Boom! Abbott, Patrick rein-in lawless TxDOT plan for more tolls

Abbott, Patrick tame rogue highway department, scrap new toll projects

The Texas Department of Transportation (TxDOT) ignited a taxpayer revolt when it proposed 15 new toll projects as part of the update to its ten year plan — the Unified Transportation Plan (UTP). Not only did TxDOT try to railroad a litany of toll projects, it adopted a plan to use Prop 1 and Prop 7 funds that are constitutionally protected from going to toll projects to finance the US 183 toll project in Austin.

Governor Greg Abbott campaigned on the promise of fixing Texas roads without raising taxes, fees, debt or tolls. He reiterated his position in his first State of the State address in 2015 as well as when he announced his Texas Clear Lanes initiative that was to focus funding on the state’s most congested roads.

The Texas Conservative Grassroots Coalition led by Texans for Toll-free Highways and Grassroots America – We the People fired off a letter to Abbott’s newly named Texas Transportation Chair Bruce Bugg, along with a press release that didn’t mince words, “Read Our Lips: No New Toll Taxes.”

Lt. Governor Dan Patrick weighed-in first with a strong public statement, “I oppose adding any additional toll lanes to TxDOT’s UTP. I fought against increasing the state’s reliance on toll roads as a state senator and I have continued that fight as lieutenant governor. The Texas Legislature worked hard to pass Proposition 7 in 2015 to provide billions in funding for transportation infrastructure to help eliminate the state’s need for additional toll roads. Eliminating the need for tolls was one of the primary reasons the Texas Legislature passed Prop 7 and why Texas voters approved it. No new toll roads have been approved by the Senate or the House in the last two sessions and legislators I have spoken with are very unhappy that the Commission seems now to be going in a direction that opposes the will of the legislature and the majority of Texans.”

Patrick also said he sent a letter to Bugg asking him “to develop a plan that contains no additional toll lanes.”

Then Abbott made clear that he expects the same. Spokeswoman Ciara Matthews stated: “The governor and his staff have been in constant communication with members of the Texas Transportation Commission and TxDOT staff to express their desire to not include new toll roads as part of TxDOT’s Unified Transportation Plan.”

Within hours, TxDOT issued its own statement retreating from its position just hours earlier at its Transportation Commission hearing, “Members of the Texas Transportation Commission and TxDOT staff have been in regular contact with the Governor’s office over the past several weeks and we understand the Governor’s expressed desire to not include new toll roads. In response to public comments received, we are developing a plan to scrub the UTP update of any toll roads in the proposed revisions.”

Boom!

So ten days after the grassroots issued its letter in support of Abbott’s no-toll promise and asking for intervention, he and Patrick wasted no time in squelching the rogue agency. Last week, Rep. Joe Pickett requested an attorney general opinion on whether or not TxDOT’s use of Prop 1 and Prop 7 funds on a toll project was even legal, which prompted news reports outing the agency’s deliberate attempt to violate the constitutional protection voters overwhelmingly chose to put in place.

The confluence of events created a perfect storm that led to a public showdown between the taxpayers and a rogue highway department bent on ramming toll roads down voters throats, despite the persistent movement away from toll roads by their elected representatives in recent years.

The unpopularity of toll roads has been reaching a boiling point in Texas. As the house of cards was falling on toll roads, the Texas Tribune ran a story highlighting the reality many commuters now face — pay hundreds of dollars a month in punitive toll taxes to get anywhere, or sit in traffic and watch your quality of life disappear.

One Austin resident literally decided to sell her house and downsize into an apartment to relieve herself of the aggravation of unrelenting traffic in the non-toll lanes or paying ridiculous sums of money in tolls to get to work in a reasonable timeframe.

Her story is echoed by many Texans, especially in the toll saturated Dallas-Ft. Worth Metroplex where drivers can scarcely go anywhere without facing unbearable gridlock or paying tolls upwards of $10/day.

Sen. Bob Hall issued a scathing statement on TxDOT’s proposed toll plan that equates the typical $10/day toll to a $25 per gallon gasoline tax that, over a lifetime, would mushroom into an eye-popping $135,000 in toll taxes.

“This is an outrageously unacceptable tax burden, and Governor Abbott must step-in to stop it before it’s too late.”

Well, Texas taxpayers can breathe a sigh of relief this Thanksgiving that both Abbott and Patrick did just that and rescued commuters from further oppressive toll taxes on 15 more Texas highways. It’s rare for a promise made to be a promise kept in politics. These two leaders are to be commended for keeping their promises to Texas voters.

Should voters promote pro-toll Burkett to senator?

Burkett wants highest possible toll taxes for constituents

With Cindy Burkett throwing her hat in the ring in an attempt to unseat grassroots conservative stalwart Senator Bob Hall, the voters of Texas Senate District 2 need to know about her record. Burkett was quick to support selling off Interstate 635 E to the highest bidder using a controversial toll contract known in Texas as a comprehensive development agreement (or CDA) that gives control of our public roads to private toll companies.

Interstate 635 toll lanes from I-35E to the Dallas North Tollway are already operated by Spain-based Cintra. Commuters in the Metroplex face paying upwards of $24/day in tolls to this foreign corporation just to get to work, and no elected official has any control over how high those toll rates can go. Burkett wants that tax burden to extend to commuters in her own district from US 75 to I-30.

Such contracts give private corporations the exclusive right to extract the highest possible toll from the traveling public in a 50-year monopoly. The private entity receives millions in gas taxes to subsidize their ‘private’ project along with federal loans and bonds backed by taxpayers. CDAs contain non-compete agreements that penalize taxpayers for the expansion of free routes, manipulate speed limits on free routes, and use the power of the state for toll collection and to block your vehicle registration or impound your car if you don’t pay up.

During the public hearing earlier this year on the bill, HB 2861, that would have handed I-635 E to a private toll operator, House colleague and former Transportation Committee Chair Rep. Joe Pickett insisted toll managed lanes do not solve congestion problems because so few can afford to utilize them. Another colleague, Rep. Ron Simmons, maintained tolls, particularly CDAs, are a targeted tax on certain areas while other Texans get their roads fixed without the additional tax burden of tolls. Simmons even asked how can pushing the most controversial and expensive form of tolling be reconciled with Governor Greg Abbott’s promise to fix our roads without new tolls or debt?

