[Federal Register Volume 66, Number 88 (Monday, May 7, 2001)]
[Notices]
[Pages 23077-23081]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-11403]
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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), 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 1012(b) of the
Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA)
(Public Law 102-240, 105 Stat. 1914), as amended by 1216(a) of the
Transportation Equity Act for the 21st Century (TEA-21) (Public Law No.
105-178, 112 Stat. 107 (1998)) and presents guidelines for program
applications. This notice updates an October 5, 1998, notice by
providing revised procedures, processes and timelines. This document
also describes the statutory basis for the Pilot Program and procedures
that will be used to implement the program. 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
continue to be held open until further notice. To ensure that all
projects receive fair consideration, the FHWA encourages all potential
grant applicants to submit their proposals no later than October 1,
2001, for fiscal year (FY) 2002 funds and October 1, 2002, for FY 2003
funds.
FOR FURTHER INFORMATION CONTACT: Mr. Patrick DeCorla-Souza, Highway
Pricing and System Analysis Team (202) 366-4076; or Mr. Steven Rochlis,
Office of the Chief Counsel, (202) 366-1395; FHWA, 400 Seventh Street,
SW., Washington, DC 20590. Office hours are from 7:45 a.m. to 4:15
p.m., e.t., Monday through Friday, except Federal holidays.
SUPPLEMENTARY INFORMATION:
Electronic Access
You may submit or retrieve comments online through the Document
Management System (DMS) at: http://dms.dot.gov/submit. Acceptable
formats include: MS Word (versions 95 to 97), MS Word for Mac (versions
6 to 8), Rich Text File (RTF), American Standard Code Information
Interchange (ASCII)(TXT), Portable Document Format (PDF), and
WordPerfect (versions 7 to 8). The DMS is available 24 hours each day,
365 days each year. Electronic submission and retrieval help and
guidelines are available under the help section of the web site.
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
[[Page 23078]]
Government Printing Office's database at: http://www.access.gpo.gov/nara.
Background
Section 1012(b) of the ISTEA, as amended by section 1216(a) of the
TEA-21, authorizes the Secretary of Transportation (the Secretary) to
create a Pilot Program by entering into cooperative agreements with up
to 15 State or local governments or other public authorities, to
establish, maintain, and monitor local value pricing pilot programs.
The statute provides that any value pricing project included under
these 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
$11 million is authorized for each of the fiscal years 2000 through
2003 to be made available to carry out Pilot Program requirements. The
Federal share payable under the program is 80 percent of the cost of
the project. 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 the TEA-21 amends section 1012(b) of the
ISTEA by adding 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 are 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, such as providing new or expanded
transit service as an integral part of the value pricing project. The
costs of such mitigation measures can be included as part of the value
pricing project implementation cost. The Secretary is required 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; Houston, Texas; and San
Francisco, California. In addition, pre-program planning activities
have been completed or are on-going in the following States: Oregon,
California, Colorado, Minnesota, Washington, Florida, Maryland, Texas,
and 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.
Discussion of Comments
The FHWA received three comments to our previous notice published
on October 5, 1998, at 63 FR 53487. One was a comment from a private
citizen, one from a metropolitan planning organization, and one from a
national trade association. Two of the comments were favorable. The
third commenter, a national trade association expressed support for the
value pricing concept. However, as a matter of policy, the association
opposes new or increased peak period tolls on Interstate highways
because it does not consider such tolls to be efficient and truckers do
not have the same flexibility with regard to their schedules as
motorists engaged in personal travel. However, based on the pilot
projects to date that have implemented pricing programs on Interstates,
tolling has only been implemented on special-use lanes, and has
actually improved traffic flow slightly in the regular unrestricted use
lanes by shifting some traffic from them to the tolled lanes.
Purpose
The purpose of this notice is to provide general information about
the Pilot Program and the 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 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. They also reduce
congestion, improve air quality, conserve energy, and meet 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. ``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 (See 49 CFR part 18).
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, consideration will also be given to the use of
other market-based approaches to congestion relief, such as parking
pricing, freight access pricing, electronic payment services linked to
value pricing, or pay-as-you-drive services, such as usage based auto
insurance, provided the project incorporates 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, improve system performance, 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 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
area wide pricing, pricing of multiple facilities or corridors, and/or
[[Page 23079]]
combinations of road pricing and parking pricing.
2. Pricing may be available at 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). Pricing of queue
jumps is also eligible. A queue jump is defined as a facility that can
be used by certain types of traffic to bypass points on the
transportation network where congestion is particularly severe and
occurs in a predictable pattern (colloquially called ``bottlenecks'').
Queue jumps can be as elaborate as an elevated facility or as simple as
an at-grade lane addition.
3. There are other applications of value pricing that 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 that 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 that 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 of value pricing across local areas and States.
5. Projects with anticipated value pricing charges that have as the
key characteristic that they are targeted at vehicles causing
congestion, and are set at levels significant enough to encourage
drivers to use alternative times, routes, modes, or trip patterns
during congested periods, are likely to receive favorable
consideration. Proposed projects that contemplate value pricing charges
that are not 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 that are likely to add to the base of knowledge about
the various design, implementation, effectiveness, operational, and
acceptability dimensions of value pricing are eligible for
consideration under the Pilot Program. The FHWA is seeking information
related to the impacts of value pricing on the following: 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 potential of
the pilot program.
