Rick Perry - Transportation

Last Updated: Jul 29, 2011

Trans-Texas Corridor

Not long after coming into office, Governor Perry began to push for a new highway system in Texas to be part of a larger international system to allow the free flow of products through Mexico, the US, and Canada. This project is known as the NAFTA super highway and the portion that runs through Texas was known as the Trans-Texas Corridor.

Getting Traffic Moving

In March of 2001, Governor Perry wrote an editorial calling for innovative methods to develop funding for traffic projects. He notes his support for Senate Bill 4 to allow state backed bonds to be issued for road and highway projects. He also states that he supports toll road projects.

Innovative Ideas Will Get Traffic Moving Again
Tuesday, March 27, 2001 • Editorial
From the Metroplex to Brownsville, from Beaumont to El Paso, traffic gridlock is jeopardizing our quality of life, economic opportunity and citizen safety.
In 1999, more than 3,500 Texans died on our roads. Since 1960, vehicle traffic in Texas has increased 375 percent, but spending per vehicle mile traveled is now 68 percent below what it was that year. Eighty percent of truck and rail traffic between the United States and Mexico travels through Texas, and Texas is now home to the busiest ports of entry along the U.S.-Mexico border.
Vehicle miles traveled are increasing faster than we're building new traffic lanes, and over the next 25 years highway usage is expected to increase 56 percent.
Statistics aside, the most compelling reason to get traffic moving is personal. Every hour you spend waiting in traffic is an hour that could be better spent with your family, with a child at a Little League game, or volunteering in your community.
If we continue to take a business-as-usual approach to transportation infrastructure, Texas will continue on a collision course with longer traffic delays, more employers deciding to expand and locate elsewhere, and more accidents.
Fortunately, Texas legislators are now considering several innovative proposals to address the traffic problem across Texas.
SB 4 and SJR 16, authored by Senator Florence Shapiro, create the Texas Mobility Fund and allow state-backed bonds to be issued for needed road and highway projects. Senator Eddie Lucio, Jr. has another piece of legislation that leverages future federal highway revenues to secure bonds today.
Texas allows bond financing for schools, prisons and even light rail lines. But unlike most other states, Texas does not allow bonds to be used to build roads or highways.
The concept is familiar to anyone who has purchased a home, financed a farm, or taken a small business loan. The state would use revenue - small in relation to our total $4.5 billion annual transportation budget - to finance bonds. Bonding is a fiscally sound and responsible way to get more dollars into our transportation system today. One-hundred million state dollars, for example, would allow $1 billion of highway bonds to be issued.
The annual cost of inflation for highway construction has averaged 5.7 percent over the past 10 years, but the interest rate on bonds is now less than 4.5 percent. That means it's possible to complete $1 billion worth of highway projects using bonds over a three- or four-year period at roughly the same real cost as completing $1 billion worth of projects using the pay-as-you-go approach over a 10-year period.
New Mexico, for example, recently embarked on a 118-mile project using bonds backed by state bonds and anticipated federal revenues. The project, which was approved by federal highway experts, was originally expected to take 27 years to complete using the pay-as-you-go system. It's now expected to be completed by the end of this year thanks to bonding. New Mexico's results have been so good that they entered a second bond agreement last month.
Other innovative transportation ideas are also being considered by the Legislature. SB 298, authored by Senator Frank Madla, authorizes the Texas Department of Transportation (TxDOT) and the Texas Turnpike Authority to approve pilot projects using the design-build method of highway construction. Design-build, which is used in office building, school and sports arena construction, may save up to 40 percent in design and construction time while lowering costs. The Texas prison system used the design-build system during the 1990s prison construction boom to quickly add facilities while cutting construction costs.
SB 342, SJR 12, HB 1045 and HJR 55, authored by Senator Florence Shapiro and Representative Clyde Alexander, allow TxDOT to partner with toll road authorities to build road projects using state dollars and toll revenues. These measures would allow toll roads to be completed much more quickly.
SB 1404 by Senator Frank Madla directs TxDOT to issue two construction contracts per biennium specifying a limited pavement warranty. Texans get warranty protection when they buy a car or a refrigerator. You deserve a similar guarantee that the roads your taxes paid for will stay in good working condition.
State leaders have about 60 days until the end of the legislative session, and business left incomplete will not be addressed for another two years. We have three basic options:

Do nothing, maintaining our business-as-usual approach while allowing gridlock to worsen and our quality of life to suffer. Under the current pay-as-you-go system of highway funding, Texas is able to fund only 36 percent of needed road projects.

