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Jul 14, 2011

The 82nd Regular Session successfully addressed certain transportation issues. The two bills with the greatest impact on the Texas Department of Transportation (TxDOT) passed during the 82nd Regular Session are the TxDOT Sunset bill (SB1420) and appropriations (HB 1):

SB 1420 – Hinojosa/Harper-Brown – TxDOT Sunset

  • Commission Structure–The Commission structure will remain largely unchanged, which means five members appointed by the Governor. However, clarity as to the definition of a rural commissioner was added.
  • Planning and Programming–The language provides for a more transparent and understandable project planning, reporting and programming system. Including:
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    • Requires that the chief financial officer certify each month that any state highway construction and maintenance contracts to be awarded by the department during that month will not create state liability that exceeds the department’s most recent cash flow forecast.
    • Requires TxDOT to develop a statewide transportation plan covering a period of 24 years and that is updated every four years that contains all modes of transportation.
    • Provides that the plan must contain specific, long-term transportation goals for the state and measurable targets for each goal, identify priority corridors, projects, or areas of the state that are of particular concern in meeting the plan goals, and contain a participation plan specifying methods for obtaining formal input on the plan’s goals and priorities with input from, among others, political subdivisions.
    • Provides a procedure whereby a political subdivision that participates financially in certain TxDOT projects may assist with, and expedite, the environmental review process.
    • Requires TxDOT to develop a unified transportation program covering a period of 10 years and updated each year to guide the development of and authorize construction of transportation projects.
    • Provides that the commission shall develop criteria for major transportation projects, program priority categories, and funding allocation and distribution.
    • Provides that all or the portion specified by the city of the money deposited to a tax increment account established in a transportation reinvestment zone must be used to fund the transportation project for which the zone was designated, as well as aesthetic improvements within the zone, and provide that any remaining money deposited to the tax increment account may be used for other purposes as determined by the city.
    • Provides that a city may issue bonds to pay all or part of the cost of the transportation project and may pledge and assign all or a specified amount of money in a transportation reinvestment zone’s tax increment account to secure repayment of those bonds.
  • North Tarrant Express (NTE) Facility agreements–For the NTE project, the Department may negotiate and enter into facility agreements with the Segments 2-4 CDA developer or an affiliate of that developer for future phases or segments of the project without going through a competitive procurement. The term of any such agreements cannot extend beyond the end of the term of the Segments 2-4 CDA, i.e., June 22, 2061.
  • CDA projects–CDA authority was provided for 11 projects mainly in the metropolitan areas of the state: four in Houston area, three in North Texas, two in Central Texas, and two in South Texas. Except for the Grand Parkway, environmental clearance of a project must be achieved before August 31, 2013. And, except for the Grand Parkway, the CDA authority expires August 31, 2015.
  • Certain toll projects – The distribution of a project’s financial risk, the method of financing for a project, and the tolling structure and methodology must be determined by a committee consisting of various members including: a representative of each municipality or county that has provided revenue or right-of-way, a representative of the department; a representative of any local toll project entity for the area in which the project is located; and a representative of the applicable metropolitan planning organization.
  • Other–The bill extends the Department until 2015.  Design-build authority is granted in the bill, although the number of projects cannot exceed three per year (this limit expires in 2015).  The Department also has the authority to designate wildfire evacuation routes on federal, state and county roads and to ensure the designations take larger businesses (hotels, restaurants, etc.) into consideration. And, it transfers remaining motor carrier division staff to TxDMV by January 2012.
  • Local – A local government sponsor is defined and responsibilities are detailed. The definition includes – a political subdivision of the state that elects to participate in the planning, development, design, funding, or financing of a highway project.
  • Heavy Permits – TxDOT will retain the authority to set weights and will retain authority over establishing the routing for super heavy permits.  The Department will also retain authority over the heavy corridor districts (ex:  Port of Corpus Christi Authority special freight district permit). The TxDMV will issue the permits. Additional details surrounding the transfer will be worked out in an MOU between both agencies. 

(Except as otherwise provided in the bill, effective September 1, 2011.)

