PART 1. TEXAS DEPARTMENT OF TRANSPORTATION
SUBCHAPTER C. OTHER ENTITIES' INTERNAL ETHICS AND COMPLIANCE PROCEDURES
The Texas Department of Transportation (department) adopts new §1.8 and §1.9, concerning internal ethics and compliance programs. New §1.8 and §1.9 are adopted without changes to the proposed text as published in the December 5, 2008, issue of the Texas Register (33 TexReg 9952) and will not be republished.
EXPLANATION OF ADOPTED NEW SECTIONS
The department has a long standing reputation for integrity and ethical behavior. To maintain and build on the department's commitment to integrity and ethical behavior, the Texas Transportation Commission (commission) in November 2007 ordered the department to develop an internal compliance program (ICP) designed to promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law and departmental policies. The commission strengthened the requirement in May 2008 by ordering the department to develop and implement for the commission and commission staff, the department's executive director, deputy executive director, and assistant executive directors a training program that is to include training on ethics law and policies and the department's ICP.
The next step is for the commission to take action to discourage fraudulent and illegal activity by persons who receive financial assistance from or contract with the department. A purpose of the rule changes is to require that an entity that receives financial assistance from the department have and enforce an ethics and compliance program that is recognized by the department. The rule changes also provide that a contractor's adoption and enforcement of an ethics and compliance program is a potential mitigating factor for the imposition of sanctions on the contractor.
New §1.8, Internal Ethics and Compliance Program, establishes a framework for the internal ethics and compliance program of an entity that receives financial assistance from the department and that is required under another rule of the commission to establish such a program. The section establishes the minimum requirements of the internal ethics and compliance program and requires the entity to certify that it has adopted and enforces compliance with the program.
New §1.9, Effect of Contractor's Internal Ethics and Compliance Program, provides that a contractor's adoption and enforcement of compliance with an internal ethics and compliance program that meets the requirements of §1.8 may be considered in determining a sanction that may be imposed on the contractor as the result of a violation of federal or state law, including regulations.
COMMENTS
No comments on the proposed new sections were received.
STATUTORY AUTHORITY
The new sections are adopted under Transportation Code, §201.101, which provides the commission with the authority to establish rules for the conduct of the work of the department.
CROSS REFERENCE TO STATUTE
None.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on January 30, 2009.
TRD-200900361
Bob Jackson
General Counsel
Texas Department of Transportation
Effective date: February 19, 2009
Proposal publication date: December 5, 2008
For further information, please call: (512) 463-8683
SUBCHAPTER A. ENVIRONMENTAL REVIEW AND PUBLIC INVOLVEMENT FOR TRANSPORTATION PROJECTS
The Texas Department of Transportation (department) adopts amendments to §2.1, concerning the applicability of the department's environmental review and public involvement requirements to transportation projects that are not on the state highway system. The amendments to §2.1 are adopted without changes to the proposed text as published in the December 5, 2008, issue of the Texas Register (33 TexReg 9954) and will not be republished.
EXPLANATION OF ADOPTED AMENDMENTS
Transportation Code, §228.012 requires the department to create a separate account in the state highway fund to hold payments received by the department under a comprehensive development agreement (CDA), the surplus revenue of a toll project or system, and payments received under Transportation Code, §228.0111(g)(2) and (i)(2). The department is required to create subaccounts in the account for each project, system, or region, and to hold money in a subaccount in trust for the benefit of the region in which a project or system is located. The department may assign the responsibility for allocating money in a subaccount to a metropolitan planning organization (MPO) in which the region is located.
Money in a subaccount must be allocated to projects authorized by Transportation Code, §228.0055 or §228.006 or, for money deposited into a subaccount in connection with a project for which a county acting under Transportation Code, Chapter 284 has the first option, to transportation projects located in the county and the counties contiguous to that county. The projects for which money in a subaccount may be allocated include transportation projects that are not on the state highway system.
The department has created subaccounts in the state highway fund to hold the payments received from the North Texas Tollway Authority (NTTA) for the right to develop, finance, design, construct, operate, and maintain the SH 121 toll project from Business SH 121 in Denton County to US 75 in Collin County (SH 121 subaccounts). Responsibility for allocating money in the SH 121 subaccounts has been assigned to the Regional Transportation Council (RTC), the transportation policy council of the North Central Texas Council of Governments (NCTCOG), under an agreement which provides that the selection of projects to be financed using those funds shall be made by the RTC, subject to Texas Transportation Commission (commission) concurrence.
The commission has authorized the executive director of the department to enter into an agreement with the NCTCOG under which the department will transfer funds from the SH 121 subaccounts to pay for the costs of projects that are not on the state highway system. The department may create additional subaccounts and may enter into agreements under which funds in those subaccounts are used to pay the costs of projects.
For some projects to be funded with money in the SH 121 subaccounts, the local governmental entities implementing those projects have been complying with environmental review, permitting, and other approval and public notice requirements applicable to those entities. The environmental review and public involvement for those projects may need to recommence if those projects are subject to the requirements of 43 TAC Chapter 2, Subchapter A. Other projects to be funded with money in the SH 121 subaccounts are anticipated to require a more limited environmental review focused on permitting and other approvals. All of the approved projects were selected by the RTC using a competitive evaluation process, resulting in the selection of projects that need to be built quickly. The RTC has determined that the approved projects will mitigate or prevent air pollution caused by the construction, maintenance, or use of other proposed or existing public roads in the area.
Amendments to §2.1, General; Emergency Action Procedures, provide that the environmental review and public involvement requirements of 43 TAC Chapter 2, Subchapter A do not apply to a project that is not on the state highway system the department funds solely with money held in a project subaccount created under Transportation Code, §228.012. The amendments require a project agreement entered into by the department ensure that the entity responsible for implementing such a project complies with all environmental review and public involvement requirements applicable to that entity under state and federal law in connection with the project.
COMMENTS
No comments on the proposed amendments were received.
STATUTORY AUTHORITY
The amendments are adopted under Transportation Code, §201.101, which provides the commission with the authority to establish rules for the conduct of the work of the department, and more specifically, Transportation Code, §201.604, which requires the commission by rule to provide for the commission's environmental review of the department's transportation projects that are not subject to review under the National Environmental Policy Act (42 U.S.C. §§4321 et seq.).
CROSS REFERENCE TO STATUTE
Transportation Code, §201.604 and Transportation Code, §228.012.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on January 30, 2009.
TRD-200900362
Bob Jackson
General Counsel
Texas Department of Transportation
Effective date: February 19, 2009
Proposal publication date: December 5, 2008
For further information, please call: (512) 463-8683
SUBCHAPTER B. COLLECTION OF DEBTS
The Texas Department of Transportation (department) adopts amendments to §5.10, concerning Collection of Debts. The amendments to §5.10 are adopted without changes to the proposed text as published in the December 5, 2008, issue of the Texas Register (33 TexReg 9955) and will not be republished.
EXPLANATION OF ADOPTED AMENDMENTS
Government Code, §2107.002, requires a state agency that collects delinquent obligations owed to it to establish by rule procedures for collecting the obligations and further requires that the rules establishing those procedures conform to the guidelines established by the Office of Attorney General. Title 1, Texas Administrative Code (TAC), §59.2, sets out those guidelines.
The department's rules relating to the collection of debts are set out in 43 TAC §5.10, Collection of Debts, which was adopted in October 1995 and has not been changed since its adoption. The department has identified some changes to §5.10 that need to be made to conform the department's debt collection procedures to the Office of Attorney General guidelines. The amendments make those changes and make some additional technical corrections.
The amendments make several changes to §5.10(a). In the definition of "debtor," the words "or entity" are deleted from the phrase "person or entity" as unnecessary, because the definition of "person" includes "entity." In the definition of "delinquent," "payment" is substituted for the phrase "when a payment" so that the definition coincides with the definition of that term in the Office of Attorney General guidelines. The definition of "demand letter" is deleted because the definition has been integrated into the substance of new §5.10(c)(4), and the subsequent paragraphs have been renumbered accordingly. Amendments to the definition of "division" clarify that the term includes "office" which is also an organizational unit at Austin headquarters.
The amendments delete §5.10(b) because the substance of the subsection is repeated in current subsection (d).
The amendments re-letter current §5.10(c) as new §5.10(b) and clarify that the department will subtract the amount of contractor's obligation to the department from payments due to a contractor if such an action is practical.
The amendments re-letter current §5.10(d) as new §5.10(c) and amend paragraph (1) to provide that the division or district that determines that an obligation is owed to the department will send the debtor a written notice of the obligation. The notice must state the amount owed and due date. Amendments to paragraph (2) provide that if the department does not receive a satisfactory response, the obligation becomes delinquent on the 31st day after the date that notice is sent and that a first demand letter will be sent not later than 30 days after the date on which the obligation becomes delinquent. This amendment is necessary to establish a definite date that an obligation becomes delinquent, which also clarifies the date on which formal demand letters for payment are to be sent, if necessary. Amendments to paragraph (3) provide that if the department does not receive a satisfactory response to the first demand letter, the division or district will send a final demand letter not later than 60 days after the date on which the first demand letter was sent. New paragraph (4) clarifies the content of, and procedure for sending, the demand letters.
Amendments re-letter current §5.10(e) as new §5.10(d) and clarify the information that the department will retain in the records of a delinquent obligation. The amendments make no substantive change to the current rules.
Amendments re-letter current §5.10(f) as new §5.10(e) and provide that before referring a delinquent obligation to the Office of Attorney General, the department will send two demand letters to the person obligated on the debt. The amendments also make technical, non-substantive changes to the section. The amendments are necessary to clarify the procedural steps that will be taken before making a referral to the Office of Attorney General.
Amendments re-letter current §5.10(g) as new §5.10(f) with no other changes.
COMMENTS
No comments on the proposed amendments were received.
STATUTORY AUTHORITY
The amendments are adopted under Transportation Code, §201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the department, and more specifically, Government Code, §2107.002(b), requiring state agencies to adopt rules that establish procedures for collecting a delinquent obligation.
CROSS REFERENCE TO STATUTE
Government Code, §2107.002.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on January 30, 2009.
