Committee On Transportation

INTRODUCTION

At the beginning of the 78th Legislature, the Honorable Tom Craddick, Speaker of the Texas House of Representatives, appointed nine members to the House Committee on Transportation. The committee membership included the following: Chairman Mike Krusee, Vice-Chairman Larry Phillips, CBO Peggy Hamric, Al Edwards, Timoteo Garza, Linda Harper-Brown, Fred Hill, James E. "Pete" Laney and Ken Mercer.

Pursuant to House Rule 3, Section 34, the Committee has jurisdiction over all matters pertaining to:

(1) commercial motor vehicles, both bus and truck, and their control, regulation, licensing, and operation;

(2) the Texas highway system, including all roads, bridges, and ferries constituting a part of the system;

(3) the licensing of private passenger vehicles to operate on the roads and highways of the state;

(4) the regulation and control of traffic on the public highways of the State of Texas;

(5) railroads, street railway lines, interurban railway lines, steamship companies, and express companies;

(6) airports, air traffic, airlines, and other organizations engaged in transportation by means of aerial flight;

(7) water transportation in the State of Texas, and the rivers, harbors, and related facilities used in water transportation and the agencies of government exercising supervision and control thereover;

(8) the regulation of metropolitan transit; and

(9) the following state agencies: the Texas Department of Transportation and the Texas Transportation Commission.

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During the interim, Speaker Craddick charged the committee with the following issues:

1. Review transportation best practices in other states to determine possible improvements in administration, operations, delivery of projects, and improving overall efficiency of the Department of Transportation.

2. Review and study all existing legislation affecting the development of transportation infrastructure in areas adjacent to the Texas-Mexico border. Study international trade issues as they relate to transportation, the adequacy of existing infrastructure to facilitate international traffic related to trade, and potential for development of inter-modal hubs and other mixed use facilities which promote more efficient trade and economic development, and the opportunities for contracting with Mexico or any of the Mexican states for joint development of transportation infrastructure. (Joint Interim Charge with House Border and International Affairs Committee)
 

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It All Starts Here -- HB 3588

"A clear vision for the future, coupled with a commitment to providing Texans with better mobility, a better economy and a better quality of life, provided the foundation for what today, by any measure, is overwhelming success in funding and delivering major mobility projects for the citizens of Texas." [2]

"I believe there are three key elements…funding, leverage and sweat equity. And what I mean by that is the ability of raising funds, leveraging them in a partnership program, and ensuring those who leverage the funds are able to move forward with transportation projects without fear money is moved to some other portion of the state. And all those tools are in place now for the first time." [3]

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A New Vision: The Trans-Texas Corridor

HB 3588 established the groundwork for Governor Perry's vision: the Trans-Texas Corridor. The Trans-Texas Corridor, as conceived, is a 4,000 mile transportation network with separate highway lanes for passenger vehicles and trucks, high-speed passenger rail, high-speed freight rail, commuter rail, and a dedicated utility zone.
 

While the actual routes of the Corridor are only conceptual at this point, their purpose is to link major metropolitan areas. With that concept in mind, there are four areas that have been identified as priority segments. These segments parallel I-35 from Denison to the Rio Grande Valley, I-69 from Texarkana to Houston to Laredo, I-45 from Dallas-Fort Worth to Houston, and I-10 from El Paso to Orange.

Although ambitious, the plan does have its precedents. The interstate highway system and the transcontinental railroad both had their critics, and both changed history. But more importantly, the Trans-Texas Corridor will help Texas solve its own transportation problems, which are expected to grow significantly during the next fifty years.
 

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"expedited condemnation" also called
"quick take"

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In response to a request for proposals (RFP), TxDOT has received three proposals from consortiums wishing to develop the I-35 parallel portion of the Trans-Texas Corridor (from the Rio Grande Valley to Dennison). It is anticipated that TxDOT will elect a team to begin negotiating a contract before the end of the year. The first phase of the contract allows the team to begin the study and development of specific segments of the I-35 corridor. Actual construction of the Corridor would entail the letting of an additional contract with any successful bidder.

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The Texas Transportation Commission has approved RMAs in Grayson and Bexar counties, joining the Central Texas RMA already in existence prior to the 78th session. Petitions for RMAs have also been filed by Cameron County, Webb County, and the North East Texas RMA (Smith and Gregg Counties).

Hays County commissioners have created a committee to study whether the county should form its own RMA or attempt to join the Central Texas Regional Mobility Authority, currently made up of Travis and Williamson counties. The Paris Economic Development Council, City of Paris and Lamar County commissioners are also considering formation of an RMA. Others interested include the Temple area, and several counties encompassing the Corpus Christi/Laredo region. All of these regions are weighing the merits of forming an RMA as a vehicle for developing needed projects.

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"New technology" requires motorists to purchase an electronic toll tag, and maintain a minimum balance.

TxDOT has already said that they have no intention of providing toll booths for those who do not have, or do not want, an electronic toll tag.

Despite repeated denials of the Transportation Commission, TxDOT, and the CTRMA, free road to toll road conversion is a very real provision of HB 3588.

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A Policy of Tolling

The federal transportation re-authorization bill remains unresolved, and according to Transportation Commission Chairman Ric Williamson, the gasoline tax receipts of the entire state now just equals the maintenance cost of the state's highway system. Obviously, the resources are going to be far fewer than the needs; only about 36% of the needs can be funded.

It is now policy in Texas to look first at tolling for all new limited-access highway projects. Commissioners have been very up front about the fact that money from the Texas Mobility Fund will be used primarily for the implementation of toll roads. This policy is not intended to be punitive, but to stretch tax dollars further. By financing through toll revenues, a road that would otherwise be built entirely with tax dollars would now require less than 40% in tax dollars. Future maintenance on the road, which has taken a large portion out of TxDOT funding for years, would now be paid out of toll revenues. Toll roads can be used by RMAs, regional toll authorities, TxDOT, and certain counties to build a revenue stream. Consider this comparison: It has taken 14 years to build the eleven miles of Highway 183 in Austin on the pay-as-you-go basis. On the other hand, the current toll road construction on the north end of Loop 1 and SH 45 (45 miles of pavement) will be completed entirely in less than five years.

Motorists will always have a free alternative to toll roads, although the alternative will typically be congested with an uncertain travel time. Money raised through tolls will remain in the community of origin, not used for projects in other parts of the state.

Opponents of tolling prefer that roads remain "free." They envision traffic pouring into quiet neighborhoods by drivers unwilling to pay tolls, resulting in neighborhood decline and loss of property values. Others, such as the city of El Paso, feel that TxDOT should first correct past transportation inequities before looking at tolling. El Paso mayor Joe Wardy testified before a joint committee in May that the city would prefer a phased-in approach. The mayor testified that the region does not have the basic infrastructure to meet the traffic and commerce needs imposed by NAFTA, and does not have the economy to support the use of toll roads. Projects that are commonplace and long existing in other cities have yet to be completed in the city of El Paso. Once El Paso has the basic transportation infrastructure components in place, it will be able to contribute to the advancement of Texas mobility with the development of tolled expansion projects in the community. Although El Paso knows tolls are inevitable, its leadership does not believe that the city is currently equipped to move in that direction.

The Austin area reports its pockets of resistance, mainly among upper middle-class citizens who do not believe that TxDOT will use Mobility Fund money only for toll projects, although that has been stated policy. Tolling has gained its proponents as the populace has become more informed about the financial situation, and the Capital Area Metropolitan Planning Organization voted to approve the region's road plan last July.

