[Federal Register Volume 63, Number 192 (Monday, October 5, 1998)]
[Notices]
[Pages 53487-53491]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-26531]
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DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
[FHWA Docket FHWA-98-4300]
Transportation Equity Act for the 21st Century; Implementation
for Participation in the Value Pricing Pilot Program
AGENCY: Federal Highway Administration (FHWA), Department of
Transportation (DOT).
ACTION: Notice; solicitation for participation.
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SUMMARY: This notice invites State or local governments or other public
authorities to make applications for participation in the Value Pricing
Pilot Program (Pilot Program) authorized by section 1216(a) of the
Transportation Equity Act for the 21st Century (TEA-21) (Pub. L. 105-
178, 112 Stat. 107) and presents guidelines for program applications.
This document also describes the legislative mandate for the Pilot
Program and procedures which will be used to implement the program. As
described in the background section of this notice, and in keeping with
the DOT's broad outreach on TEA-21 programs, the procedures described
in this notice reflect the valuable contributions of FHWA's State and
local partners and many others who have participated in a series of
regional workshops and an October 1997, Project Partners' Retreat. The
FHWA will accept comments on these administrative guidelines throughout
the life of the Pilot Program and, as necessary, will issue additional
guidance in response to public comments and program experience.
DATES: The solicitation for participation in the Pilot Program will be
held open until further notice.
FOR FURTHER INFORMATION CONTACT: Mr. John T. Berg, Highway Revenue and
Pricing Team, HPP-10, (202) 366-0570; or Mr. Wilbert Baccus, Office of
the Chief Counsel, HCC-32, (202) 366-0780; FHWA, 400 Seventh Street,
SW., Washington, D.C. 20590.
SUPPLEMENTARY INFORMATION:
Electronic Access
Internet users can access all comments received by the U.S. DOT
Dockets, Room PL-401, by using the universal resource locator (URL):
http://dms.dot.gov. It is available 24 hours each day, 365 days each
year. Please follow the instructions online for more information and
help.
An electronic copy of this document may be downloaded using a modem
and suitable communications software from the Government Printing
Office's Electronic Bulletin Board Service at (202) 512-1661. Internet
users may reach the Federal Register's home page at: http://
www.nara.gov/fedreg and the Government Printing Office's database at:
http://www.access.gpo.gov/nara.
Background
Section 1216(a) of TEA-21 authorizes the Secretary of
Transportation (the Secretary) to create a Pilot Program by entering
into cooperative agreements with up to fifteen State or local
governments or other public authorities, to establish, maintain, and
monitor local value pricing pilot programs. Section 1216(a)(4) amends
section 1012(b)(4) of the Intermodal Surface Transportation Efficiency
Act of 1991 (ISTEA), Pub.L. 102-240, 105 Stat. 1914, by providing that
any value pricing project included under these local programs may
involve the use of tolls on the Interstate system. This is an exception
to the general provisions concerning tolls on the Interstate system as
contained in 23 U.S.C. 129 and 301. A maximum of $7 million is
authorized for fiscal year 1999, and $11 million for each of the fiscal
years 2000 through 2003 to be made available to carry out Pilot Program
requirements. The Federal matching share for local programs is 80
percent. Funds allocated by the Secretary to a State under this section
shall remain available for obligation by the State for a period of
three years after the last day of the fiscal year for which funds are
authorized. If, on September 30 of any year, the amount of funds made
available for the Pilot Program, but not allocated, exceeds $8 million,
the excess amount will be apportioned to all States for purposes of the
Surface Transportation Program.
Funds available for the Pilot Program can be used to support pre-
project study activities and to pay for implementation costs of value
pricing projects.
Section 1216 (a)(5) of TEA-21 amends section 1012(b) of ISTEA by
adding
[[Page 53488]]
subsection (6) which provides that a State may permit vehicles with
fewer than two occupants to operate in high occupancy vehicle (HOV)
lanes if the vehicles are part of a local value pricing pilot program
under this section. This is an exception to the general provision
contained in 23 U.S.C. 102, that no fewer than two occupants per
vehicle be allowed on HOV lanes. Potential financial effects of value
pricing projects on low-income drivers shall be considered and, where
such effects are expected to be significant, possible mitigation
measures should be identified. The costs of such mitigation measures
can be included as part of the value pricing project implementation
cost. The Secretary is to report to Congress every two years on the
effects of local value pricing pilot programs.