But rather than express similar sentiments or concerns about the oppressive tax burden of $200-$400/month in tolls such a deal would impose on her constituents, Burkett sat silent or left the room altogether. Burkett voted in favor of it in committee and again on the House floor, but the bill was ultimately defeated by a vote of 85-51.

In the prior session, Burkett not only supported HB 3556 — the first attempt to toll I-635 E that also failed to pass — she authored it. Though it started as bill restricting the use of tolls, she changed the language giving the Texas Department of Transportation (TxDOT) a free pass to impose tolls if they determined there wasn’t enough traditional funding to do the project. Burkett knew full well that the excuse for why the project hasn’t commenced is because TxDOT claims there isn’t enough funding unless it’s tolled. Burkett even acknowledged that her constituents have made it clear that they don’t want tolls, but she insisted it remain an option until the state boosted road funding.

Well, Texas voters did just that when they voted to give TxDOT $5 billion more per year in new road funding when they overwhelmingly passed both Prop 1 in 2014 and Prop 7 in 2015. Yet Burkett apparently thinks that’s still not enough and came in the very next session pushing the bill to not only toll but also to privatize I-635 E anyway.

TxDOT has since conducted a toll feasibility study for I-635 E and Burkett now knows that TxDOT’s study shows the project isn’t toll viable. So why would she twice vote to support a CDA bill this year to allow a private toll corporation to slap tolls on it for a half century, especially since public subsidies would be needed to build it, setting up a double tax scenario?

While Burkett has filed bills to increase transparency on toll studies and at the North Texas Tollway Authority, her penchant for tolling I-635 E, selling it off to a private entity in a sweetheart deal backed by taxpayers (clearly the most expensive option), and advocating for the double taxation of her constituents, outweighs that legislation.

This is no time for lukewarm or playing footsie with special interests like Cintra who clearly wants to get its hands on the rest of I-635 E to extend its toll road all the way to I-30. The ever increasing tax burden is choking Texas residents on every front. Between the House’s failure to enact property tax reform and Burkett’s push to privatize and toll a major interstate residents rely on for daily living, the best choice in the race for Senate District 2 is the current Senator Bob Hall.

In contrast to Burkett, Hall has fought new toll taxes on every front. He’s filed and passed bills to prevent both free lanes and HOV lanes from being converted into toll lanes (as is the plan on I-635 E), as well as filing Senate Bill 84 to fight for a way to fund I-635 E without tolls by tapping some of the new sales tax revenue that would emerge from commercial development once the frontage roads are built.

Hall has also filed bills to abolish wasteful toll authorities as well as subject them to sunset review, co-authored the bill to block state funds from subsidizing toll projects (to prevent double taxation), and force disclosure of toll viability studies. He currently serves as the Vice Chair of the Senate Transportation Committee and has earned the trust and respect of his colleagues. He’s earned an A+ from anti-toll groups both sessions he’s served as a senator. Together with his pro-taxpayer record on every other issue aside from transportation, Bob Hall is a fierce, faithful taxpayer champion in the Texas Senate and the right choice to serve Senate District 2.

Grassroots to TxDOT: ‘Read our lips – No new toll taxes!’

IMMEDIATE RELEASE

Read our lips: “No new toll taxes!”

Grassroots Coalition of 67 Organizations Call Out
Transportation Agencies for Breaking Governor’s
Promise for No More Toll Roads

(November 8, 2017 — Austin, Texas) Today, a Texas Conservative Grassroots Coalition project led by Texans Uniting for Reform and Freedom (TURF), Texans for Toll-free Highways, and Grassroots America was hand-delivered to Gov. Greg Abbott and his new Transportation Commission Chair, Bruce Bugg. The Coalition letter insists that the Transportation Commission, TxDOT, and all related mobility authorities make good on Governor Abbott’s promise to build needed roads without new toll taxes. The Coalition project was launched in response to last week’s proposal by TxDOT to the Transportation Commission to approve over a dozen new toll projects in the state’s ten-year plan. Fifteen of the 17 projects are toll projects, including I-35 in Austin and San Antonio, I-635E in Dallas, I-45 in Houston, and Loop 1604 on San Antonio.

JoAnn Fleming, Grassroots America’s Executive Director said of the latest proposal for new toll projects, “Apparently, the state and local transportation bureaucracies didn’t get Gov. Abbott’s memo during his first campaign for Governor and haven’t listened ever since. The Governor has repeatedly underscored his vow to get Texas off the toll road and debt scheme. He’s made it clear he wants the state on a pay-as-you-go plan for road construction, and voters have approved the funding.

“So, it’s about time TxDOT, the Transportation Commission, the RMAs and the MPOs all got on the same page with Governor Abbott. We are sick and tired of this nonsense.  There’s always another bureaucratic plot afoot with perpetual whining that they don’t have enough money.  If they spent one-quarter of their time working to eliminate bone-headed, wasteful processes that burn through cash, instead of devising ways to defy the Governor and the state constitution, we’d all be better off.

“This goes back to the Sunset Advisory Board’s Report to the 85th Legislature, which stated, ‘As currently structured, TxDOT’s project development process is not meeting expectations and is not prepared to effectively handle the influx of new transportation funding projected to double over the next decade.  TxDOT has not met key on-time or on-budget measures for several years…’. It’s time for these bureaucracies to stop undermining our Governor and do their jobs. Gov. Abbott needs to put his foot down to stop these rogue actions, which undermine his administration.”

Terri Hall, Founder and Director of TURF and Texans for Toll-free Highways, notes, “Working families across this state have made it abundantly clear that they do not want more toll roads. Taxpayers approved two constitutional measures giving the biggest boost in highway funding to TxDOT in a generation, and they are rewarded with more toll roads? Talk about disrespect! Texans elected this governor on the promise that he was parting ways with the Rick Perry toll road cram down. Gov. Abbott even ran television campaign ads promising to fix our roads without tolls. Now his highway Commission is on the verge of approving 15 more toll projects? It’s decision time, and he’s running for re-election. How this comes down will not go unnoticed by the grassroots.”

Senator Bob Hall, Vice Chair of the state Senate Transportation Committee, strenuously objecting to more toll roads, explained, “Toll taxes create a long-term penalty for the working class. At today’s average cost of $5.00 each direction, it will cost the family of a worker – over the course of their lifetimes – in excess of $135,000 for the ‘privilege’ of using the toll lane! That’s like taking a home or a couple of college educations away from that family, while they face a daily fee that could well be the equivalent of a $25.00 per-gallon gasoline tax. This is an outrageously unacceptable tax burden, and Governor Abbott must step-in to stop it before it’s too late.”

