of its borrowing capacity on the 121 project.

• Cintra hired Massachusetts Institute of Technology professor and lawyer John B. Miller, who also is associated with the powerhouse Washington, D.C., law firm Patton Boggs. Mr. Miller concluded that North Texas would benefit from Cintra's plan to invest $763 million to build the 121 toll road as opposed to the NTTA plan to borrow all of the up-front money it has pledged to the state.;

For more on Ray Perryman CLICK HERE

© 2007 The Dallas Morning News Co

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Perry's desire for giant limited access toll road corridors (TTC) is the real reason for property rights veto

Bill to protect property rights among governor's vetoes

June 15, 2007

Copyright 2007

Governor Rick Perry vetoed on Friday a comprehensive piece of legislation designed to give property owners more eminent domain protections.

Remember Harry Whittington?

He's famous for being shot by Vice President Dick Cheney, but he's a big Austin real estate owner, too. A jury recently ordered the City of Austin to pay Whittington $10.5 million for acting illegally in taking a block of downtown land that he owned.

"The city of Austin took it, problem was, they didn't say what they were taking it for," said Bill Peacock, analyst with the Texas Public Policy Foundation.

Peacock said the case shows by property owners need more eminent domain protections in the law.

"While [Whittington] can afford to go through such a process, most property owners can't," said Peacock.

So this past session, lawmakers passed HB 2006, an bill designed to clarify and put some limitations on eminent domain.

"It would have required cities and counties come up with valid reasons for taking property, and defined public use," Peacock said.

But instead of signing the bill, the Governor vetoed it.

"No governor could ever sign this bill," said State Rep. Mike Krusee, R-Round Rock.

Krusee and Perry both liked the bulk of the legislation, but didn't like an 11th hour amendment requiring the state to compensate property owners for "disturbed access" -- which can include even small changes to the way people get to their homes or businesses.

"The cost of that would be so high that you couldn't build anymore roads in Texas," said Krusee.

The amendment ultimately led the rest of the bill to be rejected. Perry has until Sunday to veto or sign the thousands of bills lawmakers have sent him.

© 2007 KVUE Television, Inc.:

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TxDOT studies Big Brother speed traps on state highways

TxDOT plans to use cameras to track speeding drivers


by Christine DeLoma
Volume 11, Issue 42
The Lone Star Report
Copyright 2007

Despite the widespread opposition among legislators over use of automated speed cameras to ticket drivers, the Texas Department of Transportation (TxDOT) is moving full speed ahead to study the use of such cameras on state highways.

Lawmakers in May voted to prohibit the practice after hearing constituents complain about receiving speeding tickets in the mail from automated cameras set up in two Texas cities.

If Gov. Rick Perry signs HB 922 by Rep. Vicki Truitt (R-Keller), municipalities like Marble Falls and Rhome will no longer be able to use automated speed cameras.

Marble Falls had set up a “speed van” equipped with a radar device that captured how fast a car was going — this in addition to a camera that took snapshots of drivers’ licenses plates. Violators were sent citations in the mail.

The legislation, however, does not apply to areas outside city limits.

In April, TxDOT began looking for a vendor to install, operate and maintain an “automated speed notification” test program. Cameras would be installed on Interstate Highway 10 in Hudspeth County, State Highway 6 between College Station and Navasota and between Bryan and College Station.

“This is a TxDOT-initiated study… in the name of safety,” said Mark Cross, agency spokesman.

Marble Falls disabled its program after TxDOT complained it was unsafe for the city to use the device on the state’s right of ways.

Upon learning of TxDOT’s intention to set up automated cameras as part of a six-month pilot study, Marble Falls mayor Raymond Whitman called the move “hypocritical,” as reported in the Daily Tribune.

Unlike Marble Falls’ set up, TxDOT would use two cameras — one to photograph motorists as they enter a stretch of highway, the other camera would photograph when they exit the area. The system would then calculate the average speed between the two points on the road. Anyone caught driving 5 miles per hour over the maximum speed limit are flagged.

Because it’s only a pilot program, violators would not be ticketed, but would be sent a warning notice in the mail that they were speeding.

Cross said study costs are capped at $2.5 million, to be paid with state tax dollars.

Given the legislature’s opposition to municipalities’ using the technology to ticket speeders, it is unclear if the results of TxDOT’s study would sway lawmakers to implement a statewide policy.

“I can’t speak for the legislature,” Cross said. “All I can say is that this is our initiative to go out and study the technology to evaluate its usefulness, period.”

Nonetheless, Cross noted that TxDOT would not implement such a program, because it lacks the authority to issue citations.

© 2007 The Lone Star Report:

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Friday, June 15, 2007

"Current Texas law allows land grabs. HB 2006 would stop these abuses."