The Value Pricing Pilot Program is a continuation of the congestion
Pricing Pilot Program authorized by section 1012(b) of the ISTEA. Under
this program, pricing projects have reached the implementation stage in
San Diego, California; Lee County, Florida; and Houston, Texas. In
addition, pre-program planning activities have been supported in
Portland, Oregon; Los Angeles, San Francisco and Sonoma County,
California; Boulder, Colorado; Minneapolis/St. Paul, Minnesota; and
Westchester County, New York. Funds were also used to support the
California DOT's monitoring and evaluation study of the private,
variable-priced toll lanes along State Route 91 in Orange County,
California.
An important aspect of the ISTEA program was the Federal/State/
local partnership that was created as part of the program's
development. The Value Pricing Pilot Program described in this notice
builds upon that partnership and the experience of the ISTEA program.
In particular, the views and concerns of the FHWA's project partners,
and other interested parties, were solicited during a series of
regional workshops that were sponsored as part of the ISTEA program,
and in a Project Partners' Retreat that was held in October 1997. This
notice reflects these valuable contributions.
Purpose
The purpose of this notice is to provide general information about
the Pilot Program and FWHA's plans for implementing the program, and to
invite State or local governments or other public authorities to make
applications for participation in the Pilot Program.
Definitions
Value pricing, congestion pricing, peak-period pricing, variable
pricing, or variable tolling, are all terms used to refer to direct
point/time-of-travel charges for road use, possibly varying by
location, time of day, severity of congestion, vehicle occupancy, or
type of facility. By shifting some trips to off-peak periods, to mass
transit or other higher-occupancy vehicles, or to routes away from
congested facilities, or by encouraging consolidation of trips, value
pricing charges are intended to promote economic efficiency both
generally and within the commercial freight sector, and to achieve
congestion reduction, air quality, energy conservation, and transit
productivity goals.
A value pricing project means any implementation of value pricing
concepts or techniques meeting the definitions contained in this notice
and included under a local value pricing pilot program under this
section, where a local value pricing pilot program includes one or more
value pricing projects serving a single geographic area, such as a
metropolitan area, and included under a single cooperative agreement
with the FHWA. Cooperative agreement means the agreement signed between
the FHWA and a State or local government, or other public authority to
implement local value pricing pilot programs under this section.
Program Objective
The overall objective of the Pilot Program is to support efforts by
State and local governments or other public authorities to establish
local value pricing pilot programs, to provide for the monitoring and
evaluation of value pricing projects included in such programs, and to
report on their effects. While the Pilot Program's primary focus is on
value pricing on roads, attention will also be given to the use of
other market-based approaches to congestion relief, such as parking
pricing, if they incorporate significant price variations by time,
location, and/or level of congestion.
Potential Project Types
The FHWA is seeking proposals to use value pricing projects to
reduce congestion and promote mobility. Value pricing charges are
expected to accomplish this purpose by encouraging the use of
alternative times, modes, routes, or trip patterns. To this end, and to
increase the likelihood of generating information on a variety of
useful value pricing strategies, proposed projects having as many of
the following characteristics as possible will receive highest priority
for Federal support. Projects of interest include:
1. Applications of value pricing which are comprehensive, such as
areawide pricing, pricing of multiple facilities or corridors, and/or
combinations of road pricing and parking pricing.
2. Pricing of key traffic bottlenecks, single traffic corridors, or
pricing on single highway facilities, including bridges and tunnels.
Proposals to shift from a fixed to a variable toll schedule on existing
toll facilities are encouraged (i.e., combinations of peak-period
surcharges and off-peak discounts).
3. More limited applications of value pricing are also acceptable,
including pricing on lanes otherwise reserved for high occupancy
vehicles, known as high occupancy toll (HOT) lanes, or pricing on newly
constructed lanes. Highest priority will be given to lane pricing
proposals which cover multiple facilities and/or offer innovative
pricing, enforcement, or operational technologies. In order to protect
the integrity of HOV programs, the FHWA will give priority to those HOT
lane proposals where it is clear that an HOV lane is underutilized and
where local officials can demonstrate that the pilot project would not
undermine a long-term regional strategy to increase ridesharing. In
addition, areas proposing HOT lane projects are encouraged to use
revenues from the project to promote improved transit service or other
programs that will encourage transit use and ridesharing.
4. Innovative time-of-day parking pricing strategies, provided the
level and coverage of proposed parking charges is sufficient to reduce
congestion. Parking pricing strategies which are integrated with other
market-based pricing strategies (e.g., value pricing) are encouraged.
Parking pricing strategies should be designed to influence trip-making
behavior, and might include peak-period parking surcharges, or policies
such as parking cash-out, where cash is offered to employees in lieu of
subsidized parking. Pricing of a single parking facility, coverage of a
few employee spaces, or pricing of parking spaces in a small area, for
example, are unlikely to receive priority treatment, unless they
incorporate a truly unique element which might facilitate broader
applications across local areas and States.