The Dallas-Fort Worth and Houston areas, having introduced tolls to their regions some years ago, report less resistance than cities where tolling is a new concept, and officials from those areas report they will gladly toll whatever is needed for a larger share of transportation money freed up by those metropolitan areas who refuse to embrace tolling. The Dallas/Fort Worth area has submitted proposals for twelve projects that would require the entire $6 billion of one-time funding. All of these projects are being examined for toll viability.

San Antonio expects to begin collecting tolls by 2009; the city's first toll project is expected to be Loop 1604 on the north side of the city. If San Antonio had waited for conventional funding for the project, construction would not have begun until 2015.

Smith and Gregg counties would like to work together to complete Loop 49, which has been on the books for years. A preliminary toll analysis indicates a completion of the southern, western, and northern segments to be partially toll viable. Regional leaders support the tolling concept to finally complete this long-awaited project.

Toll roads require alternatives to be congested

Communities like
El Paso were told that they would not be punished for resisting toll projects. This however sends the message that DFW and Houston may very well receive fund denied El Paso and others.

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Pass Through Tolling

A pass through toll, also known as a "shadow toll," is a payment by TxDOT of per-vehicles fees as reimbursement to public entities or private companies for road construction, operation, or both. Pass-through tolling can be used by RMAs for construction and maintenance of state highways or as compensation for the cost of maintaining toll facilities transferred to an RMA. The payments are not made until after project completion, and completion of projects can often be expedited because the entity has the assurance that TxDOT will repay them. The local area benefits from timely improvements in mobility and safety, and the state benefits by not having to pay the hefty initial investment associated with road building and maintenance. TxDOT plans to use the money that it generally allocates to counties through various programs, although those rules have not yet been established, but generally it is money that would normally come to the county through the regular planning process. Rules will most likely set a minimum and maximum amount that can be used to reimburse the counties.
 

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Montgomery County, which has the highest death rate per capita of any other county in the state of Texas, has a goal of passing a bond issue of $100 million towards high priority system projects that normally would have been funded by ISTEA or TEA-21. Part of the $100 million would go towards Montgomery County's first two toll projects. After the first phase is complete, Montgomery County is requesting that TxDOT pay them back a portion of the dollars through pass-through tolls. As they are paid back through the first round, the county is proposing to take those proceeds and reinvest them into new state highway projects. It has been calculated that the $100 million in local bonds could be leveraged into about $800 million in projects. The total source of funds will be from the TIF, the state pass-through money, toll dollars and local bonds. Critical projects will be moved forward as much as five to ten years. Montgomery County leaders anticipate that this money will make the county more self-sufficient, and they will no longer need to visit TxDOT on a regular basis to request funding for their projects.

Lamar County commissioners are teaming with Paris city leaders to determine if shadow tolls would be feasible for the widening of U.S. 271 from Paris to the Sulphur River. According to County Judge Chuck Superville, widening would be an economic, as well as a safety issue. Trucking companies charge a penalty for picking up and delivering freight to a location that does not have a four-lane connection to the interstate, which increases the costs of shipping to and from Lamar County.[8]
 

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Highway-to-toll Conversion

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Public-Private Partnerships

Design-Build

HB 3588 addresses design-build, and its more encompassing counterpart, comprehensive development agreements, as they apply to regional mobility authorities. According to the legislation, "a comprehensive development agreement is an agreement with a private entity that, at a minimum, provides for the design and construction ["design-build"] of a transportation project and may also provide for the financing, acquisition, maintenance, or operation of a transportation project."

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Transportation Commission Chairman Ric Williamson has indicated that the commission needs to be very cautious in developing rules and guidelines to not protect those with whom they do business and guarantee their profits. Williamson admonished TxDOT that "what's in the public's interest is getting railroads and asphalt roads and water roads and air roads built in the state as fast and as cheaply as possible. It's not in the public's interest to guarantee an engineering firm a profit; it's not in the public's interest to guarantee that 72 construction companies get a shot at the same billion-dollar contract. Be cautious about that, please."[13]

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Rail

Texas metropolitan areas utilize freight rail more than other U.S. metropolitan cities. Moving freight by rail has a lot of pluses -- Rail moves freight with less energy, and has a lower fatality rate and shipping cost than trucks.[15] Additionally, rail does not take up valuable highway space, or idle in congestion, which helps with air quality issues.

Narrowly-drawn legislation during the 77th Session allowed TxDOT to acquire the 391-mile South Orient Rail Line that runs from Presidio to just north of San Angelo. The department is currently working to ensure that the line is rehabilitated to provide freight transportation and economic development along this vital corridor.

Since the passage of HB 3588, TxDOT now has broadened ability to put money toward owning, operating, and maintaining rail facilities, but must contract for rail operation. The department is allowed $12.5 million annual maximum use of state and federal funds for rail, excluding money spent on corridor rail projects, grading and bed preparation, and acquisition of certain abandoned rail facilities.

Rail is expected to play a larger portion in regional transportation solutions. Testimony in May indicated that according to demographics in Dallas, more people will live outside of the current three transportation authorities than inside by 2025. Planners in the region are preparing an institutional recommendation to solve that problem in the Dallas-Fort Worth region, probably through the creation of a regional rail authority.[16]

Austin and San Antonio are working toward a commuter rail system, with the goal of moving Union Pacific from the central rail corridor to a line further east. HB 3588 authorized and encouraged TxDOT to use excess bond proceeds from the Central Texas Turnpike project or from the Texas Mobility Fund to bring freight rail into the State Highway 130 corridor. The legislation also authorizes and encourages TxDOT to negotiate with a Class 1 railroad in achieving that goal.

Due to a number of factors, the region missed the chance to get freight rail into the northern segment of state highway 130. It is still possible to move traffic to an alternate route, and to place freight rail into the southern portion of 130 that moves between Lockhart and Seguin. Union Pacific railroad recently completed a major study of upgrades needed to accomplish the relocation. Relocation would significantly reduce the truck traffic through the Austin-San Antonio corridor and lessen the destruction caused by those vehicles. The cost of maintaining the infrastructure needed would shift to the railroads, the private sector, and off of the taxpayers. In addition, capacity would be freed on I-35, public safety and air quality would be enhanced, and NAFTA traffic would be sped to its destinations across the country. Capacity would also be freed to service the needs of the new Toyota plant in San Antonio.

Although some commuter rail plans lean toward private investment and assistance, railroad officials caution against hoping for too much. Even though railroad productivity has increased since deregulation in 1980, the railroads are not earning enough to meet their cost of capital to reinvest in added infrastructure. Most of today's railroad budgets are committed to maintenance and preservation. Without significant investment in improved infrastructure, railroads will be unable to satisfy the increased demand.[17]

Dennis Kearns, of BNSF, testified before the joint committee in May that the railroad is a very capital intensive industry, with BNSF responsible for over 30,000 miles of rail nationwide that needs to be maintained, along with over six thousand locomotives that pull trains over this network. The average price of a locomotive is $1.3 million, and the cost of maintaining the right-of-way is over one billion dollars a year. Although the railroads made $9 billion last year, the bottom line profits were $816 million.

According to Kearns, what freight rail can offer is leveraging of physical track structure, and railroads can participate on a pay-as-you-go mechanism, like a toll road. The current network can handle existing traffic, and the railroads operate in such a productive manner that other countries are coming to America to see how the class one railroads operate so well. However, the exponential growth of traffic on the highways and railroads is expected to increase dramatically as the American economy changes from a manufacturer of goods to an importer of goods from the Pacific Rim. The railroads are moving goods from the California area to the cities. Once the cities are reached however, trucks move the goods from that point.

The railroads are willing to partner with urban and regional transportation agencies when excess capacity is available on their lines, the railroads are made whole for the use of their right-of-way, and their capacity to handle freight goods is not diminished in the future.

