House Transportation met on March 23 to consider a number of bills. This report covers HB 1759 (Krause), HB 2203 (Romeo, Jr.), and HB 2219 (Canales). The video archive of this meeting can be found here.
This report is intended to give you an overview and highlight of the discussions on the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.
HB 1759 (Krause) – Relating to the operation of vehicles and certain equipment at railroad grade crossings when on-track equipment is approaching
- Clean up bill; adding “on track equipment” to railroad statutes to ensure the people working on it are completely safe
HB 1759 is left pending
HB 2203 (Romero, Jr.) – Relating to the powers of certain regional transportation authorities
- Clarifies language; private investment applies to all subregion boards
- Attempting to grant Trinity Metro the same authority to enter into public private partnerships that is currently granted to DART in Dallas
- Trinity Metro is looking to utilize this bill to enter into public private partnerships for TODs (transit-oriented developments) around transit stations where Trinity Metro owns land
- Without this adjustment, Trinity Metro would be restricted to issuing bonds for projects that involve a lease over 5 years; would partner with private partner for mixed use development to provide retail office, housing around transit stations
Tito Rodriguez, Trinity Metro, For
- Provides 8 million passenger trips annually
- Seeking the same authority granted to other transportation agencies, including partners in Dallas
- Bill will help leverage grant dollars to act as seed money to plan and initiate TOD, specifically for the Lancaster BRT Project
- Trinity Metro does not seek to own or operate these properties, development would primarily occur on properties Trinity Metro does not own; want properties to stay on tax roads
- Trinity Metro will not use powers of eminent domain
Terri Hall, Texas Turf and Texans for Toll-free Highways (TTH), Against
- Bill gives power to enter into private public partnerships
- Though Trinity Metro does not plan the use of eminent domain, public land is being taken for public use that is later leased to a for-profit, private company
- This bill would allow a government sanctioned monopoly over that property; government chooses winner and loser, which increases price through developers
- Transit users are generally outside the margin and unable to afford a vehicle; this price increase would be detrimental
Romero, in closing
- We want our citizens to move efficiently across our region; we have the land, will not own housing units, we want a P3 to return our investment
HB 2203 is left pending
HB 2219 (Canales) Committee Substitute – Relating to the issuance of Texas Mobility Fund obligations
- Texas is underinvesting transportation infrastructure by $7.2 billion a year; Texas Transportation revenue trajectory is expected to decline throughout the decade if there are no significant changes
- This bill reauthorizes the Texas Mobility fund, a revolving fund with a constitutionally dedicated funding source; Texas voted on the fund in 2001 to accelerate mobility projects
- In 2015, legislature prohibited the bonds on the fund’s proceeds
- Everyone hates taxes, but the responsibility is growing
Terri Hall, Texas Turf and Texans for Toll-free Highways, Against
- Have not seen committee substitute
- “No new debt”; when we finance these projects with debt money, the project cost doubles
- As TXDOT, in the future, manages this debt, it will consume the budget
- Lozano – Could you explain how debt will double the cost?
- Consider the interest on the debt; it will grow close to double the cost of the project
- If it is hard to come up with the project cost now, imagine how difficult it will be to come up with almost double that; increases the gap
Don Dixon, Self, Against
- Debt is not a way of financing
- Governor campaigned on “no new debt” in Prop 1 and Prop 7
- Stay with pay-as-you-go
- State and total agencies are close to $80 billion interest in principle; my great grandchildren will be paying that off
Steven Albright, Associated General Contractors of Texas, For
- Since the initiation of Texas Mobility Fund two decades ago, it has proven to be a valuable asset in the transportation area in this state; over $6 billion worth of projects
- Bill represents an opportunity for TXDOT to build the fully utilized tool once given by the voters
- Funding need continues to grow as the state grows without raising taxes or fees
- With every billion dollars of funding, we can support approximately 13,000 new jobs
James Bass, TXDOT, Resource Witness
- Davis – How much money will Texas receive from the CARES Act in the area of transportation?
- Over a 4-year period, a total of $967 million
- Davis – How do you distribute it?
