PRINT THIS PAGE | E-MAIL THIS PAGE

Thursday, July 24, 1997

Emissions company, state settle lawsuit for $140 million

By JUAN B. ELIZONDO Jr. / Associated Press Writer

AUSTIN (AP) - A deal gone sour between the state and an air-quality testing firm will cost Texas taxpayers $140 million.

Attorney General Dan Morales and attorneys for now-defunct Tejas Testing Technologies settle a 1995 lawsuit Wednesday. The company filed the lawsuit after the state dumped an auto emissions-testing program for which Tejas had won a seven-year contract.

The money will be paid from general state funds beginning with a $70 million payment on Aug. 31.

The agreement must be approved by the U.S. Bankruptcy Court in Austin, which is overseeing Tejas' payment of debts to investors.

The company spent millions of dollars establishing 55 inspection stations in Dallas-Fort Worth, Houston-Galveston and Beaumont-Port Arthur, where federal officials had ordered emissions testing.

Shortly after Tejas stations opened in January 1995, drivers protested the tests as cumbersome and costly.

Lawmakers reacted by killing the program. They have since instituted another testing program that's met less opposition.

But Tejas officials said killing the original program and the company's contract left them with $250 million in worthless testing stations.

State District Judge Joseph Hart earlier this year ordered the state to pay Tejas about $200 million for abandoning the emissions testing program. He said the state had the right to change its mind, but couldn't leave Tejas with a worthless contract.

Ward Tisdale, a Morales spokesman, said the state was appealing Hart's order when the settlement was reached.

Texas drivers in designated areas continue to get auto emissions tests along with their annual safety inspections. Cars are tested at two motor speeds - once at normal idle and once with the motor revved up to 2,500 revolutions per minute. If emissions are too high at either speed, the vehicle fails.

A call to Tejas' attorney in Austin was not immediately returned to The Associated Press. Send a Letter to the Editor about This Story | Start or Join A Discussion about This Story
Send the URL (Address) of This Story to A Friend: