TxDOT Sunset Review

Texas Department of Transportation - Sunset Review

History

In 2007, the Texas Department of Transportation (TxDOT) began preparing for their Sunset Review before the Texas Legislature in the 81st legislative session to convene in January 2009.

The Sunset Review process is the regular assessment of the need for a state agency to exist. While standard legislative oversight is concerned with agency compliance with legislative policies, the Sunset Review process asks a more basic question: Do the agency's functions continue to be needed?

The Sunset Review process works by setting a date on which an agency will be abolished unless legislation is passed to continue its functions. This creates a unique opportunity for the Legislature to look closely at each agency and make fundamental changes to an agency's mission or operations, if needed.

The Sunset Advisory Commission, established in 1977, is a12-member commission, appointed by the Lieutenant Governor and the Speaker of the House of Representatives. The Commission reviews the policies and programs of more than 150 state agencies. The Commission questions the need for each agency, looks for duplication of other public services or programs, and considers changes to improve each agency's operations and activities.

Assisting the Commission is a staff whose reports provide an assessment of an agency's programs, giving the Legislature information needed to draw conclusions about program necessity and workability.

81st Legislative Session Recommendation

On Tuesday, June 3, 2008, the Sunset Advisory Commission, chaired by Representative Carl Isett (R-Lubbock), issued a report recommending that the five-member Transportation Commission be replaced by a single commissioner, appointed by the Governor and subject to Senate confirmation. On Thursday, June 26, 2008, TxDOT  issued its staff response to the state's Sunset Advisory Commission report. Although the TxDOT response was generally supportive of the recommendations made by the Texas Sunset Advisory Commission staff, they did question the effectiveness of having a Contract Advisory Team review comprehensive development agreements (CDAs).

On Tuesday, July 15, 2008, the Sunset Advisory Commission convened in Austin to hear the recommendations of the Sunset staff and take public testimony. The most dramatic proposal was when several lawmakers who serve on the commission raised the possibility of making the state transportation commissioner an elected position.

On Tuesday, December 16, 2008, the Sunset Advisory Commission met to decide regarding its recommendations to the Texas Legislature on the future of the Texas Department of Transportation (TxDOT). Major recommendations include:

• Replace the five-member Texas Transportation Commission with a single transportation czar.
• Create a legislative oversight committee to work with the transportation czar and respond to the needs of legislators.
• Remove TxDOT's responsibility for vehicle registration and create a department of motor vehicles to handle duties regulating drivers.
• Hire a consulting firm to draft a plan to overhaul TxDOT's management system.
• Provide another sunset review for TxDOT in four years instead of the standard twelve.

These recommendations regarding TxDOT are the basis of a "Sunset Bill" filed in the Legislature during the session that convened on Tuesday, January 13, 2009. This legislation is expected to include a number of provisions to make the agency more accountable and transparent in its decision-making and use of funds. If the measure passes, TxDOT will continue to operate with legislative modifications. If the measure fails, TxDOT will be abolished and begin a one-year wind-down process.

The consensus of the Commission's work resulted in House Bill 300, which had its first hearing in the House Transportation Committee on Tuesday, March 31, 2009. At this stage, HB 300 suggested the following changes:

• Abolish the five-member Texas Transportation Commission and replacing it with a single commissioner to be appointed by the Governor.
• Create a legislative oversight committee made up of six lawmakers, including the leaders of the House and Senate transportation committees who could hire a consulting firm to analyze TxDOT's structure and management and make recommendations.
• Bring TxDOT up for sunset review again in four years.
• Require TxDOT to create a system to track the planning and execution of road projects that laypersons could follow.
• Move vehicle titling, vehicle registration, and oversight of trucking to a new Texas Department of Motor Vehicles.
• Strengthening prohibitions in law against TxDOT lobbying the Legislature or the public on policy. The bill would make it a firing offense for any TxDOT employee to lobby on the state level. Communication with Congress for more money would not be prohibited.
• Establish a rail division in TxDOT to expand the agency's focus on freight rail and passenger rail.

In response to a request from Chair of the Senate Transportation and Homeland Security Committee Senator John Carona (R-Dallas) during the April 22, 2009 Sunset legislation hearing, TxDOT drafted a letter providing an overview of transportation finance concerns in Texas.

In response to House floor amendments to HB 300, the Federal Highway Administration sent a letter to TxDOT on May 19, 2009 expressing concerns about the impact of the amendments to future federal funding. An amended version of the House-passed HB 300 was voted out of the Senate Transportation committee on Wednesday, May 20, 2009.

The Senate Transporation committee-passed version of HB 300 includes the following amendments:

• Maintains a five-member Governor-appointed Transportation Commission. Commissioners would serve two-year terms. If the Governor failed to fill a slot, the Lieutenant Governor could fill the slot with no need for Senate confirmation.
• Provides an extensive review of engineering staff that would guide a future staffing plan at TxDOT.
• Creates a 22-member legislative oversight committee that would include the two full transportation committees, plus the chairs of the Finance and Appropriations committees. The oversight committee would meet on a quarterly basis to discuss sunset review plus other proposed agency changes.
• Proposes limits on lobbying and marketing that prohibit the passage of legislation. Employees of TxDOT who participate in such activities can be dismissed.
• Fleshes out issues from the Senate Transportation Committee's priorities such as an online dashboard to update the public on current projects and the creation of rural planning organizations.
• Adjusts language for the operation of metropolitan planning organizations.
• Provides clarifying language from Senator Kirk Watson (D-Austin) about free lanes on US 290 East being converted to toll roads.
• Adds various other bills yet to pass the House, such as CSSB 855 by Senator John Carona (R- Dallas) that would allow for local option funding sources to be placed before voters for consideration of new funding sources for local, regional transportation mobility projects.
• The Senate sponsor of CSHB 300, Senator Glenn Hegar (R- Katy), may also attach the Senate's eminent domain legislation, SB 1023 by Senator Steve Odgen (R-Bryan), if the House is unable to pass a version of the bill that would be acceptable to the Senate.