Increase gasoline taxes. This is an option I oppose. Revenues to state government have increased by more than $5 billion since the last session and we not do need new taxes. Most Texans believe they are already paying enough at the pump, and recent OPEC actions threaten to drive gasoline prices even higher.

Use smarter, innovative financing ideas, such as road bonds, toll roads and pavement warranties. These measures stretch our transportation dollars and help build needed roads and highways more quickly.
If you're tired of unsafe and time-consuming traffic, state leaders – especially your local senator, representative and members of the House Transportation and Appropriations committees and the Senate Finance and State Affairs committees – need to hear from you today!
The next time you are frustrated by highway gridlock, wouldn't it be good to know that state officials are using every responsible measure to get traffic moving again? But alternatives will not be available unless legislators hear from people who are sick and tired of wasting time and energy in traffic. Let’s change the status quo, get highways built, and get Texans moving again. Your safety and quality of life are at stake.

Senate Bill 4

In May of 2001, Governor Perry signed Senate Bill 4. This bill created the Texas Mobility Fund.

AN ACT relating to the administration and use of the Texas Mobility Fund and the issuance of obligations for financing the construction, reconstruction, acquisition, and expansion of state highways and other mobility projects.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Chapter 201, Transportation Code, is amended by adding Subchapter M to read as follows: SUBCHAPTER M. OBLIGATIONS FOR CERTAIN HIGHWAY AND MOBILITY PROJECTS
Sec. 201.941. DEFINITIONS. In this subchapter:
(1) "Comptroller's certification" means:
(A) as to long-term obligations, the certification made under Section 201.943(e); and
(B) as to short-term obligations, the certification made under Section 201.943(f).
(2) "Credit agreement" has the meaning assigned by Section 1371.001, Government Code.
(3) "Fund" means the Texas Mobility Fund.
(4) "Long-term obligations" means an issue or series of obligations the latest scheduled maturity of which is more than five years.
(5) "Maximum obligation amount" means the maximum aggregate principal amount of long-term obligations and short-term obligations that the commission may issue from time to time after receipt of the applicable comptroller's certification.
(6) "Obligations" means bonds, notes, and other public securities.
(7) "Short-term obligations" means an issue or series of obligations the latest scheduled maturity of which is five years or less.
Sec. 201.942. ADMINISTRATION OF FUND. The comptroller shall hold the fund, and the commission, through the department, shall manage, invest, use, and administer the fund as provided by this subchapter.
Sec. 201.943. AUTHORITY TO ISSUE OBLIGATIONS; PURPOSES;  LIMITATIONS. (a) Subject to Subsections (e), (f), and (g), the commission by order or resolution may issue obligations in the name and on behalf of the state and the department and may enter into credit agreements related to the obligations. The obligations may be issued in multiple series and issues from time to time in an aggregate amount not exceeding the maximum obligation amount. The obligations may be issued on and may have the terms and provisions the commission determines appropriate and in the interests of the state. The obligations may be issued as long-term obligations, short-term obligations, or both. The latest scheduled maturity of an issue or series of obligations may not exceed 30 years.
(b) Obligations must be secured by and payable from a pledge of and lien on all or part of the money in the fund. Obligations may be additionally secured by and payable from credit agreements. The commission may pay amounts due on the obligations from discretionary money available to it that is not dedicated to or appropriated for other specific purposes.
(c) The commission may create within the fund accounts, reserves, and subfunds for purposes the commission finds appropriate and necessary in connection with the issuance of obligations.
(d) Obligations may be issued for one or more of the following purposes:
(1) to pay all or part of the costs of constructing, reconstructing, acquiring, and expanding state highways, including any necessary design and acquisition of rights-of-way, in the manner and locations determined by the commission that, according to conclusive findings of the commission, have an expected useful life, without material repair, of not less than 10 years;
(2) to provide participation by the state in the payment of part of the costs of constructing and providing publicly owned toll roads and other public transportation projects that are determined by the commission to be in the best interests of the state in its major goal of improving the mobility of the residents of the state;
(3) to create debt service reserve accounts;
(4) to pay interest on obligations for a period of not longer than two years;
(5) to refund or cancel outstanding obligations; and
(6) to pay the commission's costs of issuance.
(e) Long-term obligations in the amount proposed to be issued by the commission may not be issued unless the comptroller projects in a comptroller's certification that the amount of money dedicated to the fund pursuant to Section 49-k(e), Article III, Texas Constitution, and required to be on deposit in the fund pursuant to Section 49-k(f), Article III, Texas Constitution, and the investment earnings on that money, during each year of the period during which the proposed obligations are scheduled to be outstanding will be equal to at least 110 percent of the requirements to pay the principal of and interest on the proposed long-term obligations during that year.
