House Transportation – October 6, 2022

House Transportation met in Corpus Christi to hear invited testimony on the following interim charges and topics:

• Discuss transportation safety efforts in Texas;
• Study the impacts that increased federal funding, formula changes, and new programs authorized in the Infrastructure Investment and Jobs Act will have on state transportation projects. Evaluate strategies to ensure Texas communities can maximize receipt of federal grant funds;
• Examine the ability of the state’s seaports to promote the public purposes of state economic growth, diversification, and commerce through development of port-owned properties within their boundaries. Review the investments needed for Texas ports to remain competitive in handling increased cargo volumes and ensuring a resilient supply chain.

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.

 

Opening Remarks

• Committee members provide opening remarks
• Chair Canales notes other house members are on the dais including Representatives Todd Hunter and Abel Herrero
• Hunter – Waiting to hear the Harbor Bridge update from TxDOT

 

Barbra Canales, Nueces County Judge

• Transportation is an economic development tool; there may be modern solutions to solve the SH 361 problem
• Legislature needs to continue funding for transportation as it is future oriented
• Transportation currently in Nueces County is a small part of what we could build
• Witnessed gaps in transportation sector during multiple emergencies such as Winter Storm Uri
• Need to leverage funds from the federal Infrastructure Act with state dollars
• Disappointed with the Harbor Bridge; hope this committee will help with the resolution

 

Paulette Guajardo, Corpus Christi Mayor

• City adopted Zero Vision initiative; are doing part to increase safety and reduce death/injury
• Supported efforts to lower prima facie speed limit in Texas last session by Rep. Israel
• City budgeted $900k to implement increased security measures on roads
  • Included $750k annual budget for safe routes to schools
• $719k grant from TxDOT for improvements to signals and crosswalks
• Were granted $6.3m through the MPO Surface Transportation Block Grant
• Working on opportunities through the Reconnecting Communities Planning Grant
• Working with TxDOT on the Regional Parkway; currently only have one evacuation lane
• Have been working with the Port of Corpus Christi on their efforts to deepen and widen ship channel

 

Charlie Zahn, Port of Corpus Christi Commission

• Port is the number one strategic military port, export port, and revenue by tonnage in the country
• Focus has been on deepening and widening ship channel in order to accommodate new ships
• Are on schedule with deepening/widening; Harbor Bridge should have been completed in 2020
• Wanted both to be done around the same time, but seems Harbor Bridge will not be completed until four or five years from now

 

Interim Charge: Discuss transportation safety efforts in Texas.

• Chair Canales – Is no more important issue than this problem; had 12.3 deaths occurring on roads every day and number has skyrocketed the last couple years
• Chair Canales – Harbor Bridge has been a concern for everyone on this committee, may need to look at a new process to complete large projects like this in the future

 

Mark Williams, Executive Director TxDOT

• TxDOT shares the frustration around delays associated with this project; overviews the improvements to transportation the new bridge will have on the area
• Contracted with FDLLC to develop the harbor bridge; contracted with a third party-reviewer to provide an independent review of the design which showed multiple issues
• Reached a legal agreement letter with the developer to cure issues at Harbor Bridge; maintaining a notice of default if additional progress does not occur
• Chair Canales – Did TxDOT approve this design? A way we can avoid this happening again?
  • Bridge will be built safely; early on had concerns and hired third-party to verify
  • Have made changes in program to ensure contracts manages risks/delays
• Chair Canales – Prudent to review this on the front end so protocol will change?
  • Have improved processes
• Hunter – Committee members will need to help with this is an emergency issue; does this agreement have a timeline?
  • No
• Hunter – Need to ensure information is publicly disclosed; TxDOT is responsible to the taxpayer
• Hunter – Larger ships like cruise ships cannot get under this bridge; is halting economic development
• Chair Canales – Need deadlines for this community
• Lozano – Asks about TxDOT’s approval of the plans; when were first plans seen by TxDOT?
  • Valente Olivarez, Corpus Christi District Engineer – Plans come in segmentally; TxDOT makes comments and developer can chose to move forward or address comments
  • Valente Olivarez, Corpus Christi District Engineer – Suspended work in June due to safety concerns
• Lozano – Would like to work with you changing that process; other building plans must be thought through and approved before construction starts
• Chair Canales – Will you work with Lozano offline to answer his questions?
  • Yes
• Herrero – Disappointed with TxDOT and the project; why is there no deadline for this project?
  • Want to have a deadline; will be working off the preliminary schedule on our website
• Chair Canales – Ask TxDOT to give the community some answers; has been a lack of accountability

