By: Nichols, Shapiro, Watson	S.B. No. 19
	(In the Senate - Filed February 16, 2011; February 17, 2011,
	read first time and referred to Committee on Transportation and
	Homeland Security; March 21, 2011, reported adversely, with
	favorable Committee Substitute by the following vote:  Yeas 7, Nays
	0; March 21, 2011, sent to printer.)
	COMMITTEE SUBSTITUTE FOR S.B. No. 19	By:  Williams

	A BILL TO BE ENTITLED
	AN ACT
	relating to the development, financing, construction, and
	operation of certain toll projects.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subtitle G, Title 6, Transportation Code, is
	amended by adding Chapter 373 to read as follows:
	CHAPTER 373. TOLL PROJECTS LOCATED IN TERRITORY OF LOCAL TOLL
	PROJECT ENTITY
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec. 373.001.  DEFINITIONS. In this chapter:
	(1)  "Local toll project entity" means an entity, other
	than the department, that is authorized by law to acquire, design,
	construct, finance, operate, and maintain a toll project,
	including:
	(A)  a regional tollway authority under Chapter
	366;
	(B)  a regional mobility authority under Chapter
	370; or
	(C)  a county acting under Chapter 284.
	(2)  "Toll project" means a toll project described by
	Section 201.001(b), regardless of whether the toll project is:
	(A)  a part of the state highway system; or
	(B)  subject to the jurisdiction of the
	department.
	Sec. 373.002.  APPLICABILITY.  This chapter does not apply
	to:
	(1)  a toll project described in Section 228.011;
	(2)  Phase 4 extension of the Dallas North Tollway in
	Collin and Denton Counties from U.S. 380 to the Grayson County line
	to be developed by North Texas Tollway Authority; or
	(3)  the North Tarrant Express project in Tarrant and
	Dallas Counties (Interstate Highway 820 and State Highway 121/State
	Highway 183 from Interstate Highway 35 West to State Highway 161,
	Interstate Highway 820 East from State Highway 121/State Highway
	183 to Randol Mill Road, and Interstate Highway 35 West from
	Interstate Highway 30 to State Highway 170).
	Sec. 373.003.  PROJECT OWNED IN PERPETUITY. Unless a toll
	project is leased, sold, conveyed, or otherwise transferred to
	another governmental entity in accordance with applicable law,
	including Sections 228.151, 284.011, 366.036, 366.172, and
	370.171, a toll project procured by the department or a local toll
	project entity determined by the process under Subchapter B is
	owned by that entity in perpetuity.
	Sec. 373.004.  GOVERNMENTAL AND NOT COMMERCIAL
	TRANSACTIONS.  A transaction involving a local toll project entity
	under Section 228.011 or this chapter is not primarily commercial
	in nature but is an inherently governmental transaction whose
	purpose is to determine governmental jurisdiction, ownership,
	control, or other responsibilities with respect to a project.
	Sec. 373.005.  LEGAL CHALLENGES CONCLUDED. For the purposes
	of this chapter, all legal challenges to development of a toll
	project are considered concluded when a judgment or order of a court
	with jurisdiction over the challenge becomes final and
	unappealable.
	Sec. 373.006.  TOLL PROJECT AGREEMENT. (a)  Before
	initiating the primacy determination process under Subchapter B for
	a toll project, the department and the local toll project entity may
	enter into a toll project agreement that:
	(1)  identifies the responsibilities of each party for
	project-related activities, which may include the performance of
	environmental work and traffic and revenue studies; and
	(2)  includes an agreement that the primacy
	determination process under Subchapter B may be initiated earlier
	than as provided by Section 373.051.
	(b)  A toll project agreement may provide an alternative to
	the primacy determination process under Subchapter B for toll
	project development, including an alternative timeline for the
	development of toll project phases.
	Sec. 373.007.  EXERCISE OF PRIMACY FOR TOLL PROJECT PHASES.
