Can Texas spend the Proposition 1 and Proposition 7 highway money on toll roads or on projects that have tolled and free lanes?

Plain-English summary

A Texas House committee chair asked the AG whether the Texas Transportation Commission may spend Proposition 1 and Proposition 7 money on toll projects. Both Propositions were constitutional amendments approved by voters (Proposition 1 in 2014, Proposition 7 in 2015) that route certain revenue into the state highway fund. Proposition 1 sends oil-production tax revenue above a set level, and its constitutional text says that money "may be used only for constructing, maintaining, and acquiring rights-of-way for public roadways other than toll roads." Proposition 7 sends a slice of sales-tax and motor-vehicle-tax revenue, and its text limits the money to non-toll public roadways or to repaying certain general obligation bonds.

The AG read both provisions as a clear bar on spending the money on toll roads. The ballot language voters approved said the same thing, describing the funds as not for toll roads and for "nontolled roads." So the core answer was straightforward: the Commission may not use Proposition 1 or Proposition 7 funds to build or maintain any road for which a toll is collected. Reading "toll road" by its common dictionary meaning, that is "a road for the use of which a toll is collected."

The harder part was modern toll projects, where a road might be tolled along part of its route or in some lanes but not others. The constitutional provisions do not address mixed tolled-and-free projects, no statute defines "toll road," and the AG found no caselaw construing it. So the AG said it could not determine whether a court would allow the money to pay for the non-tolled portions of a partly tolled project. The opinion did draw one firm line: the Commission cannot pull the funds out of the highway fund into a general fund for a partially tolled project unless it has a mechanism ensuring the money is spent only on non-tolled roads. The opinion noted that after the request came in, the Commission voted to strip the tolled components from several long-term projects and to hold off using the funds on tolled projects until the Legislature and voters could clarify their intent.

Currency note

This opinion was issued in 2018. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion meant for those who asked

The requesting legislator and the Legislature (as the opinion described them): The opinion confirmed that the constitutional limits the Legislature wrote into Propositions 1 and 7 keep the money off toll roads, and it pointed to the undefined term "toll road" as something the Legislature and voters could clarify if they wanted the funds available for the non-tolled parts of mixed projects.

The Texas Transportation Commission (as the opinion described them): The opinion told the Commission it could not spend the funds on toll roads and could not route them through a general fund for a partly tolled project without a tracking mechanism guaranteeing non-tolled use. It acknowledged the Commission's own decision, after the request, to remove tolled components from several projects and to delay using the funds on tolled projects.

Drivers and the public following toll-road spending (as the opinion described them): The opinion stands for the point that the dedicated highway money the voters approved was constitutionally walled off from toll roads, while leaving open the unsettled question of mixed projects.

Common questions

What are Proposition 1 and Proposition 7 funds?
They are revenue streams that two voter-approved constitutional amendments dedicate to the state highway fund. Proposition 1 (2014) transfers certain oil-production tax revenue; Proposition 7 (2015) transfers a portion of sales-tax and motor-vehicle-tax revenue, capped by the amendment's terms.

Can that money pay for toll roads?
No, according to the AG. Both amendments restrict the money to public roadways other than toll roads, and the ballot language said the same. Read by its ordinary meaning, a "toll road" is a road for which a toll is collected, and the funds cannot go to one.

What about a project that has both tolled and free lanes?
That is where the AG stopped short. Because no constitutional provision, statute, or court decision defines "toll road" or addresses mixed projects, the AG said it could not determine whether the funds may be used on the non-tolled portions of a partly tolled project.

Could the Commission just move the money into a general fund and sort it out later?
Not without a safeguard. The AG concluded the Commission may not place the funds in a general fund for a partially tolled project unless it has a mechanism ensuring the money is spent only on non-tolled roads, as the Constitution requires.

Background and statutory framework

Proposition 1 revised article III, section 49-g of the Texas Constitution to require the Comptroller to transfer oil-production tax revenue above a set amount to the state highway fund, with the restriction that the money "may be used only for constructing, maintaining, and acquiring rights-of-way for public roadways other than toll roads" (Tex. Const. art. III, § 49-g(c)). Proposition 7 adopted article VIII, section 7-c, requiring transfers of sales-tax proceeds (id. art. VIII, § 7-c(a)) and a share of motor-vehicle tax revenue (id. art. VIII, § 7-c(b)) to the highway fund, and limiting their appropriation to non-toll public roadways or to repaying principal and interest on general obligation bonds issued under article III, section 49-p (id. art. VIII, § 7-c(c)).