The moat around the castle


Fort Worth Star-Telegram
Copyright 2007

Last month, the Texas Legislature overwhelmingly passed House Bill 2006 -- historic eminent domain reforms that would right the wrong of the U.S. Supreme Court's infamous decision in Kelo v. City of New London.

Almost two years ago, the court ruled that using eminent domain to take private property for "economic development" was constitutional. Texas was one of the first states to respond to the decision, passing legislation that on its face was a good first step but left considerable room for eminent domain abuse -- the transfer of property from one private individual to another for private profit, not public use.

HB 2006 provides substantive and nearly complete protection for Texas farmers, ranchers, and home and small-business owners. It awaits Gov. Rick Perry's signature.

The legislation focuses on what constitutes "public use" and creates procedures that are fairer to small property owners. This legislation restores the traditional and publicly accepted definition of public use -- the term perverted by the U.S. Supreme Court -- to essentially mean merely a public benefit. Should Perry sign the bill, eminent domain would be restricted to (with limited exceptions) to situations in which property would be acquired for the possession, ownership and occupation of the general public.

This definition is particularly important as it relates to blight. Blight removal has morphed from a justification to acquire properties that pose a true danger to public health and safety -- actual slums -- to an excuse to forcibly take perfectly fine properties for the purpose of increasing tax revenue.

Two notorious situations on opposite sides of the state, El Paso and Freeport, show exactly how blight laws are abused to take well-maintained properties from rightful owners only to hand that land over to better-connected private developers.

In El Paso, the city plans to replace many downtown merchants, including Jerry and Marvin Rosenbaum and Walter Kim, who rely primarily on their proximity to the state's border with Mexico for business, with chain stores and condominiums.

Wright Gore is fighting to keep his family's seafood business along the Brazos River in Freeport. The city hopes to take Western Seafood and replace it with a private yacht marina with residences and retail.

Current Texas law allows such land grabs. HB 2006 would stop these abuses.

Although state and local governments retain the ability to acquire property for genuine public uses, such as roads or courthouses or utilities, the use of eminent domain ultimately would be restricted to situations in which the general public would own and enjoy the property. Coupled with the additional voting, notice and compensation requirements, HB 2006 stands as one of the strongest examples of eminent domain reform in the country.

Of the 41 states that have changed their eminent domain laws since Kelo, Texas can be proud that HB 2006 is among the best. Indeed, the Legislature recognized the weakness that remained from its earlier reform and moved to ensure that all Texans are protected from the abuse of eminent domain.

House Bill 2006

To read the bill for yourself, go to

The last day for Gov. Rick Perry to sign bills into law is Sunday. Bills still can become law without the governor's signature.

If Perry does not veto HB 2006, it would go into effect Sept. 1.

Steven Anderson is an attorney at the Institute for Justice, which litigated the Kelo case, and also director of its Castle Coalition.

© 2007 Fort Worth Star-Telegram:

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TxDOT and toll road authorities oppose eminent domain bill

On the Lege

Eminent-Domain Fight Moves to Perry's Desk


Austin Chronicle
Copyright 2007

An eminent-domain bill awaiting the blessing or veto of Gov. Rick Perry is stirring up more opposition now than it did when it was wending its way toward easy passage in the Legislature. The reality of the bill's potential fiscal impact on local governments apparently didn't hit home until the measure arrived on the governor's desk.

Now, cities and other public entities have moved into crisis mode and are urging Perry to veto the legislation. They argue it would bankrupt local governments that rely on eminent domain to build roads and other public-use projects. The governor's office is also hearing from equally passionate supporters of the bill, who include land-rights activists, agricultural interests, and grassroots neighborhood groups that want Perry to follow the lead of the Lege, which saw very few dissenting votes in either chamber. Perry has until Sunday to decide the fate of House Bill 2006 and a raft of other bills that passed this session.

What sets this bill apart from previous land-rights measures is its appeal to Democratic legislators for a couple of reasons – recent public outcries over the state's land-grabbing expedition to build toll roads and several cities' attempts to redevelop low-income downtown-area neighborhoods through eminent domain. The legislation could put the kibosh on the latter by limiting local governments' ability to play the "blight" card in condemning entire neighborhoods for redevelopment.

El Paso would have the most to lose in the short term because the bill could hamper the city's authority in condemning more than 150 acres of property in the historic Segundo Barrio, El Paso's oldest and most storied neighborhood. The community is home to thousands of residents and small businesses catering to shoppers from across the Mexican border. El Paso Democratic Rep. Paul Moreno believes the enhanced eminent-domain measure would indeed prevent the city from bulldozing the community he grew up in. He hopes he is right. "I am totally, totally against [the plan]," he said. "I am of the opinion that they cannot proceed if this bill becomes law." Opposition to the El Paso proposal has gained momentum since The Texas Observer's May 4 cover story on the matter.