	Unless otherwise provided by a toll project agreement under Section
	373.006 or other agreement, an exercise of primacy under Subchapter
	B over a phase of a toll project is an exercise of primacy over the
	entire project, with additional phases to be developed as the
	entity determines the phases financially feasible.
	[Sections 373.008-373.050 reserved for expansion]
	SUBCHAPTER B. PROCESS TO DETERMINE ENTITY TO DEVELOP, FINANCE,
	CONSTRUCT, AND OPERATE TOLL PROJECT
	Sec. 373.051.  INITIATION OF PROCESS. (a)  At any time
	after a metropolitan planning organization approves the inclusion
	in the metropolitan transportation improvement program of a toll
	project to be located in the territory of a local toll project
	entity, the local toll project entity may notify the department in
	writing of the local toll project entity's intent to initiate the
	process described in this subchapter.
	(b)  The department may notify the local toll project entity
	in writing of the department's intent to initiate the process
	described in this subchapter at any time after a metropolitan
	planning organization has approved the inclusion in the
	metropolitan transportation improvement program of a toll project
	to be located in the territory of a local toll project entity and:
	(1)  the department has issued a finding of no
	significant impact for the project, or for a project for which an
	environmental impact statement is prepared, the department has
	approved the final environmental impact statement for the project;
	or
	(2)  for a project subject to environmental review
	requirements under federal law, the United States Department of
	Transportation Federal Highway Administration has issued a finding
	of no significant impact, or for a project for which an
	environmental impact statement is prepared, the department has
	submitted a final environmental impact statement to the Federal
	Highway Administration for approval.
	Sec. 373.052.  LOCAL TOLL PROJECT ENTITY OPTION.  (a)  The
	local toll project entity has the first option to develop, finance,
	construct, and operate a toll project.  The local toll project
	entity must exercise its option not later than the later of:
	(1)  the 180th day after the date on which notification
	under Section 373.051(a) is provided or notification under Section
	373.051(b) is received; or
	(2)  if the United States Department of Transportation
	Federal Highway Administration issues a record of decision for an
	environmental impact statement submitted by the department under
	Section 373.051(b)(2) more than 60 days after the date the
	department provides notice under Section 373.051(b), the 120th day
	after the date the record of decision is issued.
	(b)  The option period under Subsection (a) may be extended
	an additional 90 days by agreement of the department and the local
	toll project entity.
	(c)  If the local toll project entity exercises the option
	under Subsection (a), the local toll project entity after
	exercising the option must:
	(1)  within 180 days after the later of the date of
	exercising its option or the date on which all environmental
	approvals necessary for the development of the toll project are
	secured and all legal challenges to development are concluded,
	advertise for the initial procurement of required services,
	including, at a minimum, design services, for the project; and
	(2)  within two years after the later of the date of
	exercising its option or the date on which all environmental
	approvals necessary for the development are secured and all legal
	challenges to development are concluded, enter into a contract for
	the construction of the toll project.
	Sec. 373.053.  DEPARTMENT OPTION.  (a)  If the local toll
	project entity fails or declines to exercise the option to develop,
	finance, construct, and operate a toll project under Section
	373.052(a), or fails or declines to advertise for procurement or
	enter into a construction contract as required by Section
	373.052(c), the department has the option to develop, finance,
	construct, and operate the toll project. The department has not
	more than 60 days after the date the local toll project entity fails
	or declines to exercise its option under Section 373.052(a) or
	fails or declines to advertise for procurement or enter into a
	construction contract as required by Section 373.052(c) to exercise
	its option.
	(b)  If the department exercises its option under Subsection
	(a), the department after exercising the option must:
	(1)  within 180 days after the later of the date of
	exercising its option or the date on which all environmental
	approvals necessary for the development of the toll project are
	secured and all legal challenges to development are concluded,
	advertise for the initial procurement of required services,
	including, at a minimum, design services, for the project; and
	(2)  within two years after the later of the date of
	exercising its option or the date on which all environmental
	approvals necessary for the development are secured and all legal
	challenges to development are concluded, enter into a contract for
	the construction of the toll project.
