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Summary: This legislation authorizes TxDOT to enter into an agreement with a private entity for the design, development, financing, construction, maintenance, or operation of a toll or non-toll facility. In this agreement the private entity would be paid based on milestone or periodic payment methods whereby compliance performance standards define the time and amount. Payments will be made from any available funds in the State Highway Fund. This legislation stipulates that, before a project is undertaken, one of the parties (TxDOT or Private Party) shall secure security bonds to ensure mutual protection in the contract.
Analysis: This bill essentially enables alternative methods of building and financing public highway projects. The availability of funds method is in essence borrowing against the future and financing through IOU’s. While it does allow TxDOT flexibility in financing, strengthening existing contract methods can accomplish the same thing, without having to bet that there will be enough money in the pay-out account when the time comes to pay the bill.