(f) Short-term obligations in the amount proposed by the commission may not be issued unless the comptroller, in a comptroller's certification:
(1) assumes that the short-term obligations will be refunded and refinanced to mature over a 20-year period with level principal requirements and bearing interest at then current market rates, as determined by the comptroller; and
(2) projects that the amount of money dedicated to the fund pursuant to Section 49-k(e), Article III, Texas Constitution, and required to be on deposit in the fund pursuant to Section 49-k(f), Article III, Texas Constitution, and the investment earnings on that money, during each year of the assumed 20-year  period will be equal to at least 110 percent of the requirements to pay the principal of and interest on the proposed refunding  obligations during that year.
(g) The commission may agree to further restrictions in connection with the issuance of obligations and may retain independent professional consultants to make projections in addition to, but not instead of, those of the comptroller if required as a prerequisite to the issuance of the obligations.
(h) The commission has all powers necessary or appropriate  to carry out this subchapter and to implement Section 49-k, Article III, Texas Constitution, including the powers granted to other bond-issuing governmental agencies and units and to nonprofit corporations by Chapters 1201, 1207, and 1371, Government Code.
(i) As required by Section 49-k(h), Article III, Texas Constitution, proceedings authorizing obligations and related credit agreements to be issued and executed under this subchapter shall be submitted to the attorney general for approval as to their legality. If the attorney general finds that they will be issued in accordance with this subchapter and other applicable law, the attorney general shall approve them, and, after payment by the purchasers of the obligations in accordance with the terms of sale and after execution and delivery of the related credit agreements, the obligations and related credit agreements are incontestable for any cause.
(j) A comptroller's certification under this section must be based on economic data, forecasting methods, and projections that the comptroller determines are reliable.
(k) The holders of obligations and the counterparties to credit agreements have the rights granted in Section 49-k(j), Article III, Texas Constitution.
Sec. 201.944. PLEDGE OF STATE'S FULL FAITH AND CREDIT.
(a) The commission may guarantee on behalf of the state the payment of any obligations and credit agreements issued under Section 201.943 by pledging the full faith and credit of the state to the payment of the obligations and credit agreements in the event the revenue and money dedicated to the fund pursuant to Section 49-k(e), Article III, Texas Constitution, and on deposit in the fund pursuant to Section 49-k(f), Article III, Texas Constitution, are insufficient for that purpose.
(b) The exercise of the authority granted by Subsection (a) does not modify or relieve the commission from complying with Section 201.943(e) or (f) and does not permit the issuance of aggregate obligations in an amount exceeding the maximum obligation amount.
(c) If the commission exercises the authority granted by Subsection (a), the constitutional appropriation contained in Section 49-k(g), Article III, Texas Constitution, shall be implemented and observed by all officers of the state during any period during which obligations and credit agreements are outstanding and unpaid.
Sec. 201.945. DEDICATION OF REVENUE TO FUND. Annually, the revenue of the state that is dedicated or appropriated to the fund pursuant to Section 49-k(e), Article III, Texas Constitution, shall be deposited to the fund in accordance with Section 49-k(f), Article III, Texas Constitution.
Sec. 201.946. INVESTMENT AND USES OF MONEY IN FUND.
(a) Money in the fund may be invested in the investments permitted by law for the investment of money on deposit in the state highway fund.
(b) As a part of its covenants and commitments made in connection with the issuance of obligations and the execution of credit agreements, the commission may limit the types of investments eligible for investment of money in the fund but may not expand the types of investments to include any investments that are not authorized by Subsection (a).
(c) Income received from the investment of money in the fund shall be deposited in the fund, subject to requirements that may be imposed by the proceedings authorizing obligations to protect the tax-exempt status of interest payable on the obligations under the Internal Revenue Code of 1986.
(d) To the extent money is on deposit in the fund in amounts that are in excess of the money required by the proceedings authorizing the obligations and credit agreements to be retained on deposit, the commission may use the money for any purpose for which obligations may be issued under this subchapter.
Sec. 201.947. STRATEGIC PLAN. The commission may not issue obligations under this subchapter before the department has developed a strategic plan that outlines how the money will be used and the benefit the state will derive from use of money in the fund.

