July 5, 2011

The Texas Legislature has approved legislation providing local governments with valuable expanded tools that can be used to help finance and build local I-69 upgrade projects such as overpasses, interchanges, bridges, freeway lanes and access roads.

Gov. Rick Perry signed HB 563 into law on June 17 and the new legislative authority goes into effect on Sept. 1.  It was unanimously approved by both the House and Senate.

The new law greatly expands the authority of counties and municipalities to create Transportation Reinvestment Zones (TRZs) and to capture the incremental growth in both local ad valorem taxes and local sales taxes to fund locally approved transportation projects.

The amended statute allows local governments flexibility on the type of projects, the percentage of the increment devoted to funding, the ability to partner with public and private partners and to adopt their own procurement process. 

When the project is built on the state highway system or is located in the state highway right-of-way it must be coordinated with TxDOT and comply with all state and federal design and construction standards.

The legislation had the active support of the Alliance for I-69 Texas.  It was also supported by Transportation Advocates of Texas, the Texas Municipal League, the County Judge and Commissioners Association and a host of cities, trade and local associations.

The legislation was sponsored in the House by Rep. Joe Pickett of El Paso and championed in the Senate by Sen. Robert Nichols of Jacksonville.

Also approved by the Legislature was HJR 63, a proposed constitutional amendment that would allow counties to issue bonds supported by ad valorem taxes to finance the development or redevelopment of blighted areas.  If approved by the voters in November it will assist in the implementation of TRZs authorized under HB 563.

The Alliance assisted the resolution sponsors in getting the issues out of committee and to successful passage.  The resolution was sponsored by Rep. Pickett in the House and Sen. Jeff Wentworth of San Antonio in the Senate.

TRANSPORTATION FUNDING
Lawmakers took the critically important step of reauthorizing public-private partnerships (PPPs) that bring much-needed investment capital to specific transportation projects.  Members have indicated that this tool will be made available to TxDOT on a project by project basis with legislative approval.  Lawmakers authorized TxDOT to utilize comprehensive development agreements (CDA) on nine projects, all in the traffic congested Houston and Dallas-Fort Worth areas.   

Regional mobility authorities, county toll road authorities and regional toll road authorities all retained the authority to enter into CDA public-private partnerships to get projects built.  Lawmakers passed SB 19 which gives local toll authorities a first right of refusal guarantee to build future toll projects in their jurisdiction.  This concept of local “primacy” was established in earlier statute but was scheduled to expire this year.  The modified authority allows tolling entities to complete environmental and other pre-project development work more quickly and sets up timelines and procedures for efficient project delivery.  SB 19 by Sen. Nichols and Rep. Wayne Smith of Baytown becomes effective Sept. 1. 

PROPOSITION 12 FUNDS
The Legislature authorized TxDOT to issue $3 billion in Proposition 12 general obligation bonds for highway improvements.  Texas voters in 2007 approved these bonds which are backed by the state’s general revenue, not by fuel tax revenue.  An appropriations bill rider specifies how TxDOT will allocate the $3 billion for the biennium.  TxDOT was directed to spend $300 million on congestion relief in major cities; $500 million on designated bridge projects; $600 million on urban area mobility projects; $200 million on statewide connectivity projects like those on the I-69 route; and $1.4 billion on rehabilitation and safety projects spread over the entire state.

TxDOT has initiated a process for identifying the projects that will be funded over the next two years with the Prop. 12 bond funds.