By: Bettencourt, Huffman S.B. No. 2722

A BILL TO BE ENTITLED

AN ACT

relating to the use of certain tolls and charges imposed by certain counties; authorizing a civil penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter A, Chapter 284, Transportation Code, is amended by adding Section 284.014 to read as follows:

Sec. 284.014. RESTRICTION ON USE OF REVENUE FROM TOLLS AND OTHER CHARGES IN CERTAIN COUNTIES. (a) This section applies only to a county with a population of four million or more.

(b) Except as provided by this section, a county that imposes tolls or charges as otherwise authorized by this chapter may only use the revenues collected from the tolls or charges to:

(1) pay the costs of operating, expanding, maintaining, or administering a project;

(2) retire debt related to a project; or

(3) use or pledge revenues to pay or finance the costs of a project, including the costs to study, design, construct, maintain, operate, and pool a turnpike project or system, and to pay bonds or other obligations related to a project.

(c) Subsection (b) applies to any fees received by a county for operating a project of another entity but does not apply to any other revenue of a project that is collected by the county on behalf of another entity under an agreement with the entity.

(c-1) Of the revenues collected from tolls and charges that remain after paying the costs described by Subsection (b), including costs to establish reserves required by a bond instrument and to maintain ratings on bonds or other obligations related to a project:

(1) 30 percent of the amount remaining or $80 million, whichever is less, shall be distributed to the municipality that contains more than 40 percent of the number of lane miles of the project and may be used by the municipality only for the costs of providing law enforcement and other emergency services during accidents and disasters affecting a project of the county; and

(2) subject to Subsection (e) and except as provided by Subsection (f), the amount remaining after the distribution described by Subdivision (1) or after reimbursement under Subsection (c-2) shall be retained by the county and may be used only to pay costs related to a county road owned and maintained by the county.

(c-2) Notwithstanding Subsection (c-1), a contractual arrangement entered into between a county and a municipality regarding the reimbursement of emergency services provided on a project by the municipality supersedes the distribution of those revenues as provided by Subsection (c-1)(1).

(c-3) An independent auditor hired by a municipality described by Subsection (c-1)(1) shall review the municipality's annual financial report to determine whether the municipality is in compliance with the usage requirements of that subsection and shall certify the amount of the municipality's expenditures that were used for the purposes described by that subsection. The independent auditor shall report any violation of the usage requirements of Subsection (c-1)(1) to the commissioners court of the county and the state auditor's office. If the independent auditor certifies that the municipality's expenditures were less than the amount transferred to the municipality under Subsection (c-1)(1) for the applicable period, the county shall deduct that difference from the amount to be transferred to the municipality as the next disbursement under Subsection (c-1)(1).

(c-4) This subsection and Subsections (c-1), (c-2), and (c-3) expire September 1, 2030.

(d) Beginning September 1, 2030, the county shall retain the amount that remains from the revenues collected from tolls and charges after paying the costs described by Subsection (b), including costs to establish reserves required by a bond instrument and to maintain ratings on bonds or other obligations related to a project, and, subject to Subsection (e) and except as provided by Subsection (f), may use the amount retained only to pay costs related to a county road owned and maintained by the county.

(e) At least 95 percent of the amount retained by a county under this section must be allocated among all commissioners precincts as follows:

(1) one-third of the amount allocated based on the historical surplus funds transferred for the county's fiscal years 2005 through 2025 by precinct;

(2) one-third of the amount allocated based on the number of county lane miles in each precinct, excluding freeways as defined by Section 541.302 and any road facilities for which a user must pay a toll, fee, or fare, according to the county's road log or maintenance schedule on September 1 of the fiscal year preceding the allocation; and

(3) one-third of the amount allocated based on the road and pavement condition of county roads in each precinct, excluding freeways as defined by Section 541.302 and any road facilities for which a user must pay a toll, fee, or fare, according to the county engineer's annual report on September 1 of the fiscal year preceding the allocation.

(f) A county may allocate up to five percent of the amount retained under this section to a county department or project with countywide impact, as determined by the county, for a state, county, or municipal facility relating to a road, street, highway, or related facility.

(f-1) An amount allocated under Subsection (e) or (f) may not be used on a hike, bike, or trail facility unless the expenditure is necessary to comply with a state or federal guideline.

(g) A county that violates this section is subject to a civil penalty. An independent auditor hired by a county to audit the county's annual financial report made to the commissioners court and to the district judges of the county under Section 114.025, Local Government Code, shall report any violation of this section to the state auditor's office.

(h) The state auditor's office shall promptly investigate a report received under Subsection (g) to determine if the county violated this section. At the request of the state auditor's office, the attorney general shall file suit to collect a civil penalty. If the violation is:

(1) a first violation of this section, the amount of the civil penalty is an amount equal to 100 percent of the amount of revenues used by the county in violation of this section; or

(2) a second or subsequent violation of this section, the amount of the civil penalty is an amount equal to 110 percent of the amount of revenues used by the county in violation of this section.

(i) A county for which a civil penalty is imposed under Subsection (h) shall pay the penalty out of the general fund of the county.

(j) Notwithstanding any other law, a county for which a civil penalty is imposed under Subsection (h)(2) may not adopt a tax rate for the tax year following the tax year in which the penalty was imposed that exceeds the lesser of the county's no-new-revenue tax rate or voter-approval tax rate, as determined under Section 26.04, Tax Code, for that tax year.

(k) A civil penalty collected under this section shall be deposited in the state treasury to the credit of the state highway fund and may only be appropriated for transportation purposes.

SECTION 2. This Act takes effect September 1, 2025.