The AG construed the constitutional text the way Texas courts do, relying on the literal language and the drafters' intent, citing Harris Cty. Hosp. Dist. v. Tomball Reg'l Hosp., 283 S.W.3d 838, 842 (Tex. 2009) and Doody v. Ameriquest Mortg. Co., 49 S.W.3d 342, 344 (Tex. 2001). Where the language is clear, courts give it its common everyday meaning, citing City of Rockwall v. Hughes, 246 S.W.3d 621, 625-26 (Tex. 2008) and State v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006); the opinion took the ordinary meaning of "toll road" from Webster's Third New International Dictionary. Because the term is undefined and no caselaw construes it, the AG treated the mixed-project question and the question whether the Commission could adequately track funds as fact-bound matters outside the opinion process, citing Tex. Att'y Gen. Op. No. KP-0046 (2015).

Citations

Cases:

• Harris Cty. Hosp. Dist. v. Tomball Reg'l Hosp., 283 S.W.3d 838, 842 (Tex. 2009)
• Doody v. Ameriquest Mortg. Co., 49 S.W.3d 342, 344 (Tex. 2001)
• City of Rockwall v. Hughes, 246 S.W.3d 621, 625-26 (Tex. 2008)
• State v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006)

Constitutional provisions:

• Tex. Const. art. III, §§ 49-g(c), 49-p
• Tex. Const. art. VIII, § 7-c(a), (b), (c)

Prior AG opinions:

• Tex. Att'y Gen. Op. No. KP-0046 (2015)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0197
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2018/kp0197.pdf

Original opinion text

Best-effort transcription from the official PDF. Minor extraction artifacts were corrected; the linked PDF is authoritative.

KEN PAXTON
ATTORNEY GENERAL OF TEXAS

May 7, 2018

The Honorable Joseph C. Pickett Opinion No. KP-0197
Chair, Committee on Environmental Regulation
Texas House of Representatives Re: Whether Proposition 1 and Proposition
Post Office Box 2910 7 funds may be used on toll projects
Austin, Texas 78768-2910 (RQ-0192-KP)

Dear Representative Pickett:

 You request an opinion regarding whether the Texas Transportation Commission ("Commission") may use Proposition 1 and Proposition 7 funds on toll projects. [1]

    Proposition 1 refers to a constitutional amendment proposed by the Legislature in 2013 and approved by the voters in 2014. [2] That constitutional amendment revised article III, section 49-g of the Texas Constitution to require the Comptroller to transfer to the state highway fund revenue received from oil production taxes above a certain amount. See TEX. CONST. art. III, § 49-g(c). Relevant to your request, that section provides: "Revenue transferred to the state highway fund under this subsection may be used only for constructing, maintaining, and acquiring rights-of-way for public roadways other than toll roads." Id. (emphasis added).

    Proposition 7 similarly refers to a constitutional amendment proposed by the Legislature and approved by the voters in 2015. [3] That constitutional amendment adopted article VIII, section 7-c of the Texas Constitution, which requires the Comptroller to transfer to the state highway fund up to $2.5 billion in general sales tax proceeds in excess of $28 billion. Id. art. VIII, § 7-c(a). It also requires the Comptroller to transfer to the state highway fund thirty-five percent of the net revenue above $5 billion derived from the tax imposed on the sale, use, or rental of a motor vehicle. Id. art. VIII, § 7-c(b). That section restricts the use of the money transferred:

                Money deposited to the credit of the state highway fund under this section may be appropriated only to:

                (1) construct, maintain, or acquire rights-of-way for public roadways other than toll roads; or

                (2) repay the principal of and interest on general obligation bonds issued as authorized by Section 49-p, Article III, of this constitution.

Id. art. VIII, § 7-c(c) (emphasis added).

    Thus, in proposing each of these constitutional amendments, the Legislature plainly expressed its intent that the Commission not use the money transferred to the state highway fund under Proposition 1 or Proposition 7 on toll roads. Id. art. III, § 49-g(c); id. art. VIII, § 7-c(c). Furthermore, the language approved by the voters at each election acknowledged that any funds transferred pursuant to Propositions 1 and 7 would not be used on "toll roads." [4]

    Addressing your question requires a construction of the term "toll roads." Texas courts construe constitutional provisions in the same manner as they construe statutes. Harris Cty. Hosp. Dist. v. Tomball Reg'l Hosp., 283 S.W.3d 838, 842 (Tex. 2009). The guiding rule is to discern and give effect to the intent of the provision's drafters. Id. Courts rely heavily on the literal text of a constitutional provision to give effect to its plain language. Id.; Doody v. Ameriquest Mortg. Co., 49 S.W.3d 342, 344 (Tex. 2001).

    The relevant constitutional provisions do not define "toll road," nor has the Legislature defined the term for purposes of the Transportation Code. If the plain language of a constitutional provision is clear and unambiguous, courts give the language of the provision its common everyday meaning. City of Rockwall v. Hughes, 246 S.W.3d 621, 625-26 (Tex. 2008); State v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006). The common understanding of the term "toll road" is "a road for the use of which a toll is collected." WEBSTER'S THIRD NEW INT'L DICTIONARY 2405 (2002). Thus, the Commission may not spend state highway funds received under Propositions 1 and 7 to fund any road for the use of which a toll is collected. Construing the term "toll road" becomes more complicated, however, due to the realities of toll roads today.

