Fixing America's Surface Transportation (FAST) Act; Solicitation for Candidate Projects in the Interstate System Reconstruction and Rehabilitation Pilot Program (ISRRPP) |
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Brandye L. Hendrickson
Federal Highway Administration
20 October 2017
[Federal Register Volume 82, Number 202 (Friday, October 20, 2017)]
[Notices]
[Pages 48878-48882]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-22775]
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DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
[FHWA Docket No. FHWA-2017-0007]
Fixing America's Surface Transportation (FAST) Act; Solicitation
for Candidate Projects in the Interstate System Reconstruction and
Rehabilitation Pilot Program (ISRRPP)
AGENCY: Federal Highway Administration (FHWA), Department of
Transportation (DOT).
ACTION: Notice; solicitation for applications.
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SUMMARY: The FHWA invites State transportation departments to submit
applications for candidate projects in the Interstate System
Reconstruction and Rehabilitation Pilot Program (ISRRPP), authorized in
the Transportation Equity Act for the 21st Century and amended by the
Fixing America's Surface Transportation (FAST) Act. Under the ISRRPP,
FHWA may permit up to three States to collect tolls on a facility on
the Interstate System for the purpose of reconstructing or
rehabilitating Interstate highway corridors that could not otherwise be
adequately maintained or functionally improved without the collection
of tolls. This notice describes general program provisions, eligibility
and selection criteria, and the application submission and evaluation
process.
DATES: Applications are due to FHWA Division Offices by February 20,
2018. The FHWA will review these submissions and award up to three
provisional approvals to States that will be expected to fully satisfy
the ISRRPP criteria within 3 years. Should FHWA award fewer than three
provisional approvals, it will re-solicit for applications at a future
date.
The FHWA will conduct an information session regarding the ISRRPP
in the form of a Webinar on November 13, 2017 at 2:00 p.m., e.t. For
more information, please visit: https://www.fhwa.dot.gov/ipd/revenue/road_pricing/tolling_pricing/interstate_rr.aspx.
FOR FURTHER INFORMATION CONTACT: For questions about the pilot program:
Ms. Cynthia Essenmacher, Center for Innovative Finance Support, Office
of
[[Page 48879]]
Innovative Program Delivery, Federal Highway Administration, 315 West
Allegan Street, Room 201, Lansing, MI 48933, (517) 702-1856. For legal
questions: Mr. Steven Rochlis, Office of the Chief Counsel, Federal
Highway Administration, 1200 New Jersey Avenue SE., Washington, DC
20590, (202) 366-1395. Office hours are from 8:00 a.m. to 4:30 p.m.
E.T., Monday through Friday, except for Federal holidays.
SUPPLEMENTARY INFORMATION:
Table of Contents
A. Program Description
B. Program Slots
C. Eligibility Information
D. Submission Information
E. Review Information
F. Requirements for Provisionally Approved Projects
A. Program Description
1. Tolling Authority Under the Interstate System Reconstruction and
Rehabilitation Pilot Program (ISRRPP)
The FAST Act section 1411(c) amends the ISRRPP authorized under
section 1216(b) of the Transportation Equity Act for the 21st Century
(TEA-21). The ISRRPP allows a State to collect tolls on a facility on
the Interstate System in order to reconstruct or rehabilitate an
Interstate highway corridor that could not otherwise be adequately
maintained or functionally improved without the collection of tolls. Up
to three facilities may participate in the ISRRPP, and each must be
geographically located in a different State.
Since the ISRRPP's establishment in 1998, several States have
requested and received what FHWA has termed ``provisional approval'' of
pilot projects, also referred to as the reservation of a ``program
slot.'' The purpose of this step has been to enable States to invest
the considerable resources needed to fully satisfy the program
criteria, which are described below, without fear of being superseded
by a subsequent applicant. To date, however, no State has fully
satisfied the ISRRPP program criteria.