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Background

HB 3588 created many innovations that have expanded the ability of the Texas Department of Transportation to do its job more effectively. More creativity will be required in the future, as states continue to grapple with ever-increasing needs, and ever-decreasing funding. Learning from the best practices of other states expands Texas' ability for innovative thinking.

Testimony from Public Hearings

The Committee heard testimony during two scheduled hearings. Those who testified and their representation were:

February 9, 2004, in Austin, TX

Phil Russell, Texas Department of Transportation
Amadeo Saenz, Texas Department of Transportation
Steve Simmons, Texas Department of Transportation

August 24, 2004, in Austin, TX

Bill Albaugh, Florida Department of Transportation
Jim Ely, Florida Department of Transportation
Pete Rahn, former Secretary of Transportation, New Mexico
Shirley Ybarra, former Transportation Director, Commonwealth of Virginia

Texas Testimony

In 2001, the Texas Department of Transportation developed a report, "Transportation Partnerships." The report established five transportation goals that TxDOT is now using: reliable mobility, improved safety, preserving existing transportation systems, streamlining project delivery, and increasing economic vitality.

The 78th Legislature changed some of the performance measures that the Department follows. Some of those include: the number of engineering plans that the Department is producing, the dollar value of contracts, the number of projects awarded, and the miles of seal coat and overlay that are done.

One of the innovative ideas that TxDOT is examining to improve their efficiency is balancing the letting schedule. TxDOT lets about $3 billion of projects a year. In the past, letting would be light when the fiscal year began in September, and would fluctuate throughout the year. Towards the end of the fiscal year, there would be a rush of lettings, which created problems in planning in the contracting industry. TxDOT is moving towards a set letting amount, somewhere in the neighborhood of $250 to $300 million per month, planning the number of projects that will be let monthly, and examining what TxDOT can do with their own resources.

The district offices have been authorized to design twenty percent more projects than can be let with available resources. Often, an approved project will run into a stumbling block such as problems acquiring the right-of-way, or issues with utilities or the environment. If a selected project cannot be let by its due time, there will be an alternate project ready to go.

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Environmental Streamlining

Environmental streamlining is generally used to describe a new way of doing business that brings together the timely delivery of transportation projects with the protection and enhancement of the environment.

TxDOT has looked at this problem from several angles. External efforts include Memorandums of Agreement and Memorandums of Understanding with other state environmental resources agencies such as Texas Parks and Wildlife and the Texas Commission on Environmental Quality. Internal efforts include advance right-of-way acquisition and improved contracting agreements. Mitigation efforts include wetlands banking, conservation easements, and fee in lieu of mitigation.[22]
 

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Care should be exercised to insure that streamlining the process doesn't shortcut its purpose.

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The power of leveraging. In 1986, the authority faced a turning point, becoming basically debt free. Some thought that the best thing to do would be to remove all the tolls from the turnpike in the mid-eighties. Fortunately for the turnpike, the Florida Transportation Commission was created in 1987. The agency and the legislature took an entirely different route in 1990, and decided to leverage the $85 million a year in revenues provided by the turnpike mainline and build more toll roads. Revenue bonds were issued based on this dedicated financial engine, and currently Florida has $1.8 billion dollars of revenue bonds outstanding, and plans to issue a total of $4.5 billion by 2010. Since 1990, another 140 miles of turnpike have been constructed or acquired, valued at 2.4 billion dollars. Each day about 1.5 million residents or visitors ride the new facilities. Enterprise revenues will exceed $600 million this year. Just 15 years ago, revenues were only $85 million per year. At the current interest rates, every dollar can bond 14 or 15 dollars. Today, one out of every four dollars in revenue comes from one of the expansion projects built over the last ten years. Texas is uniquely positioned, like Florida, with growing populations and growing revenues, to leverage toll road revenues for transportation.

Safeguard your revenues. Tolls are not always the most popular, but their revenue streams are coveted. The rating agencies expressed concern in 1990 that as the revenue streams increased, there would be greater pressure to divert a portion of these revenues to non-turnpike projects or even non-transportation projects. Florida's legislature passed into statute a law that forbids moving turnpike revenues off the turnpike system. Every dollar collected must be put back into the transportation system for the benefit of current and future users. This is one of the reasons Florida enjoys such a high bond rating.

Customers, not motorists. Run the turnpike like a business. Customer service, workforce, project delivery and financial stability are the primary objectives of the turnpike.

Go electronic together. Toll collecting is an expensive and labor intensive operation, costing about 14.7 cents per transaction. Electronic toll collection costs less than ten cents per transaction. Currently, about 52% of the tolls in Florida are collected electronically through the Sunpass program, and Florida's goal is to increase that to 75% by 2008. 1.5 million transponders are in use statewide, and Florida hopes to increase that to two million next year, as the Sunpass is fully interoperable with other transponders in the state. One percent of the turnpike revenues are spent to promote electronic tolling. Florida recently raised the tolls for cash customers on the main turnpike, to see if the different toll would create more electronic users. Sunpass sales went from 1500 a day to 8500 per day by creating that differentiated toll.

Expand out, not in. In 1990, a major workforce decision has paid major dividends for the turnpike program. The decision was to maintain a small cadre of highly-qualified internal staff, but also use consultants and other private sector groups to deliver the state-wide program. Of the staff of 4600, only one out of ten are DOT employees. All turnpike design, all construction and engineering inspection and maintenance have been privatized, as well as all toll collection and service plaza areas. As workforce needs have changed, the turnpike program has expanded externally, rather than internally, for its staff. Private and state employees work as one unit. As a general rule, private salaries are higher than those for state employees, particularly in the professional engineering ranks. If you look at the DOT as a whole in Florida, of all the construction, engineering, and inspection, 81% is privatized at FDOT, in the right-of-way support area, 76 %, maintenance 80% and design about 82%. All toll collectors used to be DOT employees, and as they were privatized, were offered their jobs as private sector jobs.

Stretching the Dollars Further

Florida encourages the involvement of the private sector. In one instance, the Disney corporation paid for half the cost of a new toll road that was needed, the state the other half, and the state kept the revenues. Donating right-of-way and design consulting are other ways that the private sector has become involved.

As the cost of land continues to increase, Florida tries to identify future transportation corridors with the goal of purchasing right-of-way early.

Revenues come mainly from tolls, but also from concession revenues. Florida currently has eight service plazas on the turnpike that generate revenue. Florida has also constructed a convention center along the turnpike, and it has already been booked for the next five years. Two years ago, the Florida legislature directed the turnpike to look at other revenue streams, with the goal of bringing in as many dollars as possible for transportation needs.

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Asset Management

Although Texas and Florida both have asset management programs, Florida's approach is different from that of Texas. Asset management is generally described as contracting for routine maintenance work and management services. Florida expands that definition by also contracting out the planning of the work, administrative decisions, and inspection of the completed work.

The Florida Department of Transportation is well-known for its demonstration of cost savings from decreasing in-house employees and increasing privatization. In Florida, private contractors perform nearly all department toll collection and most construction and engineering, design, right-of-way, and routine maintenance work. The percentage of work performed by private contractors continues to increase, and the department has eliminated more than 800 state maintenance positions by expanding privatization between 1995 and 2003.

