Legislative Session: 80(R)

Senate Bill 792

Senate Author:  Williams et al.

Effective:  6-11-07

House Sponsor:  Smith, Wayne

            Senate Bill 792 amends provisions of the Transportation Code to address comprehensive development agreements between public and private entities with regard to toll projects and the authority of certain counties and other entities with respect to those projects.

            Article 1 of the bill amends provisions relating to state highway projects, facilities on the Trans-Texas Corridor, and transportation projects of regional mobility authorities to provide that a comprehensive development agreement or other contract with a private entity that includes the collection of tolls by the private entity may be for a term not longer than 50 years from the later of the date of final acceptance of the project or the start of revenue operations by the private entity, not to exceed a total term of 52 years.

            Article 2 authorizes, rather than requires, the Texas Department of Transportation (TxDOT) or a regional mobility authority to pay an unsuccessful private entity that submits, in response to a request, a responsive proposal for costs incurred in preparing that proposal.

            Article 3 prohibits an agreement for a state highway project entered into on or after May 1, 2007, by a private participant and a toll project entity from containing a provision permitting the private participant to operate or collect revenue from a toll project and exempts agreements in connection with certain projects and conditions.  It also prohibits a toll project entity from selling a toll project to a private entity.  The bill creates a legislative study committee to study these prohibitions in comprehensive development agreements and toll project sales and to prepare a report by December 1, 2008.  The bill abolishes the committee on December 31, 2008, and provides that the provisions of Article 3 expire on September 1, 2009.

            Article 4 provides that, with the exception of the authority to enter into agreements in connection with certain exempted projects, which expires on August 31, 2011, the authority to enter into comprehensive development agreements expires on August 31, 2009.

            Article 5 requires TxDOT to timely post on its website contracts and other information relating to the Trans-Texas Corridor and to send electronic versions of all master plan updates to certain executive and legislative entities.

            Article 6 requires, rather than authorizes, contract payments and any other revenue received by the Texas Transportation Commission or TxDOT under a comprehensive development agreement to be used for transportation or air quality projects in the region where a state highway toll project is located.  It also requires TxDOT to distribute funds under an agreement based on the percentage of toll revenue from users from each department district within the boundaries of the metropolitan planning organization in which a toll project is located. 

            Article 7 establishes provisions that apply only to certain toll projects of counties authorized by law to construct and operate certain transportation projects, and temporary provisions that apply, with certain exceptions, to toll projects of those counties and of regional toll project entities.  Both sets of provisions provide that the entities have primary responsibility for toll projects within their boundaries, require the entities to reimburse TxDOT for certain costs related to the use of state highway right-of-way, establish timelines and conditions for the entities to exercise the first option to finance, construct, or operate the portion of a toll project located within their boundaries, and authorize TxDOT or the Texas Transportation Commission, notwithstanding an action by the entities, to take any reasonable action to ensure that federal funds requirements are met.  Among the provisions that expire on August 31, 2011, are requirements for a local or regional toll project entity and TxDOT to agree on the initial toll rate, toll rate escalation methodology, and other terms and conditions and on the development of a market valuation of a toll project, or the project may not be developed as a toll project.  A provision that expires on August 31, 2009, requires the terms and conditions for State Highway 99 to be approved by the local metropolitan planning organization.  Additionally, a provision of the article requires TxDOT to create a separate account in the state highway fund for payments related to toll projects and to create subaccounts for the benefit of the regions in which toll projects or systems are located.  

            Article 8 authorizes, with certain exceptions, counties that are authorized by law to construct and operate certain transportation projects to also exercise the powers of a regional mobility authority, enter into comprehensive development agreements, and authorize the use and terms of surplus revenue for other road, street, or highway projects.  The bill provides for exceptions that require TxDOT to approve and supervise any work on the state highway system and for TxDOT and the Texas Transportation Commission to approve any use of state or federal highway funds.  The bill specifies that a county may use and access state highway right-of-way in accordance with the provisions of this act.

            Article 9 authorizes a regional tollway authority to use a comprehensive development agreement with regard to a turnpike project and establishes a process for entering into such an agreement with a private entity, including requirements relating to confidentiality of information, performance and payment bonds, use of contract payments, and collection of tolls.  It invalidates the TxDOT/North Texas Tollway Authority Regional Protocol and makes it a Class A misdemeanor to accept gifts and contributions from a contractor or to offer gifts to an authority director.

            Article 10 establishes certain eligibility requirements for serving as a director of a regional mobility authority, requires an action of an authority to comply with federal law, and prohibits an authority's design-build procedures from conflicting with other state law.

            Article 11 provides for oversight of comprehensive development agreements by the attorney general, Legislative Budget Board, and state auditor.  It also requires toll project entities to develop a formula for making termination payments to a private participant under an agreement that gives the private participant the right to operate and collect revenue from a toll project and provides certain options for an entity that elects to terminate an agreement.  It prohibits an agreement from containing a provision that limits construction of a highway or other transportation project or that requires a toll project entity to provide compensation for the construction of certain projects.  It requires a toll project entity, before entering into a contract for the construction of a toll project, to publish certain financial information related to the project and to hold a public hearing on the information.

            Article 12 requires the policy board of a metropolitan planning organization to establish an ethics policy regarding conflicts of interest.

            Article 13 makes each failure to pay a toll or administrative fee imposed by an entity contracted to operate a toll lane a separate offense and a misdemeanor punishable by a fine not to exceed $250 and provides that such an entity has the same powers and duties as TxDOT with regard to toll collection and enforcement for that toll lane.

            Article 14 increases the amount of bonds and other public securities secured by the state highway fund that the Texas Transportation Commission may issue from $3 billion to $6 billion in total and from $1 billion to $1.5 billion each year.  It also increases from $600 million to $1.2 billion the amount of those bonds and other securities that must be used to fund projects that reduce accidents or correct or improve hazardous locations on the state highway system.