2. Other Interstate Tolling Authority
The ISRRPP is not the only authority available to States to toll
facilities on the Interstate System. Today, the 46,730-mile Interstate
System includes approximately 2,900 miles of toll roads, most built as
turnpikes and incorporated into the system in 1957. Current Federal law
provides several options for States to toll Interstate facilities. The
authorities in 23 United States Code (U.S.C.) 129(a)(1) now allow for
the initial construction of an Interstate toll facility; the conversion
of an Interstate high occupancy vehicle (HOV) lane to a toll facility;
the expansion of an Interstate highway and tolling of the new capacity
as long as the current number of toll-free non-HOV lanes is maintained;
and the reconstruction or replacement of a toll-free Interstate System
bridge or tunnel and its conversion to a toll facility.
Additional authorities are provided under 23 U.S.C. 166(c), which
allows public agencies to permit toll-paying vehicles that do not meet
minimum occupancy standards to use high-occupancy vehicle (HOV) lanes.
Such lanes are commonly referred to as high occupancy toll (HOT) lanes.
Finally, the Value Pricing Pilot Program (VPPP), initially authorized
in the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA,
Pub. L. 102-240) as the Congestion Pricing Pilot Program and
subsequently amended under other laws, encourages implementation and
evaluation of value pricing pilot projects to manage congestion through
tolling and other pricing mechanisms on facilities both on and off the
Interstate System. All these current tolling authorities are separate
and distinct from the ISRRPP.
3. FAST Act Amendments to the ISRRPP
The FAST Act amendments to the ISRRPP create several changes.
First, acknowledging the key role that State legislative authority has
in implementing the ISRRPP, the FAST Act adds the specific selection
criterion that ``a State has the authority required for the project to
proceed.'' This addresses a common challenge facing those States that
have held provisional approvals, i.e., securing legal authority from
their State legislatures to collect tolls on a currently toll-free
Interstate highway.
Second, the FAST Act specifies timeframes under which States with
provisional approvals must complete the program's requirements. Any
State receiving a provisional approval as a result of this solicitation
will have 3 years from the date of the approval to fully satisfy the
program criteria, complete environmental review under NEPA, and execute
a toll agreement with FHWA. The FAST Act allows for a 1-year extension
of the 3-year provisional approval if the State demonstrates material
progress toward implementation of its pilot project.
Third, the FAST Act gave the States holding provisional approvals
at the time the FAST Act was enacted 1 year to satisfy the program
criteria or request an extension for an additional year. On the date of
enactment, December 4, 2015, three States--Missouri, North Carolina and
Virginia--held ISRRPP provisional approvals. Since then, all three have
relinquished their program slots.
B. Program Slots
In announcing this new ISRRPP solicitation--the first open call for
pilot projects since 1998--FHWA seeks applications from States for
candidate projects under the program.
Based on the program's experience, FHWA believes it unlikely that
any State would invest the considerable effort to develop an
application that fully satisfies the program criteria without assurance
that its efforts would not be superseded by a competing applicant.
Conversely, FHWA recognizes that provisional approval and the
reservation of a program slot--while allowing a State to work in
earnest to meet the program's environmental, financial, public support
and operational requirements--also inhibits other States from pursuing
similar projects. Therefore, FHWA will review each candidate project
thoroughly before making any commitment of provisional approval.
As provided in section 1411(c) of the FAST Act, FHWA may grant
provisional approval to up to three projects that will fully implement
the ISRRPP (reconstruct or rehabilitate an Interstate segment and
convert it to a toll facility) based on an assessment that eligibility
and selection criteria can be met. At the present time, all three
program slots are available.
This solicitation does not offer any Federal funds for these
projects. Formula Federal-aid highway funds may be used toward a
candidate project, subject to the eligibility requirements for these
funds. In addition, a candidate project may qualify for credit
assistance under 23 U.S.C. 601-609, the DOT's TIFIA credit program.
While section 1216(b)(6) of TEA-21 specifically prohibited the use
of Interstate Maintenance (IM) funds on the Interstate facility covered
by an ISRRPP project during the period tolls are collected, the IM
program has since been discontinued. Given the expansion of tolling
authority under 23 U.S.C. 129, the restriction on use of IM funds is
not applied to the use of eligible funding sources, including the
National Highway Performance Program.