TRD-200900363
Bob Jackson
General Counsel
Texas Department of Transportation
Effective date: February 19, 2009
Proposal publication date: December 5, 2008
For further information, please call: (512) 463-8683
The Texas Department of Transportation (department) adopts amendments to §5.53, repeal of §§5.54 - 5.59 and new §§5.54 - 5.60, concerning pass-through fares and tolls. The amendments to §5.53, repeal of §§5.54 - 5.59, and new §§5.54 - 5.60 are adopted without changes to the proposed text as published in the November 14, 2008, issue of the Texas Register (33 TexReg 9207) and will not be republished.
EXPLANATION OF ADOPTED AMENDMENTS
Transportation Code, §222.104(b) authorizes the department to enter into an agreement with a public or private entity that provides for the payment of pass-through tolls to the public or private entity as reimbursement for the design, development, financing, construction, maintenance, or operation of a toll or non-toll facility on the state highway system by the public or private entity.
Transportation Code, §222.104(c) authorizes the department to enter into an agreement with a private entity that provides for the payment of pass-through tolls to the department as reimbursement for the department's design, development, financing, construction, maintenance, or operation of a toll or non-toll facility on the state highway system that is financed by the department.
Transportation Code, §91.075(b) authorizes the department to enter into an agreement with a public or private entity that provides for the payment of pass-through fares to the public or private entity as reimbursement for the acquisition, design, development, financing, construction, relocation, maintenance, or operation of a passenger railway facility or a freight railway facility by the entity. Title 43, Texas Administrative Code, Chapter 5, Subchapter E prescribes the policies and procedures governing the department's implementation of these statutory provisions.
Amendments to §5.53(a), Proposal requirements, clarify the information, and require additional information, that is to be provided in a proposal for a project under a pass-through agreement. Amendments to paragraph (1) add the requirement that the proposal include the geographic area affected by the project. Amendments to paragraph (3) provide examples of anticipated benefits that must be included in the proposal. Amendments to paragraph (4) require that the proposal contain documentation that evidences local public support or opposition for the project. Amendments to paragraph (9) clarify that the proposal must include financial information sufficient to show the proposer's financial strength to develop and complete the project. Amendments to paragraph (10) require that the reimbursement period for proposed pass-through payments be provided. Amendments to paragraph (11) clarify that project funding sources and amounts are required for each project cost category.
New §5.53(a)(12) requires the proposal to list the financial assistance requested from the department in addition to funding under the pass-through agreement. Existing paragraphs (12) - (14) are renumbered as paragraphs (13) - (15) without change, and new paragraphs (16) and (17) are added. New §5.53(a)(16) requires a statement of whether the project is intended to be a part of a hurricane evacuation route. New §5.53(a)(17) requires a statement indicating whether the project has application to military base realignment or closure.
Each of the revised or new information requirements is added to §5.53(a) to provide the information necessary for the Texas Transportation Commission (commission) to adequately evaluate the proposals under the new criteria established in new §5.55.
New §5.54, Participation in the Program, is added to allow the commission the option of limiting the period of time during which submission of proposals will be received and limiting the total costs of all projects that will be reimbursed during a specific period, based on the commission's determination of the availability of program funds. The commission may also impose conditions that limit participation to either public or private entities, limit eligible projects to either highway or railway projects, or limit the type of project costs that will be reimbursed. To impose such limitations, the department must publish a notice describing the deadline for submitting proposals, the estimated total amount of funds available for the period described in the notice, and any limitations on public or private participation, eligibility of highway or railway projects, or on the type of project costs that will be reimbursed. After the deadline expires, the department will evaluate all of the proposals and present an analysis of each to the commission. The limitation option is being used to give all interested entities an equal opportunity to participate in the program and take advantage of the limited program funds.
Current §5.54, Commission Approval to Negotiate, is repealed and added as new §5.55 with the changes described by this paragraph to expand the considerations that the department will use in reviewing proposals. New §5.55(1) requires the consideration of the proposer's proposed financial contribution and its relationship to total project costs, and deletes the criterion dealing with the general financial benefits to the state. The proposing entities are encouraged to contribute significant amounts of their own resources to the project. A higher contribution demonstrates the importance of the project to the region and maximizes the use and leveraging of state funds. The deleted general financial benefits to the state concept is being replaced with other specific criteria in this section that better illustrate the benefits to the state. New paragraph (2) requires the consideration of the geographic area affected by the project. The proposing entities are encouraged to select potential projects that affect broad geographic areas. Projects that contribute to the statewide transportation system would be considered more beneficial than regional projects which, in turn, would be considered more beneficial than projects serving only a local geographic area. New §5.55(6) requires the consideration of the potential safety benefit that may be derived from the project. The proposing entity is encouraged to consider specific projects which have the greatest potential to enhance the safety of the transportation system as evidenced by the crash rate of the existing transportation segment under consideration compared to statewide averages for similar transportation segments. New §5.55(9) requires the consideration of the extent to which the project will close gaps in the state transportation system. New §5.55(11) adds consideration of the entity's proposed period for department reimbursement. The proposing entities should consider the longest reimbursement period feasible to maximize the use and leveraging of state funds. New §5.55(12) adds consideration of the economic development potential in the area. The proposing entities should consider the effect of the proposed project on economic development and explain the relationship of the project to that specific commission goal. New §5.55(13) adds consideration of the financial strength of the proposing entity and replaces paragraph (10) of the current section. The proposing entities should provide sufficient information to give an indication of their financial ability to bring the project to a timely completion date. New §5.55(14) adds consideration of whether the project is part of a hurricane evacuation route. The proposing entities are encouraged to give any explanation of the relationship of the project, if applicable, to any hurricane evacuation route that would assist in facilitating traffic movement in the event of these weather related events. New §5.55(15) adds consideration of whether the project has application to a military base realignment or closure. The proposing entities are encouraged to give an explanation of the relationship of the project, if applicable, to any military base realignment or closure with respect to the contribution that the project will make, in the case of realignment, to national defense and base transportation efficiency or, in the case of closure, to future economic development in the area of the base closure. New §5.55(16) adds consideration of the experience of the entity in developing similar transportation projects and replaces paragraphs (7) and (8) of the current section. The proposing entities should describe or list their experience with similar transportation projects with respect to timely project completion in the context of federal and state laws and regulations. New §5.55(17) adds consideration of the relationship of the project to stated commission goals. The proposing entities should describe the relationship of the project to the commission goals of reducing congestion, improving safety, enhancing and expanding economic opportunity, improving air quality, and increasing the value of transportation assets. Current §5.54(2) - (6) is reenacted as new §5.55(3) - (5), (7), and (8) without change.
Current §5.55, Proposals from Private Entities, is repealed and added as new §5.56 with the changes to adjust the cross references within the section to conform to the renumbering of the sections. Also, the reference in current §5.55(c) to the relative weight given to criteria in the department's evaluation of private entities' proposals is removed to provide the department with greater flexibility in considering criteria under changing cash flow scenarios and to be consistent with the approach adopted for evaluation of all proposals under new §5.54(d).
Current §5.56, Final Approval, is repealed and added as new §5.57. New §5.57(b)(2) adds a requirement that a pass-through agreement must include identification of the one or more categories of project costs paid by the proposer for which the department will make a reimbursement under the program. This requirement makes the agreement correspond to any limitations imposed on department reimbursement as set out in the particular notice described in new §5.54. All other provisions of repealed §5.56 are reenacted as new §5.57.
Current §5.57, Calculation of Pass-Through Fares and Tolls, is repealed and added as new §5.58 with no additional changes.
Current §5.58, Project Development by Public or Private Entity, is repealed and added as new §5.59 with minor cross referencing changes in new §5.59(c)(7) and (9) to conform to the renumbering of the sections. New §5.59(f) adds a requirement that a public or private entity that intends to sell bonds and use pass-through tolls or fares as evidence of financial capability to repay the bonds, must provide the department with an opportunity to review and comment on the bond offering documents prior to sale of the bonds. The department would have a minimum of five business days to review and have the right to approve provisions in the offering documents that describe the pass-through agreement, the department's obligations under agreement, the interrelationship of the department, commission, and state highway fund, and the department's obligation to provide updated information on the state highway fund. This requirement is necessary to give the department an opportunity prior to sale of the bonds to correct any mistakes in the offering documents that relate to the pass-through toll agreement and the department's obligations and to make sure that the department can comply with the future disclosure requirements. Otherwise, no additional changes are made from current §5.58 to new §5.59.
Current §5.59, Operation, is reenacted in its entirety as new §5.60.
COMMENTS
Comments on the proposed repeals, amendments, and new sections were received from one private entity, HDR Engineering, Inc. (HDR); one public entity, Montgomery County; and one former county official, Jim Powers. Each commenter's concerns and the department's responses are grouped by commenter.
Comment: HDR suggests replacing the terms "pass-through fares" and "pass-through tolls" with the term "pass-through financing." The commenter notes that the use of the word "toll" has created artificially inflated resistance to the pass-through finance program by many elected officials and members of the public. It is believed that new terminology that better reflects the actuality of the program will alleviate much of this conflict. The differences between highway and rail projects can be incorporated into more concise language rather than repeating much of the language as is currently the case.
Response: The terms "pass-through fares" and "pass-through tolls" are statutory language and therefore not subject to change by rule. Should the statute be changed in the future, the rules could be revised to reflect that revised statutory language and also consolidate the highway and rail project language. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: HDR notes that the rule revision would allow the commission to restrict the types of project costs that will be reimbursed. The commenter suggests that the types of costs that will be reimbursed be established and not subject to change with each project call. Because of the competitive nature of the project calls, many entities will be developing their applications well in advance of the commission issuing a call for projects. An established list of items that will be reimbursed under the pass-through program will allow a level playing field for those entities that proceed at-risk in developing applications. The ability of the project to satisfy the program guidelines, the regional significance of the project, and local equity contribution should be the differentiating factors where funding limitations exist for the commission in a given call for projects. This proposed change will allow applicants to proceed with financial plans with greater certainty of the criteria and focus more of their energies on anticipated participation.