The El Paso plan is extraordinarily controversial because it pits business and real estate interests – in partnership with the city – against a neighborhood that represents sacred ground for its Hispanic residents and small business owners, many of whom migrated to the U.S. from other countries. "The City Council is controlled by the big boys," Moreno said of the city's willingness to invest hundreds of thousands of dollars to further private interests in the gentrification of El Segundo, in a proposal calling for lofts, trendy shops, and perhaps a Wal-Mart or a Target store. One of the "big boys" behind the plan is real estate developer Bill Sanders, who is also the father-in-law of City Council Member Beto O'Rourke. "The City Council members are good people," Moreno said, "but they are mistaken."

Veto proponents, in addition to El Paso, include the cities of Dallas and San Antonio, as well as Tarrant and Harris counties. They have asked Perry to veto the bill on grounds that it would disrupt long-planned transportation projects, the same argument put forth by El Paso officials. A fiscal note on the bill includes a Texas Department of Transportation estimate that the new law would cost the state $800 million for highway projects. And the Harris County Toll Road Authority estimates it would run into costs of $1 billion over five years, during the construction period of 100 miles of toll roads.

Austin-area municipalities, for the most part, have been less vocal on the bill, although Travis County and the city of Round Rock have written letters against it. Travis County's beef is that the law would open the door for more lawsuits at taxpayers' expense. The city of Austin has kept quiet on the matter, perhaps out of gratitude that the measure doesn't seek to further chip away at the city's development rules in environmentally sensitive areas.

In a nutshell, the land-rights bill would require governments to shed more sunshine on their eminent-domain efforts and to make "good-faith" offers on private land needed for public use. It would also tighten the ban on taking private property for economic development purposes, adding protections to an existing state law that grew out of a 2005 U.S. Supreme Court ruling siding with local governments on an eminent-domain case in Connecticut. The measure also includes a buyback provision for landowners, requiring a constitutional amendment that voters will address in the November election.

Until Perry makes a decision on the legislation, the Texas Conference of Urban Counties and the Texas Municipal League are encouraging cities to step up lobbying efforts in support of a veto. On the other side, the Texas Wildlife Association, the libertarian Institute of Public Justice, an assortment of agricultural groups, and the less-government advocates at the Texas Public Policy Foundation are championing the measure. Bill Peacock, director of the Center for Economic Freedom at TPPF, believes the odds favor Perry's blessing of the bill, which other state legislatures are watching closely. Peacock points to El Paso as a textbook example of eminent-domain abuse. "They just want to raze blocks and blocks of homes and businesses," he said. "That's one of the problems with the existing law. [Governments] get to come in and designate a person's private property as 'blighted.'"

© 2007 Austin Chronicle:

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"Congress needs to do hearings and put some sunshine on this transfer of our public assets to private buccaneers."

Rudy Giuliani Benefits From Sale Of U.S. Highways To Foreign Companies

Q&A With Pat Choate On Privatizing U.S. Highways & The NAFTA Superhighway



Vol. 14 No. 11
Manufacturing & Technology News
Copyright 2007

The sell-off of American highways to private companies coupled with the controversial plan to build the "NAFTA Superhighway" has become an explosive political subject in many states. The influx of foreign companies involved in becoming owners of public assets has further enraged the public, as have details about their financial ties with some of the country's most well-known politicians.

One of the biggest whoppers in the whole debate about political patronage and the sell-off of public infrastructure concerns the $100-million buyout of the firm owned by Republican presidential contender Rudy Giuliani by Macquarie, the big Australian investment banking firm.

Macquarie Infrastructure has partnered with the Spanish firm Cintra Concesiones de Infraestructuras de Transporte in the controversial purchase of the Indiana Toll Road. The two companies are also part of a major political uprising in Texas concerning the privatization of State Highway 121 outside of Dallas. A Macquarie division has spent $110 million buying up 42 local newspapers along the Trans-Texas Corridor (the NAFTA Superhighway corridor).

Pat Choate, who was Ross Perot's running mate on the 1996 presidential ticket, has spent the past year studying the NAFTA Superhighway and state and federal governments' desire to privatize America's highways. Choate is known as one of America's foremost economic experts on infrastructure. Twenty-five years ago, he wrote two influential books --"America in Ruins" and "Bad Roads." He alerted America that there was an "infrastructure crisis" coming. It is now squarely upon us.

President Reagan appointed Choate to his task force to develop the policy agenda for his second term. Choate wrote the infrastructure section.

Choate is a native Texan whose family has lived in Ellis County for more than 160 years. He is currently director of the Manufacturing Policy Project. He received an M.A. and a Ph.D. in economics from the University of Oklahoma.

