Texas Lawmakers Pass Bill to Restrict Private Toll Roads

May 2, 2007

By Darrell Preston

May 2 (Bloomberg) -- Texas lawmakers passed a bill today that would restrict the state from hiring private companies to build, own and operate toll roads and sent it to Republican Governor Rick Perry.

The state House of Representatives passed the legislation by a vote of 139-1, following a 27-4 vote in the Senate on April 30. Perry, who backed hiring private developers to run toll roads as part of his plan to speed up highway construction and ease congestion, has until May 14 to veto or sign the bill or it becomes law without his signature.

``The legislature has expressed its concern about the state's rush to privatized transportation,'' said David Stall, a spokesman for CorridorWatch.org, a Fayetteville, Texas-based group that has opposed plans to hire private developers to build and operate new toll roads. ``This will give us an opportunity to get a full hearing on the issues.''

Texas is among U.S. state and municipal governments that are considering selling existing toll highways or hiring private developers to finance, build and operate new toll roads to raise money and limit the cost to government. In Texas, the efforts have met with opposition from land-rights groups and other constituencies.

Passage of the bill threatens to delay or derail the first phase of Perry's Trans-Texas Corridor project, a statewide plan to build 4,000 miles of toll roads, rail lines and right-of-way for pipelines and fiber optic cable connecting the business centers in the state.

Two-Year Moratorium

The legislation would ban the state from making agreements with private developers to take over all aspects of financing, building and operating toll roads, including controlling the toll revenue, for at least two years. The legislation also requires the state to study the issue before the next legislative session in 2009.

The state could still contract with private developers to finance, build and operate toll roads, it just couldn't turn everything including management and collection of revenue over to private companies in long-term contracts.

Both Republican-controlled houses of the Legislature have time to override a veto of the legislation, which would require a two-thirds majority.

Perry said April 30 that he would consider the bill carefully because it could jeopardize billions of dollars in federal highway funds. He was also critical of exceptions in the bill that gives local toll road authorities exemptions. He also said the legislation would kill jobs, harm quality and damage the environment by delaying needed construction.

``We cannot have public policy in this state that shuts down road construction,'' said Perry in a prepared statement.

Madrid-based Grupo Ferrovial and its Cintra Concesiones de Infraestructuras de Transporte were chosen in 2004 to develop the first leg of the Trans-Texas Corridor project, a 316-mile road from Dallas to San Antonio still in the planning stage.