TITLE 43. TRANSPORTATION

PART 1. TEXAS DEPARTMENT OF TRANSPORTATION

CHAPTER 27. TOLL PROJECTS

SUBCHAPTER G. OPERATION OF DEPARTMENT TOLL PROJECTS

43 TAC §27.82

The Texas Department of Transportation (department) adopts amendments to §27.82, concerning Toll Operations. The amendments to §27.82 are adopted without changes to the proposed text as published in the October 13, 2017, issue of the Texas Register (42 TexReg 5658) and will not be republished.

EXPLANATION OF ADOPTED AMENDMENTS

Senate Bill 312, 85th Legislature, Regular Session, requires multiple changes to the department's toll collection and enforcement procedures, specifically, the pay-by-mail process, in which customers receive an invoice for payment of tolls after using a department toll project.

The legislation created new Transportation Code, §228.0547, which provides that a person who receives an invoice from the department for the use of a toll project shall, not later than the due date specified in the invoice, pay the amount owed or send a written request to the department for a review of the toll assessments contained in the invoice. If a person fails to pay or request a review of the toll assessments, the department may add an administrative fee, not to exceed $6, to the amount the person owes. The department must set the administrative fee by rule in an amount that does not exceed the cost of collecting the toll, and may not charge a person more than $48 in administrative fees in a 12-month period. These provisions take effect on March 1, 2018.

Amendments to §27.82(e) provide that the owner or lessee of a vehicle who fails to pay the amount owed as stated on an invoice may be charged an administrative fee of $4 per unpaid invoice. In determining the amount of the administrative fee, the department considered the incremental cost of collecting a pay-by-mail transaction, the number of transactions estimated to be included on each invoice, and the anticipated timing of the payment by the customer. The department then compared the estimated fees to be collected to the estimated incremental cost. Using this methodology, and conservative projections and estimates, the department determined that a range of $4 to $5 per invoice was justified. It should be noted that lost toll revenue was not considered in the cost analysis, although that factor was considered during the development of the department's current fee schedule. If lost toll revenue had been considered, the cost would be significantly higher. Finally, the department considered customer understanding and acceptance of the new fee structure. Since the statutory cap is set at $48 per 12-month period, a level fee amount of $4 per invoice is the easiest structure to understand, implement, and administer. If the department implemented a higher administrative fee, there could potentially be several months of a 12-month period where the fee could not be charged due to the $48 cap. This situation would be difficult for customer service representatives to explain and challenging for customers to understand.

Amendments add §27.82(h) to address requirements for the new toll assessment review process. An owner or lessee of a vehicle may request a toll assessment review, in writing, prior to the due date specified in the invoice. If, after review, the department determines that the tolls were assessed correctly, the customer will be responsible for paying the total amount as stated in the invoice. If the department determines that any of the tolls were assessed incorrectly, the department will provide the customer with updated balance information. If the customer fails to pay the amount owed by the due date specified in the next invoice, the department may charge the customer an administrative fee. The written request must be mailed to the department's customer service center or submitted through www.txtag.org. The amendments also outline specific information that must be provided by the customer to initiate the review process.

The amendments will take effect on March 1, 2018.

COMMENTS

Comments concerning §27.82 were received from James A. Hernandez, of Andrews Kurth Kenyon, LLP, on behalf of Harris County and the Harris County Toll Road Authority, and from Brazoria County Judge L.M. "Matt" Sebesta, Jr., who stated that Brazoria County concurs in and agrees with the comments submitted by James Hernandez. A summary of each comment and the department's response follow.

Comment: There will be significant fiscal implications for local governments as a result of enforcing or administering the proposed amendments. For any project subject to a "1420 committee" the department should convene or reconvene, as necessary, the committee so that the committee can assess the fiscal implications of the proposed amendments in connection with its determination of the distribution of the financial risk, the method of financing, and the tolling structure and methodology. For any project subject to a market valuation waiver agreement the department should consult with the parties to that agreement to assess fiscal implications as well as to confirm compliance with the terms and conditions of such agreement.

Response: The department disagrees with this comment. The proposed amendments are very narrow in scope, addressing only the amount of the administrative fee to be charged to a registered owner or lessee of a vehicle who fails to pay an invoice for the use of a toll project and the toll assessment review process. The changes to the fee structure are required by state law and must be implemented by the department on March 1, 2018. Adoption of the proposed amendments will not affect the department's continued compliance with the determinations of a 1420 committee or the terms and conditions of any applicable market valuation waiver agreements.

Comment: Rather than a public benefit from a simplified fee structure, there will be a public cost associated with customer confusion and frustration if the department seeks to extend the scope of the SB 312 changes and the proposed amendments to the Grand Parkway and SH 288 projects. The SH 288 project is subject to a tolling structure and methodology determined by the 1420 committee. The Grand Parkway project is subject to the terms and conditions of a market valuation waiver agreement which includes an initial toll rate and toll rate escalation methodology that is based on Harris County's toll policy. It makes no sense to have these projects subject to different rules and procedures.

Reply: The department disagrees with this comment. State law authorizes multiple entities to operate toll projects across the state. Each entity has a different fee structure and business rules. The Grand Parkway project is in compliance with the toll rate structure outlined in the market valuation waiver agreement and has been operated by the department since 2014. The SH 288 project has been procured and developed in compliance with the determinations of the 1420 Committee, and will be operated in compliance with those determinations.

Comment: The proposed amendments should seek to reduce confusion in regions of the state where toll projects have been or will be developed by multiple entities.

Response: The department disagrees with this comment. The proposed change is outside the scope of this rulemaking.

Comment: The proposed amendments should not operate to extend the "powers and duties" requirement of §228.007(b) to other provisions of the Transportation Code.

Response: As previously stated, the proposed amendments are very narrow in scope. The requirements of SB 312 (specifically, new Transportation Code, §228.0547) only apply to toll projects that are operated by the department or another entity on behalf of the department, unless the other entity is specifically authorized to use its own laws, rules, and procedures in lieu of the laws, rules, and procedures applicable to the department. The proposed amendments do not purport to address the statutory authority of another entity to operate toll projects.

Comment: The proposed amendments should clarify that the "powers and duties" requirement under §228.007(b) does not apply to the SH 288 project or the Grand Parkway project.

Response: The department disagrees with this comment. The proposed change is outside the scope of this rulemaking.

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, Transportation Code, §228.0547, which requires the department to set the administrative fee by rule.

CROSS REFERENCE TO STATUTE

Transportation Code, §201.101 and §228.0547.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on January 25, 2018.

TRD-201800307

Joanne Wright

Deputy General Counsel

Texas Department of Transportation

Effective date: March 1, 2018

Proposal publication date: October 13, 2017

For further information, please call: (512) 463-8630