Response: The proposed rule revision in §5.54 allows the commission some flexibility to continue the program under limited funding conditions. The level of funding available will influence the categories of project costs that will be considered for reimbursement. It also allows the opportunity for more entities to participate in the program under these limiting conditions. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County makes a general observation that the proposed amendments reflect a more bureaucratic and less predictable approach to the administration of the pass-through program. The amendments propose to add additional criteria to the evaluation and processing of pass-through applications, yet in many cases those criteria are highly subjective in nature. The consequence would be to vest more control in the department staff and less control over the program by local entities who are the intended beneficiaries of the program. Shifting control away from local entities and undermining the predictability of the process will discourage continued participation in the program by local entities. As is evidenced by Montgomery County's experience, and that of other local governments who have used pass-through financing to accelerate the delivery of important transportation projects through local control, the program has been very successful in its present form. Montgomery County submits that it would be a mistake to adopt the sweeping changes reflected in the proposed amendments, and that a better approach would be to make minor changes with the benefit of input from local entities.
Response: The proposed rule revisions do not take away any local control of project submission or, once the project is selected, project implementation by the entity. The proposed revisions allow the department and the commission to make more informed decisions with respect to project selection and with respect to the ultimate successful conclusion of the project. The revisions allow both the proposing entity and the department to examine the project from several perspectives to properly evaluate the need for the project and the resources needed to bring the project to an expeditious conclusion. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County states that other proposed amendments are either unnecessary or overly burdensome to local entities. One proposed amendment would add a provision to §5.53(a)(4) requiring documentation evidencing local public support for the pass-through project and any local public opposition. Such a requirement would place a significant additional burden on local entities. Projects are already required to be in metropolitan approved plans and are most often presented by governmental sponsors. It is unlikely they would bring projects forward that do not have local support or for which there is not a perceived need. The department does not need to second-guess local decisions to bring projects forward by requiring further documentary proof. Moreover, the nature of the required documentation is vague and unclear, leaving local entities without adequate direction as to how to comply with the requirement. Montgomery County therefore recommends eliminating this proposed requirement or limiting its application to projects presented by private entity applicants.
Response: The commission has continually expressed a desire for evidence of local project support. There could be cases where some local governmental entities do not have full knowledge or are not in complete agreement with a proposed project. The commission wants all input to be considered before going forward with project development. In the past, simple letters or resolutions have been adequate documentation of local support. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County states that the proposed amendment to §5.53(a)(9) would require "financial information sufficient to show the financial strength and capability of the proposer to develop and complete the project." It is important that the pass-through rules continue to take into account the unique characteristics of the communities and project served by the program. Additionally, proposed §5.55(13) would require the commission to consider the financial strength of the proposer prior to authorizing the executive director to negotiate the financial terms of a pass-through agreement. Montgomery County believes that the intent of the pass-through program would be better served by looking at project-specific funding rather than the financial strength of the proposer. Many counties and other local entities (particularly rural cities and counties where an entity's tax base may be modest) are unable to demonstrate significant financial strength on paper, yet nevertheless have projects backed by strong project-specific financing. Montgomery County therefore recommends modifying rules §5.53(a)(9) and §5.55(13) to consider the financial strength of the project (and proposed project financing) rather than the financial strength of the proposer itself.
Response: The rules as proposed do not make any requirement of a specific level of financial strength that must be shown. In fact, §5.53(a)(9) refers the financial strength component specifically toward the capability to develop and complete the project. An entity's proposed project, showing sufficient financial strength through strong project-specific financing, would not be unacceptable absent any other financial information to the contrary. However, that is why overall strength of the entity must be a consideration. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County notes that several of the proposed amendments place substantial discretion in the hands of the department creating too much subjectivity and, therefore, potentially discouraging participation. For example, proposed §5.54(a) would grant the department the discretion to periodically limit the periods of time during which they will accept proposals based on "circumstances that may impair the ability of entities to equally participate in the program." No further guidance is offered. The subjectivity inherent in allowing the department to periodically determine whether "equal participation" (a vague and undefined phrase in itself) is possible would undermine local initiative and give the department too much discretion. Local transportation needs do not fall neatly into program cycles. Montgomery County recommends focusing on adequate funding for the program and leaving the application process open, rather than allowing it to be periodically closed at the discretion of the department for subjectively determined reasons.
Response: The revised rule allows the commission the flexibility to accept pass-through proposals individually as received or by providing for a program call for a specified period of time during which proposals will be accepted. Some entities have expressed concern about: the time and cost spent in submitting proposals individually when funds are not available; having their proposal equally considered with other proposed projects as opposed to simply which entity is the first to submit a proposal; and knowing which costs would be eligible for reimbursement under a pass-through agreement prior to spending resources to develop a project proposal. This revision allows the commission to consider those concerns under various proposal submission and funding scenarios. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County states that proposed §5.54(b)(5) would require the notice regarding availability of pass-through financing to specify the categories of project costs that will be considered eligible for reimbursement. This, too, should be a project-specific determination, as the cost categories needed will vary based on the unique characteristics of the project. It should not be up to the department to prescribe this in a "one size fits all" approach. Montgomery County recommends removing proposed §5.54(b)(5) or modifying it to reflect a project-specific approach.
Response: One of the purposes of the new section is to provide some level of program continuation even in periods of very limited cash flow. Another purpose is to extend the opportunity for participation to as many entities as possible. By limiting the financing to specific areas of participation, the limited funds can be extended to more entities and projects, acknowledging that the level of participation on the part of the proposer will increase if specific project cost categories are excluded from reimbursement. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County notes that proposed §5.55(1) would require the commission to consider the proposer's proposed financial contribution to the project from sources other than the department prior to authorizing negotiation of a pass-through agreement. Montgomery County recommends modifying this rule as well to clarify that financing costs that local entities will bear are included in the calculation.
Response: The commission has consistently indicated that financing costs will not be considered as part of the negotiation of the reimbursement amount. The inclusion of these costs would negate much of the benefit of the pass-through program approach from a state level perspective. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County states that proposed §5.55(7) would require the commission to consider the potential benefits to regional air quality that may be derived from a project. Montgomery County recommends specifically limiting that requirement to non-attainment or near non-attainment areas, as the benefit of air quality is otherwise irrelevant.
Response: Other than re-numbering, there has been no revision to the current rule language. It continues in its original form. The commission has indicated that one of their goals is improving air quality throughout the State of Texas. The commission has not indicated that this goal is limited to non-attainment or near non-attainment areas. Therefore, this paragraph allows for the entity to make a statement about any potential benefits to regional air quality that may be derived from the project. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County notes that proposed §5.55 lists several criteria that the commission must consider prior to authorizing the executive director to negotiate the terms of a pass-through agreement. Some of the criteria are far too subjective, including "the extent to which the project would close gaps in the state transportation system" (§5.55(9)) and "the relationship of the proposed project to stated commission goals" (§5.55(17)). There is tremendous subjectivity involved in determining whether or to what extent a project would close gaps in the state transportation system. The relationship of a project to commission goals is equally subjective, as there are not identified goals or criteria against which to measure the project. Again, as noted at the outset, subjectivity in the process reduces its predictability and will discourage local participation, which is not in the best interest of the department or the state. Montgomery County recommends removing these two items from the list of criteria to be considered by the commission or, in the alternative, outlining specific goals or parameters for measuring these criteria to reduce their subjectivity.
Response: The commission and department staff need the ability to consider a project from several perspectives. A project's effect on closing gaps in the system may be statewide, regional, or local in nature. The commission's stated goals of reducing congestion, enhancing safety, expanding economic opportunity, improving air quality, and preserving the value of transportation assets are another set of issues with which projects may be considered. A project proposal should have the flexibility to address these issues from an equally varied set of perspectives and explain the individual project's impact on these issues without restriction. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County recommends clarifying the time frame for the pass-through agreement discussed in proposed §5.57(b) and changing the reference to the "project development agreement" in the proposed §5.59(c)(4) to "pass-through agreement" and cross-referencing §5.57(b).
Response: The comment is not clear with respect to the time frame discussed in §5.57(b). The agreement will begin upon execution by both parties and terminate upon completion of the reimbursement payments. If the comment references the deadlines for key stages of project development, those deadlines will be negotiated by both parties as part of the agreement and will vary for each individual project. With respect to naming the referenced agreement, the agreement once executed has to do with the development of the project and the reimbursement schedule. While the suggested reference could be used, the agreement reference to project development seems more definitive at the point of agreement execution. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County recommends that proposed §5.57(b)(4) be deleted. Pass-through financing was established as a means for local communities to accelerate the development of needed transportation projects by allowing local entities to seek reimbursement from the department for upfront costs of constructing or expanding a state highway project. As a result, local control, and more specifically the delegation of control over key project development responsibilities to local entities, is a critical component of the pass-through program. Yet, as noted previously, many of the proposed changes have the potential to erode local control. For example, proposed §5.57(b) sets forth various requirements for the contents of a pass-through agreement, including "allocation of responsibility for all significant work to be performed, including environmental documentation, right of way acquisition, utility adjustments, engineering, construction, and maintenance" (§5.57(b)(4)). Montgomery County submits that there should be no "allocation" of responsibility for the referenced activities - those responsibilities should, as they do now, remain under control of the local government sponsor. Making these negotiated items in a pass-through agreement means that the department may try to assume responsibility for some or all of the activities. That, in turn, divests the local entity of control over important project development functions and introduces uncertainty into the project development process - uncertainty which is untenable if a local entity is financing a project from third party sources. In other words, the delegation of responsibility for key functions like environmental reviews and right-of-way acquisition to a local project sponsor allows them to retain control over timing and performance - important controls they would lose if the department insists on performing these functions in the negotiation of a pass-through agreement.
Response: Other than re-numbering, there has been no revision of the language contained in proposed paragraph (4) (see current §5.56(b)(3)). Section 5.57(b)(4) assigns responsibility to the parties in the agreement. It prevents work from having to be repeated by both parties and ensures that significant work is not overlooked. For example, if the department has already completed a portion of the environmental documentation, the agreement will provide for the department to turn that documentation over to the entity and let the environmental process progress forward from that point. This paragraph will not take project control from the local entity once the project development agreement is executed. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County recommends that §5.57(b)(10) be deleted. The reference is to an agreement including "deadlines for key stages of project development." Even with the current delegation of key functions to local sponsors there are too many unknowns to commit to project deadlines within the body of a pass-through agreement. Those deadlines can be subject to a number of influences, not the least of which is the department and the time it takes to review various submittals and information as part of its oversight function. Current practice is to incorporate milestone dates in project development schedules, which are primarily determined between the local sponsor and its project developer. Doing so allows the local entity to retain control over the schedule and, if desired, transfer risk and responsibility to its project developer. Therefore, those deadlines do not belong in a pass-through agreement with the department, and requiring otherwise will further divest local entities of control over their project.