Chairman Bugg’s comments indicate that if local governments lobby the Commission for toll ‘managed’ lanes, that they’ll consider giving toll projects a green light, despite the Governor’s campaign promises, “When a local community comes to this Commission and states that they want to add capacity, and they know the funds are not available, they want to support a managed lanes concept; and when the funds that Governor Abbott and the Texas Legislature worked so hard to provide are not being used, then I think this Commission needs to consider the local community’s support for a managed lane project.”

Coalition partners want Gov. Abbott to challenge local governments on their abusive use of excessive tolling just as he did on an array of anti-liberty, anti-taxpayer local ordinances during the past legislative and special sessions.

Taxpayers also want Governor Abbott to investigate why the public is being told there’s not enough funding for the most congested roads after they only recently voted to approve nearly $5 billion in new annual funding with approval of Prop 1 and Prop 7.  In 2015, the legislature passed House Bill 20, requiring TxDOT to put specific policies in place to ensure the highest priority projects are funded first. Yet, that’s not what has happened. The majority of new funds have been allocated to low priority projects – by design – so that TxDOT could cry poverty and enable local governments to tap a toll revenue stream for the most congested roads, creating unaccountable slush funds outside the reach of taxpayers.

Constitutional crisis?
Texas Conservative Grassroots Coalition leaders say the Transportation Commission is in violation of the law because the Commission is using Prop 1 and Prop 7 funds – money that is constitutionally barred from use on toll projects – to subsidize the US 183 toll project in Austin.

TxDOT’s presentation to the Commission on October 26 clearly shows $120 million in Prop 1 and Prop 7 funds are to be used on the US 183 toll project. In a clever deception, the agency claims it can make the move appear legal by separating the financing of the toll lanes from the non-toll lanes; however it’s all part of the same project! In the same presentation, TxDOT states that it will be doing the US 183 toll project under one contract procurement, not as two separate projects.

TxDOT’s prior policy, as evidenced in a 2014 letter to State Rep. Ron Simmons by then-Deputy Executive Director of TxDOT John Barton, clearly states if any part of a project has a toll element, it would not be eligible for Prop 1 funds. Prop 7 has the same constitutional restriction as Prop 1 and cannot be used on toll projects either.

“Apparently, TxDOT has decided they are not required to follow the Texas Constitution.  
Their brazen actions at the Commission last week are a movement toward lawlessness. If a state agency can simply break up a toll project into two parts in order to subvert the constitutional restrictions voters deliberately put in place on Prop 1 and Prop 7 funds, then it will continue to do so on every toll project. This scheme, if not challenged, will set a dangerous precedent, and we’re not going to stand for it,” concludes Terri Hall.

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OUTRAGEOUS: MoPac tolls top $8 to use toll lanes in rush hour

Tolls top $8 for commute on newly opened MoPac toll lanes

It didn’t take long for toll rates to exceed affordability. The newly opened toll managed lanes on MoPac (from Lady Bird Lake to Parmer Lane) in Austin topped $8 to go 11 miles, and cost $6.28 to drive the northern 6 miles during the evening commute. That’s just in the first week of operation. If you think that’s insane, that’s because it is. No one should have to pay over $1 a mile to get to or from work in a reasonable time. Texans pay a litany of road taxes, primarily the gasoline tax, to pay for public highways. Twice in as many years, Texas voters gave the largest boost in road funding to the state highway fund — totaling nearly $5 billion more per year. Yet supercharged toll roads continue to come online virtually unabated.

Toll managed lanes like those on MoPac use congestion pricing. The toll you pay no longer relates to the actual cost of building the road you’re driving on. Now tolls vary based on the level of congestion, rising and falling continually throughout peak hours, potentially changing in 5-minute intervals. Toll roads often provide time reliability, but today’s congestion tolling means you don’t have price reliability. A study done in 2016 by the Texas Transportation Institute at A&M, found that congestion tolling both angers and confuses the public. It states one of the biggest challenges is public acceptance.

According to the study, the top three reasons the public dislikes congestion tolling are: opposition to paying more to travel on top of what the public is already paying for roads, the complex requirements for using the lanes that change based on region, time of day, number of people in the car, and price, and the tax burden on lower income drivers without good non-toll options.

To add to the outrage, the MoPac toll project was fully paid for by the Texas Department of Transportation (TxDOT) with $200 million in gasoline taxes. No debt was owed to build it. When the public balked at the double tax scheme of making drivers pay a toll to use a road their taxes paid for, officials turned it into a loan to be paid to the local transportation policy board who will use it to build other roads MoPac drivers may never use.

Taxpayers also ended up paying $38 million more for the project than estimated, and it was over two years behind schedule in opening, with the prolonged construction negatively impacting businesses and commuters alike. Because of the legal troubles of dealing with the design-build contractor, CH2M, the Central Texas Regional Mobility Authority (CTRMA) will issue debt to pay-off the contractor to make potential litigation disputing various change orders and additional work go away.

Even with the $38 million in additional costs and the agency having to issue some debt to finish paying the contractor, the $20 million in debt issued is a drop in the bucket and no excuse to charge Austinites tolls in perpetuity to use lanes their taxes already paid for. The debt is due to the project’s gross mismanagement by a rookie agency, the CTRMA, that lacks the accountability and depth of project management experience of TxDOT (that our taxes already pay to operate). So Texans are paying taxes upon taxes to build and maintain public highways thanks to this duplicative, wasteful, mismanaged bureaucracy running the show.

Given that the CTRMA’s Executive Director who oversees a dozen employees makes $366,112 a year compared to the $299,812 salary of TxDOT’s Executive Director, who oversees 11,000 employees, you get a glimpse at the Texas-sized toll bureaucracy problem. State lawmakers have long excused digging into the financial waste and mismanagement at TxDOT because the state lacks the funds and resources to audit an agency that big. How will adding nine more of these mini-TxDOT’s known as Regional Mobility Authorities solve the problem? It exploded the waste ninefold.