The Department has an innovative highway asset management program whereby the Department contracts with a private entity for the management of all assets located within the right-of-way for an entire geographical area or portion of roadway. The contractor is responsible for all routine maintenance activities associated with the roadway, structures, drainage, roadside, rest areas, wayside parks, vegetation and aesthetics, traffic services, structure inspection, and incident management. The contractor invoices the department monthly, providing a breakdown of all work completed and associated charges. The contractor is required to respond and deploy resources within 15 minutes of initial notification, 24 hours a day, seven days a week, of any emergency. If the contractor does not arrive within one hour of the initial notification, $1,000 is deducted from the contractor's monthly lump-sum payment for each hour past the allowed response time it took the contractor to be on site.[25]

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Kansas

Innovative Contractors

The state of Kansas looked at innovations for construction of 7.5 miles of Interstate 135 south of Newton. The first, an accelerated construction schedule, was suggested by the engineering staff of KDOT District Five. Engineers felt that the project, originally slated to be completed in two construction seasons, could be completed in one. Contractors were given the option of providing two bids, one for completing the work in two years and one for a one-year completion. When the project was opened for bids, the winning company submitted the lowest overall bid for the 2-year option ($18.5 million) and also submitted a bid for the 1-year option at an additional one dollar. The 1-year schedule was selected to reduce disruption to the traveling public.

KDOT also added financial incentives to speed reconstruction of the most heavily traveled interstate ramps. Due to a $2,000 per day in incentives for early completion of the ramps, they were rebuilt in 23 days. Other incentives included a $93,000 smoothness incentive, paid as a result of the pavement profile on the project. A $302,000 quality incentive was paid as well. The project was completed far ahead of the accelerated schedule and has proven to be a high-quality highway improvement.[28]

New Mexico

Innovation from Desperation

In 1995, New Mexico's system was deteriorating quickly. The number of deficient road miles on the system had increased every single year for 23 years. With few resources and few people, something different had to be done.

Newly-appointed transportation secretary Pete Rahn came from outside the transportation and government arenas; an illogical choice for the job. He was appointed to "do something different." He believed that two things must be in place for innovation to occur: permission/encouragement to find new solutions to problems; and a recognition that there is an obstacle that traditional behavior will not solve. In government, there is traditionally no incentive to innovate, there is no reward for assuming risk.

The driving force behind New Mexico's undertakings was the desire and need to "plug their transportation system into the regional system and economy." The needs were huge and the resources scarce. Rahn believed that the lack of transportation infrastructure led to the lack of economic activity. New Mexico is 48th in per capita income, and transportation had never been a major issue for the state. An extremely aggressive goal was set to build 650 miles of new four-lane highway that would connect with 570 miles of existing isolated sections of four-lane roads to create a contiguous 1200 mile (non-interstate) four-lane system that would link over 97% of New Mexico's municipal residents with a safer, more efficient transportation system. And it was to be completed in six years.

The process that delivered this goal was the Malcolm Baldridge Quality management structure that demands organizational responsiveness to customer needs and complete involvement by department employees. NMDOT implemented a performance measurement system, named the Compass, that tracked 16 tangible results that customers could reasonably expect to be delivered if their needs were truly being met. Seventy-eight indicators were reported quarterly to the Governor, the Legislature, the Commission and the media.

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Ohio

Shortening the Environmental Process

Ohio has gotten a reputation for being among the most adept transportation departments at complying with federal environmental requirements. ODOT's work, in close cooperation with the FHWA, lets projects with minimal environmental impact be processed as categorical exclusions rather than requiring the more complex environmental assessments or environmental impact statements. Projects like simple culvert and structure replacements can now be processed without lengthy documentation. Currently, 99 percent of ODOT's projects can be cleared through the categorical-exclusion process or are completely exempt from the environmental process. Ohio officials credits its improved ability to coordinate, review, and approve highway projects to more efficient processes and better partnerships with the pertinent government agencies.[29]

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The Department would now like to advance its streamlining effort further, and will be presenting their final report and recommendations to senior management at PennDOT in the next few months. PennDOT would like to be allowed to obtain certification on all or individual environmental actions. The Department has already begun the process to become ISO 14001 certified via its Strategic Environmental Management Program. As this program advances, the Department would like to use this as a means to obtain delegation for many state or federal environmental requirements.

The Department would also like to eliminate or reduce the review process for minor projects, and set a maximum review time for federally required documents. Currently there are no mandated time frames for review and comment on environmental documents. The Department would also like to establish timelines for issue resolution, and is working with AASHTO to encourage a holistic review of federal environmental requirements. PennDOT feels that because numerous environmental laws and regulations were written over a long period of time and designed to protect a specific interest, little consideration has been given to the total impact of trying to comply from a holistic perspective. PennDOT would also like to see improved linkage between the environmental process and the planning process.[31]

Virginia

Paving Roads

The Rural Rustic Road Program offers savings in paving rural roads by paving within existing right-of-way and making minimal improvements. It contrasts with the more traditional approach of purchasing additional right-of-way, widening and reconstructing the road, and improving alignment.

To qualify for the program, the road must already be a state-maintained road in the secondary system of state highways. The road cannot have any special needs regarding alignment, drainage, or safety. It must carry a minimum of 50 vehicles per day and a maximum of 500 vehicles per day. Growth and traffic cannot be expected to increase significantly over the next 10 years. The county governing board and local citizens must support the paving concept, and the board must pass a special resolution declaring the road a "rural rustic road."

In Augusta County, Virginia, six projects were completed under the Rural Rustic Road Program that resulted in 7.85 miles of paved road for $405,207. The original cost estimate for the projects was nearly $3.5 million.

The Pave-In-Place Program is very similar to the Rural Rustic Road Program except an eligible road is allowed to carry a maximum of 750 cars instead of 500. Additionally, the Pave-In-Place Program does not require a special resolution from the county and does not place restrictions on future growth and traffic. Paving is done within the existing right-of-way, but abutting property owners are expected to donate additional right-of-way for spot widening if necessary for safety. Minor improvements in alignment and drainage also are made if needed.[32]

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Committee Recommendations

Legislation should be considered that would allow the Texas Department of Transportation to remove its requirement that its executive director be an engineer.

Legislation should be considered that requires long-term maintenance and capital improvements (i.e., lifecycle costs) to be considered in CDA and design/build procurements.

RMAs can be a valuable tool for developing much needed infrastructure throughout the state while benefiting the regions that utilize the RMA model. Legislation should be considered to assure that start-up funding is available for RMAs, so that the financial burden of start-up and organizational costs does not rest solely on the counties forming the RMA.

Language permitting non-tolled travel on HOT lanes by hybrid and other vehicles should be reconsidered.

Toll violation and enforcement authority for various types of tolling entities should be harmonized and should accommodate increased use of electronic tolling.

Language should be considered regarding participation by local entities as investors in toll projects who can receive a return on amounts contributed.

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Introduction

Road Building Initiatives

Canada, Mexico and the United States each built their transportation systems in pieces, according to the needs of over a century ago. Canada and the United States have tended to develop their transportation network in an east-west direction, the United States, in part, did so to unite the two coasts. The United States began their east-west planning with the Transcontinental Railroad, and continued that pattern when planning the U.S. Interstate Highway System.

Mexico, in contrast, did develop north-south routes, but focused on the central region of the country, especially Mexico City. Infrastructure along the northern border states was largely ignored due to their remoteness and Mexico's desire to limit contact with the United States.

