Tuesday, April 07, 2009

Texas Senate votes: Every new highway in Texas should be tolled, either by a public agency or a private corporation.

Private toll roads get new lease on life, and new leash


By Ben Wear
Austin American-Statesman
Copyright 2009

Private toll road leases, which engulfed the last Legislative session in controversy and were partially banned for two years, would live for another six years under a bill passed 29-2 by the Senate this afternoon.

But under a separate bill, which passed minutes earlier, those agreements would become less likely and those that did occur would have additional controls.

Senate Bill 404, sponsored by state Sen. John Carona, R-Dallas, would extend the authority for such long-term toll road leases by another six years to Sept. 1, 2015. If the bill doesn’t pass, signing all but a handful of such agreements would become illegal this September.

The companion bill by state Sen. Robert Nichols, R-Jacksonville, is Senate Bill 17, which has three main features:
  • Local toll road agencies, such as the Central Texas Regional Mobility Authority, would get first shot at doing a toll road as a government-run highway. If that agency said no, then TxDOT could choose to build and operate it. Only then, after both the local agency and TxDOT had said no, could the road be put out for bid as a long-term lease with private companies. Even then, the local agency would get the first opportunity to negotiate a deal.
  • If there were such a contract, the “non-compete clause” would be more limited than is allowed in current law. Such clauses typically restrict where a government could build a free road in the vicinity of a tollway. Under Senate Bill 17, all interstates and all highway projects in the area’s 25-year plan at the time a toll road lease is signed would be exempt from the non-compete restrictions. And after 30 years — most leases last 50 years — there would be no non-compete restrictions.
  • Under current law, if a private tollway opened and was profitable, the state could buy it back only by paying “fair market value.” Nichols contends that under that vague standard, the state could be on the hook for a huge amount and that litigation would be inevitable. His bill would require that the original contract set out specific buyback amounts for the life of the contract on at least five-year intervals.
The sole no vote on Senate 17 was state Sen. Wendy Davis, D-Fort Worth. She also voted against the Carona bill, along with state Sen. Glenn Hegar, R-Katy.

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© 2009 Austin American-Statesman: www.statesman.com

Texas Senate smiles on toll roads


By Peggy Fikac
San Antonio Express-News
Copyright 2009

AUSTIN — Transportation officials could enter into new agreements with private companies to operate toll roads — with restrictions — for at least six more years under a pair of bills approved Monday by the Texas Senate.

The measures, which still face House consideration, are the latest steps in a long battle over leasing toll roads to private companies.

Lawmakers allowed the public-private partnerships in 2003. In the face of critics' outcry that the state was selling key assets, they later put a moratorium on new agreements, with exceptions.

Both the moratorium and the ability to enter into such agreements are set to expire this year, requiring legislative action if the Texas Department of Transportation and regional mobility authorities are to be allowed to continue using the financing tool.

“In a session like this, where new dollars for transportation are so limited, you have to rely on tools like this, even though they may not be your first choice,” said Sen. John Carona, R-Dallas, chairman of the Transportation and Homeland Security Committee and sponsor of the bill to allow private toll road agreements.

Toll opponent Terri Hall of Texans Uniting for Reform and Freedom disagreed.

“Texans made their position perfectly clear last session when they pressured 169 lawmakers to put the brakes on privatizing our public infrastructure,” Hall said by email.

Carona's bill would extend the ability of TxDOT and regional mobility authorities to enter into comprehensive development agreements through 2015, but only if protections included in another bill also take effect. Some projects would have two years longer.

The protections, in a bill by Sen. Robert Nichols, R-Jacksonville, include specifying that local authorities and then the state have first right to develop a project — to be publicly owned and operated. Nichols' bill also says a contract with a private entity must specify a purchase price in case the state ever needed to buy back the project.

Hall said the protections could be waived. Nichols' office said steps in the process could be waived, but not protections.

Carona said he expects the House to be a “tougher challenge” for the legislation, and Hall said she hopes it will die there.

Portions © 2009 San Antonio Express-News: www.mysanantonio.com

Texas Senate backs new guidelines for toll road development


The Dallas Morning News
Copyright 2009

AUSTIN – The Senate approved new guidelines for future toll road development Monday, including rules that give public entities the first crack at projects over private firms and would forestall a repeat of the bidding war that erupted over State Highway 121 two years ago.

The bill establishes a process for toll road projects as well as protections for the public, said Sen. Robert Nichols, R-Jacksonville. It passed 30-1.

Under the proposal, public entities, such as the North Texas Tollway Authority, would have the first right of refusal to develop the roadways, and all public avenues of financing would have to be exhausted before it can be turned into a private equity project. The bill also defines vague clauses that have been in past development contracts – such as the state not being allowed to build competing roadways for 50 years. This would be changed to a 30-year agreement not to build a roadway within four miles of the center-line of the existing toll road.

Nichols said his proposal advanced public projects over private development.

"State and local entities will build and operate a road in the public's interest, not the shareholder's," he said.

Sen. Wendy Davis, D-Fort Worth, was the sole dissenter. After the vote, she said she was concerned that the measure took all competitive bidding out of a toll road project. For instance, with SH 121 running through Collin and Denton counties, the NTTA initially said the state should pay it to develop the toll road. When the state put the deal out for bids, the Spanish firm Cintra offered nearly $3 billion to operate the toll road for 50 years. NTTA belatedly joined the bidding process and beat Cintra's offer.

Separately, the Senate removed the requirement that the executive director of the Texas Department of Transportation be a professional engineer, saying it was more important that the director possess good managerial skills.

Both bills now go to the House for consideration.

© 2009 The Dallas Morning News: www.dallasnews.com

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