HB 3588

In 2003, the state of Texas passed House Bill 3588. This legislation made a number of changes to and instituted the following provisions:

It statutorily created the Trans Texas Corridor and authorized TxDOT to finance the plan using the State Highway Fund, tolls, fees, bond proceeds, the state infrastructure bank, and federal sources. It also permitted and encouraged the Department to solicit the participation of private entities in the planning, design, construction, and operation of facilities. TxDOT was also granted the authority to acquire real property in advance of determining the corridor’s final route.
TxDOT was granted the power to plan, construct, maintain, and operate rail facilities or systems, both new and existing.
TxDOT was granted the power to convert segments of the non-tolled state highway system to toll road projects and, if so desired, transfer them to RMAs.
The cap on toll equity was changed from 30 percent of the annual obligation authority under the federal highway-aid program established in 2001 to $800 million from monies in the State Highway Fund.
It also authorized several new financing tools to implement the Trans Texas
Corridor including:
- Authorizing RMAs to issue revenue bonds, to impose tolls, fees, and fares, and to lease or sell a part of a transportation project;
- Authorizing TxDOT to pay pass-through tolls to public or private entities (fees based on the number of vehicles using a highway paid by a state or local agency or authority to a private concessionaire as reimbursement for particular service [e.g. maintenance])
- Capitalizing the Texas Mobility Fund with motor vehicle inspection and driver’s license fees, which was expected to generate $250 million to back $3 billion in bonds
The sunset date for the four EDAs authorized in 2001 in conjunction with Proposition 15 was eliminated. Instead TxDOT was authorized to enter into any number of Comprehensive Development Agreements (CDA), which again included the potential for concessions with private entities to construct, maintain, repair, operate, extend, or expand a turnpike project.

Pace of Highway Construction

In August of 2004, Governor Perry released a statement noting the rapid pace of highway construction, and his support for large new programs such as the Trans-Texas Corridor.

Gov. Perry Says Texas Is Setting National Pace on Highway Construction
Friday, August 27, 2004 • Press Release
AUSTIN – Gov. Rick Perry today commended the Texas Department of Transportation’s (TXDoT’s) continued progress on state transportation projects. During their August meeting, TXDoT commissioners awarded contracts totaling $650 million for 125 projects, bringing the fiscal year 2004 total to approximately $4 billion in transportation construction contracts - more than any other state.
“These construction dollars will directly translate into reduced traffic congestion, less pollution from auto emissions and more Moms and Dads making it to their children’s softball games and other activities on time,” Perry said. “Texas is a national leader in progressive transportation solutions, and we’re pouring by far more concrete than any other state so that commuters and cargo can move more efficiently.”
Texas invested almost a billion more in transportation projects than California and $2.9 billion more than New York for Fiscal Year 2004.
This construction pace was made possible with new financing tools that the legislature gave TxDoT and that voters approved in a constitutional amendments in 2001 and 2003.
According to Perry, the new transportation projects will continue to assist the state’s job creation and economic development efforts. He cited safe and efficient goods delivery and increased quality-of-life benefits as key components in many businesses’ relocation and expansion decisions.
“We still have a long way to go to get traffic moving, and that is going to require innovative solutions like the Trans Texas Corridor,” Perry said. “To further reduce gridlock and pollution, remove hazardous cargo from city centers, and create more jobs and opportunity, we need to build new routes and not just expand existing ones.
“State gas tax proceeds will not cover maintenance on the existing system this fiscal year, and no longer even contribute to building new highways,” Perry said. “Texas also continues to get short-changed on federal gas tax dollars with roughly 10 cents on the dollar being spent in other states. Neither the gas tax nor federal highway spending comes close to keeping up with Texas’ growth. Only through innovative funding solutions can we make the progress we need.”
Last year, House Bill 3588 which gave TXDoT new oversight authority, new planning and development tools and innovative financing options to address transportation needs for the state’s growing population. Proposition 14, passed by Texas voters last September also allowed the state to leverage up to $6 billion in mobility fund and highway fund bonds for construction projects. These efforts will expedite efficient implementation of the Trans Texas Corridor.
Some of the major projects approved by TXDoT this year include:
$250 million for the total reconstruction of a two-mile section of I-10 (Katy Freeway) in Houston
$15.3 million for projects on I-37, which include adding a hurricane evacuation lane, to increase highway capacity from Corpus Christi north to SH 72.
$75 million for U.S. 281 Expressway projects between Pharr and Edinburg, which begins the three lane expansion on U.S. 281, and
$13.7 million to widen a nine mile segment of US 87 from the New Mexico State Line to a four-lane divided highway.
Commissioners also approved two measures that will provide infrastructure improvements to support additional troops sent to Texas military communities. Transportation improvements totaling $20 million were approved for Fort Hood in response to the announcement that 5,000 additional soldiers and civilians will be assigned to the Central Texas base. Gov. Perry committed the state to this improvement contingent on additional personnel moving to Fort Hood, which was quickly followed by Secretary of Defense Donald Rumsfeld announcement of the additional troops. The commission also approved $16.2 million in infrastructure improvements to support the 3,800 new troops scheduled to arrive at El Paso’s Fort Bliss in 2006.
“These dollars are not just paving roads,” Perry said. “They are paving the way for future opportunity.”