Since the original roads were built in all three countries, existing infrastructure was reinforced, but not rerouted in line with today's economic conditions. All three countries independently pursued their transportation goals along the economic lines and needs of the times, and all three were unprepared for NAFTA.[38]

Testimony from Public Hearing

The committee heard testimony on border transportation issues jointly with the House Committee on Border and International Affairs at a hearing in Laredo on August 19, 2004. Those who testified and their representation were:

John Adams, Laredo Development Foundation
Hope Andrade, Commissioner, Texas Transportation Commission
Phil Bunker, Teamsters Local 657
Alfonso Casso, Border Affairs Coordinator, Texas Secretary of State
Larry Dovalina, City of Laredo
Les Findeisen, Director of Policy, Texas Motor Transportation Association
Elizabeth G. Flores, Mayor, City of Laredo
Juan Gonzales, City of Del Rio
Rene Gonzalez, Laredo Development Foundation
Dr. Ray M. Keck III, President, Texas A&M International University
Jay Kimbrough, Office of the Governor
Augustin Redwine, Senior Research Analyst, Texas Comptroller of Public Accountants
Mark Rogers, Texas Department of Public Safety
Amadeo Saenz, Texas Department of Transportation
Gerald Schwebel, Alliance for Security and Trade
Bill Stockton, Texas Transportation Institute
Juan R. Vela, Teamsters Local 657
Jorge Verduzco, The Alliance for I-69 Texas
Regino Villareal, Coordinator de Logistica, FIDENOR

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According to a Dallas Federal Reserve Report, due to the rapid growth in truck traffic and its concentration on major arteries, the border may need even greater spending to reduce congestion and the associated social costs. According to these findings, the current rate of border infrastructure development will not meet the future trade expansion and population growth Texas wants to enjoy in the future and to maintain its leadership position. As industry outpaces the number of highways and customs booths, border cities are becoming bottlenecks, chasing away tourism, diminishing the quality of life for border residents, and crippling the Texas economy.[40]

Prior to September 11, 2001, more than 100 federal agencies had some role in approving or processing or sharing data on truck traffic crossing the border. That number does not include the host of state, local and private interests that have legitimate roles in the crossing process. Cross-border traffic has slowed down even more since the September 11 attacks. The American Trucking Association, the trade organization for the U.S. trucking industry, says that beefed up security procedures are causing truckers hours-long delays at border crossings. As a result, U.S. firms that rely on parts shipped quickly from Canada--automakers, for example--have had to rethink distribution strategies.[41]

A recent study shows the NAFTA truck traffic volume through Texas is no longer increasing. The "flat" volume is attributed to manufactures leaving Mexico for China. This finding is supported by this report. [citation]

TABLE OF CONTENTS

INTRODUCTION

Interim Study Charges and Subcommittee Assignments

It All Starts Here -- HB 3588

  Background

  Testimony from Public Hearings

  A New Vision: Trans-Tx Corridor

  Funding Tools

    Texas Mobility Fund

    The Metropolitan Mobility Plan

  Regional Mobility Authorities

    Tolling

    New Technologies

    A Policy of Tolling

    Pass Through Tolling

    Highway-to-toll Conversion

    Toll Equity

  Public-Private Partnerships

    Design-Build

    Comprehensive Dev. Agreements

  Other Innovations

    Land Acquisition

    Rail

  Local Option Taxes

  Committee Recommendations

  Rules Implementing HB 3588/HB2

Best Practice

  Background

  Testimony from Public Hearings

  Texas Testimony

    Environmental Streamlining

    Design and Construction

    Outsourcing

    Taking Tools to the Next Level

  Florida

    Lessons From Tolling

    Stretching the Dollars Further

    Asset Management

  Georgia

    Public Private Initiatives

  Kansas

    Innovative Contractors

  New Mexico

    Innovation from Desperation

    Delivering the Goods

  Ohio

    Shortening the Enviromntl Process

  Pennsylvania

    Environmental Streamlining

  Virginia

    Paving Roads

    New Ways to Toll

    Unsolicited Projects

    Special Tax Districts

  Committee Recommendations

Border Transportation

  Introduction

    Road Building Initiatives

    Testimony from Public Hearing

  NAFTA Fallout

  One Main Route

  State Efforts

  Federal Programs

  Trucking Issues

  Terrorism Regulations

  Studying Bottleneck at the Border

  Tolling

  Truck Tolling

  Rail

  Bridges

  The Effect of the Trans-Tx Corridor

  Other Considerations

    The Pacific Rim

    Increased Cargo

    Short Sea Shipping

    CAFTA

  Committee Recommendations

Federal Funding

  Background

  The Legislation

  What Texas Wants

ENDNOTES

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During the first few years of the program, Texas submitted candidate projects to the United States Department of Transportation. The first few years, Texas was highly successful, but lost ground as the Congress began to chip away at the funding with earmarks. In addition, funding was often misdirected to non-border states and corridors lacking international significance. One of Texas' main federal transportation goals is to rework the program during the re-authorization of TEA-21, currently before Congress.

It is important that Congress and the USDOT give priority to nationally-significant corridor systems already identified as High Priority Corridors and that support U.S./Mexican/Canadian trade patterns. This means that priority should be given only to north/south High Priority Corridor routes and border improvements connected to them that will enhance the flow of trade to and from border crossings in that direction.

Texas Senator Kay Bailey Hutchison, Congressman Michael Burgess, and Congresswoman Eddie Bernice Johnson authored legislation to make this focus a reality. The bills would require the USDOT to direct funding only to projects on High Priority Corridors that connect to Mexico or Canada, giving priority to corridors where the trade traffic has increased under NAFTA. The bills would also maintain the USDOT discretionary aspects of the current Coordinated Border Infrastructure Program to allow states and localities to do more in the key area to improve the efficiency of border transportation infrastructure.

Alternative legislation by Michigan Congressman Vernon Ehlers and Michigan Senator Carl Levin would fully or partially eliminate the discretionary aspects of the coordinated border infrastructure program and allocate program funding among the border states by a formula. The proposal also would maintain the discretionary aspect of the corridor program by making eligible both corridors that connect to the border crossings and those that serve as an intermodal connector. This language made its way into the recently passed Senate version of the reauthorization of the TEA-21.

SAFETEA (S 1072 as passed by the Senate on February 13, 2004) contains separate programs for borders and corridors. The Border Planning, Operations, Technology, and Capacity Program would distribute more than $1 billion in program funds over six years among the 15 border states by a formula (weight of cargo, value of cargo, number of trucks entering, and number of passenger vehicles entering). The Multi-state Corridor Program would give the Secretary of Transportation the discretion to distribute more than $1 billion in funds over six years to any state and MPO for multi-state highway and multimodal planning studies and construction.

TEA LU (HR 3550 as introduced in the House in November 2003) also contains separate programs for borders and corridors. No details are currently available on the proposed corridor program. However, TEA LU's Border Infrastructure Program would distribute $1.975 billion over six years by formula (number of incoming commercial trucks, number of incoming passenger vehicles, cargo weight on commercial trucks, and number of ports of entry) among the 15 border states.

Between the SAFETEA and TEA LU border program formulas, Texas gets a larger share of the available program funds under the SAFETEA formula. FHWA analyses show Texas receiving 28% of the program funds ($284.5 million out of $1.012 billion) in SAFETEA and 24% of the program funds ($487.8 million out of $1.975 billion) under TEA LU.[44]

At the time of this report, negotiations in the conference committee of Congress were continuing concerning the total level of funding with some issues resolved. It is expected that a short-term extension will be enacted to the end of September.

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Mexican access to the border was slowed by the courts. An appeal was made to the Supreme Court due to concerns by environmental and labor groups over truck standards. It was felt that lower Mexico pollutant standards would contribute significantly to the pollution problems along the border. Concerns have also been expressed relating to truck weights--maximum truck weights in Mexico are much higher, and there is fear that these trucks will significantly damage United States roads, which are built to design standards for lower-weight trucks.