Taxpayers will continue to face a logjam of ill-conceived toll projects just like MoPac all over the state despite Governor Greg Abbott’s campaign promise to fix Texas without more taxes, fees, tolls, or debt. Why? As long as local transportation boards known as Metropolitan Planning Organizations (MPOs) continue to push for toll slush funds to fund a host of local pet projects, the governor’s highway commission has shown little appetite for bucking them. Voters need to get engaged or risk being priced off their public roadways altogether. If congestion tolls are starting out at over $1/mile in peak hours, imagine what they’ll be next year or in 10 years. There is no legal requirement to remove tolls from these highways, even when there’s no debt owed. Expect Texas commuters to do a full court press to change that when the legislature reconvenes in 2019.

End to exorbitant toll fines in sight? AG may decide

RELIEF COMING? Ending exorbitant toll fines and fees may be decided by Texas Attorney General

It’s been a long time coming, but Texas commuters may finally cut a break when it comes to relief from exorbitant toll fines and fees. Texas State Rep. Joe Pickett, former House Transportation Committee Chair, fired off a request for an official legal opinion from Attorney General Ken Paxton this week to see if the caps on toll fines and fees in Senate Bill 312 apply to other toll entities besides the Texas Department of Transportation (TxDOT). Pickett’s House colleagues Rep. Ina Minjarez, Rep. Tom Oliverson, and Rep. Tony Dale joined him in signing the letter.

The Texas legislature passed SB 312 in May during the 85th legislative session, and it contains a strong toll collection reform capping the administrative fees imposed on drivers to just $48/year and $250/year in criminal penalties. But one section of the bill references another section of the transportation code that says an entity operating a toll lane has the same powers and duties regarding toll collection as TxDOT. That’s the hook anti-toll advocates are hoping will force the law to apply to all toll agencies, not just TxDOT when it comes to taming the out of control, excessive fines and fees being tacked onto toll bills across the state.

Texans have been financially raked over the coals, usually incurred by simple mistakes like a payment card expiring and toll entities failing to notify drivers of problems with their automatic payments before fines and fees start adding up. The stories are horrific. One Texas driver reports being fined $5,600 over $300 in unpaid tolls.

Another driver says they received a bill for $7,600 from a collections agency four years after the supposed violations, when they hadn’t received the original toll bill without any fines or fees. One commuter received a bill for $1,000 and when he called about it, they told him he now owed $13,600. Some bills can be as little as $22, and yet Texans have received bills for as much as $900 in fines and fees with no opportunity to work out payment plans or reduce the fines. One driver was charged $75 in fees for not paying a $1.26 toll (a single trip through Houston). This is while he had $40 in his TxTag account with the Harris County Toll Authority.

In Texas, a driver’s vehicle registration gets blocked for failure to pay toll bills. If you fail to show up in court over the disputed fines or unpaid bill, you could eventually face jail. The Texas House voted overwhelmingly to de-criminalize the failure to a pay a toll bill 136-3, but a handful of conference committee members put criminalization back into the final bill. Many lawmakers are still fuming over it and vow to address it the next time the legislature convenes in 2019.

An Austin resident literally moved out of state after she could no longer pay her monthly toll bills in excess of $300. She turned to high interest, short-term loans to bail her out for a time, and when she got buried under those bills, moved a family into her house to help out with rent so she could try to cover the toll expense. When that ended, she stayed off the toll roads but faced a 4-hour daily commute on the perpetually congested freeways in Austin. Buried under mounting bills, an ever longer commute, and with fines increasing $4,000 every four months, this native Texan sold her home and was forced to leave the state altogether.  She now owes over $32,000.

She’s terrified to find out Texas law penalizes you under the criminal code for failure to pay toll bills, jeopardizing her job in healthcare where she has to keep a clean record or face losing her career (and her ability to make a living). Every time she’s called the state to work out a payment plan, they deny her request and the fines just keep compounding. For this former Austin resident, she sees no way out. At 56 years old, she doesn’t see how she can possibly repay $32,000 with less than a decade left before retirement.

Her story isn’t unique, thousands of Texans have swarmed to a Facebook community under the moniker of Texas Toll Road Class Action Lawsuit to tell their stories of exorbitant and unfair toll fines and fees that are ruining their lives. With few options to get out from under the brutal toll bills, toll collection abuses jeopardize the Texas economic miracle and appeal to living here.

Relief may be on the horizon as Paxton considers issuing a legal opinion that could change course. The Attorney General has six months to render his opinion. SB 312’s cap on fines and fees officially take effect on state operated toll projects in March 2018, but it won’t help the thousands who are already in a hopeless cycle of an inability to pay their toll bills. Expect lawmakers to face that conundrum in 2019.

Note: The names of the drivers in this story have been kept anonymous due to fear of reprisals for speaking out.

Harvey’s impact on Texas infrastructure expected to be massive

Harvey’s impact to infrastructure could be Texas-sized problem

With literally 400 road segments still impacted by the flood waters of hurricane and tropical storm Harvey, the long-term effects to Texas infrastructure along the Texas coast and in the Houston area may be equally devastating. Few state leaders have publicly waded into the tricky waters of how to pay for the massive rebuilding effort of Texas’ infrastructure damaged due to Harvey. One state lawmaker hinted at tapping the state’s Rainy Day Fund, but Governor Greg Abbott quickly tamped down any talk of raiding the Rainy Day Fund before lawmakers come back into session in 2019.

Abbott told reporters Friday that Texas has adequate resources to “address the needs between now and next session.”

In 2005, Hurricane Katrina cost taxpayers $110 billion, and Harvey is expected to top that. Regardless of the final dollar amount, it’s going to be big, and it’s hard to know where the funds will come from. The state’s Rainy Day Fund sits at $10.3 billion.

Texas Transportation Commissioner Jeff Austin commented at this week’s commission meeting that, “Right now is not the time to worry about how we’re going to pay for it, but we are going to rebuild. It’s too critical to the Texas economy.”

President Donald Trump asked congress for a $7.9 billion down payment toward Harvey relief, but congressional leaders have yet to dive into how to pay for it. With the deadline looming to raise the debt ceiling and tax relief as priority number one for the White House, it’s going to get dicey real quick as Congress returns to Washington this week to dig into the politics of tying Harvey relief to raising the debt ceiling.

Texas’ infrastructure push
Like most states, Texas has struggled to keep pace with highway construction and maintenance needs with a fixed federal and state gasoline tax for over 20 years. Under former governor Rick Perry, now Trump’s Secretary of Energy, the state turned to a massive tolling scheme, particularly public private partnerships (P3s) that hand the exclusive right to charge tolls for the use of public highways to private entities (often foreign) in 50 year contracts. Though Perry promised no public money would go into such deals, financial details on the Federal Highway Administration Office of Innovative Finance Support’s web site reveal every single P3 in Texas involved public funds and put the taxpayers on the hook for the private entity’s losses.