- Would be going to project development and delivery in place of lost revenue. We do not see this federal funding as an addition to our programs due to COVID’s impact to our revenue stream
- Projections of our revenue today are less than they were 15 months ago
- Davis – Is the $967 million from the CARES Act more or less than the previous stimulus package?
- The American Recovery Reinvestment Act gave us $2 billion
- Davis – What would attribute to the difference in funding between the two stimulus packages?
- The overall funding from the federal government to state DOTs
- The $967 million was a part of a package in late December that distributed $10 billion between all state DOTs
- Davis – Does that represent all the money we will get from CARES act or is there additional funding and resources coming to the state?
- There are additional funds coming to programs underneath TXDOT like the Federal Transit Authority for urban communities
- Davis – Has the department done any analysis on how much money we have saved by lowering our debt? What does that do? Paying down on debt?
- We do an annual report to the legislator on the refinancing opportunities that the department has undertaken
- On the Texas Mobility Fund by refinancing the debt, we have saved over $938 million on a gross basis
- Over time, state has issued just under $7.4 billion of bonds backed by the Texas Mobility Fund, that figure is approximately $5.9 billion now
- Davis – What do we get with that savings?
- Debt on Mobility Fund can go out 30 years in the future, some of that $938 million is into the future, most will be needed for debt service
- As money enters the Fund, it first pays off the debt service; when there are funds remaining, we focus the surplus on development activities
- Davis – Why do we lose money if you used the federal funding to replace loss of revenue?
- Report in appropriations request
- People were driving less due to COVID, acquired less motor fuel tax
- Fewer registration fees
- We are making forecasts for how quickly the traffic and motor fuel tax revenue will return to pre-pandemic numbers
- Ashby – The $3 billion dollars reported in this bill; is that on an annual basis? Annually, there is still a $7 billion shortfall?
- No, $3 billion over time
- In our fiscal note, we propose that we issue $1.5 billion in bond proceeds followed two years later by an additional $1.5 billion
- $7.2 billion number might be prior to Prop 1 and Prop 7
- There was a $5 billion annual need initially, but as Prop 1 and Prop 7 were approved, our tools were taken away
- Testimony by Texas Transportation Institute says that those tools equated to another $2.2 billion
- We are thankful for the funding from Prop 1 and Prop 7; Prop 7 brings in $2.5 billion a year and Prop 1 brings in $1.2 billion. An additional $600 million from State Highway Fund, totaling $4.3 billion
- $300 million of that pays for a debt service in Prop 12
- The programs have gained around $4 billion against original deficit
- Canales – Was the Texas Mobility Fund created for mega projects? What was the largest project?
- Fund was never specified for mega projects, unsure. Went towards some large scale projects as well as thousands of small scale
- I35 expansion between Georgetown and Hillsboro, 2007-2012
- Canales – When you talk about money saved, how much roughly would that 2007 project cost today?
- Highway cost index, an equivalent to CPI but concrete and steel: we see about 4% inflation annually on construction costs
- Would be roughly 40% more expensive today than several years ago without compounding the interest
- Canales – The investment and debt were worth it?
- Correct, we see savings by delivering it sooner; inflation vs interest costs was a big discussion when the fund originally passed
- Magically, if inflation and interest cancelled each other out, the advantage of debt is having the infrastructure in place already and seeing that economic and safety development
- Canales – Has the price of construction gone down?
- I don’t think so, we do see up and down cycles annually, averages 4% increase
- Thompson– Any retrospective reports on the cycles to look at? Create a data point
- The state had issued around $7.4 billion out of the Mobility fund; if we bundle the interest rates, the average rate is 3.8% – lower than our historic average of inflation
- State and citizens get the benefit of having the infrastructure in place
- Ortega – Does this provide a tool for TXDOT to approve the pending projects that are seeking funding under the UTP?
- Would add money to the UTP, additional funding would be distributed by formula
- There is a limitation on commission discretion authority within the UTP, category 12, which is no more than 10% of budget
- Do not think they would be allowed to direct the funding to category 12, so it would be distributed to category 2, MPOs, or category 4
- Ortega – So this would benefit the whole state?
- Yes
Canales, in closing
- Huge issues in Texas transportation, this was approved by voters and will allow us to improve infrastructure projects
HB 2219 left pending