HBA-CMT C.S.S.B. 342 77(R) BILL ANALYSIS Office of House Bill AnalysisC.S.S.B. 342 By: Shapiro Transportation 5/7/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Under current law, the Texas Department of Transportation (TxDOT) is authorized to expend money from any source available for the cost of turnpikes, toll roads, or toll bridges of the Texas Turnpike Authority provided that money expended out of the state highway fund is repaid from tolls or other turnpike revenue. TxDOT and the Texas Transportation Commission are also authorized to participate in the cost, construction, maintenance, and operation of toll facilities of various entities provided that funds expended are repaid. TxDOT is precluded from advancing funds for turnpike project development without an obligation of repayment. Entities that construct toll facilities seek federal and state highway funds to leverage their own funds and complete financing for high-cost facilities, but repayment obligations may make construction infeasible. C.S.S.B. 342 removes the requirement for repayment from public entities and authorizes TxDOT to expend funds for the cost of toll projects of public and private entities. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Transportation Commission in SECTION 1 (Section 222.103, Transportation Code) of this bill. ANALYSIS C.S.S.B. 342 amends the Transportation Code to authorize the Texas Department of Transportation (TxDOT) to participate in the cost of the acquisition of a toll facility of a public or private entity by spending money from any available source on terms established by the Texas Transportation Commission (commission). The bill sets forth provisions relating to repayment of any money spent by TxDOT for a toll facility of a public or private entity. The bill requires the commission to adopt rules for the spending and repayment of money for such toll facilities. The bill specifies that a bond or other debt obligation to finance a toll facility is an obligation of the issuing entity and not of the state. The bill prohibits the money granted by TxDOT each federal fiscal year for cost participation in toll facilities from exceeding 30 percent of the obligation authority under the federal-aid highway program that is distributed to this state in that year. The bill provides that any toll project that uses money that is granted or loaned from constitutionally dedicated funds for the construction or maintenance of a project must be let by a competitive bidding procedure in which the contract is awarded to the lowest responsible bidder. The Texas Turnpike Authority (authority) is authorized to enter into exclusive development agreements on four projects before March 1, 2004 (Sec. 222.103). The bill authorizes TxDOT to expend money for the cost of the acquisition, construction, maintenance, or operation of a turnpike project by the authority. The bill authorizes TxDOT to require the authority to repay the money from toll revenue or other sources (Sec. 361.191). If TxDOT spends money for a joint venture agreement with the authority, the bill authorizes the commission to require the authority to repay the money from toll revenue or other sources. If the commission finds that the mobility of the traveling public will be enhanced, the bill authorizes the commission to enter into an agreement with the authority for the contribution of money to the authority for any purpose of the Texas Turnpike Authority Project Revolving Fund. The bill authorizes TxDOT or the commission to require the repayment of money contributed to a regional tollway authority from toll revenue and other sources (Sec. 362.004). The bill requires that money repaid as required by TxDOT or the commission under these provisions be credited to the fund from which the contribution was made (Sec. 366.301). The bill provides that the powers and duties of the board of directors of the regional authority under the provisions relating to the authority or other law are transferred to the commission on September 1, 2001 (Sec. 361.005 and SECTION 11). The bill authorizes the commission, on the request of a district office of TxDOT, to create a regional tollway authority (regional authority) for turnpike projects located in that district if a tollway authority does not exist in that area. If the commission establishes a regional tollway authority, the regional authority is subject to and has the powers of the authority. Each year, a regional authority established under the bill is required to transfer to the Texas Mobility Fund any revenue that exceeds the sum of the authority's debt service and coverage requirements of any bond indenture and costs necessary to operate and maintain turnpike projects of the regional authority, unless that revenue is to be used for the expansion of a turnpike project or system (Sec. 361.003). The bill repeals the provisions pertaining to a successor agency to the authority (SECTION 8). EFFECTIVE DATE The bill takes effect on the date on which the constitutional amendment relating to the creation of the Texas Mobility Fund takes effect and only if the Act relating to the administration and use of the Texas Mobility Fund takes effect. The provisions relating to the transfer of the powers and duties of the board of directors of the Texas Turnpike Authority to the Texas Transportation Commission take effect September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.S.B. 342 modifies the original bill by adding the provision that the money granted by the Texas Department of Transportation (TxDOT) for cost participation in toll facilities is prohibited from exceeding 30 percent of the obligation authority under the federal-aid highway program that is distributed to this state in that year rather than in the biennium. The substitute specifies that any toll project that uses money that is granted or loaned from constitutionally dedicated funds for the construction or maintenance of a project must be let by a competitive bidding procedure in which the contract is awarded to the lowest responsible bidder rather than being subject to procedures for bids and contracts for highway projects under the Transportation Code. The substitute authorizes the Texas Turnpike Authority to enter into exclusive development agreements on four projects before March 1, 2004 (Sec. 222.105). The substitute adds provisions for the creation of a regional tollway authority by the Texas Transportation Commission in a TxDOT district if a regional tollway authority does not exist (Sec. 361.003). The substitute provides for the transfer of powers and duties from the board of directors of the Texas Turnpike Authority to the Texas Transportation Commission (Sec. 361.005 and SECTION 11). The substitute modifies the effective date.