FOR IMMEDIATE RELEASE
March 29, 2001
AUSTIN, TX--Today the Texas Senate passed Senate Joint Resolution 10 and Senate Bill 241 by state Sen. Eddie Lucio, Jr., D-Brownsville, that will allow Texas to maximize federal transportation dollars in the form of GARVEE bonds.
GARVEES, or Grant Anticipation Revenue Vehicle Bonds, are based on revenues received or to be received from the federal government that are available for the payment of bonds and bond-related costs. These revenues can be deposited in the state's highway fund.
SJR 10, the Constitutional Amendment that will go before the voters this November, authorizes the Texas Transportation Commission (TxDOT) to issue GARVEE Bonds and to use these bonds as a finance option for highway construction.
"Thanks to the leadership of Gov. Rick Perry, State Comptroller Carole Keeton Rylander and Texas Transportation Commission Chairman Johnny Johnson, we were able to craft this legislation to address the needs of the entire state of Texas," remarked Sen. Lucio. "I am glad that our transportation officials endorsed this measure as a good optional financing tool for Texas."
Sen. Lucio included an amendment to SJR 10 to ensure that highways and farm-to-market roads will not be reduced in proportion to the federal highway program as a result of the use of GARVEE bonds. He explained that "the amendment requires the TxDOT Commission to certify--before any GARVEE bond issuance--that overall priority given to state programs is proportional to that given federal programs."
SB 241 is the "enabling" legislation for the Constitutional amendment that was introduced as a Committee Substitute with all language for geographic priorities removed. This bill also limits the maximum debt service level to 5 percent of the federal highway obligation funds anticipated to be received by the state. Last session, Sen. Lucio passed a similar measure in the Senate with a debt service limit of 15 percent.
Comptroller Rylander, a supporter of GARVEEs, earlier testified in the Senate Committee on Business and Commerce that "Texas is not plowing unchartered territory. Other states have used GARVEE financing as a component of their road construction."
New Mexico was one of the first states to construct State Highway Route 44 using GARVEEs. This was a highly successful project that combined $100 million in GARVEE bonds and straight bonds to fund the $295 million project. Currently, 13 states use this type of funding.
The Comptroller's testimony also revealed that roads have a direct effect on the productivity of the state's economy. She said, "One study indicated every dollar spent on road construction yields 29 cents in increased productivity. That means more jobs and more revenue to [your] local communities, increased investment in our state and increased confidence in our economy."
"Texans need and deserve good roads, and GARVEEs is a great vehicle to accomplish this," said Sen. Lucio. "I feel confident that the people of this state will recognize the value of such a funding program for our state."
Co-authors of the bill are state Senators Steve Ogden, R-Bryan and Judith Zaffirini, D-Laredo.
The bill must now go to the House for consideration.
Note: Staff member handling this legislation is Mr. Daniel Esparza, legislative director.