Comprehensive Development Agreements
Created on 09/04/09By Norman Garza
Associate Legislative Director
Transportation issues remain a high priority for Texas Farm Bureau, especially the ongoing battle to repeal the Trans-Texas Corridor (TTC). We have made significant strides, but this objective was not accomplished during the recently concluded regular or special legislative sessions. However, one issue associated with the TTC has received significant attention this year: Comprehensive Development Agreements, known as "CDAs."
CDAs are contracts between government entities and private companies. The purpose of these agreements is for companies to build a road by investing their money in return for the authority to collect tolls. This is an additional tool for the Texas Department of Transportation (TxDOT) to attract private capital to build more roads, alleviate congestion, and move traffic efficiently.
It is important that Farm Bureau members are knowledgeable about this public policy concept. The fact is that CDAs are simply a finance tool to build roads, regardless of whether the road is part of the TTC. They offer a variety of options that enable private-sector participation in the
To set the record straight, the legislature imposed a moratorium on TxDOT from using CDAs to finance the TTC in 2007. Although the moratorium expired at the end of August, additional protections are in place for future CDAs. From here on, only projects already approved through current law can be financed under a CDA until
The controversial issue with CDAs is how they can be structured according to the law. Particular attention should always focus on potential legislative actions that may be detrimental to the public through CDAs. For example, some divisive components of the current law on CDAs are "non-compete clauses" and the permissible years of an agreement.
As such, State Sen. Robert Nichols (R-Jacksonville) attempted to address these issues earlier this year. During the three-day special session, Nichols authored Senate Bill 3 which Farm Bureau publicly supported.
Non-compete clauses limit the construction of any roads that would compete with a
privately developed project. The Nichols bill would have not allowed a non-compete clause in CDAs that apply to expanding an interstate highway or constructing a project included in the state's 25-year transportation plan. Farm Bureau policy opposes non-compete clauses in contracts authorizing construction of tolled highways (157; Pg. 68, Lines 93-94).
The bill would have also reduced the maximum term of a CDA to 30 years from 50 years.
Additionally, Sen. Nichols favors protecting the right of local entities to always determine whether or not a road construction project should be tolled, and that local entities have the first opportunity to build the project over the possibility of a foreign company. This right of local control is known as "primacy determination." In essence, this process limits the use of CDAs. Farm Bureau policy calls for the primary responsibilities for the construction and maintenance of highways to remain with the state (157; Pg. 67, Lines 1-3).
Unfortunately, the bill did not pass this year. But we now have a solid foundation to use next session with the help of our friend, Sen. Nichols, who serves as a member of the influential Senate Transportation Committee. He is a huge asset to Farm Bureau through his knowledge of the issues as a former Texas Transportation Commissioner and his understanding of our perspective.
In conclusion, Farm Bureau certainly recognizes the need to invest in our transportation infrastructure. But we will work diligently to protect private property rights and challenge the state to set forth fair guidelines