The backlash was predictable as Texans now face paying $40 a day in tolls to foreign corporations for generations, causing state lawmakers to retreat from tolls as the panacea for road funding woes. In 2014, Texas voters overwhelmingly approved a constitutional amendment, Proposition 1, that took a portion of the state’s oil and gas severance tax (that typically goes to the Rainy Day Fund) and placed it into the state highway fund, in part to end the reliance on tolls.

In 2015, Abbott, who campaigned against tolls, ushered in one of the largest infusions of  road funding in a generation by encouraging voters to approve yet another constitutional amendment, Proposition 7, to direct a portion of vehicle sales tax and general state sales tax to the state highway fund. All told, nearly $5 billion in new highway funding has been dedicated to the state’s highway fund in recent years. Neither Prop 1 nor Prop 7 funds can be used on toll roads. Earlier this year, the Texas Transportation Commission approved the projects for these new funds for the next 10 years.

Both Prop 1 and Prop 7 will be impacted by Harvey’s aftermath as oil production interruptions and sales tax in and along the gulf coast and Houston area have come to a stand still as road closures, flood waters, and the destruction of thousands of homes make normal commerce impossible.

Fast forward to a post-Harvey world and lawmakers face a tremendous struggle of how to keep those projects on track and still mount the massive resources necessary, even with federal aid, to rebuild the critical infrastructure lost due to Harvey. As Texans continue to stand shoulder-to-shoulder to help their fellow man recover and rebuild from Harvey’s devastating losses, elected officials have the unenviable task of figuring out how to balance needs in other parts of the state with getting that critical infrastructure in Harvey’s wake back online without jeopardizing the state’s overall economic growth.

Victory! Tolls come off several Texas highways

Tolls come down: Precedent set as toll comes off two Texas highways

The bureaucrats couldn’t fight the momentum. Texans have been calling for tolls to come off roads once they’re paid for and thanks to passage of Senate Bill 312, the Texas Transportation Commission voted to do just that on Camino Colombia SH 255 in Laredo and on Cesar Chavez Border Highway in El Paso. To add icing on the cake, the Dallas City Council also voted to deep six the controversial Trinity Toll Road after a 20 year battle, and the Commission is also mulling changing plans on US 183 North in Austin to expand it as non-toll instead of tolled. All that in a matter of weeks.

The last time tolls were removed from a road in Texas was in 1977 — forty years ago. But it’s not without some wailing and gnashing of teeth by the Texas Department of Transportation (TxDOT) and the Commission that governs it.

TxDOT never thinks it has enough money, despite Texans voting to swell its coffers by nearly $5 billion more a year by passing Proposition 1 (in 2014) and Proposition 7 (in 2015). So the department cannot stand the idea of losing its own personal revenue stream that’s not accountable to taxpayers, and it fought tooth and nail to prevent it. But thanks to quick work by State Representatives Joe Pickett (D – El Paso) and Richard Raymond (D – Laredo), they attached their amendments to take the tolls off highways in their districts to must-pass sunset legislation, and both amendments managed to survive a pro-toll conference committee.

Commissioner Jeff Austin said he hates to see the revenue removed from Camino Colombia though he also stated he was in support of taking the toll off as an isolated incident. Austin tried to limit support for removing tolls strictly to roads that would never need to be expanded. So all these toll ‘managed lanes’ (that are not financially viable projects to begin with) that are plunked down the middle of existing highways in urban areas are roads that will need future expansion. So it’s safe to conclude Austin is arguing for tolls to remain in perpetuity as long as they can find another use for your money (ie – extending the toll road at some future time).

Make no mistake. TxDOT does not want tolls to stop because it sets a precedent and expectation that tolls should come off roads once the debt is retired. The only reason these tolls are coming down is because lawmakers had to force it through legislation. TxDOT argues no road is ever paid for because of maintenance. But Pickett, former House Transportation Committee Chair for many years, rejects that argument saying that the department could absorb the cost of maintaining the small network of toll roads currently open to traffic once the debt for those highways is paid off.

It’s like a drop in the bucket according to Pickett. “I’d like to think a state that maintains 80,000 miles could absorb 400-500 miles of lanes if it took the tolls off certain projects,” Pickett argued at an interim committee hearing last year.

Pickett said that only 6 percent of the traffic on the Border Highway uses the toll lanes and they’re only used roughly two to three hours a day. He argues the toll ‘managed lanes’ cause more traffic than they alleviate.

“We have a road that goes unused 21 hours a day, seven days a week,” Pickett said. “That’s ridiculous.” He later told the Commission that “not all toll projects are bad, just most of them.”

Pickett told the Washington Post that ‘tolls are designed to be in perpetuity now,” allowing unelected bureaucrats to grow their toll systems into ‘bureaucratic behemoths.’

Raymond echoed Pickett’s sentiment during a House Transportation Committee hearing on his stand alone bill in April, “You don’t want a toll on this road. It’s paid for. It just doesn’t make sense.”

Most Texans wholeheartedly agree with his assessment. No one should be charged a toll to use a road that’s paid for, otherwise it’s double taxation. The move to remove tolls once a road’s debt is retired is one of several recommendations that came out of the interim legislative study by the House Transportation Committee when it was led by Pickett in 2016. It’s also in keeping with the 2016 Texas GOP platform that calls for the same.

History of double taxation
In 2000, Camino Colombia started as Texas’ first privately built and operated tollway, hoping to capture border traffic and attract trucks from nearby congested Interstate-35. But just like SH 130, Texas’ first public-private partnership (P3) that opened twelve years later in 2012, it went bankrupt shortly thereafter. TxDOT bought the $85 million Camino Colombia tollway for $20 million from an insurance company that snatched it up at a fire sale price on the courthouse steps for $12 million. No debt was owed on SH 255 from that point on, yet TxDOT continued to charge tolls and traffic remains anemic. Local officials are hopeful now that tolls are coming down that trucks will finally move off I-35 in Laredo and take SH 255, which was designed as a bypass to avoid downtown congestion in the first place.

The Border Highway toll managed lane project was also paid for with state funds, yet Texans have to pay a toll to use it. Even more egregious is the Loop 375 Border West Expressway, also in El Paso, that’s not even open yet.