He sat down recently with Manufacturing & Technology News editor Richard McCormack to discuss the latest developments in the ongoing saga of privatizing America's infrastructure. He provided documentation for virtually everything he describes in the interview below.

Question: What are the latest developments in the debate over privatizing American highways?

Choate: Texas is the battleground for a major policy shift on who owns and operates America's public infrastructure, including highways. You have the U.S. Department of Transportation trying to get the states to lease public roads to private toll operators and allow these private operators to build new ones. In Texas, there is a budgetary shell game under way. The governor and the legislature beginning with George W. Bush, have diverted $15 billion out of the state highway department and put that money in the general budget. In Texas, they now have 85 percent of their highway transportation money going into maintaining their roads and only 15 percent going into new construction, compared to the national state average of 52 percent going into maintenance and 48 percent into construction.

The Texas legislature and governor have chosen to get big chunks of up-front money -- $2-billion to $3-billion per project on 13 projects around the state along with $6 billion or $7 billion on the 600-mile Trans Texas Corridor -- by turning public roads over to private interests.

Fundamentally what is happening is Gov. Perry wishes to finance his tax cuts by getting pre-payments on leasing public property. They are turning the public infrastructure over to private entities for 50 years.

Q: How is that playing out in Texas?

Choate: You have a handful of citizens -- people who are really extraordinary -- who said they're not going to put up with it. The first thing they did was actively participate in the Texas Department of Transportation environmental hearings. They got 14,000 people to show up at those meetings which TxDOT really intended to be perfunctory events.

There was a documentary filmmaker who made "Truth Be Told," which just won the Houston Film Award for best documentary. He filmed the public hearings -- it's terrific stuff. The witnesses were passionate and could not believe the governor and legislature intended to convert one of the state's major freeways into a privately-owned toll road.

When the legislature came back in session this year, they had heard from their constituents. They approved a piece of legislation [HB-1892] by a vote of 131-to-1 in the House and 27-to-4 in the Senate that mandated a two-year moratorium on privatization. Yet the governor vetoed it.

When the bill looked like it was going to pass, Perry rushed forward and signed a contract with [Spanish firm] Cintra to complete the privatization of Rt. 121 in Dallas.

Involved in this rush deal on Rt. 121 in Dallas was a very prominent New York lawyer from a Texas firm named Bracewell & Giuliani who was paid very handsome amounts to put together the finance and legal work. In March, Macquarie Bank from Australia bought [Presidential hopeful Rudy] Giuliani's investment division, which had less than 100 people and lost $1.65 million last year. Macquarie paid $100 million for it. Giuliani personally gets $70 million.

Q: Why hasn't there been much reporting or attention paid to this sale, given its controversial nature?

Choate: There has literally been no coverage here, but in the Australian press you got all this reporting about the deal saying, "What is Macquarie doing? They are overpaying for this company."

Well, I can tell you exactly what they're doing. Macquarie can't put money into a presidential campaign, but Rudy Giuliani can. It's a back-door way to finance the Giuliani campaign for 20-million, 40-million, 50-million bucks. Macquarie wants to own a president who will do tolling all over America. It is phenomenal.

Macquarie is a very shrewd corporation. As the opposition to this highway deal heated up in Texas, Macquarie bought 42 little newspapers, virtually all of which are along the route and most of which opposed the deal editorially. Why not? They can take billions of dollars out of Texas if Gov. Perry gets his way.

Q: Why has Gov. Perry been so adamant in pursuing this?

Choate: He's diverting the highway funds to the state budget so he can cut taxes. This is how the no-new-tax guys are financing their stuff. Indiana Gov. Mitch Daniels got $3.8 billion from the sale of his toll road so that he can finance everything else. But when that money runs out his successor and the people of Indiana are stuck for 60 years with a foreign-based company controlling a major part of their development rights through the center of their state.

In Texas, Perry got the legislature to change the standards. Instead of awarding to the lowest price bidder it's now the best value. Talk about flexibility. So now Cintra wins all the contracts. He was rushing to do a contract with Cintra on a high-volume bypass road in Dallas that was two-thirds of the way finished and was built with public funds. Cintra would pay the state $2.3 billion and finish the road and have a 50-year lease on it. In the deal, the governor signed a no-compete clause for 10 miles on either side on the road -- you can do nothing for 50 years that will take traffic away from the toll road.

The other thing he did was have TxDOT set it up so that the North Texas Toll Authority (NTTA), a very experienced toll authority that has worked in the public interest for decades, could not bid on the project. People were furious.

A state senator named John Carona, who chairs the Senate Transportation Committee asked NTTA to use the same assumptions that Cintra used and asked them what they would have bid. They would have bid $3.5-billion more. The outrage was so great that the governor backed off. But Cintra supporters got the Federal Highway Administration in Washington to send a letter which, in effect, threatens to cut off federal highway funds if they redo the bid because of the "integrity" of the bidding process. Give me a break.

