Texas DOT forgives more than $1B in toll late fees

The Texas Department of Transportation will dismiss approximately $1.3 billion in toll late fees for approximately 2.2 million motorists, according to the department. On Wednesday, representatives from the Texas DOT told the state House Transportation Committee about the waiver and how the department plans to move forward with toll collection.

Motorists in Texas racked up a toll late fee bill of $1.3 billion from 2007 to March 1. According to KXAN-TV in Austin, some toll users owed thousands of dollars in late fees. Others said bills were sent to incorrect addresses.

During a transportation committee hearing, Rep. Joe Pickett, D-El Paso, asked Texas DOT Executive Director James Bass how the department plans to move forward with existing debt now that new rules are in effect. Pickett pointed out that people who owe are not sure what to do.

“March 1 is a new day and is being considered to be a new day in the system,” Bass said. “Rather than trying to carry forward two different violation policies within the system, the decision has been made we are only moving forward with the current one in compliance with Senate Bill 312. All of the older late fees are no longer being pursued.”

On June 9, 2017, Gov. Greg Abbott signed SB312 into law. Within the bill, the Texas DOT was ordered to set new rules regarding the collection of toll fees that went into effect on March 1. One of the new rules sets a maximum late fee at $48 in a 12-month period.

Essentially, all late toll fees incurred before March 1 on Texas DOT-controlled toll roads have been forgiven. However, Bass emphasized that only the late fees are being waived. Actual toll costs before March 1 are still being collected.

“In the coming weeks customers will only see the new late fee of $4 per statement on their statement after 30 days of nonpayment – note that it may take a little longer to clear the balance of previous late fees from our online system, but know that we will not be billing for these previous late fees,” the Texas DOT said in a statement. “Customers are still required to pay the toll charges remaining on their accounts.”

Texas DOT Chief Financial Officer Brian Ragland said most of that debt was likely never going to be recovered.

“The lion’s share was never expected to be collected,” Ragland said. “In fact, it was never booked as an accounts receivable because in accounting lingo it has to be reasonably expected to be collected.”

Bass said most of the money would have never been deposited into the state treasury anyway. Late fee revenues would likely go into one of the trust estates that are held on behalf of the bond holders.

“It was never about collecting money,” Bass said. “It was trying to encourage people to do the right thing and to make on-time payment on their tolls.”

Since March 1, Texas DOT has capped late fees at $4 per monthly invoice. For each month the late fee remains, another $4 is tacked on for nonpayment until it reaches the $48 12-month cap set in SB312.

Before SB312 went into effect, motorists could be charged $5 in late fees per transaction. For example, someone traveling on three separate Texas DOT toll roads in a month could be charged $15 for nonpayment. Now, all toll travel is consolidated into monthly invoices, significantly reducing that $15 fee to $4.