First, the entire project is paid for state funds. Not one penny of debt is owed, yet drivers will be be charged tolls to use it (it’s currently under construction). The project is jointly owned by the state and the Camino Real Regional Mobility Authority (or RMA), even though the RMA put no funds into the project. The state gave them $500 million in Texas Mobility Funds, granting the RMA ownership in proportion to that dollar amount, and the state paid the $130 million balance of the $630 million project with gasoline taxes.

So the state gave away more than eighty percent ownership to an unelected toll authority who will gain over eighty percent of the toll revenues in perpetuity for a highway that’s already paid for by taxpayers. Pickett warned the Commission this project would likely spark another fight to remove the toll designation when it comes online.

More Texas highways share the same genesis as Camino Colombia and Cesar Chavez — projects that are 100% paid for with gas taxes and other public funds (like the Katy managed toll lanes in Houston and MoPac, SH 71, SH 45 SW, and SH 45 SE in Austin), yet tolls are being charged simply as a new tax for bureaucrats to spend (and raise in perpetuity) without accountability.

End run around toll removal
The drumbeat to remove tolls once a road is paid for has prompted toll bureaucracies and TxDOT to refinance their toll systems in order to co-mingle the projects financially into a single system so that they can claim nothing is paid off for at least a generation. But such moves by unelected boards triggers greater anti-toll fervor, and the call to remove tolls only gets louder as other parts of the state ask why they are being charged tolls when others get the benefit of having tolls removed. It’s going to get harder and harder for elected officials to answer those questions and survive politically.

While President Donald Trump seems bent on pushing tolls and more P3s at the federal level, Texas continues to experience toll fatigue and gets Texas-sized pushback to more tolling, especially in the hands of private companies that get bailed out by taxpayers.

SH 130’s recent bankruptcy sent a grassroots coalition over the edge prompting them to fire off a letter to Attorney General Ken Paxton asking where was the state in representing the public interest in bankruptcy court when it wiped out nearly all of the $1.4 billion of the private entity’s debt (it now owes a mere $250 million), giving the highway that’s virtually paid for to the previous bond holders to continue to soak Texas taxpayers with tolls for the next 45 years? The new owner-operators stand to make millions, if not billions, in profit for the next two generations thanks to the generosity of the courts.

Expect the demand for tolls to come down to get fierce by the time the legislature comes back into session in 2019. Senator Lois Kolkhorst and State Rep. Matt Shaheen have consistently authored the bill to do just that. Neither bill got a hearing in the last two sessions, but Shaheen offered it as an amendment to SB 312 and it failed 74-53. Those numbers will likely reverse by 2019. Anti-toll advocates are working furiously to ensure that’s the case.

BAIT & SWITCH: TxDOT yanks express lane, shrinks existing capacity on US 281 in Alamo city

UPDATE as of July 13, 2017:
TxDOT finally responded to our inquiries about this apparent bait & switch on the lane count on US 281. They produced the same schematic presented to the public and clarified the new lanes in the southern section are technically auxiliary lanes and transition lanes from the interchange, so they don’t technically count those in the lane number, however, there will be FOUR main lanes each direction up to Stone Oak Parkway.

Double crossed: Express lane taken away, turned into HOV-bus lane after new lane promised to public
Congestion weary commuters thought they’d finally get a break. Expansion of US 281 in San Antonio is set to go to construction on Sunday, July 17, but it’s not what the Texas Department of Transportation (TxDOT) presented to the public. Today, US 281 has three general purpose lanes each direction (from Loop 1604 to Evans Rd.). The plan  was to add an additional HOV-bus lane, overpasses (so cars can bypass those wretched stop lights impeding traffic flow), and to build frontage roads to the outside of the existing highway.However, the plan now shows only two express lanes each direction and one HOV/bus lane. So they’re taking away an existing express lane and shrinking the expressway from three down to two. The unelected bureaucrats at TxDOT and the local transportation boards point you to the new frontage roads as the new capacity.281 schematic from July 2017TxDOT’s explanation as of July 10, 2017: The $192 million project to expand US 281 to a six-lane expressway with frontage roads between LP 1604 and Stone Oak Parkway will begin on July 17. The finished product will have three express lanes in each direction, one of those lanes being reserved for transit and carpool vehicles. Frontage roads will match the existing road today with two or three lanes each way.

I went to Jacobs Engineering to review the plans a year ago to ensure there would be four main lanes each way — three general purpose lanes and one HOV-bus lane each direction (because this has been a bone of contention for over a decade). Now, that’s not what they’re going to build according to a new schematic being promoted by TxDOT. Too bad so sad for John Q taxpayer, though. They pulled a fast one and they’re going to construction this weekend.

April 30, 2016 Official Jacobs schematic for 281 & EncinoRio - click to view detail

Bait & Switch: This is what was presented in the final public Open House for the US 281 project in May 2016. We obtained this directly from the consultant doing the schematics, Jacobs Engineering. Compare this to the schematic above and you’ll see they’re shrinking exisiting highway capacity and converting an existing general purpose lane into a restricted HOV-bus lane, which violates both current law and a law that takes effect on September 1 — a law we worked to get in place for precisely this reason — to prevent TxDOT from intentionally causing congestion on our public highways by converting existing lanes into toll lanes or other restricted lanes and crediting frontage roads as the new ‘highway’ capacity.

To add insult to injury, Webber got the contract. Webber Construction passes itself off as an American company, but it’s a subsidiary of Ferrovial, the parent company of Spain-based Cintra who tried to privatize and toll US 281 back in 2005. It’s also the company that went bankrupt on the first Texas public-private toll project, SH 130. Of course, nothing is coincidence when you’re dealing with a crony system deliberately set-up to abuse taxpayers by allowing unelected bureaucrats to direct contracts to well-connected companies. Cintra’s lobbyists have been alive and well at TxDOT and in the state capitol since toll roads became Rick Perry’s legacy 15 years ago.

The timing is suspect, too. Anti-toll groups just passed a new state law that protects taxpayers against the conversion of an existing general purpose lane into an HOV or toll lane (or from having a general purpose lane downgraded to a frontage road). However, it doesn’t take effect until September 1.