5. Projects with anticipated value pricing charges which have the
key characteristic that they are targeted at vehicles causing
congestion, and they are set at levels significant enough to encourage
drivers to use alternative times, routes, modes, or trip patterns
during congested periods. Proposed projects which contemplate value
pricing charges which are not
[[Page 53489]]
significant enough to influence demand, such as minor increases in fees
during peak-periods, or moderate toll increases instituted primarily
for financing purposes, will be given low priority.
6. Projects which are likely to add to the base of knowledge about
the various design, implementation, effectiveness, operational, and
acceptability dimensions of value pricing. The FHWA is seeking
information related to the impacts of value pricing on travel behavior
(mode use, time-of-travel, trip destinations, trip generation, etc., by
private and commercial trips); on traffic conditions (trip lengths,
speeds, level of service); on implementation issues (technology,
innovative pricing techniques, public acceptance, administration,
operation, enforcement, legality, institutional issues, etc.); on
revenues, their uses and financial plans; on different types of users
and businesses; and on measures designed to mitigate possible adverse
impacts and their effectiveness. These diverse information needs mean
that the FHWA may fund different types of value pricing applications in
different local contexts to maximize the learning potential of the
pilot program.
7. Projects which do not have adverse effects on alternative routes
or modes, or on low-income or other transportation disadvantaged
groups. If such effects are anticipated, proposed pricing programs
should incorporate measures to mitigate any major adverse impacts,
including enhancement of transportation alternatives for peak-period
travelers.
8. Projects which indicate that revenues will be used to support
the goals of the value pricing project and to mitigate any adverse
impacts of the project.
While the FHWA is seeking proposals that incorporate some, or all
of these project characteristics, these guidelines are intended only to
illustrate selection priorities, not to limit potential program
participants from proposing new and innovative pricing approaches for
incorporation in the program.
Pre-Project Studies
A small amount of Pilot Program funds will be used to assist State
and local governments in carrying out pre-project study activities
designed to lead to implementation of a value pricing project,
including activities such as pre-project planning, public
participation, consensus building, modeling, impact assessment,
financial planning studies, and work necessary to meet any Federal or
State environmental or other planning requirements. The intent of the
pre-project study phase of the Pilot Program is to support efforts to
identify and evaluate value pricing project alternatives, and to
prepare the necessary groundwork for possible future implementation.
Purely academic studies of value pricing (not designed to lead to
possible project implementation), or broad, areawide planning studies
which incorporate value pricing as an option, will not be funded under
this program. Broad planning studies can be funded with regular
Federal-aid highway or transit planning funds. Proposals for pre-
project studies will be selected based on the likelihood that they will
lead to implementation of pilot tests of value pricing meeting the
characteristics described in the previous section.
Eligible Costs
Funds available for the Pilot Program can be used to support pre-
project study activities and to pay for implementation costs of value
pricing projects. Costs eligible for reimbursement under section
1216(a) of TEA-21 include costs of planning for, setting up, managing,
operating, monitoring, evaluating, and reporting on local value pricing
pilot projects. Examples of specific costs eligible for reimbursement
include the following:
1. Pre-Project Study Costs--All costs of pre-project study
activities, including costs of pre-project planning, public
participation, consensus building, marketing research, impact
assessment, modeling, financial planning, technology assessments and
specifications, and other work necessary for defining value pricing
projects for implementation, and doing necessary design work to bring
projects to the point where they can be implemented. Costs of pre-
project study activities cannot be reimbursed for longer than three
years.
2. Implementation Costs--Implementation costs are costs necessary
for implementation of specific value pricing projects identified during
the pre-project study phase of the program, including costs for setting
up, managing, operating, evaluating, and reporting on a value pricing
project, including:
a. Costs associated with implementation of a value pricing project,
including necessary salaries and expenses or other administrative and
operational costs, such as installation of equipment necessary for
operation of a pilot project (e.g., AVI technology, video equipment for
traffic monitoring, other instrumentation), enforcement costs, costs of
monitoring and evaluating project operations, and costs of continuing
public relations activities during the period of implementation.
b. Costs of providing transportation alternatives, such as, new or
expanded transit service provided as an integral part of the value
pricing project. Funds are not available to replace existing sources of
support for transit services.
c. Depending on the availability of funds, a limited amount of
funds may be made available to serve as a revenue reserve fund to
provide assurance to toll authorities that a pilot test of value
pricing would not jeopardize their bond covenants. For example, a toll
authority might propose a revenue-neutral pricing strategy with peak-
period surcharges and off-peak discounts designed to shift demand
patterns and improve customer service, or to reduce the need for future
capacity expansion. Even though no reduction in toll revenues is
intended, FHWA recognizes that forecasting traffic and revenue changes
is inherently uncertain, and the availability of a reserve fund to
offset any unintended toll revenue losses is intended to help overcome
institutional barriers to the testing and use of value pricing by
existing toll authorities.