    Throughout Texas, many roads are tolled for portions of their route but not their entirety. In addition, some lanes of a road may be tolled while others are not. The constitutional provisions restricting the use of funds do not directly address whether the Commission may use the funds on roads that have both tolled and non-tolled components. Further, we find no caselaw interpreting the term "toll road," nor do Texas statutes define the term. The common definition of "toll road" fails to clarify whether a toll road includes a non-tolled portion or lane of a road that also contains tolls. Accordingly, we cannot determine whether a court would construe Propositions 1 and 7 to allow those monies to be used for "toll projects" when those provisions refer to "toll roads."

    Unquestionably, the Commission may not withdraw Proposition 1 and Proposition 7 funds from the state highway fund and place them into a general fund for a partially tolled project with no mechanism for ensuring that it spends the funds as constitutionally required, that is, only on non-tolled roads. [5] In your request, you explain that the Commission has "projects that have both tolled and non-tolled components," and you indicate it is "using Prop 1 and Prop 7 monies along with other funding" to fund these projects. Request Letter at 1. After you submitted your request, however, the Commission reversed course and voted to remove the tolled components from several of its long-term construction projects. [6] Until the Legislature and the voters have an opportunity to clarify their intent regarding the appropriate use of Proposition 1 and Proposition 7 funds, the Commission has chosen to delay using the funds on projects with tolled components.

                                  SUMMARY

                  The Texas Transportation Commission may not spend state highway funds received pursuant to Propositions 1 and 7 to fund any toll road. Furthermore, the Commission may not withdraw Proposition 1 and Proposition 7 funds from the state highway fund and place them into a general fund for a partially tolled project with no mechanism for ensuring that it spends the funds as constitutionally required. The absence of a definition of "toll road" in the constitutional provisions, statutes, or caselaw leaves us unable to determine whether the Commission may use Proposition 1 and Proposition 7 monies on non-tolled portions of toll projects.

                                         Very truly yours,

                                         KEN PAXTON
                                         Attorney General of Texas

JEFFREY C. MATEER
First Assistant Attorney General

BRANTLEY STARR
Deputy First Assistant Attorney General

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

[1] See Letter from Honorable Joseph C. Pickett, Chair, House Comm. on Envtl. Regulation, to Honorable Ken Paxton, Tex. Att'y Gen. at 1 (Nov. 9, 2017), https://texasattorneygeneral.gov/opinion/requests-for-opinion-rqs ("Request Letter").

[2] See Tex. S.J. Res. 1, 83d Leg., 3d C.S., 2013 Tex. Gen. Laws 5049, 5049-50.

[3] See Tex. S.J. Res. 5, 84th Leg., R.S., 2015 Tex. Gen. Laws 5414, 5415-16.

[4] The language approved by the voters through Proposition 1 stated:
The constitutional amendment providing for the use and dedication of certain money transferred to the state highway fund to assist in the completion of transportation construction, maintenance, and rehabilitation projects, not to include toll roads.

Tex. S.J. Res. 1, 83d Leg., 3d C.S., 2013 Tex. Gen. Laws 5049, 5050 (emphasis added). The language approved by the voters through Proposition 7 stated:
The constitutional amendment dedicating certain sales and use tax revenue and motor vehicle sales, use, and rental tax revenue to the state highway fund to provide funding for nontolled roads and the reduction of certain transportation-related debt.

Tex. S.J. Res. 5, 84th Leg., R.S., 2015 Tex. Gen. Laws 5414, 5416 (emphasis added).

[5] There is an indication that the Commission, at least with regard to one project, can provide "separate tracking for all the non-tolled elements," and that it is "able to account for that separately and demonstrate to the public that [it is] not using any of the Prop 1 or 7 ... money for a toll project." See Brief from C. Brian Cassidy, Locke Lord, LLP, Counsel to Cent. Tex. Reg'l Mobility Auth. at 5 (Dec. 12, 2017) (on file with the Op. Comm.) (quoting Tex. Transp. Comm'n Meeting (Oct. 26, 2017) (statement of J. Bruce Bugg, Jr., Chairman, Tex. Transp. Comm'n)). Whether the Commission possesses the ability to track funds accordingly, and whether the Commission does so, are fact questions beyond the purview of an attorney general opinion. See Tex. Att'y Gen. Op. No. KP-0046 (2015) at 4 (noting that whether funds are spent in accordance with what the voters approved involves questions of fact that cannot be answered in the opinion process).

[6] See Tex. Transp. Comm'n Meeting (Nov. 16, 2017) (statement of J. Bruce Bugg, Jr., Chairman, Tex. Transp. Comm'n).