Texas bills restrict, don’t eliminate, private toll roads

| 4/8/2009

The Texas Senate this week approved new guidelines for toll roads and extended the authority to start and lease the projects for another six years. OOIDA says privatization efforts would be more suitable for transit work.

By a vote of 30-1, Senators advanced a bill to the House that would establish a process for building toll roads throughout the state. Local tolling authorities would have the first option to develop roadways. Also, all public avenues of financing would need to be exhausted before handing projects over to private groups.

Sen. Robert Nichols, R-Jacksonville, insists his bill – SB17 – puts in place protections for the public.

“It is important to establish a process for building new roads, but private financing for transportation projects should only be used as a last resort,” Nichols said in a written statement. “State and local entities will build and operate a road in the public’s interest, not the shareholder’s.”

The Owner-Operator Independent Drivers Association says that selling off assets around the country is not something that is looked upon favorably by most.

“Not only Texans but the overwhelming majority of citizens overall do not see privatizing our infrastructure as a benefit. We certainly know it wouldn’t be for truckers,” OOIDA Executive Vice President Todd Spencer told Land Line.

Spencer said that for lawmakers intent on working out privatization deals it makes more sense for them to shift their focus.

“Public-private partnerships that seem attractive to lawmakers and policymakers only see dollar signs when they look at cars and trucks and a captive market. If there is a legitimate role for public-private partnerships, it needs to be in the area of needs that aren’t currently being met. And that is principally in the area of transit,” Spencer said. “That’s where there focus should be, and lawmakers should insist on that.”

Another provision in the bill would require private contracts to include a buy-back price if the state opts to end the contract early. Texas law now requires the state to pay “fair market value” but it isn’t clear how that is determined, The Dallas Morning News reported.

The bill also addresses non-compete clauses. It would prohibit the state from building roadways within four miles of the center-line of existing toll roads for 30 years, instead of the 50-year terms now included in state law.

Sen. John Carona, R-Dallas, is the sponsor of another Senate-approved bill – SB404 – that would allow the state or local tolling agencies to contract with private companies to build, operate and profit from toll roads until 2015. Texas law permitting contracts with private operators is set to end this year.

The six-year extension is contingent on the passage of Nichols’ bill.

With the trend in recent years toward public-private partnerships, Mike Joyce, OOIDA’s director of legislative affairs, had a word of caution for politicians and other policymakers seemingly enamored with the prospects of leasing their roadways.

“They need to be very, very cautious and leery of what the private sector is selling to them as to potential benefits,” Joyce said.

Both bills are awaiting assignment to committee in the House.

– By Keith Goble, state legislative editor

Editor’s Note: Please share your thoughts with us about the legislation included in this story. Comments may be sent to statelegislativedesk@ooida.com.