 

Valente Olivarez, Corpus Christi District Engineer

• Working to keep public and local elected officials updated regarding the project
• Have a website that aims to transparently provide information
• Hunter – Want you to meet with Mayor of Port Aransas and local officials and for you to meet with me on concerns about Padre Island
• Chair Canales – Reiterates this needs to be resolved due to hurricane season; look forward to working with you

 

Michael Smith, Permian Road Safety Coalition

• Mission to reduce the number of crashes and fatalities on Texas roadways; notes a recent crash which took the lives of two firefighters
• 22 consecutive years without a fatality-free day on Texas roads
• Face a significant challenge especially in the Permian Basin area due to oil and gas sector activity
• $3b granted in the 2023 UTP will modernize transportation network
• Have been employing road safety education in the PB for high school students
  • Technology can improve driving behaviors
• Pilot of life-saving kits for police and first responders for immediate lifesaving aid; investment of $240k
• Permian Strategic Partnership investment of $1.1m expanded the program in 2021
• $3.3m investment further expanded this program in 2022
• Have applied for a significant road safety grant from the U.S. Department of Transportation
• Chair Canales – Need to focus on this and the thousands of box culvert bridges being dissolved by acidic PB soil
• Landgraf – PB expands through New Mexico, what are the differences in both areas?
  • See seatbelt use, distracted driving, and increase in drug/alcohol use especially on the New Mexico side has led to this increase in crashes
  • Incredible increase in crashes in Midland/Odessa
• Landgraf – Asks about mobile apps being used by commercial drivers
  • Are apps specific to truck drivers called Wellsite Navigator; currently in process of being able to roll out sending safety or alternative route messages via that app

 

Study the impacts that increased federal funding, formula changes, and new programs authorized in the Infrastructure Investment and Jobs Act will have on state transportation projects. Evaluate strategies to ensure Texas communities can maximize receipt of federal grant funds.

• Chair Canales – Texas is set to be the largest single recipient of the IIJA for a number of projects

 

Brandye Hendrickson, Texas Department of Transportation

• Provides the committee with a slideshow presentation
• All states received a 21% increase over FY21 in formula funding from the Federal Surface Transportation Authorization legislation
  • Is about $1b
• Represents less than a 6% increase in TxDOT’s yearly budget
• All federal funding represents all of TxDOT’s FY22 total budget appropriations
• Have accepted and obligated an additional $480m in redistribution of federal funds in FY22
• Five-year total IIJA allocations are administered through various federal programs
• Are four new categories: carbon reduction, pre-disaster mitigation resiliency, EV and alternative fuel charging corridors, and bridge rehabilitation replacement program
  • Will be aligned to TxDOT’s UTP
• 10% of funding distributed through new and existing federal grant programs
• Presentation slides provide information on eligible entities and new grant programs
• Are still pending grants and those that have not opened up yet; awaiting additional guidance
• Have been assisting local transportation partners in the grant application process
• No federal requirement for local entities to alert TxDOT of their application
• Today USDOT put out a notice of the Thriving Communities Program
• Have been 6 federal discretionary grants granted in 2022; Texas has been recipient of a grant in six of the program awards
• Infrastructure in Texas matters more now than ever; committed to investment
• Chair Canales – Is a grant to electrify school buses, but is up to school districts to apply who do not have the resources to do so
• Chair Canales – A lot of funding for rural and moderately sized cities, what can TxDOT do to maximize awareness?
  • Highly encourage coordination with local TxDOT district offices
  • Working to inform local communities on opportunities
• Chair Canales – Status of EV charging infrastructure?
  • Last week got approval from federal government on Texas’ EV NEVI plan; will put out a procurement plan and charging stations need to be first placed on highways in alternative fuel corridors
• Chair Canales – Look forward to working with you on that plan and ensuring resiliency of the grid

 

Examine the ability of the state’s seaports to promote the public purposes of state economic growth, diversification, and commerce through development of port-owned properties within their boundaries. Review the investments needed for Texas ports to remain competitive in handling increased cargo volumes and ensuring a resilient supply chain.

