BILL ANALYSIS

S.B. 1138

By: Watson

Transportation

Committee Report (Unamended)

BACKGROUND AND PURPOSE

A regional mobility authority (RMA) currently has authority to enter into a comprehensive development agreement (CDA) that provides for the design and construction of certain projects, but that authority will soon expire.  A project developed through a design/build CDA is designed and constructed by a developer selected by the RMA through a competitive process but is financed, operated, and maintained by the RMA.

S.B. 1138 continues the authority of an RMA to use a design/build CDA and authorizes the use of a design/build/finance CDA for transportation projects.  Similar to a design/build CDA, a design/build/finance CDA allows an RMA to seek some financing in connection with the design/build CDA competitive procurement process as a way to cover the difference between what can be financed through the bond market and the cost of the project. 

S.B. 1138 authorizes an RMA to use the design-build method for transportation projects and limits an RMA to no more than two design-build contracts in any fiscal year.  The bill sets out requirements and procedures that an RMA and design-build contractor must follow in using the design-build method.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

S.B. 1138 amends the Transportation Code to remove the authorization for a regional mobility authority to use a comprehensive development agreement with a private entity to construct, maintain, repair, operate, extend, or expand a transportation project.  The bill establishes that a comprehensive development agreement is an agreement with a private entity that, among other functions, entitles a private entity to a leasehold interest in a transportation project or the right to operate or retain revenue from the operation of a transportation project.  The bill removes provisions making an authority's authority to enter into comprehensive development agreements expire August 31, 2009, and exempting certain projects from the expiration of that authority.  The bill makes provisions relating to the August 31, 2011, expiration of the authority to enter into comprehensive development agreements for certain exempted projects relate instead to the expiration, except as provided by the law governing regional mobility authorities, of an authority's authority to enter into a comprehensive development agreement as defined by the bill's provisions.

S.B. 1138 authorizes a regional mobility authority to use the design-build method for the design, construction, financing, expansion, extension, related capital, maintenance, rehabilitation, alteration, or repair of a transportation project. The bill prohibits a design-build contract from granting to a private entity a leasehold interest in the transportation project or the right to operate or retain revenue from the operation of the transportation project.  The bill authorizes an authority to enter into not more than two design-build contracts for transportation projects in any fiscal year.    

S.B. 1138 sets out requirements and procedures that a regional mobility authority and design-build contractor must follow in using the design-build method and in entering into a contract for the services of a design-build contractor.  The bill includes requirements and procedures relating to the use of an engineer or engineering firm, other professional services, request for qualifications, request for detailed proposals, negotiation, assumption of risks, stipend amount for unsuccessful proposers, and a performance or payment bond.  The bill defines "design-build contractor" and "design-build method."  The bill makes conforming changes. 

S.B. 1138 repeals Section 370.314, Transportation Code, relating to design-build procedures.

EFFECTIVE DATE

On passage, or, if the bill does not receive the necessary vote, August 29, 2011.