Response: Other than re-numbering, there has been no revision of the language contained in proposed paragraph (10) (see current §5.56(b)(9)). The pass-through toll program has experienced delays in some projects moving forward after execution of the project development agreement. This has contributed to funds for the program being in limbo with respect to how much and when the department may have to start reimbursement payments. Internal auditors have cited these project delays as contributing to the inefficiency of the program. The purpose of this paragraph is not to take over the project schedule, but to encourage the upfront development of a realistic project schedule that allows completion of the project and reimbursement to the entity to progress in a timely and efficient manner. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County states proposed §5.58(a)(1)(A)(i) requires the commission to consider, in determining the level of pass-through fares, whether "the project's estimated benefits to mobility warrant a pass-through fare at a level that is more or less than the department's estimate of project costs." This gives undue weight to the department's cost estimates, which could be incorrect. The proper measure should be estimates agreed to by the department and the project sponsor. Montgomery County also directed these same comments to §5.58(b)(1)(A)(i).
Response: Other than re-numbering, there has been no revision of the language contained in proposed §5.58(a)(1)(A)(i) or (b)(1)(A)(i) (see current §5.57(a)(1)(A)(i) and (b)(1)(A)(i)). The department's estimate acts as a baseline to ensure that the department does not pay more for the project than the project would have cost the department if done internally. The proposer will also be able to submit their independent estimate as part of the project application. Past experience indicates that the parties discuss differences in their respective estimates. However, because of the long term commitment of state highway fund resources, the department will rely on its own independent project estimate. It is noted that differences in project cost between the two parties can still be a factor in the negotiation of the final project reimbursement amount. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County states that clarification is also needed regarding §5.58(a)(1)(B)(i), which provides that the commission may approve payment of pass-through fares in excess of the department's current estimate "by the difference between the department's current estimate and the department's estimate for the time when the project would likely have been completed in the absence of a pass-through agreement." It is well known that the department faces serious funding challenges, and that the pass-through program was shut down (notwithstanding its popularity and success) because of funding constraints. It is unclear when, if ever, the department may have sufficient funds to complete projects brought forward under the pass-through program. Montgomery County recommends deleting this possibility, and limiting the payments to agreed upon cost estimates plus some stated adjustment for inflation. Montgomery County also directed these same comments to §5.58(b)(1)(B)(i).
Response: Other than re-numbering, there has been no revision of the language contained in proposed §5.58(a)(1)(B)(i) or (b)(1)(B)(i) (see current §5.57(a)(1)(B)(i) or (b)(1)(B)(i)). It should be noted at the outset that the department will have funds available to honor all project reimbursements as reflected in executed project agreements. The difference between the department's current estimate and the department's estimate for the time when the project would likely have been completed would generally be an inflation factor. As stated in a previous response, the department's estimate acts as a baseline to ensure that the department does not pay more for the project than the project would have cost the department if done internally. If a case of differences in applying the future inflation factor occurs, the reimbursement amount is still subject to negotiation between the two parties. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County states that proposed §5.58(a)(1)(A)(iii) requires the commission to consider, in establishing the level of pass-through fares, whether "the public or private entity proposes to share in the cost of the project." Montgomery County recommends modifying this rule to clarify that financing costs that local entities will bear are included in that calculation. Financing costs can be a major component of the project development costs that local entities will bear, and there is no reason not to consider those as part of a local entity's cost sharing and financial contribution to a project. Montgomery County also directed these same comments to §5.58(b)(1)(A)(iii).
Response: Other than re-numbering, there has been no revision of the language contained in proposed §5.58(a)(1)(A)(iii) or (b)(1)(A)(iii) (see current §5.57(a)(1)(A)(iii) or (b)(1)(A)(iii)). The commission has consistently indicated that financing costs will not be considered as part of the negotiation of the reimbursement amount. If the department had the resources to bear the financing costs of the state highway system project, then there is little benefit to using a pass-through agreement in terms of completing the project. Simply stated, the department could just complete the project now and finance the cost based on future revenues and incur the debt service internally. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County notes that proposed §5.58(a)(1)(B)(ii) states that the commission will not consider any financing costs incurred by the local entity in determining the level of pass-through fares. To do so ignores a significant component of project costs and potential cash flow requirements facing a local entity. Also, to do so seems inconsistent with the intent of Transportation Code, §91.075(b) which provides that pass-through fares may be reimbursement for the "acquisition, design, development, financing, construction, relocation, maintenance, or operation of a passenger rail facility or freight facility" (emphasis added). Montgomery County therefore recommends deleting §5.58(a)(1)(B)(ii).
Response: The language contained in proposed §5.58(a)(1)(B)(ii) is unchanged from current §5.57(a)(1)(B)(ii) language. The commission has consistently indicated that financing costs will not be considered as part of the negotiation of the reimbursement amount. The inclusion of these costs would negate much of the benefit of the pass-through program approach from a state level perspective. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County recommends deleting a portion of §5.58(a)(3)(A) and §5.58(b)(3)(A) (addressing pass-through fares and pass-through tolls, respectively,) which state that "Unless authorized by the commission and incorporated in a pass-through agreement by the department, the department's liability under a pass-through agreement shall be neither increased nor decreased by cost overruns and underruns." Montgomery County recommends deleting the first portion of that sentence (in each referenced section) to remove the commission's discretion to modify the department's liability by agreement. The rules should recognize that it is up to the local entity to deliver the project. The local entity is in a better position than the department to assume the risks and benefits associated with project delivery and to negotiate appropriate risk transfers with its developer. By assuming the risk, the local entity bears the responsibility for any cost overruns, but it is also appropriate that the entity benefit from any cost underruns. They should not be penalized for delivering the project "under budget."
Response: Other than re-numbering, there has been no revision of the language contained in proposed §5.58(a)(3)(A) and §5.58(b)(3)(A) (see current §5.57(a)(3)(A) and §5.58(b)(3)(A)). The reimbursement amount to be paid to the entity by the department is fixed in the agreement. Project cost overruns or underruns are the responsibility of the entity and do not affect the amount of reimbursement as described in the executed agreement unless there was a mutually agreeable change in the scope of the project. Any amendments to the agreement would have to be agreed to and executed by both parties. Project cost underruns would not result in a penalty to the entity. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County notes that in addition and similar to proposed §5.58(a)(1)(B)(ii), proposed §5.58(b)(1)(B)(ii) states that financing costs will not be considered in determining the level of pass-through tolls. Again, it is completely unfair to eliminate the substantial costs that local entities bear to accelerate a project from the calculus of the level of pass-through tolls. Those are real costs and are being paid during the same period that pass-through toll payments are being received. There is no reason not to consider these costs, and to exclude them seems inconsistent with the intent of Transportation Code, §222.104(b) which provides that pass-through tolls may be reimbursement for the "design, development, financing, construction, maintenance, or operation of a toll or non-toll facility" (emphasis added).
Response: The language contained in proposed §5.58((b)(1)(B)(ii) is unchanged from current §5.57(b)(1)(B)(ii). The commission has consistently indicated that financing costs will not be considered as part of the negotiation of the reimbursement amount. The inclusion of these costs would negate much of the benefit of the pass-through program approach from a state level perspective. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County states that proposed §5.58(b)(2)(B)(iii) and (iv) include among the potential bases for variation in pass-through tolls, the condition of the roadway and whether the highway is tolled. Neither of those factors should impact the pass-through toll amount. That amount should be influenced by project costs and traffic volumes, and Montgomery County therefore recommends deleting this section.
Response: Other than re-numbering, there has been no revision of the language contained in proposed §5.58(b)(2)(B)(iii) and (iv) (see current §5.57(b)(2)(B)(iii) and (iv)). The factors cited, such as the condition of the roadway and whether the highway is tolled, will have a direct impact on both the project costs and the projected traffic volumes. The ability to consider such project factors and their influence on traffic volume needs to be the basis for negotiation of the project development agreement and the associated reimbursement amount. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County notes that §5.59(a)(1) provides that the department may choose to conduct the environmental review and public involvement for a project. Montgomery County believes that it is essential that environmental review and public involvement should be delegated to the local entity and should remain under local control. Montgomery County recommends deleting the last sentence of proposed §5.59(a) so that local entities can more predictably develop the project schedules referenced above (in connection with proposed §5.57(b)(10)).
Response: Other than re-numbering, there has been no revision of the language contained in proposed §5.59(a) (see current §5.58(a)). Subsection (a) does not restrict an entity from having local control of the environmental review or public involvement process that is assigned as part of the agreement. However, the department may already have started environmental review and/or public involvement prior to a project being selected as a pass-through candidate. It may simply be more efficient for the department to complete some or all of the processes in order to keep the project on schedule to construction. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Montgomery County states that §5.59(f) would require public or private entities intending to sell bonds and use pass-through tolls or fares as evidence of financial capability to repay the bonds, to provide the department with an opportunity to review and comment on the bond offering documents prior to the sale of the bonds. While using debt to finance projects is relatively new to the department, public and private entities have issued bonds to finance projects for decades. The market requires a legal opinion to accompany any bond offering, including one from the Attorney General, which is ample safeguard to potential purchasers. No benefit is achieved by inserting the department in the process, and in fact this provision could add significant delay to a timely issuance - critical to a local entity. This provision also raises concern of whether the department is attempting to "approve" the issuance of debt, a role that is not appropriate for the agency. Montgomery County therefore recommends eliminating this proposed requirement.
Response: The intention of §5.59(f) is not for the department to approve the issuance of debt by another entity. The department wants an opportunity to review the bond offering documents to understand any obligations or interrelationships between the offering and the department, commission, or state highway fund, and any department obligation to provide bond investors with updated information on the status of the state highway fund. No additional action affecting the substance of these rules as proposed is made as a result of these comments.
Comment: Former county official Mr. Jim Powers notes that the majority of the proposed amendments to §5.53 are standard proposal requirements and should be readily available to proposers.