Metro Mobility Plan

In October of 2004, Governor Perry released a statement noting his support for the Metro-Mobility Plan.

Gov. Rick Perry's Statement on Transportation Commission Action
Thursday, October 28, 2004 • Press Release
AUSTIN – Gov. Rick Perry today issued the following statement regarding the Texas Transportation Commission’s approval of mobility plans for the state’s eight metropolitan areas:
“I applaud Texas Transportation Commissioners on their approval of the Texas Metropolitan Mobility Plan. Local transportation leaders also are to be commended for their hard work in presenting highway plans that use innovative financing tools provided by the Texas Legislature. This Mobility Plan will help ease traffic congestion because it leverages an additional $12 billion beyond the $68 billion that is expected to be available over the next 25 years from gas taxes and other traditional highway funding sources. These new funding sources also cut in half the time in which it will take metropolitan areas to begin building highways to meet population needs.”

Breaking the Gridlock

In December of 2004, Governor Perry wrote an editorial discussing both the funding for transportation items in Texas and the need for increased access to transportation to encourage growth.

Breaking the Gridlock
Wednesday, December 01, 2004 • Editorial
Anyone who has driven in Houston knows what it is like to be stuck in traffic. Houston traffic can strike at any moment – during a rush hour commute, during the 12-month “construction season,” and even on a seemingly normal Saturday afternoon as you head for a child’s ballgame. It is an unfortunate reality of our tremendous growth that traffic congestion is as much a part of our daily routine as reading the morning paper or arguing over the latest college football polls (for the record, this Aggie thinks the Longhorns are getting the raw end of the deal, but I digress.)
Texas traffic is such that by the time a freeway expansion is complete, it is often just in time for the next needed expansion. As a fast-growing state, we have to confront the reality of aging infrastructure and a lack of capacity that jams millions of drivers onto the same roads each day.
Those who think a hike in the gas tax is the solution need to realize they would have to pay at least 50 cents more per gallon just to get close to meeting our infrastructure needs. Wishing for more federal funding is also not the ultimate solution. Nor is doing nothing. That’s why the state has taken matters into its own hands by utilizing innovative financing solutions.
Just recently the Texas Transportation Commission approved a $21.5 billion transportation project that included $3 billion in bond proceeds to accelerate highway construction projects in major urban areas – an ambitious effort called the Metropolitan Mobility Plan. Because of these new funds, nearly 90 percent of the major metropolitan highway projects planned for the next 12 years will be completed in half the time. And nearly $1.2 billion – 40 percent – of these bond proceeds are headed to Houston to accelerate the construction of 16 key transportation projects.
The funding will be used to widen I-45 from Medical Center Drive to Beltway 8 to include ten main lanes, with two three-lane frontage roads and two HOV lanes; reconstruct and widen I-10 from east of Beltway 8 to east of Silbur Road, and from west of Highway 6 to east of Kirkwood to include 8 main lanes, 4 managed lanes and 3-lane frontage roads; and construct new overpasses at US 59 at FM 2919 and Isleib Road.
These projects will be accelerated by one to four years. Other jobs in the area, like the expansion of Highway 249 from Willow Creek to Brown Road, will be completed up to eight years faster because of this new funding.
Texas voters made these new funds available by passing ballot propositions in 2001 and 2003 that allowed the state to leverage up to $6 billion in transportation bonds for construction projects. For the first time in history Texas can use its bonding authority to dramatically accelerate the construction and completion of transportation projects across the state. And that’s a big part of the reason we are pouring more concrete to build more roads faster than any other state in the nation.
Had the state relied only on gas taxes and vehicle registration fees, funds to reduce urban congestion through 2016 would have been limited to $6.8 billion. But because of the choices made at the ballot box, mobility funding for the state’s largest cities will top $15.4 billion.
The transportation projects we are accelerating in Houston and across the state will help ease congestion, clean up our air, encourage business expansion and improve safety conditions on highways in our largest urban areas.
While it is important to accelerate expansion of the current system, we can’t lose sight of a long-term vision. The fact is the Texas population will double in a few short decades. I can’t imagine cramming all those new Texans onto the same crowded roads we drive on today. That is why I have proposed the Trans Texas Corridor. With 4,000 miles of roads, railways, pipelines and utility lines constructed in new corridors, we will move hazardous cargo out of city centers, further connect Texas to trade opportunities, and help clean urban air.
It is a bold and innovative plan that has even caught the attention of the governor of California, Arnold Schwarzenegger, who said his state should model itself after Texas when it comes to transportation strategies. Imagine that: California looking to Texas for solutions. We always knew they did. We must be doing something right.