Prop 12

During a recent Transportation Commission meeting, it was noted that HB 1 provides TxDOT virtually everything requested in their baseline plus the remaining four billion of Prop 12 bond proceeds.

Prop 12 Bonds–The bulk of the increase in funding comes from $4 billion in Prop

12 bond proceeds, distributed as follows:

  • $300 million – development of future mobility projects in the four most congested regions.
  • $500 million – bridges specified in the bill.
  • $600 million – urban and metro mobility, split among the MPOs.
  • $200 million – connectivity, allocated by commission.
  • $1.4 billion – rehab and safety, distributed by Category 1 formulas.

Report on Impacts–The Department must submit a detailed plan for the use of Prop 12 and Fund 6 appropriations. The report must include impacts to the State’s economy, traffic safety, congestion reduction, and pavement scores.  As opposed to the current biennium, the LBB does not have to approve the plan.

Other key bills passed during the 82nd Legislative Session include:

HB 563 – Pickett/Nichols – provides local governments the ability to establish transportation reinvestment zones for projects without the need for it to be tied to the pass- through financing program. Provisions in the bill state that the Department shall delegate project responsibilities upon request from the local government, but the Department maintains project oversight. Some language was added in the Sunset bill ensuring counties could use this process as well. (Effective September 1, 2011.)

HB 1201-Kolkhorst/Hegar –  repeals the Trans-Texas Corridor statutes, but retains the ability for the Commission to establish exclusive lanes for use by oversize/overweight vehicles and higher speed limits on facilities designed to such standards.  (Effective Immediately) HB 1353 (Elkins/Williams) is worth mentioning as it also addresses speed limits on a larger scale.  It allows the Transportation Commission to establish 75 mph speed limits on the state highway system if found reasonable and safe through a traffic engineering study.  In addition, HB 1353 eliminates the statewide nighttime and truck speed limit differential (Effective September 2, 2011).  Next Steps: The revisions to the administrative rules as a result of both bills were presented during the June 30 Texas Transportation Commission meeting for preliminary adoption.

SB 19 – Nichols/Wayne Smith – establishes a primacy process for toll projects within the boundaries of a local toll project entity. Local toll project entities have the first option to develop, finance, construct, and operate a toll project within its boundaries. There are several deadlines and timelines associated with the process of determining whether the local toll project entity or the Department will be responsible for developing, financing, constructing, and operating a toll project. (Effective Immediately)

SB 731 – Nichols/Kolkhorst – allows the Office of the Attorney General (AG) to charge the Department or another toll project entity a non- refundable fee for the legal sufficiency review of CDAs which can be reimbursed by the private developer. The fee cannot be based on a percentage of the contract value, and cannot exceed reasonable attorneys fees charged for similar legal services in the private sector.  The AG has a deadline of 60 business days to complete the review, which can be extended for a period of no more than an additional 30 business days. (Effective immediately)

SB 959 – Wentworth/Pickett – streamlines the Department’s video billing process through using alternate methods of locating an owner’s billing address and providing express authority to refund unexpended balances upon closure of an account.  The language also allows for an assessment of fines and fees to span multiple transactions or a billing cycle as opposed to being assessed per transaction. (Effective Immediately)

Special Session—SB 1, the fiscal matters bill reviewed above,  included a two- month delay in the distribution of Motor Fuels Tax (MFT) at the end of 2013.  (This translates to approximately $200 M per month. To compensate for this short term loss, TxDOT will either slow lettings or issue short term debt.)

SB 18 – the Eminent Domain bill reviewed under the section on “Emergency Items” imposes certain requirements on entities with eminent domain authority, such as TxDOT. TxDOT’s current rules conflict with certain provisions of SB 18, or are not broad enough to incorporate other provisions. Amendments were offered during the June 30th Transportation Commission meeting to bring the rules into compliance with the provisions of SB 18 and clarify existing language. More details: http://www.txdot.gov/about_us/commission/2011_meetings/documents/minute_orders/jun30/6b3.pdf

TxDOT will spend the next several months implementing legislation with the assistance of the various divisions and districts.