Many consider Texas the cradle of liberty and a bastion of limited government conservatism. But who let’s a state agency abuse taxpayers and deliberately thumb their noses at a state law they know is coming online that was passed by wide margins by the people’s duly elected officials? Who sits idly by and allows bureaucrats to overrule their elected representatives and sneak in a change that shrinks highway capacity and will do irreparable harm to a major U.S. highway for a generation? Apparently Alamo city state and local elected officials will unless the people speak up.

Texans angered over SH 130 bankruptcy deal that wipes out money owed to taxpayers

Zero: Money owed taxpayers for SH 130 toll road erased by bankruptcy court

The defunct SH 130 tollway just emerged from bankruptcy court and the news isn’t good for taxpayers. In 2007, the Texas Department of Transportation (TxDOT) entered into a Comprehensive Development Agreement, or public private partnership, with SH 130 Concession Company, a subsidiary of Spain-based Cintra and Zachry Toll Road 56, which had ownership dispersed among Australian and many other foreign entities. The 41-mile southern stretch of SH 130 opened in November 2012, designed to be a bypass around congested downtown Austin. But the traffic never materialized and the private concession company sought bankruptcy protection in March 2016. According to the terms that emerged from bankruptcy court, all of the private entity’s $1.4 billion debt was wiped away, leaving federal taxpayers left holding the bag for the $430 million federally-backed Transportation Infrastructure Finance and Innovation Act (TIFIA) loan given to the private entities.

Texas taxpayers feel betrayed. Former Texas Transportation Commission Chairman Ric Williamson swore under oath before the Senate Transportation Committee on March 1, 2007, that if the private entities went bankrupt, the Texas taxpayers would get the road back free and clear of any debt. Free and clear means no debt obligations, and therefore no need to continue to charge tolls for usage. However, that didn’t happen. Instead, new owners were brought in, Strategic Value Partners, $260 million in new debt was issued, and the new private company will continue to charge tolls until the contract is up in 2062 — for a road that now owes virtually no debt compared to its original $1.4 billion.

The Build America Bureau, an arm of the federal government, is also a 34 percent owner in the new deal, as a move to placate the expected taxpayer backlash for having the taxpayers’ original federal loan wiped out by the court. Specializing in distressed assets, Strategic Value Partners is yet another global company with offices in Connecticut, England, Germany and Japan.

Some are asking why the state of Texas didn’t step in and insist the public interest was protected and defended in bankruptcy court. Taxpayers have a right to know why they didn’t get the road back, why their $430 million federal TIFIA loan was wiped out, and why they have to continue paying tolls for another 45 years to use a road that’s lost $1.2 billion of its $1.4 billion original value. The state also had a revenue sharing agreement with the previous owners, Cintra-Zachry. Will the state ever see any of that promised toll revenue?

Track record of failure
This isn’t the first time the taxpayers ended up on the losing end of such a public-private toll road deal. The South Bay Expressway in San Diego went bankrupt in less than three years of operation, and federal taxpayers were forced to write down nearly $80 million on that federal TIFIA loan in 2011 — a loss of 42 percent. There’s a growing list of toll road failures, yet these private equity firms know how to make money even when they go bankrupt through tax benefits and by how they set-up their complicated corporate structures.  They funnel everything through their own subsidiaries. The deals are set-up so that one arm pays the other a host of fees (management fees, transaction fees, etc.) and oftentimes even pays the company’s own construction firm to build the project, among other gimmicks.

Short-seller investor and president of Kynikos Associates, Jim Chanos, recently felt the need to remind Americans that the techniques used by Australian company, Macquarie Group, under public private partnerships are politically unpopular, and rather than drain the swamp, put Wall Street over Main Street.

”In my own view, these public-private projects are not what core supporters thought they were getting with Trump. It’s going to be great for Wall Street investment banks, but I’m skeptical that a lot of people are going to be able to get excited about the economic growth coming from them,” Chanos said in a June interview with Institute for New Economic Thinking.

The critic credited with being the first to spot Enron’s financial fraud compares Macquarie’s financial antics to a Ponzi scheme. With President Donald Trump signaling he wants to push public private partnerships and toll roads as a major part of his $1 trillion infrastructure plan, it’s necessary to sound the alarm bells anew.

Gotcha provisions that come back to haunt taxpayers
These corporations have an army of lawyers to ensure their investors get a return on their investment, so aside from the public subsidies, they find creative ways to further socialize every potential loss through ‘compensation events,’ ‘non-compete clauses’ (that prohibit or penalize the expansion of free routes), ‘adverse event’ triggers, and even manipulation of speed limits on free routes.

Texas taxpayers are also paying to subsidize truck toll rates to get truckers to take SH 130 ($18.7 million/yr). While the subsidies only technically apply to TxDOT’s section of SH 130, it still provides indirect relief to the private section of SH 130 by increasing the number of truck toll payers. Private equity firms also force taxpayers to pay for other losses like uncollectible tolls, and they use the state as their toll collector – giving them access to the power to block vehicle registration for failure to pay a toll.

Anti-toll advocates say giving that kind of power to private corporations that the people cannot hold accountable gives up the state’s sovereignty over public infrastructure and critical corridors that are the very lifeblood of the Texas economy. They say no elected official should cede control of public roads, and therefore hand the keys of the Texas economy, over to private corporations in such sweetheart deals.

Revolving door
Deirdre Delisi, former Chair of Texas Transportation Commission, is now a new board member for Strategic Value Partners. Strategic Value Partners could be cashing in on her inside connections to TxDOT since this road has major structural and pavement issues yet to be resolved with TxDOT. According to a San Antonio Express-News investigative report, “The end of the road,” by Katherine Bluntpublished in September 2016, an independent contractor, HDR engineering, found 160 pavement defects in its 2014 inspection. In a letter to the company in 2015, the state notes, “TxDOT remains concerned with the short-term and long-term deficiencies related to the pavement conditions.”

In addition to the pavement deficiencies, TxDOT also found Cintra-Zachry to be in ‘persistent developer default’ (defined as 52 or more breaches in a one-year period), which encompasses not only the pavement deficiencies, but also other areas of its contract, constituting a breach of contract. The concession company had amassed 122 in just 2015 alone. Plus, there has been a significant increase in flooding events since the road was built, leaving homeowners in the area with 30 inches of water in their homes at times.

TxDOT said this, too, was a breach of contract, and demanded the company construct detention ponds at a cost of $1.4 million. Texas taxpayers and homeowners have a right to know if these pavement defects, flooding problems, and persistent developer defaults will be remediated by the new owners per the original contract or whether this, too, will be wiped away by the bankruptcy court or by undue influence exerted by Delisi, as a board member of the new company with close ties inside TxDOT.