Project implementation costs can be supported for a period of at
least one year, and thereafter until such time that sufficient revenues
are being generated by the project to fund its implementation costs
without Federal support, except that implementation costs for a pilot
project cannot be reimbursed for longer than three years. Each
implementation project included in a local value pricing pilot program
will be considered separately for this purpose. Funds may not be used
to pay for activities conducted prior to approval of Pilot Program
participation. Funds may not be used to construct new highway through
lanes, bridges, etc., even if those facilities are to be priced, but
toll ramps or minor pavement additions needed to facilitate toll
collection or enforcement are eligible.
Complementary actions, such as, construction of HOV lanes,
implementation of traffic control systems, or transit projects can be
funded through other highway and transit programs eligible under TEA-
21. Those interested in participating in the Pilot Program are
encouraged to explore opportunities for combining funds from these
other programs with Pilot Program funds.
Eligible Uses of Revenue
Revenues generated by a pilot project must be applied first to pay
for pilot project implementation costs as defined above. Any project
revenues in excess of pilot project implementation expenses, may be
used for any programs eligible under Title 23, U.S.C. Uses of revenue
[[Page 53490]]
are encouraged which will support the goals of the value pricing
program, particularly uses designed to provide benefits to those
traveling in the corridor where the project is being implemented.
Applying for Program Participation
Qualified applicants include local, regional and State government
agencies, as well as public tolling authorities. Although project
agreements must be with public authorities, a local value pricing
program partnership may also include private tolling sponsors and
authorities. To streamline the process of applying for program
participation as much as possible, it is suggested that, prior to
submitting a formal application for program participation, potential
applicants contact their State FHWA Division Office and/or the FHWA
Pricing Team in the Office of Policy Development to discuss their
interest in the Pilot Program and the general nature of the proposed
local value pricing pilot program or pre-project study. The FHWA will
then be able to provide materials and technical support to assist in
the development of the application. Following this initial contact, a
sketch plan for the proposed pricing program should be submitted before
a full scale proposal is developed. The sketch plan should, as a
minimum, provide a brief description of the following:
1. Congestion problem to be addressed.
2. Nature of proposed or potential pricing projects to respond to
that problem, including overall project goals, potential facilities to
be included, time line for study and possible implementation of value
pricing projects.
3. Parties proposed as being signatories to the cooperative
agreement with the FHWA (as a minimum, the local Metropolitan Planning
Organization (MPO), and the owner/operator of the facility or
facilities to be priced, must endorse or express support for the
program). Indications of support from affected parties, including
representatives of business, labor, industry, transportation users,
and/or local residents, or plans for obtaining such support should be
included.
4. Extent of public participation in the development of the
proposal, or of plans for future public participation activities.
Potential equity consequences of any proposed projects should be
portrayed in general terms, and if adverse impacts are anticipated,
preliminary plans for responding to such problems should be identified.
5. Legal and administrative authority needed to carry out a value
pricing project, extent to which these have been obtained, and further
steps needed to obtain necessary authority.
6. Plans for pre-project study, or findings from pre-project
studies that have already been completed.
The sketch plan should be submitted through the MPO and/or State
Department of Transportation to the appropriate FHWA Division
Administrator, who will forward the plan to FHWA's Director, Office of
Policy Development, where the FHWA Pricing Team is located.
Based on its initial review of the initial sketch plan, the FHWA
will work with the proposing authority to develop a detailed proposal
for review by the Federal Interagency Review Group which provides
support to the FHWA in evaluating program applications (see ``Review
Process,'' below). Ideally, the detailed proposal will include:
1. Detailed description of the congestion problem being addressed
(current and projected);
2. Detailed description of the proposed pricing program and its
goals, including description of facilities included, expected pricing
schedules, technology to be used, enforcement programs, and so on;
3. Preliminary estimates of the social and economic effects of the
pricing program, including potential equity impacts, and a plan or
methodology for further refining these estimates for all pricing
project(s) included in the program;
4. The role of alternative transportation modes in the project, and
anticipated enhancements proposed to be included in the pricing
program.