• Chair Canales – Seaports generate $1.3t in economic activity and $150b in Texas alone; are severely neglected by the state such as Corpus Christi’s need to further dredge and widen channel
• Chair Canales – Traditional financing methods not reliable; have to wait for federal funds
• Chair Canales – Ship Channel Improvement Revolving Fund and the Port Capitol Investment Program funding pots are empty; need to capitalize on investment in these funds this upcoming session
• Chair Canales – Investing in seaports does not amount to corporate subsidy; notes taxpayers pay “lions share” of roadway maintenance even though the trucking industry “wreaks havoc” on roads and other industries are the same

 

Sean Strawbridge, CEO Port of Corpus Christi

• Port is a major economic generator: $400b in economic output nationally and $40b in Texas
  • Largest gateway for U.S. produced energy exports in the entire country
  • Largest port in the U.S. in revenue by tonnage
  • Support 1 in 3 jobs in the region and account for a major movement of goods value
• Port has attracted $65b in privately funded industrial investment; outside of $1b port authority has granted during the same period
• Texas has second largest GDP and largest export tonnage; ports represent a third of state’s GDP
• Highest valued exported goods has shifted to petroleum, crude oil, and liquified natural gas
• Western Europe, Japan, Korea, and NATO countries are partners
• Russia has proven to be an unreliable energy supplier like Europe, is likely to drive manufacturing out of Europe and to more stable business climates like Texas
• More is needed in expanding seaport infrastructures to remain competitive
• Historically state has allocated $40m to the Port Capital Improvement Program during session
• Funding for the Mobility Fund is limited to roadways, many port projects would not be eligible
• Chair Canales – Asks about the Mobility Fund
  • Only captures funding to one of four modalities needed to transport goods
• Legislature has recognized the need to widen and deepen the ship channel; program is not currently funded
• Corpus Christi has own ship channel improvement project; estimated to add $40b annually in goods value exports and provide $150m in transportation cost savings
  • Has taken far too long to get federal funding for this project
  • Original cost estimate was $188m, now at $681m
• Ask the Texas legislature continue funding programs
• TxDOT’s LAR includes $150m Port Capitol investment and $400m to Ship Channel Improvement Revolving Fund
• Texas Ports Association proposes $1b for Port Capitol Investment Program and $750m Ship Channel Improvement Revolving Fund
• Chair Canales – Speaker and House has said next session will focus on infrastructure
• Thompson – How much harbor maintenance tax Port of Corpus Christi would generate in a year?
  • Are a donor port and tax generated goes to other ports; largest recipient is Louisiana
  • Have been conversions to change this, current agreement is energy transporter ports and donor ports will get a larger share of money coming for maintenance
  • Appropriations to the Army Core for Texas ports are inadequate
• Thompson – Important for committee to engage with federal partners to look at this; harbor maintenance tax is not being used as it should be
  • Ports that get more imports than exports tend to get more harbor maintenance tax funds; we have to make up those funds through other means

 

Kerrick Henny, Port Houston

• Throughout the pandemic, ports keep working
• Port supports over 20% of the state’s GDP, generates 1.4m jobs in state, and 2.3m jobs nationwide
• Over the past two years cargo coming through the port has increased by 30%; requiring infrastructure expansion
  • Project increases will continue to grow
• Pandemic shifted supply chains to Houston and has created congestion at container terminals and all operations
• Project to expand/deepen ship channel is expected to be completed in 2025; need $189m to complete the $1b project
  • Port has committed $669m into the project already
  • Were awarded $142.5m in the IIJA for this project

• Will request of $1.75b to fund port authority projects through TxDOT’s Port Advisory Committee
• With a $27b surplus next session, is the time to invest in ports; other states like California have invested millions/billions in improving their ports’ infrastructure
• Chair Canales – Know Texas is falling behind because we are not investing; notes to ED of TxDOT that $189m is “budget dust”