A coalition of anti-toll and conservative grassroots groups are asking Texas Attorney General Ken Paxton to insist the new owners comply with the original contract by making needed repairs at no extra cost to Texas taxpayers and determine why Texans did not get the highway back, allowing it to become toll-free. In the meantime, Texans will continue to pay tolls to a group of foreign investors for a generation.

Reforms make it to Governor’s desk

IMMEDIATE RELEASE

CONTACT: Terri Hall, Director
Texas TURF, & Texans for Toll-free Highways
(210) 275-0640

 

Anti-toll reforms finally pass Texas legislature

Reforms changed in conference, but still cripple future toll roads

(Austin, TX – Sunday, May 28, 2017) As the Texas legislature comes to a close tomorrow, a must-pass bill to continue the Texas Department of Transportation (TxDOT), SB 312, cleared its final hurdle yesterday evening. The House passed a strong anti-toll bill May 17, adding several good anti-toll measures pushed by grassroots pro-taxpayer groups for over a decade. But rather than concur with the strong House version, the Senate chose to reject the House version (which signaled trouble ahead), forcing both the House and Senate to appoint a conference committee to work out the differences in the bill.

This is where the chicanery usually happens, and it did.

The House suspended the rules and rushed a vote to concur with the conference committee’s changes and the Senate followed before it adjourned Saturday evening as well – pushing passage of a 100-page bill before anyone could read what was in it.

The rules governing conference committees are very limited. Conferees cannot add anything into a bill that isn’t already in either version the House or Senate passed. They essentially decide what amendments stay in or get removed. However, loopholes and exceptions were added to SB 312, and the House and Senate authors did not fully notice their colleagues of the loopholes and completely new language they added.

For example, at the very end of this lengthy bill in Section 78 pertaining to the prohibition on an HOV lane being converted into a toll lane, it grants a new exception for all projects that are contained in the state’s air quality implementation plan prior to September 1, 2017. This means virtually every managed toll lane project on the books in Houston and Dallas-Ft. Worth — the Texas cities that are in non-attainment for federal air quality standards — can still convert an existing HOV lane into a toll lane, despite both chambers voting to prohibit it.

This exception was not deemed a significant problem in committee nor did it prevent passage by the full Senate when Sen. Bob Hall’s SB 1143 (which is the same language of the amendment tacked onto SB 312 in the House) passed, 29-2. Yet new language was suddenly required at the eleventh hour and was added into the bill without adequately notifying lawmakers of the change that impacts several projects, including one important to Hall’s constituents, where an HOV lane on I-635 East is slated to be converted to a toll lane.

Sen. Lois Kolkhorst and Rep. Joe Pickett‘s amendment, which was a bill that had already passed the Senate, SB 812, also had completely new language inserted. Their amendment requires toll project entities to repay any funds they receives from the state. The public resents having their ‘free’ road funds going into toll roads then having to pay again to use them. The state currently grants most toll entities road taxes to the tune of $10 billion and has rarely required any of those funds to be repaid to the state. In fact, the local toll agencies get to keep most, if not all, of the toll revenues locally.

Both the House and Senate voted to stop unrestricted grants of highway funds to toll projects and require funds to be repaid, yet a handful of conferees overruled them to allow toll projects as far back as January 1, 2014, to move forward without requiring repayment of those funds if the environmental review on those projects had commenced by that date.

“The whole purpose of this amendment is to require funds to be repaid on any project that isn’t already operating as a toll road. To retroactively continue this abuse not only betrays the legislative actions taken by the majority of the House and Senate, it also betrays the taxpayers forcing the double taxation to continue,” concluded Terri Hall, Founder/Director of Texas TURF and Texans for Toll-free highways.

For whom the bill tolls
An amendment by Rep. Ina Minjarez sought to remove criminal penalties for toll violations and drastically reduce the administrative fees and fines that could be levied against motorists. It passed by an overwhelming majority in the House by a vote of 136-3. Yet, this same handful of conferees put criminal penalties back into the bill. The House debated the criminal penalties and overwhelmingly decided to remove them. They felt strongly that no Texan should be made a criminal or have their ability to drive taken away for failure to pay a fine/fee. It’s a throw back to debtors prisons.

The new language actually captures more people as ‘violators’ by making them a criminal if they simply haven’t paid a single toll after supposedly receiving two bills. The toll could be for one trip for $.20 or $2.00 and they’ll now be punished under what used to be a habitual toll violator with 100 or more unpaid toll transactions.

Many Texans complain they never receive the first bill from the toll entity and then later get a late payment notice after being put into collections, erroneously, and after penalties are already imposed. This happened to Rep. Tom Oliverson who described his outrage at the experience during the House debate on SB 312 leading up to the overwhelming adoption of the Minjarez amendment to de-criminalize.

“Though special interests and their lobbyists attempted to undo the intent of what they see as hostile legislation to their existence and add and remove language outside the public purview, anti-toll groups delivered a major blow to future toll roads in Texas with passage of SB 312,” Hall declared.

Perhaps the biggest victory of all was killing the bill to re-authorize public private partnership toll roads, HB 2861. Nineteen Texas highways would have been handed over in government-sanctioned monopolies giving private, foreign corporations the exclusive right to extract the highest possible toll in 50-year sweetheart deals. That era is now over. There’s also plenty to celebrate in SB 312.

Anti-toll reforms in SB 312:

1) Texans will now be protected from having their free lanes converted to toll lanes or having their free lanes downgraded to frontage roads.
2) Despite the exceptions added, HOV lanes cannot be converted into toll lanes.
3) Toll administrative fees will be capped at $48/year, and any criminal fines are capped at $250/year (versus the current system where thousands can be tacked on).
4) Tolls will be removed from Camino Columbia toll road in Laredo and the Cesar Chavez toll project in El Paso (after a vote by local El Paso officials who have indicated they support removing the tolls). This sets an important precedent to get tolls removed from other projects.
5) Any state funds for toll projects that had environmental review commence by January 1, 2014, must be repaid. The grant/subsidy, double tax gravy train is now over.

Taxpayers pushed for over a decade to get these reforms in place and finally got them in SB 312. While there’s still much work to be done to completely reform toll policy in Texas, the majority of the heavy lifting began with passage of SB 312 last night.

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