April 20, 2014

Legislature Kills Max Tyler’s Bill to Prohibit Non-Compete Agreements

Should "congestion guarantees" for toll road investors be legal? (Photo by Flickr user Joming Lau.)


Among the many problems with privately financed toll roads is the frequent inclusion of congestion guarantees. The investors often insist that local governments take steps to increase congestion on local roads in order to push traffic onto the tolled roads in order to boost toll revenues. It’s a great deal for the investors but often a lousy deal for local residents. The agreement between the Northwest Parkway Public Highway Authority and Brisa (the Spanish company that bought out the Northwest Parkway, saving it from bankruptcy), for instance, requires Broomfield to compensate Brisa for any revenue lost as a result of Broomfield building or improving local roads within its own city boundaries. If they build or improve a road that gives their local traffic any sort of improved alternative to the Northwest Parkway, they’ll have to pay Brisa for every vehicle that uses it even if improving or building that road would have been good for Broomfield residents. And because the agreements often last decades (99 years in Broomfield’s case), communities with congestion guarantees are often saddled with restrictions like these for generations.

Golden’s representative in the Colorado State House, Max Tyler, introduced a bill this session to prohibit the use of “non-compete agreements,” which is one of way creating a congestion guarantee. As Representative Tyler explained in his newsletter, “For the proposed Jefferson Parkway, for example, this bill would have made sure that local governments would still have the option of improving Highway 93, as well as Indiana and McIntyre.” Despite his best efforts, however, the Republicans on the Transportation Committee voted against the bill and it died on a party line vote. Jefferson County opposed the bill.