Response: The comment is noted and no additional action affecting the substance of these rules as proposed is made as a result of this comment.
Comment: Mr. Powers notes that the proposed §5.54 is intended to provide transparency in terms of notifying the public of available funding for program periods and to provide planning capability to the department in determining program periods.
Response: The comment is noted and no additional action affecting the substance of these rules as proposed is made as a result of this comment.
Comment: Mr. Powers notes that, along with the proposed programmatic changes in administrating the program, the additions to the proposed §5.55 are the substantive changes proposed for the pass-through program. Requiring proposers to enumerate specific benefits should give the department's evaluation efforts more transparency and put proposers on "equal footing" with regard to project selection.
Response: The comment is noted and no additional action affecting the substance of these rules as proposed is made as a result of this comment.
Comment: Mr. Powers notes that proposed §5.56 and §5.57 provide consistency with proposed proposal requirements and criteria.
Response: The comments are noted and no additional action affecting the substance of these rules as proposed is made as a result of these comments.
STATUTORY AUTHORITY
The repeals are adopted under Transportation Code, §201.101, which provides the commission with the authority to establish rules for the conduct of the work of the department, and more specifically, Transportation Code, §91.075(d), which provides the commission with the authority to adopt rules for a pass-through fare program and Transportation Code, §222.104(g), which provides the commission with the authority to adopt rules for a pass-through toll program.
CROSS REFERENCE TO STATUTE
Transportation Code, §91.075 and §222.104.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on January 30, 2009.
TRD-200900364
Bob Jackson
General Counsel
Texas Department of Transportation
Effective date: February 19, 2009
Proposal publication date: November 14, 2008
For further information, please call: (512) 463-8683
STATUTORY AUTHORITY
The amendments and new sections are adopted under Transportation Code, §201.101, which provides the commission with the authority to establish rules for the conduct of the work of the department, and more specifically, Transportation Code, §91.075(d), which provides the commission with the authority to adopt rules for a pass-through fare program and Transportation Code, §222.104(g), which provides the commission with the authority to adopt rules for a pass-through toll program.
CROSS REFERENCE TO STATUTE
Transportation Code, §91.075 and §222.104.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on January 30, 2009.
TRD-200900365
Bob Jackson
General Counsel
Texas Department of Transportation
Effective date: February 19, 2009
Proposal publication date: November 14, 2008
For further information, please call: (512) 463-8683
SUBCHAPTER H. TRANSPORTATION CORPORATIONS
The Texas Department of Transportation (department) adopts amendments to §15.92, concerning transportation corporations. The amendments to §15.92 are adopted with changes to the proposed text as published in the December 5, 2008, issue of the Texas Register (33 TexReg 9957). The section was modified to correct a typographical error in subsection (a)(1)(A).
EXPLANATION OF ADOPTED AMENDMENTS
To maintain and build on the department's commitment to integrity and ethical behavior, the Texas Transportation Commission (commission) ordered the department to develop an internal compliance program (ICP) designed to promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law and departmental policies. The rule changes expand the use of that concept to require transportation corporations to have and enforce compliance with an internal ethics and compliance program. The purpose of the changes is to discourage fraudulent and illegal activity by persons who receive financial assistance from or contract with the department.
Amendments to §15.92, Miscellaneous Powers and Duties of Corporations, add new subsection (c) to require a transportation corporation formed under the Texas Transportation Corporation Act (Transportation Code, Chapter 431) for the promotion and development of public transportation facilities and systems to adopt an ethics and compliance program that satisfies new 43 TAC §1.8, Internal Ethics and Compliance Program. The amendments give a transportation corporation approximately one year to satisfy the requirement. The amendments also add new subsection (d), which requires the transportation corporation to enforce compliance with the program.
COMMENTS
No comments on the proposed amendments were received.
STATUTORY AUTHORITY
The amendments are adopted under Transportation Code, §201.101, which provides the commission with the authority to establish rules for the conduct of the work of the department.
CROSS REFERENCE TO STATUTE
Transportation Code, Chapter 431.
§15.92.Miscellaneous Powers and Duties of Corporations.
(a) Open Meetings and Public Information.
(1) A corporation is subject to the Open Meetings Act, Government Code, Chapter 551.
(A) Except as provided in subparagraph (B) of this paragraph, the Board shall file notice of each meeting of the board in the same manner and in the same location as is required of a state governmental body under Chapter 551, Government Code.
(B) If the commission designates an area of the state in which a corporation may act on behalf of the commission, the board shall file notice of each meeting of the board in the same manner and the same location as is required of a governmental body under Government Code, §551.053.
(2) The Board is subject to the Public Information Act, Government Code, Chapter 552.
(b) Texas Non-Profit Corporation Act. The Texas Non-Profit Corporation Act applies to a transportation corporation to the extent that the provisions of that Act are not inconsistent with provisions of the Transportation Corporation Act, Transportation Code, Chapter 431, and this subchapter.
(c) Internal ethics and compliance program. A corporation shall adopt an internal compliance and ethics program that satisfies the requirements of §1.8 of this title (relating to Internal Ethics and Compliance Program) before the later of:
(1) January 1, 2010; or
(2) the first anniversary of the date on which the corporation is created.
(d) Enforcement of compliance program. A corporation shall enforce compliance with the internal compliance and ethics program adopted under subsection (c) of this section.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on January 30, 2009.
TRD-200900366
Bob Jackson
General Counsel
Texas Department of Transportation
Effective date: February 19, 2009
Proposal publication date: December 5, 2008
For further information, please call: (512) 463-8683
The Texas Department of Transportation (department) adopts amendments to §§21.142, 21.149 - 21.151, 21.155, 21.160, 21.411, 21.431, 21.441, 21.521, 21.531, 21.541, 21.561, and 21.572, concerning regulation of signs along interstate and primary highways and control of signs along rural roads. The amendments to §§21.149, 21.151, 21.155, 21.160, 21.411, 21.431, 21.441, 21.521, 21.531, 21.541, 21.561, and 21.572 are adopted without changes to the proposed text as published in the December 5, 2008, issue of the Texas Register (33 TexReg 9958) and will not be republished. The amendments to §21.142 and §21.150 are adopted with changes to the proposed text as published in the December 5, 2008, issue of the Texas Register (33 TexReg 9958). The sections are changed from the proposal to correct typographical errors in §21.142(2)(O) and §21.150(e)(1). These amendments are effective March 1, 2009.
EXPLANATION OF ADOPTED AMENDMENTS
The department is in the process of restructuring department duties and responsibilities. With these changes, the department is looking for ways to streamline work processes and increase efficiency in specific programs such as the outdoor advertising program. The department believes that moving from a de-centralized, district-based management system to a central or regional administration process will achieve more uniformity in the program and will be a more efficient use of the state's limited resources. In order to make any changes to the structure of the program, the department must eliminate references to district offices and district engineers throughout the outdoor advertising rules.
All references to district offices and district engineers are replaced with either the department or the executive director. These changes will allow the department the flexibility to restructure the program in a manner that is most efficient. The department believes that these changes will also improve the consistency of the program.
Amendments to §21.142, Definitions, delete the definition of director and district engineer. These rules remove all references to director and district engineer; therefore, the definitions are no longer needed. These amendments add the definition of executive director, which is defined as the executive director of the Department of Transportation or the executive director's designee not below the level of regional manager, division director, or office director. The executive director replaces the district engineer throughout these amendments in references to decision authority. The inclusion of the designee language allows the executive director to designate another staff member the responsibilities under the program as long as the selected staff is of a level of regional manager, division director, or office director or higher. The amendments to the definitions are needed to correspond with other amendments.
Amendments to §21.149, Licenses, replace director with executive director for the approval of license applications, revocations, or suspensions of the license, and the filing of appeal requests. By eliminating the reference to the Right of Way Division Director, the department has the flexibility to structure the outdoor advertising program into either a regional or centralized program. The amendments also make a grammatical correction, changing "outdoor advertisers surety bond" to "outdoor advertiser's surety bond."
Amendments to §21.150, Permits, replace district engineer with the department for the receipt of permit applications and renewals and requests for replacement permit plates. On these issues, the district engineer is not exercising decision authority. The term is used to provide the location for the documents to be sent and reviewed. The language of the current rule limited the department's ability to review additional submission alternatives such as a web-based system. By this change, the department has the flexibility to review and determine the most efficient manner to receive and review applications. The department will provide submission location information on application forms and other correspondence so that the applicants and affected parties will know where and how to submit documents to the department.
Amendments to §21.150 also replace the district engineer with the executive director for the approval of permit applications, the notification for the removal of signs or cancellation of a permit, and the approval of non-profit sign applications. This substitution provides the executive director or his designee of a level not below regional manager, division director, or office director decision authority for outdoor advertising issues. By removing references to a particular position these changes allow the department flexibility in structuring the outdoor advertising program into either a regional or centralized program.
Amendments to §21.151, Local Control, delete the term director of the right of way division and replace it with the executive director as the position to receive information from political subdivisions regarding the local certification program. The amendments also substitute the executive director as the party responsible for consulting with the Federal Highway Administration as it relates to the department's opinion that the political subdivision has adequate sign and zoning ordinances. The amendments also move the authority to de-certify a political subdivision to the executive director. By the new definition, the executive director can designate another employee of a level of regional manager, division director, or office director or higher to carry out these duties. By eliminating the reference to the Right of Way Division Director the department has the flexibility to structure the outdoor advertising program into either a regional or centralized program.
Amendments to §21.155, Directional Signs, delete reference to district engineer and replace it with the executive director in the determination of whether a particular sign advertises an activity or attraction which is nationally or regionally known and of outstanding interest to the traveling public. By moving this authority to the executive director the department can be more consistent throughout the state in making these types of decisions. This change also allows the department to restructure the outdoor advertising program into either a central or regional program.
Amendments to §21.160, Relocation, delete the references to district engineer and replace it with the executive director as the approval authority for determining the necessity and approval of the relocation permit application. Changing to the executive director will improve the consistency throughout the state and will allow the department the flexibility in structuring the outdoor advertising program into either a regional or centralized program.