5. A time line for the pre-project study and implementation phases
of the project (proposals indicating early implementation of pricing
projects that will allow evaluation during the life of TEA-21 will
receive priority);
6. A description of tasks to be carried out as part of each phase
of the project, and an estimate of costs associated with each;
7. Plans for monitoring and evaluating value pricing projects,
including plans for data collection and analysis, before and after
assessment, and plans for long term monitoring and documenting of
project effects;
8. A detailed finance and revenue plan, including a budget for
capital and operating costs; a description of all funding sources,
planned expenditures, proposed uses of revenues, and a plan for
projects to become financially self-sustaining (without Federal
support) within three years of implementation.
9. Plans for involving key affected parties, coalition building,
media relations, etc., including either demonstration of previous
public involvement in the development of the proposed pricing program,
or plans to ensure adequate public involvement prior to implementation;
10. Plans for meeting all Federal, State and local legal and
administrative requirements for project implementation, including
necessary Federal-aid planning and environmental requirements. Priority
will be given to proposals where projects are included as a part of (or
are consistent with) a broad program addressing congestion, mobility,
air quality and energy conservation, where an area has congestion
management systems (CMS) for Transportation Management Areas (urbanized
areas over 200,000 population or those designated by the Secretary) and
the congestion mitigation and air quality (CMAQ) program. If some of
these items are not available or fully developed at the time the
proposal is submitted, proposals will still be considered for support
if they meet some of the priority interests of the FHWA as described
under ``Potential Project Types,'' and include some of the proposal
characteristics described in this section, and there is a strong
indication that these items will be completed within a short time.
Review Process
Upon receipt of the detailed proposal, the FHWA's Pricing Team will
arrange for a review of the proposal by the Federal Interagency Review
Group established to assist the FHWA in assessing the likelihood that
proposed local value pricing programs will provide valid and useful
tests of value pricing concepts. The Review Group is composed of
representatives of several concerned offices in the U.S. DOT, including
offices in FHWA, Federal Transit Administration, Office of the
Secretary of Transportation, and Office of Intermodalism. The
Environmental Protection Agency is also represented on the Review
Group. To facilitate review, applicants should submit ten copies, plus
an unbound reproducible copy, of the proposal. The FHWA will review
applications received and make selections of program participants based
on the criteria contained in this notice. As with the sketch plan,
detailed proposals should be submitted through the MPO and/or State DOT
to the appropriate FHWA Division Administrator, who will forward the
plan to the FHWA's Director, Office of Policy Development.
[[Page 53491]]
Cooperative Agreement
Based on the recommendations of the Review Group, the FHWA will
identify those Pilot Program proposals which have the greatest
potential for promoting the objectives of the Pilot Program, including
demonstrating the effects of value pricing on driver behavior, traffic
volume, ridesharing, transit ridership, air quality, availability of
funds for transportation programs, and other measures of the effects of
value pricing. Those Pilot Program candidates will then be invited to
enter into negotiations with the FHWA to develop a cooperative
agreement under which the scope of work for the value pricing program
will be defined. The cooperative agreement will be governed by the
Federal statutes and regulations cited in the agreement and 49 CFR part
18, Uniform Administrative Requirements for Grants and Cooperative
Agreements to State and Local Governments, as they relate to the
acceptance and use of Federal funds for this program.
Prior to FHWA approval of pricing project implementation, value
pricing programs must be shown to be consistent with Federal
metropolitan and statewide planning requirements.
Projects outside metropolitan areas must be included in the
approved statewide transportation improvement program and be selected
in accordance with the requirements set forth in section 1204(f)(3) of
TEA-21.
Those in metropolitan areas must be: (a) Included in, or consistent
with, the approved metropolitan transportation plan (if the area is in
nonattainment for a transportation related pollutant, the metro plan
must be in conformance with the State air quality implementation plan);
(b) included in the approved metro and statewide transportation
improvement programs (if the metro area is in nonattainment for a
transportation related pollutant, the metro transportation improvement
program must be in conformance with the State air quality
implementation plan); (c) selected in accordance with the requirements
in Pub.L. No. 105-178, section 1203(h)(5) or (i)(2); and (d) consistent
with any existing congestion management system in transportation
management areas, developed pursuant to 23 U.S.C. 134(i)(3).
(Authority: 23 U.S.C. 315; sec. 1216(a), Pub. L. 105-178, 112
Stat. 107; 49 CFR 1.48).
Issued on: September 24, 1998.
Kenneth R. Wykle,
Federal Highway Administration, Administrator.
[FR Doc. 98-26531 Filed 10-2-98; 8:45 am]
BILLING CODE 4910-22-P