	Sec. 373.054.  REINITIATION OF PROCESS. If the process
	described by Sections 373.051, 373.052, and 373.053 concludes
	without the local toll project entity or the department entering
	into a contract for the construction of the toll project, either
	entity may reinitiate the process under this subchapter by
	submitting notice to the other entity in the manner provided by
	Section 373.051.
	Sec. 373.055.  WAIVER OF OPTION; ALTERATION OF STEPS OR TIME
	LIMITS.  (a)  The department or the local toll project entity may at
	any time before or during the process established by this
	subchapter waive or decline to exercise any option, step, or other
	right under this subchapter that solely benefits that entity by
	notifying the other entity of its decision in writing.
	(b)  The department and the local toll project entity may, by
	written agreement, alter any other step or time limit under this
	subchapter, including the timing of or conditions for initiating
	the process under Section 373.051.
	Sec. 373.056.  SHARING OF PROJECT-RELATED INFORMATION.
	(a)  In this section, "project-related information" includes
	traffic estimates, revenue estimates, plans, specifications,
	surveys, appraisals, environmental studies, and other work product
	developed for a toll project.
	(b)  On initiation of the process under Section 373.051, the
	department shall make its project-related information available to
	the local toll project entity.
	(c)  If the local toll project entity fails or declines to
	exercise an option or fails or declines to advertise for
	procurement or enter into a construction contract under Section
	373.052, the local toll project entity shall make its
	project-related information available to the department.
	(d)  On entering into a contract for the construction of the
	toll project, the department or the local toll project entity, as
	applicable, shall reimburse the other entity for shared
	project-related information that it uses.
	(e)  Use by an entity of project-related information
	received by the entity under this section is at the sole risk of the
	receiving entity and does not confer liability on the entity that
	furnished the information.
	Sec. 373.057.  PROGRESS REPORTS. After the department or
	the local toll project entity exercises an option under this
	subchapter, the department or the local toll project entity, as
	applicable, shall issue a semiannual report on the progress of the
	development of the toll project. The report shall be made available
	to the public.
	Sec. 373.058.  ENVIRONMENTAL REVIEW. (a)  The department or
	the local toll project entity may begin any environmental review
	process that may be required for a proposed toll project before
	initiating the process under this subchapter.
	(b)  If the local toll project entity initiates the process
	for development of a toll project under Section 373.051(a) and has
	not begun the environmental review of the project, the local toll
	project entity shall begin the environmental review within 180 days
	of exercising the option.
	(c)  The department or the local toll project entity may
	begin development of a toll project before the project receives
	environmental clearance but may not begin construction of the
	project before the project receives that clearance.
	Sec. 373.059.  PROJECT LOCATED IN TERRITORY OF MORE THAN ONE
	LOCAL TOLL PROJECT ENTITY.  If a toll project is in the territory of
	more than one local toll project entity, only the local toll project
	entity that first constructed toll projects may exercise the
	options and other rights under this subchapter.  The local toll
	project entity exercising an option or other right under this
	section:
	(1)  may do so only with respect to the portion of the
	project located in the territory of that local toll project entity; and
	(2)  shall do so on behalf of another local toll project
	entity in whose territory the project will be located if requested
	by the other entity after the original entity declines to exercise
	its option.
	[Sections 373.060-373.100 reserved for expansion]
	SUBCHAPTER C. USE OF RIGHT-OF-WAY BY LOCAL TOLL PROJECT ENTITY
	Sec. 373.101.  USE OF STATE HIGHWAY RIGHT-OF-WAY.
	(a)  Consistent with federal law, the commission and the department
	shall assist a local toll project entity in the development,
	financing, construction, and operation of a toll project for which
	the local toll project entity has exercised its option to develop,
	finance, construct, and operate the project under Subchapter B by
	allowing the local toll project entity to use state highway
	right-of-way and to access the state highway system as necessary to
	construct and operate the toll project.
	(b)  Notwithstanding any other law, a local toll project
	entity and the commission may agree to remove the toll project from
	the state highway system and transfer ownership to the local toll
	project entity.