Announcement of Highway Safety Funds

In December of 2004, Governor Perry issued a statement noting $600 million in funds being released to Texas for various projects. Governor Perry notes his support for the funds and the use of bonds to increase the pace of these projects.

Gov. Perry Announces $600 Million in Highway Safety Funds
Wednesday, December 15, 2004 • Press Release
AUSTIN – Governor Rick Perry today announced that the Texas Department of Transportation is set to approve a plan that will invest more than $600 million to improve safety on Texas roads. The plan is part of a $3 billion bond package passed by Texas voters in September 2003.
“Today I am proud to announce that Texas is undertaking the largest highway safety improvement program in state history,” Perry said. “The Texas Transportation Commission is poised to approve a plan to invest more than $600 million in 645 highway safety projects across the state that will make our roads safer for motorists, reduce accidents and save hundreds of lives.”
These funds will be used for four major types of safety projects identified by the Texas Department of Transportation as having the greatest potential to save lives:

A widening of nearly 1,600 miles of narrow two-lane roadways to at least 24 feet. The projects will focus on rural areas of the state. Making these roads wider will help reduce the number of crashes caused by cars running off the road, as well as the number of head-on collisions caused by vehicles crossing the center line.

Installing 740 miles of concrete or cable safety barriers in the medians of divided highways to reduce the number of head-on collisions.

Constructing left turn lanes at 171 highway intersections across the state to significantly reduce the number of rear-end crashes each year.

Building 10 critically needed highway overpasses that will not only improve traffic flow, but will also lower the number and severity of accidents.
These safety improvements will cover more than 2,300 miles of Texas highways and could save an estimated 1,800 lives and prevent 21,000 injuries over the next 20 years, according to the independent Texas Transportation Institute's Center for Transportation Safety.
Perry noted that every year, an aging transportation infrastructure contributes to vehicle accidents that exact an enormous cost on motorists, their families and the Texas economy. “The state share of gas taxes paid by motorists barely keeps up with maintenance demands, and unfortunately Texas continues to be shortchanged on transportation funding at the federal level, ranking 51st on our rate of return for federal gas tax dollars,” Perry said.
Perry noted that for the first time in history, Texas is able to use its bonding authority to dramatically accelerate the construction and completion of transportation projects across the state. “While improving and expanding the current system is important, we cannot neglect a long-term vision, especially since our population will double in a few short decades. That’s why I have proposed the Trans Texas Corridor,” Perry said.
“The Trans Texas Corridor will put Texas on the map as the leader in addressing gridlock,” Perry said. “And the $600 million in funding we are announcing today will allow the state to quickly complete work on high priority safety improvements within the next three years, meaning we will make the existing infrastructure safer even while we fund new corridors.”

Private/Public Partnerships

In July of 2005, Governor Perry gave a speech on the merits of private / public partnerships in transportation projects. The discussion revolved around Governor Perry's Trans-Texas Corridor Program and partnerships with foreign and San-Antonio Construction companies.

