[Federal Register Volume 73, Number 180 (Tuesday, September 16, 2008)]
[Notices]
[Pages 53478-53483]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-21517]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration


Value Pricing Pilot Program Participation, Fiscal Year 2009

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice; solicitation for participation.

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SUMMARY: This notice invites State and local governments and other 
public authorities to apply to participate in the Value Pricing Pilot 
(VPP) program and presents guidelines for program applications. This 
notice supersedes three previous notices about the VPP program under 
the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A 
Legacy for Users (SAFETEA-LU) published in the Federal Register on 
January 6, 2006 (71 FR 970), July 17, 2006 (71 FR 40578), and December 
22, 2006 (71 FR 77084). A January 6, 2006, notice covering non-grant 
tolling programs, which was a companion to the original January 6, 
2006, VPP program notice, remains in effect. That notice was entitled 
``Safe, Accountable, Flexible, Efficient Transportation Equity Act: A 
Legacy for Users (SAFETEA-LU); Opportunities for States and Other 
Qualifying Agencies to Gain Authority to Toll Facilities Constructed 
Using Federal Funds'' (71 FR 965). Today's new notice and the previous 
companion notice covering non-grant tolling programs are together 
intended to cover all of the opportunities for States and other 
qualifying transportation agencies to obtain approval to toll their 
respective facilities.

DATES: Applications for tolling authority only may be submitted at any 
time. Formal grant applications, however, must be submitted no later 
than November 7, 2008, for FY 2009 funds.
    Application Submission: All Federal agencies, including FHWA, are 
required to use http://www.grants.gov, an electronic format for 
receiving applications. Grants.gov was developed as part of the 
President's Management Agenda and related E-Government Strategy, which 
charged Federal grant-making agencies with developing a single 
electronic system to help prospective applicants find and apply for 
Federal grant opportunities. Therefore, applicants requesting funding 
under the VPP program must file their applications online at http://www.grants.gov.

FOR FURTHER INFORMATION CONTACT: For questions about this notice, 
please contact Mr. Wayne Berman, FHWA Office of Operations, (202) 366-
4069, <a href="/cdn-cgi/l/email-protection#196e7860777c377b7c6b747877597d766d377e766f"><span class="__cf_email__" data-cfemail="c4b3a5bdaaa1eaa6a1b6a9a5aa84a0abb0eaa3abb2">[email protected]</span></a>. For technical questions related to project 
development, please contact Mr. Patrick DeCorla-Souza, FHWA Office of 
Operations, at (202) 366-4076, <a href="/cdn-cgi/l/email-protection#66160712140f050d4802030509140a074b1509131c072602091248010910"><span class="__cf_email__" data-cfemail="b5c5d4c1c7dcd6de9bd1d0d6dac7d9d498c6dac0cfd4f5d1dac19bd2dac3">[email protected]</span></a>. For legal 
questions, please contact Mr. Michael Harkins, FHWA Office of the Chief 
Counsel, (202) 366-4928, <a href="/cdn-cgi/l/email-protection#f19c98929990949ddf9990839a989f82b1959e85df969e87"><span class="__cf_email__" data-cfemail="bcd1d5dfd4ddd9d092d4ddced7d5d2cffcd8d3c892dbd3ca">[email protected]</span></a>. Office hours for the 
FHWA are from 7:45 a.m. to 4:15 p.m., e.t., Monday through Friday, 
except Federal holidays.

SUPPLEMENTARY INFORMATION: 

Electronic Access

    An electronic copy of this document may be downloaded from the 
Federal Register's home page at: http://www.archives.gov and the 
Government Printing Office's database at: http://www.access.gpo.gov/nara.

Background

    Section 1012(b) of the Intermodal Surface Transportation Efficiency 
Act (ISTEA) (Pub. L. 102-240; 105 Stat. 1914), as amended by section 
1216(a) of the Transportation Equity Act (TEA-21) (Pub. L. 105-178; 112 
Stat. 107), and section 1604(a) of the Safe, Accountable, Flexible, 
Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) 
(Pub. L. 109-59; 119 Stat. 1144), authorizes the Secretary of 
Transportation (the Secretary) to create a Value Pricing Pilot program. 
Value pricing encompasses a variety of strategies to manage congestion 
on highways, including tolling of highway facilities, as well as other 
strategies that do not involve tolls, such as congestion pricing at 
port facilities, mileage-based vehicle taxes and leasing fees, parking 
pricing, and car sharing. The value pricing concept of assessing 
relatively higher prices for travel during peak periods is the same as 
that used in many other sectors of the economy to respond to peak-use 
demands. For example, airlines, hotels, and theaters often charge more 
at peak periods than at non-peak periods.
    The FHWA is seeking applications for the FY 2009 VPP program that 
are consistent with the objectives of the DOT's National Strategy to 
Reduce