Amendments to §21.411, Definitions, add the definition of executive director. The term is defined as the executive director of the Department of Transportation or the executive director's designee not below the level of regional manager, division director, or office director. The inclusion of the designee language allows the executive director to designate another staff member the responsibilities under the program as long as the selected staff is of a level of regional manager, division director, or office director or higher. By other amendments, the term has been added throughout the subchapter so it is necessary that the definition be included.
Amendments to §21.431, Registration of Existing Off-Premise Signs, delete the district engineer and the district office as the location and person in which an applicant submits required permit applications. This change allows the department to review alternative methods for the submission of documents and allows for the flexibility of a central or regional program to accommodate the department's current restructuring efforts. The department will provide submission location information on application forms and other correspondence so that the applicants and affected parties will know where and how to submit documents to the department.
Amendments to §21.441, Permit for Erection of Off-Premise Sign, replace the district engineer with the executive director regarding who has the authority to approve permit applications and transfers. By designating the executive director, the rules will provide the department the flexibility to establish a central or regional program. This section is also amended by deleting references to the district office to allow the department the ability to review alternative methods for the submission of documents. The department will provide submission location information on application forms and other correspondence so that the applicants and affected parties will know where and how to submit documents to the department. The changes to this section will also provide for more consistent application of the rules throughout the state and also allows for either a central or regional program to accommodate the department's current restructuring efforts.
Amendments to §21.521, On-Premise Sign Erectors, replace the director of right of way with the executive director with all decision authority regarding on-premise signs. By eliminating the references to the Right of Way Division Director, the department has the flexibility to structure the outdoor advertising program into either a regional or centralized program.
Amendments to §21.531, Board of Variance, replace the term engineer-director of the department with the executive director. The engineer-director is considered the executive director so there is no transfer of duty under this amendment. The change is only to correct the terminology to the more current term used by the department.
Amendments to §21.541, Revocation of Permits, replace the director of right of way with the executive director regarding the authority to revoke permits. By eliminating the reference to the Right of Way Division Director, the department has the flexibility to structure the outdoor advertising program into either a regional or centralized program.
Amendments to §21.561, Removal of Sign, transfer the authority to the executive director to determine whether to order a sign to be removed. This change will provide for more consistent application of this rule throughout the state and will also allow for either a central or regional program to accommodate the department's current restructuring efforts.
Amendments to §21.572, Notice and Appeal, replace the director of right of way with the executive director regarding the authority to issue revocation notices. The executive director must also receive the requests for the administrative hearing. By eliminating the references to the Right of Way Division Director, the department has the flexibility to structure the outdoor advertising program into either a regional or centralized program.
COMMENTS
No comments on the proposed amendments were received.
SUBCHAPTER I. REGULATION OF SIGNS ALONG INTERSTATE AND PRIMARY HIGHWAYS
43 TAC §§21.142, 21.149 - 21.151, 21.155, 21.160
STATUTORY AUTHORITY
The amendments are adopted under Transportation Code, §201.101, which provides the commission with the authority to establish rules for the conduct of the work of the department, and more specifically, Transportation Code, §391.032, which provides authority to establish rules to regulate the orderly and effective display of outdoor advertising on primary roads, Transportation Code, §391.065, which provides authority to establish rules to standardize forms and regulate the issuance of outdoor advertising licenses, and Transportation Code, §394.004, which provides the commission with the authority to establish rules to regulate the erection and maintenance of signs on rural roads.
CROSS REFERENCE TO STATUTE
Transportation Code, Chapters 391 and 394.
§21.142.Definitions.
The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Act--Transportation Code, Chapter 391, concerning beautification of a regulated highway.
(2) Commercial or industrial activities--Those activities customarily permitted only in zoned commercial or industrial areas except that none of the following shall be considered commercial or industrial:
(A) outdoor advertising structures;
(B) agricultural, forestry, ranching, grazing, farming, and related activities, including, but not limited to, temporary wayside fresh produce stands;
(C) activities not:
(i) housed in a permanent building or structure;
(ii) having an indoor restroom, telephone, running water, functioning electrical connections, and adequate heating; or
(iii) having permanent flooring other than material such as dirt, gravel, or sand;
(D) activities not housed in a permanent building that is visible from the traffic lanes of the main-traveled way;
(E) activities conducted in a building primarily used as a residence;
(F) railroad right of way;
(G) activities that do not have a portion of the regularly used buildings, parking lots, storage or processing areas within 200 feet from the edge of the right of way;
(H) activities conducted only seasonally;
(I) activities conducted in a building having less than 300 square feet of floor space devoted to the activities;
(J) activities that do not have at least one person who is at the activity site, performing work, an average of at least 30 hours per week or at least five days per week;
(K) activities which have not been open for at least 90 days;
(L) recreational facilities such as campgrounds, golf courses, tennis courts, wild animal parks, and zoos, except for the portion of the activities occupied by permanent buildings which otherwise meet the criteria in this subsection and parking lots;
(M) apartment houses or residential condominiums;
(N) areas used by public or private preschools, secondary schools, colleges and universities for education or recreation (this does not preclude trade schools or corporate training campuses);
(O) quarries or borrow pits, except for any portion of the activities occupied by permanent buildings which otherwise meet the criteria in this paragraph and parking lots; and
(P) cemeteries, or churches, synagogues, mosques, or other places primarily used for worship.
(3) Commission--The Texas Transportation Commission.
(4) Conforming sign--A sign which is lawfully in place and complies with size, lighting, and spacing requirements and any other lawful regulations pertaining thereto.
(5) Department--The Texas Department of Transportation.
(6) Electronic sign--A sign, display, or device that changes its message or copy by programmable electronic or mechanical processes.
(7) Erect--To construct, build, raise, assemble, place, affix, attach, embed, create, paint, draw, or in any other way bring into being or establish.
(8) Executive Director--The executive director of the department or the executive director's designee not below the level of regional manager, division director, or office director.
(9) Freeway--A divided highway with frontage roads or full control of access. A proposed freeway is designated a freeway for the purposes of this subchapter when the construction contract is awarded, regardless of whether the main-traveled way is open to the public.
(10) Interchange--A system of interconnecting roadways in conjunction with one or more grade separations that provides for the movement of traffic between two or more roadways or highways on different levels. A proposed interchange is designated an interchange for the purposes of this subchapter when the construction contract is awarded, regardless of whether it is open to the public.
(11) Intersection--The common area at the junction of two roadways as defined in Transportation Code, §541.303.
(12) Interstate highway system--That portion of the national system of interstate and defense highways located within the State of Texas which now or hereafter may be so designated officially by the commission and approved pursuant to 23 United States Code §103.
(13) License--An outdoor advertising license issued by the department pursuant to the provisions of Subchapter C of the Act.
(14) Main-traveled way--The traveled way of a highway that carries through traffic. In the case of a divided highway, the traveled way of each of the separate roadways for traffic in opposite directions is a main-traveled way. It does not include such facilities as frontage roads, turning roadways, or parking areas.
(15) National Highway System--That portion of connected main highways located within the State of Texas which now or hereafter may be so designated officially by the commission and approved pursuant to 23 United States Code §103.
(16) Nonconforming sign--A lawfully erected sign that does not comply with the provisions of a law or rule promulgated at a later date, or which later fails to comply with a law or rule due to changed conditions.
(17) Nonprofit sign--A sign erected and maintained by a nonprofit organization in a municipality or the extraterritorial jurisdiction of a municipality if the sign advertises or promotes only the municipality or another political subdivision whose jurisdiction is in whole or in part concurrent with the municipality.
(18) Outdoor advertising or sign--An outdoor sign, display, light, device, figure, painting, drawing, message, plaque, placard, poster, billboard, logo or symbol, or other thing which is designed, intended, or used to advertise or inform, if any part of the advertising or information contents is visible from any place on the main-traveled way of a regulated highway.
(19) Permit--The authorization granted for either the erection and/or maintenance, of an outdoor advertising sign as provided in the Act, §391.068.
(20) Person--An individual, association, partnership, limited partnership, trust, corporation, or other legal entity.
(21) Primary system or federal-aid primary system--That portion of connected main highways which were designated by the commission as the federal-aid primary system in existence on June 1, 1991 and any highway which is not on that system but which is on the National Highway System.
(22) Public park--A public park, forest, playground, nature preserve, or scenic area designated and maintained by a political subdivision or governmental agency.
(23) Regulated highway--A highway on the interstate highway system or primary system.
(24) Removed--The dismantling and removal of a substantial portion of the parts and materials of a sign or sign structure from the view of the motoring public. The term shall not include the temporary removal of a sign face for operational reasons.
(25) Rest area--An area of public land designated by the department as a rest area, comfort station, picnic area, or roadside park.
(26) Sign face--The part of the sign that contains the message or informative contents and is distinguished from other parts of the sign and other sign faces by separation borders or decorative trim. It does not include lighting fixtures, aprons, and catwalks unless they display part of the message or informative contents of the sign.
(27) Sign structure--All of the interrelated parts and materials, such as beams, poles, braces, apron, catwalk, and stringers, that are used, designed to be used, or are intended to be used to support or display a sign face.
(28) Traveled way--That portion of the roadway used for the movement of vehicles, exclusive of shoulders.
(29) Turning Roadway--A connecting roadway for traffic turning between two intersection legs of an interchange.
(30) Unzoned commercial or industrial area--
(A) An area along the highway right of way which has not been zoned under authority of law, which is not predominantly used for residential purposes, and which is within 800 feet, measured along the edge of the highway right of way, of, and on the same side of the highway as, the principal part of at least two adjacent recognized commercial or industrial activities. To be considered an unzoned commercial or industrial area, the following requirements must be met.
(i) A portion of the regularly used buildings, parking lots, storage or processing areas where each respective business activity is conducted must be within 200 feet of the highway right of way and the permanent building where the activity is conducted must be visible from the main-traveled way.
(ii) To be considered adjacent, there must be no separation of the regularly used buildings, parking lots, storage or processing areas of the two activities by vacant lots, undeveloped areas over 50 feet wide, roads, or streets.
(iii) Two activities may occupy one building as long as each has 300 square feet of floor space dedicated to that activity and otherwise meets the definition of a commercial or industrial activity. There must be separation of the two activities by a dividing wall, separate ownership, or other distinctive characteristics. A separate product line offered by one business will not be considered two activities.
(B) An unzoned commercial or industrial area is more specifically identified as follows.