Aging tractors and safety concerns are refuted by both U.S. and Mexican sources. Dilapidated tractor-trailers are used only as short-haul drayage trucks that brokers use to ferry loads across the border. Those trucks are not the same trucks used to haul loads from their point of origin. To save the wear and tear of long periods of idling, Mexican truckers start with loads hitched up to one truck, then switch to an older and indifferently maintained truck to make the border crossing. Once on the United States side, the load is rehitched to a U.S. truck. Mexican and U.S. experts say lifting the barriers to allow Mexican long-haulers into the United States would eliminate the need for the elaborate hitching and unhitching and encourage the use of the modern Mexican fleet. Mexican carriers, like their United States counterparts don't want to risk a breakdown of equipment or delays in delivering goods.[46]

The Supreme Court ruled on June 7, 2004, that the Bush administration can open U.S. roadways to Mexican trucks as soon as it wishes. But barriers remain. The Department of Homeland Security did not exist when NAFTA rules were first drafted, and terrorism concerns will have to be addressed. In addition, Mexican truckers will need extra insurance, and will need to abide by U.S. safety and environmental standards.

In addition, now that they have preliminary approval to cross the border, truckers on both sides aren't sure they want to. Mexican truckers fear larger, faster, more efficient American companies stealing their customers, while American truckers fear that lower-paid Mexican drivers might erode what they can charge for their services.[47] In addition, Mexican truckers can haul only international cargo. A Mexican trucker must immediately head back to Mexico after unloading cargo in a U.S. city, either with goods bound for Mexico or empty-handed, which cuts profits.

Texas Department of Transportation officials believe that opening the border to Mexican long-haul trucks will not specifically cause more trucks to be on Texas highways, but simply provide a different mix of trucks. Rather than only United States trucks operating on Texas highways outside the commercial zone, some of those U.S. long haulers will be replaced with Mexican long haulers. The Texas Department of Public Safety has estimated that opening the border will mean only up to about 500 Mexican trucks driving on Texas roads in the near future. Should NAFTA trade continue to grow, however, steady growth of vehicles will continue.

Removing the barriers to Mexican trucks allows the state to treat every carrier, whether it is Canadian, U.S. or Mexican, in the same way, and facilitates federal compliance with NAFTA. In addition, traffic and commerce may move more smoothly, by reducing truck re-hitching and allowing long-haulers to move straight through. The agreement, however, does not diminish the need for improvements of our bridges and roads on the border.

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Studying the Bottleneck at the Border

Although infrastructure is a major concern at the border, traffic is originally slowed by time consuming border checks. One of the goals of the Federal Highway Administration is to help improve the economic efficiency of the U.S. transportation system by reducing delays in the border crossing process. Getting traffic through the border and on its way is an issue that has been studied by various entities. The Texas Department of Transportation commissioned the Texas Transportation Institute and the Center for Transportation Research of UT-Austin to examine the feasibility of an expedited border process, which would facilitate trade while permitting the federal and state agencies to maintain their inspection responsibilities.

Phase One of the initial research on the Texas Model Border Crossing Project determined that automation of the crossing process is feasible and will not generate substantial additional costs. The project showed that the greatest opportunity for efficiency gains comes with the implementation of express lanes for precleared trucks. In 2003, the U.S. Bureau of Customs and Border Protection initiated the express lanes with the implementation of FAST (Free and Secure Trade) lanes. The FAST program is an initiative between the United States and its NAFTA partners using common risk-management principles, supply chain security and advanced technology to improve the efficiency of screening and clearing commercial traffic at U.S. borders. The program offers expedited clearance to importers, carriers, foreign manufacturers, and intermediaries enrolled in the program by reducing Customs inspection requirements for low-risk shipments, dedicating lanes at major crossings to FAST participants (where possible), using common technology, and physically examining cargo transported by these stakeholders with minimal frequency.[49]

Tolling

According to the Governor's Business Council, over a ten-year period, vehicles increased more than 26 percent, population increased 23 percent, and workers have increased more than 20 percent. Vehicle Miles Traveled increased more than 40 percent, while new lane miles increased less than 4 percent. The traditional pay-as-you-go financing has been unable to keep up with the increased demand.

Tolling, one of the funding mechanisms of HB 3588, is the fastest way to improve mobility in Texas. However, the tool has been resisted by communities where it is a new concept. This is especially true on the border.

The City of El Paso, in particular, has been vocal that their transportation needs have been overlooked for a long time. The area is in need of a loop, and states that their economic base is insufficient to finance the project with tolls. The city supports the concept of tolls in the future, but not until their basic infrastructure has caught up with the rest of the state's metropolitan areas. Other border areas state that population densities and per-capita earnings would make it difficult to find the financial base to support a toll road. Testimony by Elizabeth Flores, Mayor of Laredo, indicated that city leaders there feel the same.

The Texas Department of Transportation is committed to thoroughly evaluating all controlled-access highway projects as possible candidates for tolling in order to ensure that the state's limited transportation dollars are used to their fullest potential. This includes roadways where one has not existed before, and increased capacity projects such as adding additional main lanes or constructing new main lanes. The intent is to identify projects that make sense for tolling. Projects that are not toll viable will proceed through the traditional funding process.

An example of such an evaluation can be found in the Rio Grande Valley. TxDOT has been looking into the possibility of building a bypass around the city of Pharr to connect the Pharr International Bridge to U.S. 281. At the present time, if the trucks need to travel north, they have to go through downtown Pharr and countless signals. TxDOT is working to develop a corridor for the area, but will not be able to finance it until 2010. The project was found to have a tolling feasibility of about 40%. If the project is a $200 million project, TxDOT can issue revenue bonds for $80 million of that $200 million. This accomplishes two objectives: Instead of having to allocate the entire $200 million on that project, $80 million can be applied to another project.

TxDOT understands that not every project will be toll-feasible. Some projects are important and they will still have to be constructed. But if there is a possibility additional resources of money can be brought in, then dollars can be stretched or leveraged to do a lot more for less.[50]

The Hidalgo County Commissioners Court hopes to form a Regional Mobility Authority to study the possibility of toll roads near the border. County officials want to examine the possibility that toll roads near the international bridges will steer some of the commercial truck traffic away from residential roads.[51]

Truck Tolling

Truck-only tolls are gaining favor on the federal level. The Federal Highway Administration has predicted a 31% increase in truck freight nationwide by 2015. In 2003, 77 million trucks hauled 13.2 billion tons of freight. Truck-only toll (TOT) lanes would allow highways to be widened without using tax dollars. Construction would be paid for with toll money. Concessions to truckers are being considered, such as the lifting of a 13-year-old restriction on double and triple trailers for TOT lanes, saving a potential $40 billion a year for truckers. Truckers, thus far, have been opposed to the idea.[52]

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Four years ago, the legislature authorized the funds for transportation to purchase tracks and right-of-way for the South Orient railroad, to save it from destruction. TxDOT has oversight of the rehabilitation of the South Orient Rail line from near Coleman to Presidio. The public-private partnership between the State of Texas and Texas Pacifico Transportation Ltd. will return rail service along the entire line, from a deep water port on the west coast of Mexico through a re-opening of the line at Presidio, one of only seven U.S.-Mexico rail crossings.

The Brownsville rail relocation project is a county project designed to minimize highway-rail grade crossings. Significant safety benefits are expected by the elimination of seventeen existing highway-rail crossings in Brownsville, and six highway-rail crossings in Matamoros. Freight train transit time from Brownsville to Monterrey would be cut by approximately two-and-a-half hours, congestion would be reduced, and a new highway corridor could be developed in the City of Brownsville. After construction of the new line, the plan calls for use of the existing right-of-way through Brownsville for future roadway construction projects. This would provide an additional roadway transportation corridor that is needed to access western Brownsville, the Amigoland Mall area, and the current B&M roadway-rail bridge into Mexico.[54]

The City of El Paso, with about forty crossings per day, is considering moving its downtown railroad to facilitate transportation safety. A consulting firm has determined that moving the railroad lines would be a $921 million investment over a twenty year period. Complicating the move is El Paso's terrain, with mountains on one side, a river on the other, and Mexico to the south.[55]

Bridges

Bridges connecting Texas and Mexico are owned by various entities. Twenty-three are currently operating, two have been closed. There are also two dam crossings, one hand-drawn ferry, and five rail-only bridges that cross the border. Seven new bridges have been proposed.

