US House Reps transport committee bill puts black cloud over tolling

The US House transportation committee's 'Surface Transportation Authorization Act of 2009' (STAA2009) released today proposes a heavy hit on tolling, road pricing and traffic management. It would revoke four longstanding federal legal authorities for tolling while providing general authority to control toll projects at a new "Office of Public Benefit" within FHWA.

STAA2009 would terminate:

- Interstate System Construction Toll Pilot program (PL109-59, § 1604(c)) under which states may apply for US permission to toll new construction of interstate highways
                        
- Interstate System Reconstruction and Rehabilitation Pilot program (PL105-178, § 1216(b)) under which states may apply for US permission to toll reconstruction of interstates

- Road User Fees Field Test (PL109-59, § 1919) under which advances in toll and road pricing technology can be tested and proven
 
- Value Pricing Pilot program (PL102-240, § 1012(b)) under which scores of congestion management road pricing schemes including conversion of HOV lanes to express toll lanes have been supported (editor - this is contested, see http://www.tollroadsnews.com/node/4222 2009-06-23 1700)

It is unclear whether the programs allowed and sponsored under these four laws would be continued under new generalized authority of an Office of Public Benefit.

George Orwell stirs in his grave in Oxfordshire at the prospect of an OPB.

"Office of Public Benefit" within the FHWA to supervise tolling and P3s 

An "Office of Public Benefit" (OPB) within FHWA would be established by STAA2009, purportedly to ensure that the utilization of tolls and PPPs "enhances the nation’s surface transportation network and provides maximum benefits to the public."

The bill claims to "provide national leadership in protecting the public interest in relation to highway toll projects and PPP agreements on Federal-aid highways"

This is an innocent sounding objective, but it constitutes a major encroachment on state and local powers, and an extra procedural and political hurdle for toll projects to clear. At a minimum it would add enormously to the lobbying load needed to gain federal permits.

Control over "plans for toll rates" on federal-aid highways

The Office of Public Benefit, the sponsors say "reviews and approves (or disapproves) state plans for toll rates on Federal-aid highways, methods for adjusting those tolls, and plans to mitigate toll impacts; and oversees new Federal requirements for PPP agreements on federal-aid highways."

They call the new office, with its truly Orwellian name, a "one-stop shop for federal toll authority."

They claim it "replaces the current patchwork of overlapping toll requirements and pilot programs with a single, centralized source of federal toll authority."

If it were truly a one-stop shop then the Office of Legal Counsel which normally plays the major role would be bypassed. More likely this is empty rhetoric, since we don't see anyone easily bypassing the new counsel Karen Hedlund.

Interstates toll-free "except under narrowly defined circumstances"

They say the bill "keeps Interstates toll-free except under narrowly-defined circumstances."

Where a federal-aid highway is tolled, "transportation alternatives and public protections" will be required.

Use of toll revenues is limited to "debt service, reasonable return on investment, operations and maintenance, and highway and transit transportation projects in the tolled corridor."

Toll concessions will be prohibited from including non-compete provisions preventing states from improving or expanding other roads located within the same corridor as the toll road.

Before implementation of tolls, the federal law would require public comment on the proposed tolling structure, consideration of toll impacts on interstate commerce and travel, and operational and transit improvements to address any projected travel diversion; and measures to mitigate the impacts of tolls on low-income travelers.

Are these the "narrowly defined circumstances"? They aren't that narrow, indeed most are routinely met already - editor.

Pre-existing commitments to be honored

The bill says the new law will not encroach on existing commitments "provided that the toll project is operational or substantially underway."

So existing commitments - state toll concession contracts - will be liable to be trampled if the project is contracted, in design and just starting to get under way?

STAA2009 has one odd redundant toll provision:

Private entities that operate Federal-aid highways are prohibited from "restricting public access to use of those highways."

Why would they ever want to restrict public access unless it was access by drunk divers or other threats to public safety, since the public are the source of their toll revenues? - editor

"Fair market value"

STAA2009 requires PPP concession agreements to allow the government to "buy back" the facility lease at "fair market value" compensation to the private partner, without specifying who determines "fair market value" or how. Maybe the Office of Public Benefit rules on that?

PPP agreements are to include standards that the highway facility must meet, or be upgraded to, by the private partner by the end of the term of the agreement. (Redundant - that already happens.)

Where's the opposition?

STAA2009 is presented by transportation committee chairman James Oberstar (Dem) and highways and transit subcommittee chair Peter DeFazio (Dem) but interestingly also by their two Republican counterparts, or ranking members John Mica and John Duncan. (pictures nearby)

It appears the bill has bipartsian support.

Assessment - pesssimistic/optimistic

This bill can be seen as a large black cloud over the future of tolling in America by cutting productive federal programs supporting congestion management and pricing while subjecting tolling to a new layer of bureaucracy, and introducing federal on top of state politics into the process of starting new toll projects.

Or optimistically, fiscal difficulties will constrain federal and state tax grant monies for roads, forcing states and local governments to sponsor toll projects outside the federal-aid highway program and free of federal controls, while at the federal level encouraging the Office of Public Benefit to exercise its toll powers liberally over federal-aid highways.

Either way tolling would be more of a political gamble under STAA2009 - editor.

TOLLROADSnews 2009-06-18