7. Projects that do not have adverse effects on alternative routes
or modes, or on low-income or other transportation disadvantaged
groups, are encouraged under the Pilot Program. 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, services such as
``life-line'' toll rates aimed at low income travelers, and toll
credits earned by motorists in regular lanes which can be used to pay
tolls on priced lanes.
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 that assist in
establishing value pricing projects and programs. 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, area-wide 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 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--Pre-project study activity costs
allowed include: pre-project planning, public participation, consensus
building, marketing, impact assessment, modeling, financial planning,
technology assessments and specifications, and other pre-implementation
work that relate to the establishment of the value pricing project.
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 such as costs for
setting up, managing, operating, evaluating, and reporting on a value
pricing project, including:
[[Page 23080]]
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 toll authorities to purchase an
insurance policy that will cover unanticipated lost revenue resulting
from a pilot test of value pricing. This may be necessary to avoid
jeopardizing a toll authority's bond covenants. If an agency decides to
purchase an insurance policy to cover anticipated loss of revenue,
federal participation would be no more than 50 percent of the total
cost or a dollar cap. 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, the FHWA recognizes
that forecasting traffic and revenue changes is inherently uncertain,
and that an insurance policy to offset any unintended toll revenue
losses would be designed 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 the project
generates sufficient revenues 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, the
implementation of traffic control systems or transit projects can be
funded through other highway and transit programs eligible under TEA-21
and from new revenues raised as a result of a pilot. Those interested
in participating in the Pilot Program are encouraged to explore
opportunities for combining funds from these other programs with Pilot
Program funds. This is not meant to imply that Federal funds may be
used to match Pilot Program funds unless specific statutory authority
permits such matching.
Eligible Uses of Revenue
The FHWA will provide up to the legislatively allowable 80 percent
share of the estimated costs of an approved project. Any revenues
generated by a pilot project must be applied first to pay for pilot
project implementation costs. Any project revenues in excess of pilot
project implementation expenses may be used for any programs eligible
under title 23, U.S. Code. Uses of revenue 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 authorities and
non-profit organizations. 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
Highway Pricing and Systems Analysis Team in the Office of
Transportation Policy Studies 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, potential applicants
should submit a sketch plan for the proposed pricing program before
developing a full-scale proposal. To facilitate a streamlined
application process, the sketch plan need not exceed 15 pages. The
sketch plan should 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. At a minimum, by the time the refined proposal
is submitted, the local Metropolitan Planning Organization (MPO) and
the owner/operator of the facility or facilities to be priced should
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 complete pre-
project studies. The sketch plan should be submitted through the State
Department of Transportation to the appropriate FHWA Division
Administrator, who will forward the plan to FHWA's Director, Office of
Transportation Policy Studies. To expedite the review, the applicant
should concurrently send a copy directly to the FHWA Highway Pricing
and System Analysis Team at 400 Seventh Street, SW., Washington, D.C.
20590.
Based on initial review of the sketch plan, the FHWA will work with
the proposing authority to develop a refined proposal for review by the
Federal Interagency Review Group which provides support to the FHWA in
evaluating program applications (see the caption ``Review Process,'' in
this preamble below). Ideally, the refined proposal will include:
1. A description of the congestion problem being addressed (current
and projected);
2. A description of the proposed pricing program and its goals,
including description of facilities included, and, for implementation
projects, expected
[[Page 23081]]
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 implementation
projects, including plans for data collection and analysis, before and
after assessment, and long term monitoring and documenting of project
effects;
8. A detailed finance and revenue plan, including for
implementation projects 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. The FHWA
will give priority 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 in this preamble under the caption ``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 Highway Pricing
and Systems Analysis 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 the FHWA, the Federal
Transit Administration, the Office of the Secretary of Transportation,
and the Office of Intermodalism. The U.S. Environmental Protection
Agency and the U.S. Department of Energy are also represented on the
Review Group. To facilitate review, applicants should submit an
electronic copy of their application, plus an unbound reproducible hard
copy of the proposal. 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 Transportation Policy Studies. The FHWA will review
applications received and make program participant selections based on
the criteria contained in this notice.
To ensure that all projects receive fair consideration, the FHWA
encourages all potential grant applicants to submit their proposals no
later than October 1, 2001, for FY 2002 funds and October 1, 2002, for
FY 2003 funds. This timeline will allow for a fair comparison among
proposals received and will also allow the FHWA to make timely
recommendations to the Secretary regarding how to expend available
funds in accordance with the criteria discussed in this preamble.
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 to define the scope of work for the value pricing program.
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 the FHWA approval of pricing project implementation, value
pricing programs must be shown to be consistent with Federal
metropolitan and statewide planning requirements.
Implementation 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 the TEA-21.
Implementation projects 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 metropolitan plan must be in conformance with the State
air quality implementation plan); (b) included in the approved
metropolitan and statewide transportation improvement programs (if the
metropolitan area is in a nonattainment area for a transportation
related pollutant, the metropolitan transportation improvement program
must be in conformance with the State air quality implementation plan);
(c) selected in accordance with the requirements in Public Law 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: April 27, 2001.
Vincent F. Schimmoller,
Deputy Executive Director.
[FR Doc. 01-11403 Filed 5-4-01; 8:45 am]
BILLING CODE 4910-22-P