[U.S. Sen.] Kay Bailey Hutchison [R-Texas] then sent a letter to [U.S. Department of Transportation] Secretary Mary Peters to get this out in the open. Peters comes back and says that's not what the letter meant. Then the Federal Highway Administration sent another letter, which said that is exactly what it means if you do it. There is a revolution going on over in DOT.

Then [U.S. House of Representatives] member Nick Lampson (D-Texas] had Sec. Mary Peters up before the Transportation Committee [on May 11]. He had all the letters concerning DOT's interference with the bill passed by the Texas legislature. Peters said to him: "We're not going to interfere. Texas can do what it wants if they can get a better deal on it."

Well, when you go into the DOT Web site, you'll find that DOT has "model" legislation for the states showing them how they can change their constitutions and laws so that they can sell off and lease their public roads to private entities. They call it PPP -- Public/Private Partnerships. It's unbelievable.

Mary Peters, a Republican, was transportation director for Arizona. Then she went to work for a large firm that helped states convert and build private roads. The person she brought with her as general counsel, a man named [David James] Gribbins, had worked as a field organizer for Pat Robertson and Ralph Reed for the Christian Coalition.

Gribbins then goes to Koch Industries in Wichita where his job is to sell states and communities on PPPs.

The Bush administration named him to be the chief counsel at the Federal Highway Administration where he worked with Gov. Mitch Daniels in Indiana doing these deals. He then left to work as the chief lobbyist in Washington, D.C., for Macquarie Bank, one of the largest of these operators in the world. In January, he got nominated to be chief counsel to the Department of Transportation. Macquarie and Cintra work together. It was Macquarie and Cintra that jointly did the Indiana Toll Road and they are doing other projects together. What you wind up with is privateers coming from these beneficiary companies now running the Department of Transportation.

Q: What's the backlash been in Indiana?

Choate: They doubled the toll on that road. If the state re-does the contract, it has to pay the company their lost profits for the balance of the contract. This is not about providing the best transportation at the least cost: it's about making the most amount of money. These companies are only there for the profit and they'll raise the rates even if volume drops until they maximize profit. They plot the curve.

This is a radical departure as to how this country has gone about building and operating roads for the last century. The question voters face is do they want to cut other state taxes and finance state operations by selling concessions to private companies for the operation of public facilities in exchange for a big up-front payment and perhaps some part of the revenues?

Q: What's happening with the NAFTA Superhighway?

Choate: The Trans Texas Corridor is on hold for two years. Seven people in Texas who mobilized the opposition have brought it to a stop. Most of the Mexican toll roads necessary for the long corridor from ports in Southwest Mexico are in place. The rail is in place. The issue is not that there is not going to be a route -- there is going to be a corridor, which is Rt. 35, the major north-south route that now exists.

A super corridor has congressional approval and it's going to be built, but the question is this: Is it going to be a private or public road?

Rt. 35 was built 50 years ago with enough space to easily double it. It's a major artery and it's very busy. There are four major arteries north-south in the United States. All four are overcrowded. The truth is we need to expand those roads for our own purposes, but the last thing we need do is turn them over to the private operators. If the federal government allows states to toll these interstates, it's a guaranteed money maker. If the country is going to toll this national highway, it should be through a state public authority and the profits should be used to build feeders. Selling or leasing parts of our interstate system is not something that should be left to the governors or state legislatures. These roads are part of a national system, owned by all of us.

Reps. Jim Oberstar [D-Minn.], chairman of the House Transportation Committee and Peter DeFazio [D-Ore.], chairman of the subcommittee on highways and transit, sent a letter to all of the governors on May 10 telling them not to do any of these deals. They said: "We strongly discourage you from entering into public-private partnerships ("PPP") agreements that are not in the long-term public interest.

Although Bush administration officials have lauded PPPs at every turn, the Committee on Transportation and Infrastructure of the U.S. House of Representatives believes that many of the arrangements that have been proposed do not adequately protect the public interest." They said that the committee will work to "undo any state PPP agreements that do not fully protect the public interest."

Q: If there is so much public resentment over these deals, then why are they still happening?

Choate: What I think has happened is that "read-my-lips" George Bush Sr. couldn't figure a way to operate government without raising taxes. His son solved the problem by radically increasing the national debt, borrowing primarily from the central banks of other nations.

Now, we have a new generation of Republicans who say I'll cut taxes, and I'll never raise taxes. They intend to finance their promise by selling off the public infrastructure. What the public doesn't understand and what the media is not explaining is that the private operations of our public infrastructure represents the highest tax you can possibly have because those investors are going to run up the prices they charge to the limit and under the binding contracts these "no-new-tax" governors are signing, we have no democratic alternative for dealing with these contracts.