(i) The area to be considered, based upon the qualifying activities, is 1,600 feet (800 feet on each side) plus the actual or projected frontage of the commercial or industrial activities, measured along the highway right of way by a depth of 660 feet in accordance with §21.144(b) of this title (relating to Measurements).
(ii) The area shall be located on the same side of the highway as the principal part of the qualifying activities.
(iii) The area must be considered as a whole prior to the application of the test for predominantly residential.
(iv) An area shall be considered to be predominantly residential if more than 50% of the area is being used for residential purposes. Roads and streets with residential property on both sides shall be considered as being used for residential purposes. Other roads and streets will be considered nonresidential.
(31) Visible--Capable of being seen, whether legible or not, without visual aid by a person with normal visual acuity.
(32) Zoned commercial or industrial area--An area designated, through a comprehensive zoning action, for general commercial or industrial use by a political subdivision with legal authority to zone. The following areas are not zoned areas:
(A) areas that permit limited commercial or industrial activities incident to other primary land uses;
(B) areas designated for and created primarily to permit outdoor advertising structures along a regulated highway;
(C) unrestricted areas; and
(D) small parcels or narrow strips of land that cannot be put to ordinary commercial or industrial use and are designated for a use classification different from and less restrictive than that of the surrounding area.
§21.150.Permits.
(a) Eligibility. Except as provided in subsection (l) of this section, a permit under this section may only be issued to a person holding a valid license issued pursuant to §21.149 of this title (relating to Licenses).
(b) Application and issuance.
(1) Except as provided in §21.151 of this title (relating to Local Control) a person who desires a permit to erect or maintain a sign along a regulated highway must file an application in a form prescribed by the department, which shall include, but not be limited to:
(A) the complete name and address of the applicant;
(B) the proposed location and description of the sign;
(C) the complete legal name and address of the designated site owner;
(D) verification of the applicant's nonprofit status if the sign is a nonprofit sign; and
(E) additional information the department deems necessary.
(2) No permit may be approved unless the applicant has obtained written permission from the owner of the designated site. The department may provide a space on the permit application for this signature or the applicant may provide a copy of the written lease for the site or a consent statement in a form prescribed by the department. The signature must be the signature of the property owner or the owner's duly authorized representative. The owner's permission operates as permission for the life of the permit, unless the owner provides a written statement that permission for the maintenance of the sign has been withdrawn and documentation showing that the lease allowing the sign has been terminated in accordance with the terms of the lease agreement or through a court order. If the sign owner disputes the lease termination in court with the owner, the department will not cancel the permit until a court order is provided.
(3) The application must be signed under oath by the sign owner and filed with the department and shall be accompanied by the prescribed fee or fees and, if the sign is located within the jurisdiction of a municipality with a population of more than 1.9 million that is exercising its authority to regulate outdoor advertising, a certified copy of the permit issued by the municipality.
(4) An application will not be approved unless the sign for which the permit is requested is located in an unzoned commercial or industrial area or in a zoned commercial or industrial area, and meets all applicable requirements of the sections under this subchapter, or was lawfully in existence when the sign became subject to the Act.
(5) If approved, a copy of the application, endorsed by the executive director and a Texas sign permit plate will be issued to the applicant. Not later than 30 days after erection of the permitted sign, or after the issuance of a permit if the sign is lawfully in existence when the highway along which it is located becomes subject to control by the department, the sign owner shall cause the permit plate to be securely attached to that portion of the sign structure nearest the highway and visible from the main-traveled way. If the permit plate becomes illegible, the department may require that a replacement plate be obtained in accordance with subsection (f) of this section. The plate must be attached and may not be removed from the sign described in the application.
(6) The proposed location for a new sign must be identified by the applicant on the ground by a stake or paint with at least two feet of the stake visible above the ground. The stake must be set at the proposed location of the center pole. Staking the site is considered part of the application. Stakes must not be moved or removed until the application is denied, or if approved, until the sign has been erected. The sketch submitted with the application must reflect the location of the center-pole and show the exact location of the sign faces in relation to the center pole.
(c) Priority. Permits will be considered on a first-come, first-serve basis. If an application is returned because of errors or incomplete information, other applications received for the same or conflicting sites between the time a denied application is returned to the applicant and the time it is resubmitted, will be considered before the resubmitted application. A second application for a conflicting site may be held until a decision is made on the first application.
(d) Renewals.
(1) Subject to the terms and location stated in the permit application, a permit issued or renewed under this section shall be valid for a period of one year, provided that the sign is erected and maintained in accordance with the applicable sections under this subchapter. The permitted sign must be erected within one year from the date the original permit is issued in order for a sign permit to be eligible for renewal.
(2) A permit issued by the department prior to September 6, 1985, must be renewed no later than October 1, of each succeeding year.
(3) An annual permit issued subsequent to September 5, 1985, must be renewed on or before the anniversary date of the date of issuance.
(4) If a sign continues to meet all applicable requirements, a permit holder may renew a permit by filing with the department a written request in a form prescribed by the department and the prescribed renewal fee.
(e) Transfer.
(1) A permit may only be transferred with the written approval of the executive director. At the time of the transfer, both the transferor and the transferee must hold a valid outdoor advertising license issued pursuant to §21.149 of this title (relating to Licenses), except as provided in paragraphs (3) - (5) of this subsection.
(2) A permit holder who desires to transfer one or more permits must file a written request in a form prescribed by the department and the prescribed transfer fee at the department. The transferor and transferee will each be issued a copy of the approved permit transfer form.
(3) A permit issued under subsection (l) of this section may be transferred to a nonprofit organization that does not hold a valid outdoor advertising license issued under §21.149 of this title (relating to Licenses) if the permit is transferred for the purpose of maintaining a nonprofit sign.
(4) A permit issued under subsection (l) of this section may be transferred for a purpose other than maintaining a nonprofit sign if the transferee holds a valid outdoor advertising license at the time of the transfer.
(5) The executive director will approve the transfer of one or more sign permits from a lapsed outdoor advertising license to a valid outdoor advertising license, with or without the signature of the transferor, if:
(A) legal documents showing the sale of the sign are provided; and
(B) documents are provided that indicate the transferor is dead or cannot be located.
(6) A permit that has an unresolved permit violation, will not be transferred. An unresolved permit violation means that a permit cancellation is impending or a cancellation has been abated pursuant to subsection (k) of this section pending the outcome of a hearing.
(f) Replacement. In the event a permit plate is lost or stolen, is missing from the sign structure, or becomes illegible, the sign owner must submit a request for a replacement plate in a form prescribed by the department, together with the prescribed replacement plate fee.
(g) Fees.
(1) Except as provided in paragraphs (2) and (3) of this subsection, for a permit issued pursuant to this section:
(A) the original fee is $96;
(B) the annual renewal fee is $40;
(C) the transfer fee is $25 per permit up to a maximum of $2,500 for a single transaction; and
(D) the replacement plate fee is $25.
(2) For a nonprofit sign permit:
(A) the original fee is $10 for each sign;
(B) the annual renewal fee is $10 for each sign; and
(C) the transfer fee is waived for the transfer of a permit issued under subsection (l) of this section if the permit is transferred under subsection (e)(3) of this section. Any other permit transfer is subject to the provisions of paragraph (1) of this subsection.
(3) The initial permit fee is $50 for a sign lawfully in existence which becomes subject to the Act.
(4) A fee prescribed in this subsection is payable by check, cashier's check, or money order, and is nonrefundable.
(5) If a check or money order submitted for fees described in this section is dishonored upon presentment by the department, the permit, renewal, or transfer will be void from inception.
(h) Expiration. A permit automatically expires if:
(1) it is not renewed by the permit holder;
(2) the license under which it was issued expires or is revoked by the department pursuant to §21.149 of this title (relating to Licenses); or
(3) the sign is acquired by the state.
(i) Cancellation. The executive director may cancel a permit if the sign structure:
(1) is removed;
(2) is not maintained in accordance with applicable sections under this subchapter or the Act;
(3) is damaged beyond the repair threshold contained in §21.156 of this title (relating to Discontinuance of Signs);
(4) is abandoned, as determined by §21.156 of this title (relating to Discontinuance of Signs);
(5) is not built in the location described on the permit application or in accordance with the description of the structure on the permit application;
(6) is built by an applicant who uses false or materially misleading information on the permit application;
(7) is located on property owned by a person who withdraws, in writing, the permission granted pursuant to §21.150(b)(2) of this title (relating to Permits);
(8) is located in an area in which the activity has ceased in accordance with §21.145(b) of this title (relating to Cessation of Activities);
(9) is erected, repaired, or maintained in violation of §21.161 of this title (relating to Destruction of Trees/Violation of Control of Access);
(10) has been made more visible by the permit holder clearing vegetation from the highway right of way in violation of §21.161 of this title; or
(11) does not have permit plates properly attached under §21.150(b) and (f) of this title (relating to Permits).
(j) Removal. If a permit expires without renewal, is canceled without reinstatement, or if a sign other than an exempt sign is erected or maintained without a permit, the owner of the involved sign and sign structure shall, upon written notification by the executive director, remove the sign at no cost to the state.
(k) Notice and appeal. Upon determination that a permit should be canceled, the executive director shall mail by certified mail a notice of cancellation to the address of the record license holder. Notice shall be presumed to be received five days after mailing. The recipient of the notice may provide proof that the notice was not received five days from mailing, in which case, the executive director may extend the time for requesting a hearing.
(1) The notice shall clearly state:
(A) the reason for the cancellation;
(B) the effective date of the cancellation; and
(C) the right of the permit holder to request an administrative hearing on the question of the cancellation.
(2) A request for an administrative hearing under this subsection must be made in writing to the executive director within 10 days of the receipt of the notice of cancellation.
(3) If timely requested, an administrative hearing shall be conducted in accordance with §§1.21 et seq. of this title (relating to Contested Case Procedure), and shall serve to abate the cancellation unless and until that cancellation is affirmed by order of the commission.
(l) Nonprofit signs.
(1) A nonprofit organization may obtain a permit under this section to erect or maintain a nonprofit sign.
(2) In order to qualify for a permit issued under this subsection, a sign must comply with all applicable requirements under this subchapter from which it is not specifically exempted.