While House and Senate conferees were named and issued a report, the Conference Committee Report on the TxDOT sunset bill failed to be adopted by both houses due to disagreement about the local option funding issue that was added as a Senate amendment.

However,Governor Rick Perry called a special session for Wednesday, July 1, 2009 and the Legislature passed two of the three issues Governor Perry included in his call, including a Sunset "Safety Net" bill. This bill, Senate Bill 2, extended the lives of five agencies for two more years--Transportation, Insurance, Racing, Affordable Housing, and the Office of Public Insurance Counsel. 

Interim Activity

During the interim , TxDOT has responded to several of the recommendations contained in the Sunset Advisory Commission’s staff 2008 review including:

1. The creation of the “Project Tracker System” where laypersons can easily track the planning and execution of road projects.
2. Moving the vehicle titling, vehicle registration, and oversight of trucking operations to a new Texas Department of Motor Vehicles
3. Establishing a rail division in TxDOT to expand the agency's focus on freight rail and passenger rail.

The major overhaul, however, will be to address the portion of the Sunset review that declares that TxDOT is seen as distrustful, unaccountable, and "out of control" and should have an independent review that specifically addresses all levels of management and its impact on operations.

As a result of the Sunset Commission review, the Texas Transportation Commission contracted with Grant Thornton, LLP, an independent audit firm, to conduct the review. On Wednesday, May 26, 2010, Grant Thornton, LLP released its report that included a recommendation that TxDOT be prepared to commit to a transformational period led by a newly-established leadership team.

On Friday, July 2, 2010, the Texas Transportation Commission approved a motion by Commissioner Ned Holmes to appoint Howard Wolf to chair a committee to oversee the restructuring of TxDOT’s management and operations.  Wolf, an attorney with close ties to Lt. Governor David Dewhurst, has a proven track record of rehabilitating public and private organizations. When Dewhurst was Land Commissioner, he recruited Wolf to assess what changes were needed in the General Land Office. Wolf serves as a citizen appointee on the Sunset Advisory Commission and was instrumental in reforms at the Texas Alcoholic Beverage Commission. Wolf also served on the Texas Tax Reform Commission.

In addition to Wolf, the Texas Transportation Commission approved the selection of Jay Kimbrough, general counsel for the Texas A&M University System and former advisor to Governor Rick Perry, to assist Wolf in forming the committee. Both Wolf and Kimbrough will serve in a volunteer capacity.

The group Howard Wolf chairs is now called the Restructure Council. The Restructure Council has put together a comprehensive database of recommendations.

The formal report was due to be presented to the Texas Transportation Commission at a public hearing and at the Texas House Transportation Commmittee on Thursday, December 16, 2010.  Deidre Delisi, the Chair of the Texas Transportation Commission, pulled it from the agenda because she could not be in attendance. The Commission is now scheduled to receive the report at its Wednesday, January 5, 2011 meeting. Delisi told the members of the Texas Sunset Commission that she took full responsibility for the delay. Members of that commission had hoped to see the report in December 2010.  

Wolf testified at the House Committee meeting that the Restructuring Council’s report solely addresses management practices and not transportation funding. House Transportation Committee Chairman Joe Pickett (D-El Paso) expressed disappointment that the Restructuring Council’s report had not yet been released.

On Wednesday, January 5, 2010, the Texas Transportation Commission received the report from the TxDOT Restructure Council. The Restructure Council recommended that TxDOT make significant organizational changes including: recruiting executive management with significant business experience; combining all financial functions under one financial officer; elevating both the Human Resources and Communications Departments; and separating Government Relations and Communications. 

The report also recommends that the Commission raise the salary for the executive director in order to attract candidates with extensive business background. This will require legislation to address the current salary cap of $192,500 per year.

Click here to read the entire report.

At its Wednesday, January 12, 2011 meeting, the Texas Sunset Advisory Commission voted 7-5 to abolish the five-member Texas Transportation Commission and place the Texas Department of Transportation (TxDOT) under the authority of a single statewide commissioner. That commissioner would be appointed by the Governor and confirmed by the Senate. Currently, the Governor appoints all five members of the Texas Transportation Commission.

That proposal was one of several recommendations from members of the Sunset Commission. 

82nd Legislative Session Action

The 82nd Legislature, which adjourned on May 30, 2011, passed Senate Bill 1420 that allows TxDOT to continue for four years. The law included several of the recommendations made by the Sunset Commission. It did not include the recommendation to abolish the Texas Transportation Commission and move TxDOT under the authority of a single statewide commissioner. The legislation includes several modifications to improve the transparency, accountability, and reliability of TxDOT.

Click here for a summary report of the legislation.

Resources

Restructure Council Report (January 5, 2011)

HB 300 Bill History and Various Versions of the Bill

Texas Sunset Advisory Commission Final Report on the Texas Department of Transportation (July 2009)