New tollway bill passes Senate

More projects exempted from private toll road moratorium in unanimous Senate vote.

May 15, 2007

By Ben Wear, AMERICAN-STATESMAN STAFF

The Texas Senate, after hours of closed-door negotiations stamped out hot spots of dissent, unanimously passed revamped toll road legislation Monday that would supplant a bill languishing on Gov. Rick Perry's desk.

Perry, who has made it clear he would veto the first bill, House Bill 1892, immediately signaled that he would allow Senate Bill 792 to become law if the House passes it in its current form. Lawmakers involved in the negotiations say they hope to get SB 792 to Perry late this week in time to avert a veto, although the often-fractious House might not play along.

"This is a good compromise that allows projects important to local communities to go forward, recognizing that Texas is a fast-growing state with real congestion concerns that cannot be put on hold," Perry said.

The bill, running about 60 legal-size pages after several Senate amendments Monday, further dilutes a two-year ban on private toll contracts with the state that has been the focus of transportation debate this session.

That ban in HB 1892 already had several exemptions for proposed tollways in Dallas-Fort Worth, San Antonio and El Paso. The Senate on Monday, with SB 792, added the Grand Parkway loop planned for Houston, the potential Interstate 69 from near Corpus Christi to Brownsville, and all of Cameron County.

Perhaps more meaningfully, it would allow private toll road contracts to run 50 years, rather than 40, and make other changes likely to encourage the private sector to continue its keen interest in building and operating Texas tollways. Most new toll projects would be subject to an up-front "market valuation" of how much they might fetch on the private market. If a local government toll agency could not generate that market value, the projects could be put up for bid on the private market.

Sen. John Carona, R-Dallas, chairman of the Senate Transportation and Homeland Security Committee, who over the past week helped negotiate SB 792's language, said he remains no fan of handing off roads to private concerns. But he said private projects are a necessary evil for now because the Legislature has declined to raise the state gas tax for 16 years.

"Is it my first choice?" Carona said of private tollway contracts, often referred to as comprehensive development agreements, or CDAs. "Candidly, it's my last choice. But communities simply have no alternative until the Legislature sees fit to bring current our gasoline tax rate."

Activists around the state who have opposed Perry's transportation policies, such as the Trans-Texas Corridor of cross-state tollways, say the Legislature, in supplanting HB 1892 just a couple of weeks after passing it, is fixing a problem that doesn't exist. They would rather the House and Senate, which approved HB 1892 in recent weeks by a combined 166-5 vote, hang tough and, if necessary, override a veto.

"CorridorWatch sees serious signs that SB 792 will create loopholes big enough to drive any (Trans-Texas Corridor) CDA through," said David Stall, co-founder of the Fayette County-based group. "If that's the case, we are all wasting each others' time."

---

Highlights of the compromise toll road legislation

•Allows private toll road contracts to last 50 years, instead of 40 years as in House Bill 1892 and 70 years under current law.

•Exempts more roads and areas from the two-year moratorium on private toll road contracts, including Texas 99 near Houston, Interstate 69 south of Interstate 37, and Cameron County.

•Changes language in HB 1892 that would have allowed the state to buy back a profitable toll road from a private company based primarily on what the company had invested in the road. Instead, the buyback amount would be based on original estimates of toll revenue for the life of the project.

•Addresses a mistake in HB 1892 that would have directed all money from multibillion-dollar concession payments for the Texas 121 tollway to the Dallas area. Under this bill, the money would be allocated to the Dallas and Fort Worth areas.

•Requires the Harris County Toll Road Authority, which under HB 1892 would have gotten right of way free from the state for some new tollways, to reimburse the state its cost for acquiring the land. However, those payments would have to go to other Houston-area road projects.

•Stipulates that toll road projects, with the exception of 12 ongoing projects in Dallas-Fort Worth and Greater Houston, would undergo a 'market valuation' by a third party. The local toll agency would have first shot at the project if it could raise that up-front money and dedicate it to area road projects.

Source: Senate Bill 792