C. Eligibility Information
To be selected for provisional approval in the ISRRPP, an applicant
must be a State transportation department (State DOT) and the project
[[Page 48880]]
must be a facility on the Interstate System.
1. Interstate Facility
A facility on the Interstate System is considered to be a route on
the Dwight D. Eisenhower National System of Interstate and Defense
Highways as described in 23 U.S.C. 103(c). This is the originally
designated Interstate System and includes those Interstate additions
under former 23 U.S.C. 139(a).
Each State may propose only a single Interstate facility as its
candidate project, and each facility selected by FHWA must be in a
different State.
Note that the existing statute in 23 U.S.C. 129(a)(1)(E) already
allows for reconstruction or replacement of a toll-free Interstate
bridge or tunnel and its conversion to a toll facility. For the
purposes of the ISRRPP, the scope of the candidate project must include
reconstruction or rehabilitation throughout the Interstate facility
(not solely on bridges or tunnels), where estimated improvement costs
exceed available funding sources and work cannot be advanced without
the collection of tolls.
2. Toll Revenue Uses
The ISRRPP's conditions on toll revenue uses reflect the intent
that tolls are collected to reconstruct or rehabilitate an Interstate
facility, not to pursue other projects. The State must execute an
agreement with FHWA specifying that toll revenues received from
operation of the facility will be used in accordance with the
requirements set forth in section 1216(b)(5) of TEA-21. This section
requires that all toll revenues be used only for (1) debt service, (2)
reasonable return on investment of any private person financing the
project, and (3) any costs necessary for the improvement of and the
proper operation and maintenance of the toll facility, including
reconstruction, resurfacing, restoration and rehabilitation of the toll
facility. It is important that applicants understand that these
conditions are more restrictive than those that apply to projects
authorized under 23 U.S.C. 129 or 23 U.S.C. 166.
Additionally, the toll agreement must include a provision that the
State will conduct regular (e.g., annual) audits to ensure compliance
with the provisions regarding use of toll revenues, and the results of
these audits will be transmitted to FHWA.
The FHWA is concerned that the initiation of new toll collection
should not occur until it is evident to the traveling public that tolls
will result in investment on the facility. Accordingly, the earliest
that tolls may be imposed on an ISRRPP facility is the date of award of
a contract for the physical reconstruction or rehabilitation of a
significant portion of the facility. In the case of a design-build
contract or public-private partnership agreement, this would occur when
a notice to proceed for the physical construction has been issued or
when the design-builder otherwise becomes contractually obligated to
accomplish the physical construction activities of the project.
3. Federal-Aid Requirements
Regardless of whether Federal-aid funds are to be used in the
reconstruction or rehabilitation activities, each ISRRPP project must
satisfy the applicable Federal laws, rules and regulations set forth in
title 23 U.S.C. and title 23 Code of Federal Regulations.
A State receiving provisional approval must complete the
environmental review and permitting process under the National
Environmental Policy Act of 1969 (NEPA, 42 U.S.C. 4321 et seq.) for the
candidate project before it can receive final approval. The NEPA
analysis must take into account not only the impacts of the proposed
reconstruction or rehabilitation activities but also consider impacts
associated with converting the toll-free facility to a toll facility.
D. Submission Information
A State that seeks to participate in the pilot program must submit
an application that addresses the program's statutory eligibility and
selection criteria as described below.
1. Address
A State DOT must submit the application to its respective FHWA
Division Office. Subsequent application tasks will also be coordinated
through the Division Office.
2. Content and Form of Application
Although the State DOT may determine the appropriate form, the
application package is limited to no more than 25 pages. The FHWA
recommends that the project narrative be prepared with standard
formatting preferences (i.e., a single-spaced document, using a
standard 12-point font such as Times New Roman, with 1-inch margins).
The project narrative may not exceed 25 pages in length, excluding
cover pages and table of contents. The only substantive portions that
may exceed the 25-page limit are supporting documents to support
assertions or conclusions made in the 25-page project narrative. If
necessary, FHWA may request supplemental or clarifying information from
the State.
