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Tolling and Pricing of Federal-Aid Highways:

Summary of Opportunities and Process

Background

Tolling and pricing strategies (e.g., strategies that vary the price of a toll based on the time of day or traffic volume) are increasingly emerging as necessary and useful tools to finance projects, manage congestion, improve air quality, and facilitate the creation of public-private partnerships. However, all tolling and pricing of Federal-aid highway system facilities requires legal authority from the Federal government, through the U.S. Department of Transportation. The purpose of this paper is to summarize the various opportunities for tolling and pricing of federal-aid highways and the process for requesting permission to toll a federal-aid highway. This paper directly references material from the January 6, 2006 Federal Register Notice on this subject.

Tolling and Pricing Programs and Provisions

Title 23 of the United States Code (23 U.S.C.), Section 301, generally prohibits the imposition of tolls on federal-aid highway facilities. However, SAFETEA-LU legislation, along with previous provisions, offers States and other public entities an enhanced variety of opportunities to toll motor vehicles to finance Interstate construction and reconstruction, promote efficiency in the use of highways, reduce traffic congestion, and/or improve air quality. There are now six tolling and pricing programs or provisions that allow tolling or pricing of federal-aid highways:

More detailed information on these programs and provisions is contained in the Federal Tolling Programs and Provisions Decision Support Guidance matrix at the end of this paper.

Process for Requesting Permission to Toll a Federal-Aid Facility

The six programs and provisions described above can be potentially confusing because of their range of specific purposes. In an effort to minimize this potential confusion, FHWA has established a collaborative process for a State or other public entity to work with the FHWA “Tolling and Pricing Team” in identifying the appropriate program or provision and applying to a specific program or provision. This process can be summarized as follows:

Further Information

While this paper presents a summary of this subject, further information can be found from a variety of sources:

Federal Tolling Programs and Provisions Decision Support Guidance

Issues/Federal Requirements

Value Pricing
Pilot Program
(Sec. 1012(b) of ISTEA, as amended)

Express Lanes Demonstration Program (Sec. 1604(b) of SAFETEA-LU)

Interstate Construction Toll Pilot (Sec. 1604(c) of SAFETEA-LU)

Interstate Rehab & Reconstruction (Sec. 1216(b) of TEA-21)

HOV Facilities
(Includes HOT Lanes)
23 U.S.C. 166

23 U.S.C. Section 129
Section 129 Agreements

Funding
(Discretionary funding for Feasibility, Pre-Implementation, Implementation, and Evaluation)

$12 mil for each of the FYs 2006-2009
($3 mil shall be available only for projects that do not involve highway tolls)
Projects may not be funded for a period longer than 3 years.

None

None

None

None

None

State
Participation
Restrictions

Only 15 States may participate
14 currently participating: CA, CO, FL, GA, IL, MD, MN, NC, NJ, OR, PA, TX, VA, WA

15 demonstration projects eligible in any state

3 facilities on the Interstate eligible
*Compact of states are eligible

3 facilities on the Interstate eligible
Each facility must be located in a different state
2 facilities currently participating: VA, MO

Unlimited participation

Unlimited participation

Deadlines for Participation

Expressions of Interest- August 1 each year for the subsequent fiscal year.
Formal application-October 1 in the fiscal year where funds are requested.

September 30, 2008

August 10, 2015

None

None

None

Eligible Projects 

Conversion of Interstate HOV lanes to new HOT lanes

No
*Authority will be granted under 23 USC 166

Yes
*May toll new HOT/Managed Lanes and existing HOV lanes
*Authority will be granted under 23 USC 166

No

Yes

Yes
*Only HOV lane may be tolled

No

Development of new Interstate HOT or Managed Lanes

Yes
*May toll only HOT/Managed Lanes

Yes
*May toll only HOT/Managed Lanes

No

Yes

Yes
*May toll new HOT/Managed Lanes and existing HOV lanes

No

Tolling to Rehab and Reconstruct

No

No

No

Yes
*May toll entire facility
Interstate only

Yes
*Only HOV lane may be tolled

Yes
Interstate-bridge or tunnel only
Non-Interstate eligible

Tolling to finance expansion of a highway

No

Yes
*May toll only HOT/Managed Lanes

No

Yes
*May toll entire facility

Yes
*May toll new HOT/Managed Lanes and existing HOV lanes

Yes
Interstate-bridge or tunnel only
Non-Interstate eligible

Tolling to construct a new Interstate facility (other than HOT/Managed Lane)

No

No

Yes
Interstate only

No

No

Yes
Non-Interstate only

Tolling existing free interstate

Yes

Yes

No

Yes

Yes
*Motorcycles, bicycles, and vehicles that do not meet the established occupancy requirements for the HOV lanes may be tolled.

Yes
Interstate-bridge or tunnel only

Tolling Requirements  

Ability to toll vehicles that do not meet the established occupancy requirements for the HOV lanes (if HOV occupancy set at 3+, can charge 2 occupants

No

Yes

Yes

Yes

Yes (except for motorcycles and bicycles)

Yes

Required use of non-cash electronic technology toll collections

No
**However, NPRM will require it

Yes

No
**However, NPRM will require it

No

Yes

No

Manage demand by varying toll

Yes

Yes

No

No

Yes

No

Required to limit or discontinue tolling program if facility is degraded

No

Yes

No

No

Yes

No

Toll agreement

Yes

Yes

Yes

Yes

Yes

Yes

Revenue Restrictions  

Use of toll revenue

Debt service, reasonable rate of return on investment, and maintenance and operations of toll facility Also, project implementation costs and mitigation measures for low income users

Debt service, reasonable return on investment, and maintenance and operations of toll facility. If state certifies project is adequately maintained and operated, may be used for any other purpose relating to a highway or transit purpose carried out under Title 23 or Title 49.

Debt service, reasonable return on investment, and maintenance and operations of toll facility

Debt service, reasonable return on investment, and maintenance and operations of toll facility

Debt service, reasonable return on investment, and maintenance and operations of toll facility

Debt service, reasonable return on investment, and maintenance and operations of toll facility

Use of toll revenue for transit operating costs (non-Title 23)

Yes
*Only as part of project

No

No

No

No

No

Use of excess toll revenue

Must be eligible under Title 23

If state certifies project is adequately maintained and operated, may be used for any other purpose relating to a highway or transit purpose carried out under Title 23 or Title 49.

Only on facility

Only on facility

Must be eligible under Title 23 - give priority to projects for developing alternatives to SOV travel and projects for improving safety

Must be eligible under Title 23

Other Restrictions  

Evaluation of value pricing aspects, including if appropriate, the effects on low income drivers

Yes

No

N/A

N/A

No

N/A

Requirement for state to enforce HOV violations

No

Yes

No

No

Yes

No

Requires states to establish a performance monitoring, evaluation and reporting program for HOV facility

No

Yes-Performance goals for each project required

No

No

Yes

No

Required to submit annual certification indicating meeting Federal requirements for HOT lanes

Yes

Yes

No

No

Yes

No

Non-Compete Agreement required

No

No

Yes

No

No

No

Can the facility use IM funds?

Yes

Yes

No

No

Yes

Yes

Page last modified on April 1, 2013.
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