(3) An application for a permit under this section must include, in detail, the content of the message to be displayed on the sign. Prior to changing the message, the permit holder must obtain the approval of the executive director.
(4) If at any time the sign ceases to be a nonprofit sign, the permit will be subject to cancellation pursuant to subsection (i) of this section.
(5) If the holder of a permit issued under this subsection loses its nonprofit status or wishes to advertise or promote something other than the municipality or political subdivision, an outdoor advertising license must be obtained pursuant to §21.149 of this title (relating to Licenses), the permit must be converted to a permit for a sign other than a nonprofit sign, and the holder must pay the original permit and annual renewal fees set forth in subsection (g) of this section.
(6) A nonprofit organization that holds a valid permit for a nonconforming sign that would otherwise qualify for a permit under this subsection may convert its permit to one issued under this subsection.
(m) Conversion of rural road permits and registrations. The department will convert a registration issued under §21.431 of this title (relating to Registration of Existing Off-Premise Signs) or a permit issued under §21.441 of this title (relating to Permit for Erection of Off-Premise Sign) to a permit under this section if a highway previously regulated in accordance with Transportation Code, Chapter 394 becomes subject to control under the Act. A holder of a permit or registration converted under this subsection will not be required to pay an original permit fee under subsection (g) of this section; however, the permit must be renewed annually under subsection (d) of this section, on the date the renewal of the permit or registration issued under §21.431 or §21.441 of this title would have been due. In the event a sign owner has prepaid registration fees, the outstanding prepayment will be credited to the sign owner's annual renewal fee. The department will issue permit plates to a holder of a permit or a registration converted under this subsection at no charge. In the event replacement plates are needed after the initial issuance, fees will be charged in accordance with this section.
(n) New highway or change in highway designation. Owners of signs that become subject to the Act because of the construction of a new highway or the change in designation of an existing highway must apply to the department for a permit and must obtain an outdoor advertiser's license pursuant to §21.149 of this title (relating to Licenses) within 30 days after being notified by the department that the sign has become subject to the Act. If the owner of the sign cannot be identified from information on the sign, notice may be given by prominently posting notice on the sign for a period of 30 days.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on January 30, 2009.
TRD-200900367
Bob Jackson
General Counsel
Texas Department of Transportation
Effective date: March 1, 2009
Proposal publication date: December 5, 2008
For further information, please call: (512) 463-8683
43 TAC §§21.411, 21.431, 21.441, 21.521, 21.531, 21.541, 21.561, 21.572
STATUTORY AUTHORITY
The amendments are adopted under Transportation Code, §201.101, which provides the commission with the authority to establish rules for the conduct of the work of the department, and more specifically, Transportation Code, §391.032, which provides authority to establish rules to regulate the orderly and effective display of outdoor advertising on primary roads, Transportation Code, §391.065, which provides authority to establish rules to standardize forms and regulate the issuance of outdoor advertising licenses, Transportation Code, §394.004, which provides the commission with the authority to establish rules to regulate the erection and maintenance of signs on rural roads.
CROSS REFERENCE TO STATUTE
Transportation Code, Chapters 391 and 394.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on January 30, 2009.
TRD-200900368
Bob Jackson
General Counsel
Texas Department of Transportation
Effective date: March 1, 2009
Proposal publication date: December 5, 2008
For further information, please call: (512) 463-8683
SUBCHAPTER E. FINANCIAL ASSISTANCE FOR TOLL FACILITIES
The Texas Department of Transportation (department) adopts amendments to §27.53, concerning financial assistance for toll facilities. The amendments to §27.53 are adopted with changes to the proposed text as published in the December 5, 2008, issue of the Texas Register (33 TexReg 9966).
EXPLANATION OF ADOPTED AMENDMENTS
To maintain and build on the department's commitment to integrity and ethical behavior, the Texas Transportation Commission (commission) ordered the department to develop an internal compliance program (ICP) designed to promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law and departmental policies. The rule changes expand the use of that concept to require that to be eligible to receive funds from the department for the financing of a toll facility that is not under the jurisdiction of the department, an entity must have an internal ethics and compliance program and enforce compliance with that program. The purpose of the changes is to discourage fraudulent and illegal activity by persons who receive financial assistance from the department.
Amendments to §27.53, Request, add new subsection (a)(3) to provide that, to be eligible for financing by the department of a toll facility that is not under the jurisdiction of the department, an entity must have adopted, and must enforce compliance with, an ethics and compliance program that satisfies new 43 TAC §1.8, Internal Ethics and Compliance Program. While most entities that apply for financial assistance for toll facilities currently have ethics and compliance programs in place, the commission recognizes that some potential applicants may not have those programs. It is the intent of the commission that the requirements of this new paragraph will apply only for applications for financial assistance submitted to the department after January 1, 2010, and the application forms for the assistance will contain such a provision.
COMMENTS
No comments on the proposed amendments were received. The wording of §27.53(a)(3) has been modified to emphasize that the requirements of that new provision apply only to applications for financial assistance submitted to the department after January 1, 2010.
STATUTORY AUTHORITY
The amendments are adopted under Transportation Code, §201.101, which provides the commission with the authority to establish rules for the conduct of the work of the department, and more specifically, Transportation Code, §222.103, which provides the commission with the authority to establish rules to finance the cost of a toll facility of a public or private entity.
CROSS REFERENCE TO STATUTE
Transportation Code, Chapter 222, Subchapter E.
§27.53.Request.
(a) Eligibility.
(1) A public or private entity that is authorized by state law to construct or maintain a toll facility is eligible to submit a request for financing under this subchapter.
(2) A private entity is not eligible to submit a request for a grant.
(3) For requests submitted after January 1, 2010, to be eligible to receive funds under this subchapter, an entity must have adopted an internal ethics and compliance program that satisfies the requirements of §1.8 of this title (relating to Internal Ethics and Compliance Program) and must enforce compliance with that program.
(b) Basic request. Except as otherwise noted below with respect to a request for funding of development costs only, a request must be accompanied by:
(1) an overview of the project, which shall include a description of the project, the estimated total cost of the project or the preliminary cost estimate of development costs if the request is to fund only development costs, and the proposed use of the requested financial assistance;
(2) a list of all proposed funding sources, including, but not limited to, bond revenue, any equity contribution from the requestor, and grants or loans requested under this subchapter, and the proposed use of the funding;
(3) the requested financing terms if loan financing is requested;
(4) a description of the need, or potential need in the case of a request for financing of development costs, for the project and potential impact on traffic congestion and mobility;
(5) a statement of the amount of unencumbered (or unreserved) cash on hand or the requestor's latest audited financial statement;
(6) the latest bond rating obtained by the requestor when using similar sources of revenue to be pledged, if applicable;
(7) a preliminary design study which includes:
(A) an initial route and potential alignments;
(B) the project's logical termini and independent utility, if applicable; and
(C) potential revisions or changes to state highway system facilities necessitated by the project;
(8) a description of the extent to which the requestor's toll collection system or plan for a toll collection system provides interoperability;
(9) unless the request is to fund development costs only, official written approval of the project by the governing body of each entity that may become liable for repayment of any financial assistance;
(10) a binding commitment that the environmental consequences of the proposed project will be fully considered in accordance with, and that the proposed project will comply with, all applicable local, state, and federal environmental laws, regulations, and requirements;
(11) a binding commitment to implement all EPIC; and
(12) documentary evidence, to the extent then available, of community involvement in development of the proposed project and public opinion about it.
(c) Supplemental information and data. Except as provided in subsection (d) of this section, the requestor shall submit the following supplemental information and data.
(1) Financial feasibility study. Unless the request is to fund development costs only, the requestor shall submit a financial feasibility study that includes:
(A) a project construction or asset acquisition schedule identifying the timing, amount, and source of all funds required;
(B) an analysis of the expected financing period of the project;
(C) a pro forma annual cash flow analysis for the expected financing period of the project showing:
(i) if applicable, anticipated revenues to be used in repayment by source;
(ii) anticipated disbursements for preliminary studies and engineering, construction, EPIC, right of way acquisition, utility adjustments, operations, and maintenance;
(iii) anticipated debt service coverage ratios for each debt obligation; and
(iv) funds expected to be used to meet the requirements of any sinking funds, reserve funds, and loan amortization payments;
(D) a description of the methods used in preparing the financial feasibility study, the assumptions contained in the study, and persons and entities responsible for the preparation of the study;
(E) if loan financing is requested under this subchapter, the length of time the financial assistance will be outstanding or obligated;
(F) the anticipated interest rates for any and all debt outstanding during the term of the financial assistance;
(G) the anticipated benefits to the state and to the requestor resulting from the assistance; and
(H) based upon then available information and analyses, a description of how the requested assistance will, to the extent applicable, accomplish the following (it being understood that failure to accomplish all of these items will not necessarily cause a request to be ineligible for financial assistance):
(i) expand the availability of funding for transportation projects;
(ii) reduce direct state costs;
(iii) maximize private and local participation in financing projects; and
(iv) improve the efficiency of the state's transportation systems.
(2) Project impacts. The requestor shall provide the following information concerning the impact of the project:
(A) how the project will be consistent with the Statewide Transportation Plan and, if appropriate, with the metropolitan transportation plan developed by an MPO;
(B) if the project is in a nonattainment area, how the project will be consistent with the Statewide Transportation Improvement Program, with the conforming plan and Transportation Improvement Program for the MPO in which the project is located (if necessary), and with the State Implementation Plan; and
(C) a preliminary description of any known environmental, social, economic, or cultural resource issues, such as hazardous material sites, impacts on wetlands and other water resources, endangered species, parks, neighborhoods, businesses, historic buildings or bridges, and archeological sites.
(d) Waiver of required information or data. The executive director may waive submission of individual items of information or data required by subsection (c) of this section if:
(1) the information or data required by this section is not relevant to the project or the financial assistance requested;
(2) the department already possesses information or data in a format that may be substituted for the required information or data; or
(3) the past performance of the requestor on previous projects developed in collaboration with the department indicates that the requestor will adequately and prudently address the issues and impacts described in the requested information or data.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on January 30, 2009.
TRD-200900369
Bob Jackson
General Counsel
Texas Department of Transportation
Effective date: February 19, 2009
Proposal publication date: December 5, 2008
For further information, please call: (512) 463-8683