The other thing that happens is that Perry has found a fantastic way to finance his political career. In his last race for governor, he got $2.5 million in donations from the sponsors of these deals.

That is a lot of money.

No wonder he is being talked about as a possible GOP vice presidential candidate in 2008. You have engineers, lawyers, investment bankers and construction companies who are happy to keep their champion in there. What other governor would look at the 131-to-1 vote against him and say I cannot be overridden in a veto?

This Texas fight is really important because you have a popular uprising. This was the number-one issue in the Texas legislature this year.

Q: What other private companies are involved?

Choate: Fluor, Bechtel, and Koch Industries, which is a $30-billion corporation. Goldman Sachs and Morgan Bank are willing to raise the money for these kinds of deals. If you are a governor and you need $3 billion, $4 billion or $5 billion to finance state government and you have a heavily trafficked route, these private companies will come in and pay the state the money and you're all of a sudden flush with cash. They will put together a package and their teams of lawyers will come in to work with you on what you need to do to change your state constitution and change your laws.

If you need to do a referendum, they will help you finance and run the referendum. They'll lobby the state legislature and the local media. To streamline all of this, the U.S. Department of Transportation is working with them state by state on privatizing public roads. The Department of Transportation is flacking for Wall Street and a couple of foreign corporations.

This recent exchange of letters with the Federal Highway Administration, Congress and TxDOT shows how they are extorting the states that want to take a more responsible approach. Congress needs to do hearings and put some sunshine on this transfer of our public assets to private buccaneers.

© 2007 Manufacturing & Technology News:

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE


"The session is over, but the battle goes on. "

Political Toll

Moratorium preserves big chunks of Perry's Trans-Texas Corridor


by Eileen Welsome
The Texas Observer
Copyright 2007

The conservatively dressed representatives of the Texas Department of Transportation who walked into the Capitol rotunda this spring found themselves engulfed in a perfect storm. For months, bloggers had been at their keyboards, whipping up fractious constituents. Demonstrations had been held, bumper stickers passed out, and alliances forged between groups that normally find themselves at opposing ends of the political spectrum. They had a common goal: slaying the Hydra-headed monster—the Trans-Texas Corridor—a network of supercorridors with lanes for cars, trucks, trains, and pipelines, as well as other infrastructure.

Ric Williamson, who chaired the monthly Texas Transportation Commission meetings with the benign indifference of Henry the Eighth, could have looked out a window of the gothic Greer Building on 11th Street and seen the gathering clouds at the Capitol. But Williamson, an old friend of Gov. Rick Perry and an ex-legislator himself, was not concerned with such piffle. He had more important things on his mind, like the $86 billion shortfall that TxDOT faced in a few decades, when there would not be enough money to maintain roads. Williamson felt the best way to solve the $86 billion problem (a figure state auditors would later say was inflated) was to let deep-pocketed multinational companies build gleaming new tollways that would be paid for by Texas drivers for the next two, three, or even four generations.

To Williamson and his bevy of engineers, lawyers, consultants, and flacks, the “noisies,” as one journalist described the grassroots groups, could be waved off like flies. But TxDOT officials soon realized that virtually every member of the House and Senate was buzzing mad, too, because lawmakers had just survived elections in which toll roads were a key issue.

TxDOTies came to the Legislature with an ambitious wish list, including finding money to build their very own railroad. Lawmakers were in no mood to give them anything. They wanted blood, particularly Williamson’s blood, for stoking an already volatile situation by alienating transportation authorities from Dallas and Houston.

Once Williamson’s forces realized how much ill will they had engendered, they abandoned their grandiose dreams and played defense. What ensued was a good old-fashioned Texas brawl. While Perry holed up in the Governor’s Mansion, Rep. Mike Krusee, a Round Rock Republican and Perry’s go-to transportation guy, tried to stamp out the populist uprising with arguments about interest rates, bonds, and the efficiency of private equity partners. Williamson began to look less like Henry the Eighth and more like a trussed-up Marie Antoinette, sitting in a horse cart and headed for the guillotine.

Peter Samuel, an irreverent Australian who publishes a pro-toll road newsletter, watched the Texas goings-on from his headquarters in Maryland. A history buff, Samuel likened the movement to halt the TTC and other toll roads to France’s capitulation to the Germans in 1940: “This whole wild campaign for a toll road concession moratorium in Texas could be seen as the biggest and most dramatic setback for the forces of enlightenment and progress since mid-May 1940, when Reich Gen. Heinz Guderian’s XIX army corps Panzers burst out of the Ardennes forests of Belgium, established pontoon bridges over the Meuse, and cut off the bulk of the French and British armies, leading to the fall of France to the Nazis—despite France’s numerical superiority in soldiers, tanks, and artillery, its equality in airplanes, and its strong defensive positions.”