	Sec. 373.102.  REIMBURSEMENT FOR USE OF RIGHT-OF-WAY.
	(a)  The commission or the department may not require a local toll
	project entity to pay for the use of state highway right-of-way or
	access, except:
	(1)  to reimburse the department for actual costs
	incurred by the department that are owed to a third party, including
	the federal government, as a result of that use by the local toll
	project entity; and
	(2)  as required under Subsection (b).
	(b)  A local toll project entity shall reimburse the
	department for the department's actual costs to acquire a
	right-of-way transferred to the local toll project entity.  If the
	department is not able to determine that amount, the reimbursement
	must be in an amount equal to the average actual historical
	right-of-way acquisition values for comparable right-of-way
	located in proximity to the project on the date of original
	acquisition of the right-of-way.
	(c)  In lieu of reimbursement, and at the local toll project
	entity's sole option, the local toll project entity may agree to pay
	to the department a portion of the revenues of the project, in the
	amount and for the period of time agreed to by the local toll
	project entity and the department.
	(d)  Money received by the department under this section
	shall be deposited in the state highway fund and, except for
	reimbursement for costs owed to a third party, used to fund
	additional projects in the department district in which the toll
	project is located.
	(e)  The department shall reimburse a local toll project
	entity for any cost of right-of-way acquired by the entity for a
	toll project that will be developed, financed, constructed, and
	operated by the department.
	(f)  The commission or department or the local toll project
	entity may waive the requirement of reimbursement under this
	section.
	Sec. 373.103.  AGREEMENT FOR USE OF RIGHT-OF-WAY.  A local
	toll project entity and the department shall enter into an
	agreement for any toll project for which the entity has exercised
	its option to develop, finance, construct, and operate the project
	under Subchapter B and for which the entity intends to use state
	highway right-of-way.  The agreement must contain provisions
	necessary to:
	(1)  ensure that the local toll project entity's
	construction, maintenance, and operation of the project complies
	with the requirements of applicable state and federal law; and
	(2)  protect the interests of the commission and the
	department in the use of right-of-way for operations of the
	department, including public safety and congestion mitigation on
	the right-of-way.
	Sec. 373.104.  LIABILITY FOR DAMAGES.  (a)  Notwithstanding
	any other law, the commission and the department are not liable for
	any damages that result from a local toll project entity's use of
	state highway right-of-way or access to the state highway system
	under this subchapter, regardless of the legal theory, statute, or
	cause of action under which liability is asserted.
	(b)  An agreement entered into by a local toll project entity
	and the department in connection with a toll project that is
	developed, financed, constructed, or operated by the local toll
	project entity and that is on or directly connected to a highway in
	the state highway system does not create a joint enterprise for
	liability purposes.
	Sec. 373.105.  COMPLIANCE WITH FEDERAL LAW.  Notwithstanding
	an action taken by a local toll project entity under this
	subchapter, the commission or department may take any action that
	in its reasonable judgment is necessary to comply with any federal
	requirement to enable this state to receive federal-aid highway
	funds.
	SECTION 2.  Section 228.006, Transportation Code, is amended
	by amending Subsection (a) and adding Subsection (a-1) to read as
	follows:
	(a)  The commission shall authorize the use of surplus
	revenue of a toll project or system to pay the costs of a
	transportation project, highway project, or air quality project
	within a region [department district] in which any part of the toll
	project is located.
	(a-1)  The department shall allocate the distribution of the
	surplus toll revenue to department districts in the region that are
	located in the boundaries of the metropolitan planning organization
	in which the toll project or system producing the surplus revenue is
	located based on the percentage of toll revenue from users in each
	department district of the project or system. To assist the
	department in determining the allocation, each entity responsible
	for collecting tolls for a project or system shall calculate on an
	annual basis the percentage of toll revenue from users of the
	project or system in each department district based on the number of
	recorded electronic toll collections.
