NORTH CAROLINA:Legislature calls for investor toll proposals & study of govt pikes

North Carolina (NC) has passed legislation calling for a study of public toll roads and for one investor proposed toll project, as a pilot. The NCDOT will advertise shortly to announce that it will receive private sector proposals for the first investor-built toll project in the state.

“We aren’t formally soliciting, but just announcing that we will receive proposals as the licensing agency,” said a NCDOT official.

The proposals must be new facilities, as the legislation has a preamble stating that the legislature does not wish tolls to be imposed on any existing state routes. That apparently leaves open the possibility of tolls on an interstate highway, or on a county or city route, as part of widening or major improvements.

The preamble to the legislation (HB1630) suggests they expect urban toll roads to get priority. It says the DOT is “directed to focus on using toll roads to alleviate commuter traffic congestion.” The DOT is required by the legislation to evaluate proposals and select the best to go forward.

Regulation up to proposers

The legislation does not contain anything on regulation of tolls, or rates of return, but an official says this could be incorporated in the licensing contract. The department will not prejudge the issue of whether controls are needed. But there will be no taxpayer subsidies!

Meanwhile in a separate program NCDOT will be looking for consultants to help it evaluate the potential for publicly sponsored toll projects in the state.

The legislation gives the NCDOT the power to issue a license, in the words of the law, “to finance, design, construct, maintain, improve, own, or operate, solely from private resources, one pilot toll transportation project within the State of North Carolina.” A toll licensee has to produce a business analysis showing the project is financable, and the NCDOT has to declare it to be necessary and in the public interest. The DOT has to issue the license to toll by July 1, 2003. The toll license may be up to 50 years, and may be renewed after its expiry. There is no provision for transfer of investor assets to the state, though without a license to toll they would not be worth much!

The NCDOT has the power to set minimum standards of construction and maintenance as part of the toll license. The licensee has to buy right of way for the project, and the state’s power to seize land under eminent domain doctrine is only to be used to assist the licensee as a last resort. In that case the licensee will have to pay for the land plus the state’s costs. State land may be transferred to the licensee at fair market price.

Rush job?

A second major strand to the legislation is the requirement that NCDOT study “the feasibility of construction of State-owned and State-operated toll roads” and make proposals for toll roads on state routes. The legislation requires it to report to a joint transport committee of the state legislature by February 1, 2001. Officials say they will be discussing this deadline with the committee, pointing out that a thorough study with specific project recommendations will require more time. NCDOT will be engaging consultants in different fields to conduct this state toll policy study in the next month or so. They want advice on the appropriate organizational structures, necessary legislation and guidelines for the selection of projects for tolling.

NCDOT is also required to produce an annual report on “any toll project planning, construction, or operations

pursuant” to this law.

The legislation signed into law by the state governor July 13 is titled: “AN ACT TO AUTHORIZE CONSTRUCTION OF PILOT PRIVATELY FUNDED ROAD OR BRIDGE PROJECTS FUNDED BY TOLLS AND TO DIRECT THE DEPARTMENT OF TRANSPORTATION TO STUDY THE FEASIBILITY OF STATE-OWNED AND STATE-OPERATED TOLL ROADS OR BRIDGES.”

The preamble to the law says: “It is hereby declared that the existing State road system is becoming increasingly congested and overburdened with traffic in many areas of the State; that the sharp surge of vehicle miles traveled is overwhelming the State’s ability to build and pay for adequate road improvements; and that an adequate answer to this challenge will require the State to be innovative and utilize several new approaches to transportation improvements in North Carolina.”

The corresponding Senate bill provided for up to three investor-owned toll projects but this was apparently compromised down to one in conference.

The legislation mentions toll road or toll bridge facilities. The term toll road apparently includes tolled lanes on an existing free road road, so some kind of toll express or HOT lanes could qualify. Toll express lanes have been discussed on I-77, north out of Charlotte and on I-40 in the Chapel Hill/Durham/Raleigh area. A toll bridge and road (NC-168) have been discussed in the Outer Banks area around Currituck Sound, and enabling legislation for that as a public facility already exists. That project would match up with a city toll project under construction on a stretch of VA-168 in Chesapeake VA heading to the NC line. Coastal areas around Moorehead City in central NC also need upgraded connections (NC-43, US-70) to the interstate network and could be candidates for toll projects. These would tap into the pockets, primarily, of Washington DC vacationers and weekenders going to northern NC beaches.

BACKGROUND: Jim Allen of United Toll Systems AL played a major role in initiating this new interest in toll projects in NC, speaking extensively to state assemblymen and staffers, and appearing before state committees. His success in funding and building toll bridges in his state has given him credibility.

Larry Goode, a former director of finance at NCDOT, now Institution for Transport Research, NC State University Raleigh has also been outspoken about the importance of tolls as a new source of funding for state roads: “Our needs (for funding) are quite incredible. I think we have no alternative but to look very hard at tolls.” Goode has named (TRnl#46 Feb00 p1) a list of projects that he says should be studied for toll financing including: (1) I-77 north of Charlotte which could use toll express lanes (2) unfunded sections of the Charlotte Loop (3) I-40 toll express lanes Raleigh through Chapel Hill (4) Raleigh Outer Loop (5) a missing link in US-64 east of Raleigh (6) Winston-Salem Loop (7) Greensboro Loop (8) Outer Banks connections (9) I-95 VA-SC. The last, 290km (180mi) of presently 2x2-lane motorway with 39 interchanges, Goode says, needs reconstruction to 2x3 and in places 2x4-lanes. Tolls are the way to go, he says. Much of the traffic enters at one end of the state and exits the other end, so it doesn’t pay fuel taxes in the state. The rebuilt and widened I-95 is about a $2b job.

These are the megaprojects! There are many smaller projects that may be more easily advanced, for example a new bridge over the Catawba River/Lake Wylie in the southwest part of the Charlotte area west of the airport to improve connections to Gastonia. Though few road projects are easy! (Contacts Calvin Leggett NCDOT 919 733 2031 text of bill at www.ncga. state.nc.us, Larry Goode 919 515 8564, Jim Allen 334 567 2001)