Sixteen bridges are owned or operated by cities and/or counties, which charge a toll. Cameron County, owner or part-owner of three bridges, has over eight million crossings annually with a gross revenue of over $60 million.[56]

Bridges owned by the federal government are not tolled. Federal legislation would be required to allow Texas to toll United States-owned bridges.

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Increased Cargo

The new trend in shipping freight is container ships. Containerization is a system of intermodal cargo transport using standard containers that can be loaded on container ships, railroad cars, and trucks. Container capacity is measured in twenty-foot equivalent units (TEU). A twenty-foot equivalent unit is a measure of containerized cargo equal to one standard 20 ft. x 8 ft. x 8.5 ft. Most containers today are of the 40-ft. variety and thus are 2 TEU.[58] A container ship can unload and load again in 24 hours, compared to up to four days for a conventional freighter. A container ship can be handled at one berth in port, instead of being shifted between piers to deal with different cargoes. One container ship, it has been estimated, can do the work of six ordinary freighters.[59]

This increased cargo will eventually find its way to the Gulf Coast. Altogether, the Gulf Coast container market posted a 9 percent increase to 1.5 million TEUs in 2003 compared with a national growth of 8.9 percent to 22.1 million TEUs in the same year. If construction begins as planned, the new $600 million Texas City container terminal between Houston and the Gulf of Mexico could open by mid-2006. The first phase of the Port of Houston's $1.2 billion Bayport Container Terminal is expected to open about the same time. Although Asian trade is not expected to be at the same level as what is occurring on the West Coast, major retailers such as Walmart and Home Depot want flexibility in the event of another West Coast strike. The Panama Canal cannot handle the largest container ships at this time, but they can handle up to 4500 TEUs.

Obviously, once the container freighters arrive and are unloaded, truckers and rail carriers will travel with them across Texas' already over-burdened infrastructure. Supporters of the construction of I-69 have testified before the Texas Transportation Commission that container trade is expected to triple in the next twenty years, and I-69 is vital to alleviate the upcoming crush, particularly if it contains a freight element.[60]

Short Sea Shipping

Short sea shipping, common in Europe, is the movement of goods from Mexico to the United States across the Gulf of Mexico. Transportation time is generally shorter than overland movement, and short sea shipping is less polluting than trucks. Difficulties include finding cargo to transport on the return trip, and find adequate overland routes once the cargo has arrived. Increased pressure on existing infrastructure should make this alternative viable eventually.

The Port of Victoria is working to expand their operations to short sea ship goods to the Port of Houston. Although their initial grant application to the Texas Commission on Environmental Quality was denied, the port will be re-submitting their application in the near future with additional information required by the TCEQ.

CAFTA

The Central American Free Trade Agreement (CAFTA) is expected to be approved by Congress next year. This agreement between United States, five central American countries, and the Dominican Republic is designed to eliminate trade barriers, including government regulations that indirectly affect trade, such as zoning restrictions, and environmental regulations in goods and services between these seven countries. Traffic effects have not yet been determined.

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What Texas Wants

A 95% rate of return for all states by FY 2009. Depending on how you look at the numbers, Texas currently receives approximately 87 to 90.5 cents for every dollar the state sends to the federal government. States receiving much more than what they send include South Dakota; $2.11 for every dollar sent, Alaska; $7 for every dollar sent, and New Mexico; $1.21 for every dollar sent. If Texas could increase their rate of return to 95%, that would mean approximately an extra $200 million dollars for road construction a year.

TEA LU provides a 78% rate of return. SAFETEA promises a 95% rate of return by FY 2009, but holds high growth states such as Texas at a 90.5% rate of return every year through FY 2008, providing Texas with an 81% rate of return on average. Texas loses ground under both versions of the bill.
 

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Unlimited federal-aid highway tolling authority language included in the RAPID Act. More and more high-growth cities and states have turned to tolls in recent years. But the many federal restrictions on how and where tolls can be used severely limit their options. The RAPID Act allows states to construct and impose a toll on a highway, bridge, or tunnel on the Interstate System, and to reconstruct a previously toll-Interstate highway and convert it to a toll facility. Also allows states to use toll revenues from a federally funded project to be used on a project that is not eligible for federal funds. It currently requires an act of Congress for a specific route segment to apply tolls to any portion of the Interstate. Although the House Bill addressed the subject of expanded use of tolls, the Kennedy Amendments severely stifled their use. The Kennedy Amendments dedicate all tolls to the road on which they were paid, forbid the use of cash tolls and toll booths, and abolish the toll once the costs of building the road were paid (leaving no money for maintenance). New Developments: Congress is edging toward a decision to give states broad authority to levy tolls as a way to break the gridlock over the funding levels.

Language inserted to modify the calculation of federal toll credits. States are rewarded by the federal government when toll roads are built with the awarding of toll credits. These credits can be used to draw down federal transit dollars, reducing the non-federal share of a federally-funded project, thereby granting the state greater flexibility in its financing options for needed infrastructure improvements and transit projects. Currently, a state cannot receive toll credits if any federal money is used in a project. Texas would like the federal government to allow at least a partial benefit when federal money is part of a toll project.
 

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Encourage private participation in surface transportation infrastructure projects by expanding the types of projects eligible for exempt facility bonds to include highway facilities and freight transfer facilities. Currently, private activity bonds are used to finance projects that are run by a non-governmental entity, but are for public good such as airport terminals, public housing and airports. Texas desires to expand the types of projects eligible for exempt facility bonds to include highway facilities and freight transfer facilities. This allows private entities to operate major infrastructure projects while maintaining the tax-exempt status of the bonds issued to finance the projects. This legislation is currently HR3857 by Johnson, the Private Bonds for Modern Roads Act.

Bring the borders and corridors program back to its original purpose, separate into two programs, and give priority consideration to corridors in which traffic has increased since the date of enactment of NAFTA implementation.

Allow for federal reimbursement of options that are exercised when acquiring land for a final alignment. Allows states to use federal funds to pay an option to purchase property that the state ultimately incorporates into an eligible surface transportation project.

Due to the current political climate, it is likely that a new transportation bill will be delayed for another year, until after the presidential elections. There are very few days left for Congress to work this year. Currently, conferees cannot agree on a budgetary number, and have not begun to tackle contentious issues within the legislation.

Both the House and Senate approved a two-month extension of current law the week of July 19. The measure continues the authorization of transit and safety funds until September 30. This latest extension also continues highway funding until September 24.

Unlike past extensions, this extension changed current law by not allowing for the continuation of contract authority to allow the twelve donor states to retain their 90.5% minimum rate of return in highway aid. It also set aside $1.8 billion for unspecified, unauthorized House projects. The House committee's original version of the extension would have added $400+ million in contract authority for the purpose of ensuring that every state ends up with 90.5% rate of return for FY 2004, which is what TEA 21, the current law, requires. However, budget hawks and Senators from recipient states objected and the provision was stripped from the extension. Budgeters claimed the additional contract authority took the transportation bill over its budget limit, and recipient state's Senators didn't want to see donor states getting any additional money in the extension. The twelve donor states who deserved the additional contract authority may end FY 2004 with less than a 90.5% ROR of the programs covered by the TEA 21 Minimum Guarantee, a bad precedent for Texas and other donor states.[65]

Texas currently stands to lose $115 million in highway funding that it should get if the TEA 21 Minimum Guarantee provisions are applied using the latest motor fuels tax contributions to the federal Highway Trust Fund. So far, this year, the various extensions of TEA 21 have used FY 2003 factors. If the latest contribution rates are factored in, Texas would have an 87.5% rate of return in FY 2004 highway fund. If Congress chooses to hold the other states harmless for this adjustment (meaning they won't lose any funds they've already received in FY 2004 due to using older FY 2003 data), then they will have to add new funding to make this adjustment for Texas and 16 other donor states for FY 2004. It was the addition of these new funds that caught the attention of the budget hawks and the recipient states, and they raised an objection to the "fix." While Texas stands to lose $115 million, the next highest state's adjustment is only $46 million, so Texas' loss is significantly more than other states.[66]

The Texas Department of Transportation is actively involved in the process in Washington, and is working to communicate inequities in the system to those with a stake in the future of transportation funding.

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1 Robert Poole, Jr., "Texas Sets the pace in Highway Finance," March 15, 2004.

3 Testimony by Michael Morris, Director of Transportation for the North Central Texas Council of Governments, May 4, 2004.

4 Patrick Graves, "HB 3588 overview," House Research Organization, June 27, 2003.

5 Lucas Wall, "State changes mobility funding," Houston Chronicle, August 29, 2003.

6 Debbie Howlett, "Motorists can keep on rolling soon," USA Today, May 26, 2004.

7 Urban Mobility Corporation, Innovation Briefs, January/February 2004.

8 Jeff Parish, "Shadow tolls could fund road work," The Paris News, May 24, 2004.

9 Lucas Wall and Jo Ann Zuniga, "Part of Texas 249 eyed for tollway," Houston Chronicle, May 29, 2004.

10 An Introduction to Design-Build, Design-Build Institute of America website, 1994.

11 Bill Wilson, Roads and Bridges, December 2003.

12 Tony Hartzel, "State shifts road work to high gear," Dallas Morning News, October 13, 2003.

13 Transportation Commissioner Ric Williamson, comments during the Transportation Commission meeting, June 24, 2004.

14 Robert Poole, Jr., "Texas Sets the pace in Highway Finance," March 15, 2004.

17 Shelley Sekula-Gibbs, "Crisis on our freight rail lines," Houston Chronicle, September 5, 2004.

18 Tony Hartzel, "Group wants to take a (tax) hike," Dallas Morning News, May 1, 2004.

19 Tom DeLay, U.S. Congressman, House Majority Leader, in remarks before the Texas Transportation Conference, August 13, 2004.

20 Pete Rahn, former Secretary of Transportation in New Mexico, in testimony presented before the committee August 24, 2004.

21 James L. Ely, Turnpike Director, Florida Department of Transportation, in testimony presented before the committee August 24, 2004.

22 John Overman, Texas Transportation Institute, review document for Transportation Committee, January 30, 2004.

23 Bernie Fette, Texas Transportation Institute, review document for Transportation Committee, January 30, 2004.

24 NCHRP Synthesis 313: State DOT Outsourcing and Private-Sector Utilization: A Synthesis of Highway Practice, Consultant, Thomas R. Warne, 2003.

25 Cindy Ellison, Research Specialist, Texas Legislative Council, "Transportation Best practices in Florida and Virginia," July 2, 2004.

26 Florida Department of Transportation website, Highway Maintenance, April 2, 2004.

27 Georgia Assembly, Public Information Office, Weekly Update, Internet.

28 Charles Churilla, "What If We Changed the Way Highways Are Built?" Public Roads, May/June 2004.

29 Success Stories, AASHTO: Transportation Center of Excellence website, March 23, 2004.

32 Cindy Ellison, Research Specialist, Texas Legislative Council, "Transportation Best Practices in Florida and Virginia," July 2, 2004.

33 "Truckers May Find Rigs Rolling Along Toll Lanes," Editorial, Tyler Morning Telegraph, July 25, 2004.

34 Coby Chase, Legislative Affairs Director, Texas Department of Transportation, during testimony before the Texas Transportation Commission, May 27, 2004.

35 Joe Wardy, Mayor of El Paso, in testimony before the House Transportation Committee and the Senate Infrastructure Development and Security Committee, May 4, 2004.

36 Donald Michie, Ph.D., Border Trade Alliance/Foreign Trade Association, in testimony before the Senate Committee on International Relations and Trade, March 4, 2004.

37 Richard Garcia, Chair of the Texas Border Infrastructure Coalition, in testimony before the Senate International Relations and Trade Committee, July 7, 2004.

38 Susan L. Bradbury, "Planning Transportation Corridors in Post-NAFTA North America," Journal of the American Planning Association, Spring 2002, Volume 68, Issue 2, page 137.

39 Thomas Rubin and Wendell Cox, "The Road Ahead: Innovations for Better Transportation in Texas," Texas Public Policy Foundation, February 2001.

40 Joe Wardy, Mayor of El Paso, testimony before the Senate Committee on Infrastructure Development and Security, May 4, 2004.

41 Ken Cottrill, "New Roads to NAFTA," Planning, Volume 68, Issue 2, February 2002.

42 Ken Cottrill, "New Roads to NAFTA," Planning, Volume 68, Issue 2, February 2002.

43 Michael Morris, Director of Transportation, North Central Texas Council of Governments, in testimony before the Senate Infrastructure Development and Security Committee, May 4, 2004.

44 Amadeo Saenz, P.E., testimony before the Senate Committee on International Relations and Trade, March 4, 2004.

45 Bonnie Pfister, "NAFTA truck case goes to high court," San Antonio Express-News, April 21, 2004.

46 "Falsehoods driving debate over allowing Mexican trucks in U.S." Editorial, Austin American-Statesman, June 14, 2004.

47 Teresa Border, "Mutual fears put brakes on Mexican trucks," Cox News Service, Laredo Morning Times, June 19, 2004.

48 Ricardo Sandoval, "Bottleneck at the border," Dallas Morning News, September 4, 2004.

49 Bill Stockton, Associate Director, Texas Transportation Institute, submitted written testimony, July 7, 2004.

50 Amadeo Saenz, P.E., Assistant Executive Director for Engineering Operations, Texas Department of Transportation, in testimony before the Senate Committee on International Relations and Trade, March 4, 2004.

51 Alma Walzer, "County officials counting on area toll roads," McAllen Monitor, June 27, 2004.

52 Debbie Howlett, "Truckers leery of toll-lanes idea," USA Today, June 28, 2004.

53 Steve Roop, Strengthening the U.S.-Mexico Rail Connection, Texas Transportation Researcher, 2001.

54 Amy Medrano, TxDOT, e-mail message sent July 15, 2004.

55 Roy Gilyard, Executive Director, El Paso MPO, in testimony before the Senate International Relations and Trade Committee, March 4, 2004.

56 David A. Garza, Cameron County Commissioner, in testimony before the Senate Committee on International Relations and Trade, March 4, 2004.

57 David Hendricks, San Antonio Express-News, column, February 25, 2004.

58 Containerization definition from Wikipedia. Internet site: http://en.wikipedia.org/wiki/Containerization

59 The Encyclopedia Americana, International Edition, Volume 24.

61 Tonia Ramirez, Texas Department of Transportation, quoted by Brian Friel, "Road Battle: FAIR Versus SHARE," National Journal, August 30, 2003.

62 Mark Scott, "The traffic in dollars is going to (sic) other way," Corpus Christi Caller-Times, March 18, 2004.

63 Coby Chase, Texas Department of Transportation, quoted by James A. Cooley, "Highway bill leaves Texas funding in the dust," Lone Star Report, April 16, 2004.

64 Jim Abrams, "Highway money distribution rekindles perennial battle," The Associated press, July 3, 2004.

65 Tonia Ramirez, Texas Department of Transportation, e-mail, July 27, 2004.

66 Tonia Ramirez, Texas Department of Transportation, e-mail, August 2, 2004.