Gov. Rick Perry Speaks on Trans Texas Corridor
* Note: Gov. Perry frequently departs from prepared remarks.
Friday, July 22, 2005 • Speech
Thank you Commissioner Williamson. It is good to be here today with the U.S. Highway Administrator Mary Peters. With the innovative infrastructure projects we are building in Texas, we’re seeing a lot of Mary these days. It is also good to see friends in the Legislature (such as Chairman Mike Krusee), the executive chairman of Grupo Ferrovial, the parent company of Cintra, Rafael Del Pino, the president and chief operating officer of the Zachry Construction Corporation, David Zachry, the various representatives of Cintra-Zachary who are partnering with the state, and the executive director of TxDOT, Michael Behrens.
Today my vision for a private-public partnership to build a better, safer and more reliable transportation system is becoming a reality as the state signs a comprehensive development agreement with the Cintra-Zachry consortium to build segments of the Trans Texas Corridor stretching from Oklahoma to San Antonio. This development agreement is a significant step toward a better, more reliable transportation system that will move commuters and cargo faster and more safely, and create greater economic opportunities for our families and employers. The Trans Texas Corridor will remove hazardous cargo from the congested freeways our friends and loved ones drive on today. The Trans Texas Corridor will remove sources of pollution from city centers, and connect cities and towns all across Texas to important resources and commodities. But more than providing a new method to move people and goods faster, the Trans Texas Corridor is a huge jobs program that will put 140,000 Texans to work as we build the first six segments. And the Trans Texas Corridor will allow needed roads to be built faster, and ultimately cheaper, without any tax dollars being expended up front for construction.
In Texas, we’re not waiting on others to lead or innovate, we’re not afraid to ask how we can do things better, even if it’s different than how we have always done them, and we’re not going to accept a future marred by gridlock and growing pollution problems. The agreement signed today establishes a cost-effective partnership with proven private sector entities. At the same time, much is left to be decided, and the public will have a thorough opportunity to continue giving their input. The route has not been designated, the environmental review is ongoing, the price for driving on the corridor has not yet been determined, and negotiations with landowners have yet to begin. But I think it is important to be clear on one important point: this state is committed to making all the necessary improvements to I-35, and that is non-negotiable. At the same time, everyone would be wise to realize that we can’t expand I-35 fast enough or wide enough to keep up with growth and traffic. The only solution is a new corridor with room for future growth, and that involves much lower acquisition costs than expensive real estate that is adjacent to I-35 today.
For my fellow farmers and ranchers, and other landowners on the eventual route, there will be fair compensation, and even a unique chance to participate in corridor proceeds, much like royalty payments paid to landowners who have oil and gas wells on their property. When you consider the alternatives, the Trans Texas Corridor is truly the best choice for Texas. The state would have to raise the gas tax by about a dollar to keep up with the needs of growth, and the gas tax hits all Texans the same even though some Texans, especially rural Texans, don’t receive the same benefit in terms of new roads. Second, Texas receives only 86 cents back for every dollar we send to Washington. And while we hope to get more federal funding in the future, we can’t base our future on it. The third option, doing nothing differently, will simply lead to more accidents, more pollution and more congestion headaches as millions more Texans fill our roads in the years to come.
We have no better choice than public-private partnerships. They are the wave of the future because they are faster, cheaper and fairer, charging a cost only to those who use toll roads. If you don’t want to pay a toll in Texas, you will always be able to drive the same free roads you’re driving today. Just as the interstate highway system was an essential element to the growth and prosperity of our economy over the last 50 years, the Trans Texas Corridor will greatly expand the economy of the next fifty years. It is truly vital to creating jobs, wealth and opportunity because it will better connect Texas to trading partners, and ensure the reliable movement of people and products in our time-sensitive economy. Those who said it couldn’t be done just didn’t realize that we Texans are used to doing things bigger, better and first. And with $7.2 billion on the table from Cintra-Zachry to build the first six segments, Texas is taking the lead in partnering with the private sector to achieve the public good. Thank you.

HB 2702

Following the mounting criticism toward the Trans Texas Corridor as well as the prospect of a heavily increased reliance on tolling to fund transportation, there was an expectation going into the 2005 legislative session that the policies put in place by HB 3588 would undergo significant change. Underscoring how that bill “slipped under the radar” in 2003, the Austin American-Statesman reported that even the media had not been paying close attention at the time. But that circumstance was about to change for the upcoming session, as HB 2702, which initiated a series of limitations and prohibitions, was passed by the Legislature and signed by the Governor in June 2005.

A number of modifications and clarifications to the acquisition of real property for the Trans Texas Corridor (and other projects) including encouraging the purchase of options for possible future use (of not more than five years in duration) and offering leasebacks to property owners when the property is needed for immediate use Its key provisions included:
Prohibiting non-compete clauses in CDAs for projects included in the Unified Transportation Program of a local government. (Non-compete clauses meant that state and local authorities agree that no transportation improvement can be made which might adversely affect traffic and revenue for the project covered by the CDA)
Requiring RMAs, CDAs, or toll authorities to approve a methodology for setting, increasing, or collecting tolls
Authorizing RMAs to offer transit services and the transfer of toll authority assets to an RMA
Limiting concessions to 50 years and expanding them to rail projects, joint toll road, rail projects, and projects that contain both tolled and untolled elements; TxDOT CDAs could be 70 years under certain conditions, if not on the Trans Texas Corridor
Clarifying the application of pass-through tolls and authorizing pass-through fares for rail projects
Prohibiting the conversion of an untolled highway to tolled highway expect under certain pre-existing stipulations or if it gained county and voter approval
Removing the $800 million cap on toll equity, replacing it with a five-year, average, annual expenditure limit of $2 billion