What’s more, it wasn’t the French-loving Dems who led the campaign, but freedom fry-crunching Republicans like state Sens. John Carona of Dallas and Steve Ogden of Bryan. The TxDOTies went into a swoon after the defection of state Sen. Robert Nichols, a freshman Republican legislator from Jacksonville who had served on the Transportation Commission for eight years.

White-haired, bearded, and extremely bright, Nichols worked his way through Lamar University selling fireworks and ironing clothes for other students. In 2006, he won the Senate seat vacated by Todd Staples, and soon had a spot on Carona’s Transportation and Homeland Security Committee.

On March 1, when the committee held the Legislature’s first public hearing on the TTC and related toll road projects, Nichols listened attentively, stroking his beard, occasionally asking a pointed question. A few days later, he filed a bill imposing a two-year moratorium on toll projects governed by comprehensive development agreements. In the House, Brenham Rep. Lois Kolkhorst, another Republican representing a rural district, filed an identical measure.

Nichols was worried by several aspects of the comprehensive development agreements. He didn’t like the noncompete clauses, which could require the state to reimburse developers for lost revenue if Texas built a free road that competed with the toll facility. In a letter circulated on the Internet, Nichols noted that in 2004 both transportation officials and Cintra-Zachry, the American-Spanish partnership chosen to build the corridor, had promised there would be no noncompete clauses. “Put simply, the state is enacting a policy that forces Texans to drive on a toll road with very few alternatives. In high-growth areas, the private toll operator will be free to increase tolls as demand for the road increases. New road construction by the state would be penalized, thereby setting up a classic monopoly, agreed to by the state, forcing Texans to pay ever-increasing tolls.” Nichols used a devastatingly simple metaphor to drive home his point: “Imagine if you could make a deal with the state to build a store in your hometown, use the state’s power of eminent domain to take the land needed for your store, and then get the state to agree to refrain from building another store in your hometown for 50 years. Now imagine your hometown was projected to have double-digit growth. While it may be hard to fault any business for pursuing such a deal, the taxpayers would hold elected officials accountable.”

Nichols was also worried about the absence of clear language stating how much the state would pay to buy back a toll project. In some cases, he estimated the buyback price could be 48 times the original cost. He wrote, “The private companies prefer to put off addressing the buyback issue until another day. This means the private companies would be free to hire experts to determine what they think the road is worth. It does not take a genius to figure out the companies will calculate the price in a way that enriches shareholders and leaves taxpayers holding the bag. Therefore, before any contract is signed, the state should negotiate an agreed-upon formula.”

Hundreds of citizens showed up at the Capitol for Carona’s hearing. Unlike the lobbyists, who gathered outside with their palms and Palm Pilots out, the citizens didn’t come to the Lege asking for anything. Instead, they wanted to give something—more taxes—so their grandchildren and great-grandchildren wouldn’t have to pay tolls. “Tax me,” begged one man, flinging open his arms.

The state motor fuel tax, which historically has been used to build and maintain highways, stands at 20 cents a gallon, with a nickel diverted to education. Krusee, whose enthusiasm for tolls remains undiminished, on two occasions pushed legislation allowing the gas tax to rise with inflation. Both efforts flamed out, but Krusee scored a subtle victory that may well come back to haunt legislators during the next election season: “Everyone’s on record as to whether they want to tax or toll,” he said. “They don’t want to tax.”

After the hearing, the toll road issue disappeared into hallways and backrooms where lobbyists, lawmakers, and other interested parties diced, spliced, seasoned, smoked, and stuffed language into bills. Local officials from Houston and the Dallas-Fort Worth area began lobbying hard for toll road projects in their heavily congested cities. Representatives from the governor’s office, high-level TxDOT operatives, and members of the highway lobby trolled the corridors. The moratorium movement seemed to run out of gas.

Then Kolkhorst tacked her moratorium proposal onto House Bill 1892, a transportation bill sponsored by Wayne Smith, a Baytown Republican. The bill burst from the House Calendars Committee and galloped onto the floor on April 11. When Speaker Tom Craddick called for a record vote, the board behind him lit up in a sea of fluorescent green lights—137 yeas and two nays. Krusee, predictably, was one of the dissenting votes. (The other was Richardson Republican Fred Hill.) Krusee said the bill was “seriously flawed” and would jeopardize federal highway funding. “I knew at the time the governor would veto the bill and that the Legislature would not be able to override the veto,” Krusee said.

The moratorium bill passed the Senate 27-4 and went to the governor. True to Krusee’s prediction, Perry vetoed the bill on May 18, saying it jeopardized billions of dollars in infrastructure investment and federal funding. Perry, who for five years had been tirelessly promoting the Trans-Texas Corridor, was disturbed by language that would have allowed the local yokels in Houston to seize TxDOT’s right of way, jeopardizing its ability to issue bonds and leading to all kinds of legal problems.