The application should include information required for FHWA to
assess each of the criteria specified in section E (Review
Information). The State should demonstrate the responsiveness of a
project to any pertinent selection criteria with the most relevant
information it can provide, regardless of whether such information has
been specifically requested, or identified, in this notice. The
application should describe all critical project milestones and the
State's current progress toward achieving them.
The FHWA recommends that the application adhere to the following
basic outline and the project narrative include a table of contents,
maps, and graphics as appropriate to inform the review. The specific
statutory references from section 1216 of TEA-21 (as amended by section
1411 of the FAST Act) are noted in brackets after each item:
i. Project Description: An identification of the facility on the
Interstate System proposed to become a toll facility, including the
age, condition, and intensity of use of the facility [1216(b)(3)(A)].
ii. MPO Consultation: In the case of a facility that affects a
metropolitan area, a description of the State's current consultations
regarding the candidate project with that area's metropolitan planning
organization (MPO) established under 23 U.S.C. 134. Full satisfaction
of this eligibility criteria requires an assurance that the MPO for the
area has been consulted concerning the placement and amount of tolls on
the facility [1216(b)(3)(B)].
iii. Financial Analysis: An analysis demonstrating that the
facility could not be maintained or improved to meet current or future
needs from the State's Federal-aid apportionments and allocations and
from revenues for highways from any other source without toll revenues
[1216(b)(3)(C)].
iv. Facility Management Plan:
(a) A plan for implementing tolls on the facility
[1216(b)(3)(D)(i)]. Note that an approved plan must take into account
the interests of local, regional, and interstate travelers
[1216(b)(4)(C)].
(b) A proposed schedule and finance plan for the reconstruction or
rehabilitation of the facility using toll revenues [1216(b)(3)(D)(ii)].
The plan should give extensive focus to the development phase
requirements, including among its milestones the completion of NEPA,
the acquisition of tolling authority from the legislature,
[[Page 48881]]
and the issuance of any debt backed by toll revenues.
(c) A description of the public transportation agency that will be
responsible for implementation and administration of the candidate
project [1216(b)(3)(D)(iii)].
(d) A description of whether consideration will be given to
privatizing the maintenance and operational aspects of the facility,
while retaining legal and administrative control of the portion of the
Interstate route [1216(b)(3)(D)(iv)]. Note that the ISRRPP selection
criteria require the State to give preference to the use of a public
toll agency with demonstrated capability to build, operate and maintain
a toll expressway system meeting criteria for the Interstate System
[1216(b)(4)(E)].
(e) A statement as to whether the State currently has the authority
required for the toll project to proceed and, if not, a plan and
timetable for when such authority will be obtained [1216(b)(4)(F)].
3. Submission Date
A State DOT must submit the application to its FHWA Division Office
by local close of business on February 20, 2018. States are strongly
encouraged to work closely with their respective Division Offices
throughout the preparation of the application.
E. Review Information
1. Review and Selection Process
The FHWA will perform an initial eligibility review of an
application received by the submission date. Based on its knowledge of
the proposed project and the State's highway program, FHWA will
evaluate the project's technical and financial feasibility, risks,
planning approvals, NEPA and other environmental reviews/approvals,
tolling authority, agreements to operate and maintain a toll expressway
system, and other implementation agreements. The FHWA staff will review
and compare all applications received from the States. Candidate
projects will be rated as Not Recommended, Recommended, or Highly
Recommended. The projects will be advanced to the FHWA Administrator
who will select projects to award provisional approvals.
2. Rating Criteria
The FHWA Headquarters evaluation team will use the information in
the application to assess the State's readiness and capability to fully
satisfy the ISRRPP program criteria in order to deliver the candidate
project. Based upon this evaluation, FHWA will provide up to three
provisional approvals to States that will be expected to fully satisfy
the following selection criteria within 3 years. These criteria are set
forth (in italics) in section 1216(b)(4) of TEA-21 as amended by
section 1411(c)(1) of the FAST Act:
A. The State is unable to reconstruct or rehabilitate the proposed
toll facility using existing apportionments. Because Federal-aid
formula apportionments can support municipal bond issues (i.e.