Senate Bill 792

In June of 2007, Governor Perry issued a press statement noting his signing of Senate Bill 792. This legislation resulted from dissatisfaction with the state’s aggressive policy toward private toll road development. There was widespread sentiment that TxDOT’s power to pursue CDAs needed to be brought into check. Local toll authorities in Dallas-Fort Worth (North Texas Tollway Authority [NTTA]) and Houston (Harris County Toll Road Authority [HCTRA]) had felt marginalized by TxDOT’s preference to seek deals with private developers and collect multibillion dollar upfront payments. In February, a deal was announced to lease SH 121 near Dallas to Cintra, which would assume responsibility for existing operations, construction already underway, and an additional extension. Additionally, a State Auditor’s Report was released that same month noting that TxDOT had overstated the expected gains and underestimated the potential costs of the TTC-35 project, and had been pursuing the deal without sufficient oversight.15

The 2007 state legislative session produced numerous proposed bills curtailing TxDOT’s powers and the execution of CDAs with private entities. An all-day senate transportation committee hearing was held on March 1 examining the efficacy of private toll road development through the questioning of state transportation officials. Committee members expressed concern that private development would lead to higher toll rates, which would provide excessive profits rather than needed investments in the region’s transportation system. A large contingent of the public was also in attendance, primarily voicing their opposition to the TTC-35.

By May and following negotiations with the Governor, who had disapproved of an initial bill passed by the House and Senate (HB 1892), SB 792 was signed in June after the end of the legislative session. It placed further restrictions on the development of private toll road development, although several exceptions were made. The main provisions of the bill included:

Reducing the maximum term of a CDA with TxDOT from 70 to 50 years and requiring the contract to contain an explicit mechanism for setting the facility’s purchase price if TxDOT chose to take over the project
Placing a two-year moratorium (through September 1, 2009) on CDAs with private entities, with a number of exceptions, including those in which a major portion was located in a nonattainment or near-attainment air quality area, and establishing a legislative committee to study this prohibition
Sun-setting authorization to enter into CDAs following the end of the moratorium; authorization for projects still allowed under the moratorium were excepted, instead sunsetting on August 31, 2011
Requiring TxDOT to reinvest CDA revenue back into projects in the same region containing the toll project
Granting certain counties the right of first refusal (primacy) to develop a toll project, rather than permitting TxDOT to pursue a CDA with a private developer as the first option
Establishing a market valuation process under which a toll project must be developed; the market valuation process specified an initial toll rate and rate increase formula
Furthering the limitations on including non-compete clauses in CDAs
Requiring TxDOT to issue and distribute timely updates on the Trans Texas Corridor, including contract documents and master plan updates
Requiring greater fiscal transparency for public and private developers of toll projects

Gov. Perry Signs Transportation Bill
Monday, June 11, 2007 • Press Release
AUSTIN – Gov. Rick Perry today signed into law Senate Bill 792, a statewide transportation bill that ensures Texas will continue to build needed roads and expands the powers of local transportation authorities to develop toll projects.
“I am proud to sign this legislation because it will help Texas build the roads we need to manage our state’s tremendous population growth,” Perry said. “Under this legislation, every planned road construction project will move forward as scheduled, local leaders will have more authority to build new toll roads and all toll revenue will be used for transportation projects in the area it was raised.”
Key provisions in SB 792 will:

Ensure that local toll authorities have the first option to build new toll projects and may use state rights of way as needed.

Require local toll authorities and the Texas Department of Transportation (TxDOT) to agree to certain business terms, such as toll rates, when a project is first proposed and to perform a Market Valuation Study based on those terms to determine a road’s total value.

Allow local toll authorities to propose that needed state roads be built as toll roads; currently, only TxDOT can initiate such a proposal. This provision will allow more needed toll roads to be built sooner.

Modify comprehensive development agreements (CDAs) by limiting CDAs to 50 years; mandating that the state’s future buyback cost be stipulated in the CDA; clarifying that competing tax roads cannot be built within four miles on either side of a CDA toll road; and requiring CDA revenue be used only for other projects in the region in which it is generated.

Place a two year moratorium on some CDAs. Virtually all CDAs planned to be executed over the next two years were exempted from the moratorium by their local lawmakers.

Allows TxDOT to issue $3 billion in bonds to borrow against future gas tax revenue. This provision will allow TxDOT to use these bonds as toll equity for state toll roads.

SB 792 is a compromise bill lawmakers developed after the governor expressed concerns about House Bill 1892, a similar transportation measure Perry later vetoed.

References

[1] Website: TransportationFinance.org Article: Trans Texas Corridor Case Study Author: NA Accessed on: 07/25/2011