	SECTION 3.  Subsection (a), Section 228.011, Transportation
	Code, is amended to read as follows:
	(a)  This section applies only to a county acting under
	Chapter 284 for:
	(1)  the widening, expansion, reconstruction, and
	continued operation of existing toll projects of the county; or
	(2)  [and] the development, construction, and
	operation of all or a portion of any of the following toll projects,
	a component of that project, or the functional equivalent of that
	project:
	(A) [(1)]  Beltway 8 Tollway East, between US 59
	North and US 90 East;
	(B) [(2)]  Hardy Downtown Connector, consisting
	of the proposed direct connection from the Hardy Toll Road southern
	terminus at Loop 610 to downtown Houston;
	(C) [(3)]  State Highway 288, between US 59 and
	Grand Parkway South (State Highway 99);
	(D) [(4)]  US 290 Toll Lanes, between IH 610 West
	and the Grand Parkway Northwest (State Highway 99);
	(E) [(5)]  Fairmont Parkway East, between Beltway
	8 East and Grand Parkway East (State Highway 99);
	(F) [(6)]  South Post Oak Road Extension, between
	IH 610 South and near the intersection of Beltway 8 and Hillcroft in
	the vicinity of the Fort Bend Parkway Tollway;
	(G) [(7)]  Westpark Toll Road Phase II, between
	Grand Parkway (State Highway 99) and FM 1463;
	(H) [(8)]  Fort Bend Parkway, between State
	Highway 6 and the Brazos River; and
	(I) [(9)]  Montgomery County Parkway, between
	State Highway 242 and the Grand Parkway (State Highway 99), and if
	the Grand Parkway project has not begun construction, a nontolled
	extension of the Montgomery County Parkway to allow a connection to
	Interstate Highway 45.
	SECTION 4.  Section 228.012, Transportation Code, is amended
	to read as follows:
	Sec. 228.012.  PROJECT SUBACCOUNTS. (a)  The department
	shall create a separate account in the state highway fund to hold
	payments received by the department under a comprehensive
	development agreement and[,] the surplus revenue of a toll project
	or system[, and payments received under Sections 228.0111(g)(2) and
	(i)(2)].  The department shall create subaccounts in the account
	for each project, system, or region.  Interest earned on money in a
	subaccount shall be deposited to the credit of that subaccount.
	(b)  The department shall hold money in a subaccount in trust
	for the benefit of the region in which a project or system is
	located and may assign the responsibility for allocating money in a
	subaccount to a metropolitan planning organization in which the
	region is located.  Money [Except as provided by Subsection (c),
	money] shall be allocated to projects authorized by Section
	228.0055 or Section 228.006, as applicable.
	(c)  [Money in a subaccount received from a county or the
	department under Section 228.0111 in connection with a project for
	which a county acting under Chapter 284 has the first option shall
	be allocated to transportation projects located in the county and
	the counties contiguous to that county.
	[(d)]  Not later than January 1 of each odd-numbered year,
	the department shall submit to the Legislative Budget Board, in the
	format prescribed by the Legislative Budget Board, a report on cash
	balances in the subaccounts created under this section and
	expenditures made with money in those subaccounts.
	(d) [(e)]  The commission or the department may not:
	(1)  revise the formula as provided in the department's
	unified transportation program or a successor document in a manner
	that results in a decrease of a department district's allocation
	because of the deposit of a payment into a project subaccount [or a
	commitment to undertake an additional transportation project under
	Section 228.0111]; or
	(2)  take any other action that would reduce funding
	allocated to a department district because of the deposit of a
	payment [received from the department or local toll project entity]
	into a project subaccount [or a commitment to undertake an
	additional transportation project under Section 228.0111].
	SECTION 5.  Subsection (b), Section 284.004, Transportation
	Code, is amended to read as follows:
	(b)  In addition to authority granted by other law, a county
	may use state highway right-of-way and may access state highway
	right-of-way in accordance with Sections 228.011, 373.101, and
	373.102 [228.0111].