GARVEEs), the State must demonstrate that toll revenue financing
(whether through the TIFIA program or another capital market source) is
essential to raising the needed funds.
B. The facility has a sufficient intensity of use, age, or
condition to warrant the collection of tolls. A State should use its
asset management process or life cycle planning analysis to support
this criterion. This effort should include conducting a performance gap
analysis to identify deficiencies hindering progress toward improving
or preserving the facility and achieving and sustaining the desired
state of good repair. The FHWA will give preference to those facilities
with a greater gap between current/projected and target performance.
C. The State plan for implementing tolls on the facility takes into
account the interests of local, regional, and interstate travelers. The
FHWA will give priority consideration to candidate projects that have
already been considered for tolling as a strategy in their State and
MPO long-range plans, which should also take into account the impact of
tolling on local, regional, and interstate freight movement.
D. The State plan for reconstruction or rehabilitation of the
facility using toll revenues is reasonable. A reasonable plan will
balance the estimated sources and uses of funds in accordance with the
requirements on toll revenue use set forth in section 1216(b)(5) of
TEA-21. Likewise, the estimated cost of the candidate project must be
matched by a financial plan that includes traffic and revenue
projections sufficient to secure the needed debt component.
E. The State has given preference to the use of a public toll
agency with demonstrated capability to build, operate, and maintain a
toll expressway system meeting criteria for the Interstate System.
Should a State determine that its public toll agencies lack the
capability or resources to take on the candidate project, a public-
private partnership may well provide a viable alternative.
F. The State has the authority required for the project to proceed.
The lack of such authority has previously prevented provisionally
approved projects from fully satisfying the program criteria. The FHWA
will give priority consideration to candidate projects that have
already obtained statutory authority to toll the candidate project or,
lacking that, demonstrate the likelihood of obtaining the authority to
toll the candidate project as evidenced by expressions of support for
the project from State and local governments, community interests, and
the public. The FHWA will also give priority consideration to candidate
projects that demonstrate the likelihood of completing the
environmental review and permitting process under the NEPA within 3
years of provisional approval.
In addition, the FHWA Headquarters evaluation team will also
consider the geographic distribution of candidate projects selected and
will give priority consideration to projects critical to the national
and regional movement of people and goods.
F. Requirements for Provisionally Approved Projects
Should FHWA provisionally approve a candidate project, a State will
have 3 years from the date the provisional approval is granted in which
to:
Submit a complete application that fully satisfies the
eligibility and selection criteria noted above [1216(b)(6)(A)(i)].
Complete environmental review and permitting process under
the National Environmental Policy Act of 1969 (NEPA, 42 U.S.C. 4321 et
seq.) for the project [1216(b)(6)(A)(ii)].
Execute a toll agreement [1216(b)(6)(A)(iii)].
Further, FHWA may allow for a 1-year extension of the provisional
approval if the State demonstrates material progress toward
implementation of the project as evidenced by:
Substantial progress in completing the environmental
review and permitting process for the pilot project under NEPA
[1216(b)(6)(B)(i)].
Funding and financing commitments for the project
[1216(b)(6)(B)(ii)].
Expressions of support for the project from State and
local governments, community interests, and the public
[1216(b)(6)(B)(iii)].
Submission of a facility management plan as noted under
the eligibility criteria above [1216(b)(6)(B)(iv)].
Given the extensive State DOT and FHWA collaboration needed to
implement a project under the ISRRPP, FHWA will regularly assess the
progress of each provisionally approved project.
[[Page 48882]]
Should it become evident that the project will not meet the statutory
deadline, FHWA reserves the right to revoke the provisional approval
prior to the deadline and re-offer the program slot to other State
DOTs.
Brandye L. Hendrickson,
Acting Administrator, Federal Highway Administration.
[FR Doc. 2017-22775 Filed 10-19-17; 8:45 am]
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