 

Chris Fisher, Port of Beaumont

• Supply chain challenges have exposed cracks in our system
• $449b in economic impact is contributed by Texas ports per year with millions of jobs
• GDP generated by ports is greater than 37 states in the nation
• System’s aging infrastructure robs ports of capacity ability, resources, human capacity, etc.
• Provides the committee with an example of a dock which sunk that resulted in a loss of $20m
  • Also working on funding $45m to rehab a grain elevator
• Chair Canales and Fisher discuss the cost of the dock and the cost to rebuild the dock
• General perception of ports is that there is no need to invest; this is not true, ports need to improve public facilities, grow the economy, and to facilitate millions of jobs
• Funding is the biggest “crack” in the system; support from the state with help with competition
• Based on economic impact ports provide, reiterates funding request in previous testimonies
• Thompson – The dock you were discussing, what interest rate on that?
  • About 2.5% and try to reinvest monies back into our ports; voters passed a general obligation bond in 2017
• Thompson – Helpful if we did something like the water infrastructure funds? A way to use Rainy Day funds to do low-rate revolving loans at low rates?
  • Would be helpful, SCIRF is set up that way; mostly requesting grants from the state
• Chair Canales – Between having something versus nothing, believe they will take something
• Thompson – Ability to borrow at a low rate is better than going into the market to get a bond
  • Do regularly get revenue bonds; recently $225m for an Orange County project
• Chair Canales – Need to provide more tools

 

Larry Kelley, Port of Port Arthur

• Ports are seeking direct investment in port infrastructure
• Port has seen a 5-fold increase in tonnage in recent years and corresponding increase in jobs
• Port is located in both Speaker Phelan and Rep. Deshotel’s districts
• Shipped over 38m diesel to global markets and largest exporter of renewable biomass
• Overviews the ports’ other exports including lumber, shrimp, and to military installations
• Are a relatively small port, but economic impacts make a difference to the community
• Funding to the port have mostly been on the backs of the local taxpayers; poverty rate is around 20% and median household income is relatively low
• Chair Canales – Ports have been number one for so long, with state’s involvement could be “miles” ahead

 

David Mills, Great Lakes Dredge & Dock Company

• Largest dredging company in the U.S. recently moved headquarters to Houston
• Remaining work in the Corpus Christi channel is proceeding well
• Historically have been a part of multiple dredging projects in Texas
• Have worked on a federal level to access the Harbor Maintenance Trust Fund among others
• Have partnered with Texas Ports to Panama and Texas A&M to establish a lab to research innovative solutions to costal issues
• Have engaged with the Governor’s Office as well
• Billions is needed for additional infrastructure; smaller ports especially need help getting funds
• Excited by permanent/routine funds provided by the state; support TPA’s funding request

 

Raquel Espinoza, Union Pacific San Antonio and South Texas

• 40% of UP’s freight originates or terminates in a different country
• Last year UP moved more than 1.8m rail shipments; some originated/terminated at Texas ports
  • Products include plastic, vehicles, etc.
• Serve industries around ports as well
• Significant investment is required to maintain rail; $3.7b invested in the last three years in Texas
  • Specifically, $100m on Angleton subdivision and $300m on track in Houston
• Illustrates UP’s commitment to be a strong freight partner to Texas’ ports
• Overviews the benefits of rail including less wear/tear and congestion on Texas roads
• Committee should invest in grade separations such as overpasses for communities

 

Paul Belella, Parsons Transportation Group

• Area of expertise is freight and goods movement with intelligent transportation systems
• TxDOT has outlined an outstanding port plan, but places strains on landside transportation systems such as roads
• Committee needs to leverage investments and address potential community challenges created
• Are involved a number of projects to lessen congestion and managing truck parking facilities
• Use technology to improve efficiency such as a corridor management system

 

Chris Phelan, For the Greater Good

• Port of Corpus Christi was created originally for agriculture and have seen “creep” in their mission and in ability to control the port from a democratic perspective
  • Is a safety issue due to emissions
• Port is in competition with supplying water to the city
• Port commissioners do not answer and are not accountable to members of the public; this needs to change