	SECTION 6.  Subsection (d), Section 284.061, Transportation
	Code, is amended to read as follows:
	(d)  Subject to the reimbursement requirements of Section
	373.102, a [A] county has full easements and rights-of-way through,
	across, under, and over any property owned by this state that are
	necessary or convenient to construct, acquire, or efficiently
	operate a project under this chapter.
	SECTION 7.  Subsection (c), Section 366.170, Transportation
	Code, is amended to read as follows:
	(c)  An authority has full easements and rights-of-way
	through, across, under, and over any property owned by the state or
	any local governmental entity that are necessary or convenient to
	construct, acquire, or efficiently operate a turnpike project or
	system under this chapter. This subsection does not affect the
	obligation of the authority under other state law, including
	Section 373.102, to compensate or reimburse the state for the use or
	acquisition of an easement or right-of-way on property owned by or
	on behalf of the state. An authority's use of property owned by or
	on behalf of the state is subject to any covenants, conditions,
	restrictions, or limitations affecting that property.
	SECTION 8.  Subsection (c), Section 370.169, Transportation
	Code, is amended to read as follows:
	(c)  An authority has full easements and rights-of-way
	through, across, under, and over any property owned by the state or
	any local government that are necessary or convenient to construct,
	acquire, or efficiently operate a transportation project or system
	under this chapter. This subsection does not affect the obligation
	of the authority under other law, including Section 373.102, to
	compensate or reimburse this state for the use or acquisition of an
	easement or right-of-way on property owned by or on behalf of this
	state. An authority's use of property owned by or on behalf of this
	state is subject to any covenants, conditions, restrictions, or
	limitations affecting that property.
	SECTION 9.  Subchapter A, Chapter 371, Transportation Code,
	is amended by adding Section 371.003 to read as follows:
	Sec. 371.003.  VALUATION DETERMINATION.  Any determination
	of value, including best value, under applicable federal or state
	law for a comprehensive development agreement or other
	public-private partnership arrangement involving a toll project
	must take into consideration any factors the toll project entity
	determines appropriate, including factors related to:
	(1)  oversight of the toll project;
	(2)  maintenance and operations costs of the toll
	project;
	(3)  the structure and rates of tolls;
	(4)  economic development impacts of the toll project;
	and
	(5)  social and environmental benefits and impacts of
	the toll project.
	SECTION 10.  The heading to Section 371.052, Transportation
	Code, is amended to read as follows:
	Sec. 371.052.  NOTIFICATION TO LEGISLATIVE BUDGET BOARD [AND
	STATE AUDITOR].
	SECTION 11.  Section 228.0111 and Subsection (c), Section
	371.052, Transportation Code, are repealed.
	SECTION 12.  Section 228.012, Transportation Code, as
	amended by this Act, applies only to payments received by the Texas
	Department of Transportation under that section on or after the
	effective date of this Act. Payments received by the department
	under Section 228.012, Transportation Code, before the effective
	date of this Act are governed by the law in effect immediately
	before the effective date of this Act, and that law is continued in
	effect for that purpose.
	SECTION 13.  The repeal of Section 228.0111, Transportation
	Code, by this Act does not affect any project agreement, agreement
	regarding a negotiated value, market value agreement, market
	valuation waiver agreement, memorandum of understanding regarding
	market valuation, letter agreement regarding market valuation
	analysis, advance funding agreement, or other agreement entered
	into between the Texas Department of Transportation and a local
	toll project entity, or any resolution or minute order adopted by
	the department or a local toll project entity, under that repealed
	section.  If a waiver of market valuation or waiver of first option
	to develop, finance, construct, or operate a toll project is
	withdrawn or terminated subsequent to the effective date of this
	Act, the department and the local toll project entity have the
	rights regarding the applicable project as exist under Chapter 373,
	Transportation Code, as added by this Act.
	SECTION 14.  This Act takes effect immediately if it
	receives a vote of two-thirds of all the members elected to each
	house, as provided by Section 39, Article III, Texas Constitution.
	If this Act does not receive the vote necessary for immediate
	effect, this Act takes effect September 1, 2011.
	* * * * *