Perry made it known he would sign Senate Bill 792, a bill by Republican Sen. Tommy Williams of The Woodlands that mysteriously became the vehicle for all new highway legislation. Grassroots groups felt whipsawed and confused. Lawmakers knew what to do: They put their butcher’s aprons back on and began making more sausage.

Samuel, the Aussie back in Maryland, watched these goings-on with a queasy stomach. His column no longer contained references to cowardly French generals, unstoppable Panzer tanks, and blitzkriegs. This was sausage-making at its bloodiest and ugliest: “At Texas Lege Sausage Treats Unlimited, a close watch of operations generates that bad stomach feeling,” he wrote. “At least when they finally do put their bad product on the street, they immediately go to work on a recall.”

The new transportation bill zipped through the Senate’s Transportation and Homeland Security Committee, the full Senate, and the House County Affairs Committee. It bogged down in the House on May 17, when members had taken to shadowboxing with one another in the aisles. Legislators paused from their diversions long enough to tack 20 amendments onto the bill, forcing the measure back into conference committee. A couple of days later, the bill reappeared and was passed by both chambers. Then it was shipped off to Perry, who had until June 17 to sign the bill, veto it, or let it become law without his blessing. “We’re still reviewing and reading the fine print,” Perry spokeswoman Krista Moody said as the Observer went to press.

On Memorial Day, the last day of the session, legislators sleepwalked through offices piled high with decaying fruit, stale baked goods, candy, and half-drained bottles of booze. In the Senate chamber, frigid as Alaska as usual, Nichols strode to his desk. His posture was not that of a broken French general, but the chin-up, chest-out thrust of George Patton. Nearly everyone, including the TxDOT operatives, was still confused by language in the second moratorium bill. Nichols rattled off two of the bill’s most important components, stopping momentarily to inquire if he was speaking too fast. “What this moratorium means is, No. 1, more than 99 percent of the Texas highway system is now protected from private toll builders. No. 2, all counties that fall under local toll authorities are armed with the right to be at the table and will have the first option to build the toll road themselves—or veto it.” The new measure, he added, was only the beginning of the Legislature’s effort to deal with transportation issues. “It’s a good first step,” he said. “And there will be more to come. It may take several sessions to solve these problems.”

The grassroots groups weren’t so positive. “I think we’ve been had,” said Terri Hall, spokesman for the San Antonio Toll Party. The bill is so loaded with exemptions that it resembles Swiss cheese. More than $20 billion worth of toll projects, mostly in the Houston and Dallas-Fort Worth areas, will continue to move forward. Carona conceded that the two-year freeze was “more porous in urban areas,” but he added that other provisions significantly reined in how toll road contracts could be structured.

The moratorium does put the brakes on toll projects planned for State Highway 281 and Loop 1604 in San Antonio. In the El Paso area, toll projects not approved by the metropolitan planning organization prior to May 1 can’t go forward. The Trans-Texas Corridor also falls under the moratorium. But two road projects that likely will become part of the TTC network—Loop 9 in the Dallas-Fort Worth area and State Highway 130 east of Austin—will be allowed to proceed. Finally, a southern portion of TTC-69, the megacorridor that will begin at the border, skirt Corpus Christi and Houston, and run in a northeasterly direction toward Louisiana, also has the green light.

Although the TxDOTies had hoped to get the toll road contracts extended for 70 years or more, the Lege said the deals couldn’t last more than 50 years. What’s more, the bill allows contracts to be structured in 10 year increments. That way, said Carona, voters can see the plusses and minuses of longer-term packages. The bill also creates a committee to study public-private partnerships in a less politicized environment over the next year.

One of the least understood sections of the bill establishes what’s called a “market valuation” process for determining how much money a toll road project can generate. That means private companies and public entities alike might wind up paying huge, up-front concession fees in exchange for toll roads.

Hall sees this process as the most sinister aspect of the bill and predicts it will lead to the highest possible tolls for the driving public. “The grassroots will not stand idly by and allow Rick Perry and Ric Williamson’s market-based incarnation of extorting money from the traveling public to drive on highways we’ve already built and paid for. We will not let this governor unleash a whole new policy initiative hatched in some backroom deal with legislators who lack spines.”

In other words, the session is over, but the battle goes on. A World War II buff like Peter Samuel might see it as the next phase of the struggle between Vichy France and the Free French Forces led by Charles de Gaulle.

But this is a Texas fight, and both sides are likely to be more inspired by George S. Patton, the gawky young colonel once stationed at Fort Bliss, who said, “You’re never beaten until you admit it.”

© 2007 The Texas Observer:

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