[[Page 53479]]

Congestion, announced on May 16, 2006, which seeks to dedicate 
substantial Departmental resources toward addressing the growing 
problem of urban congestion. This national strategy, and its linkage to 
the VPP program applications that are being solicited by this notice, 
are discussed in greater detail later in this notice. Consistent with 
this national strategy, the primary objective of the VPP program for 
fiscal year 2009 will be to facilitate cities in systematically 
progressing toward implementation of broad congestion (variable) 
pricing in the relatively near term.
    According to the statutory requirements of the VPP program, FHWA 
may enter into cooperative agreements with up to 15 State or local 
governments or other public authorities (henceforth referred to only as 
``States'') to establish, maintain, and monitor value pricing pilot 
programs, each including an unlimited number of projects. The FHWA 
invites interested States to apply to participate in the VPP program 
for FY 2009. As of the date of this notice, there are already 13 State-
led programs and 1 city-led program currently in the VPP program: 
California, Colorado, Florida, Georgia, Illinois, Maryland, Minnesota, 
New Jersey, North Carolina, Oregon, Texas, Virginia, Washington State, 
and New York City. Therefore, at this time, only one additional State 
or other public authority is eligible to participate. 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 
prohibiting tolls on the Interstate system as contained in 23 U.S.C. 
129 and 301.
    To comply with the statutory cap on the number of partnering States 
and other public authorities in a manner that maximizes program 
participation, FHWA will only consider an ``active'' cooperative 
agreement sufficient to hold one of the 15 available value pricing 
slots. An agreement will be considered ``active'' by FHWA under either 
of the following two conditions: (1) During the period encompassing the 
time between when a cooperative funding agreement for a project or 
projects has been signed and when the project or projects has or have 
been completed, and (2) if VPP program tolling authority has been 
granted and is still needed to toll a new or existing highway. Absent 
one or both of these conditions being met, an agreement will not be 
considered active for the purposes of the VPP program. If the State's 
progress in moving forward to use its VPP tolling authority is 
unsatisfactory, FHWA reserves the right to withdraw that State's 
authority in favor of other applicants seeking to obtain VPP tolling 
authority. A State that does not maintain an active agreement with FHWA 
risks being denied the opportunity to participate in the program in the 
future if no participation slots are left.
    A maximum of $12 million is authorized for fiscal year 2009 to be 
made available to carry out the VPP program. Of this $12 million, $3 
million per fiscal year must be set-aside for value pricing pilot 
projects that do not involve highway tolls. 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 3 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 
VPP program, but not allocated, exceeds $8 million, the excess amount 
will, to comply with the statutory requirements of the VPP program, be 
apportioned to all States as Surface Transportation Program funds.
    Funds available for the VPP program can be used to support pre-
implementation study activities as well as to pay for pricing-specific 
implementation costs of value pricing projects. Pursuant to section 
1012(b)(2) of ISTEA, FHWA may not fund pre-implementation or 
implementation costs for more than 3 years. Also, section 1012(b)(6) of 
ISTEA 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. In addition to this authority under the VPP program, 23 U.S.C. 
166 authorizes States to convert HOV lanes into high occupancy toll 
(HOT) lanes in which vehicles without the number of occupants required 
for HOV status are permitted to use a HOV lane if such vehicles are 
charged a toll. Since the authority to establish and operate a HOT lane 
(including HOT lanes on the Interstate System) is no longer 
experimental and has been ``mainstreamed'' in 23 U.S.C. 166, the 
provisions of 23 U.S.C. 166 will generally be used for HOT projects in 
order to more effectively allocate VPP funds and program slots.
    Pursuant to section 1012(b)(7), the potential financial effects of 
value pricing projects on low-income drivers shall be considered. 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, toll 
discounts or credits for low-income motorists who do not have viable 
transit options, or fare or toll credits earned by motorists by use of 
regular lanes which can be used to pay for tolls on priced lanes. 
Mitigation measures can be included as part of the value pricing 
project implementation costs.
    Also, section 1012(b)(6) of ISTEA requires the Secretary to monitor 
the effect of value pricing programs for a period of at least 10 years 
and report to Congress every 2 years on the effects such programs are 
having on driver behavior, traffic volume, transit ridership, air 
quality, and availability of funds for transportation programs. Project 
partners will be expected to assist FHWA by providing data on their 
programs for use in these reports throughout the length of the 
monitoring and reporting period.
    In addition to the VPP program, other authorities are available 
that permit States to use tolling to finance highway construction and 
reconstruction, promote efficiency in the use of highways, and support 
congestion reduction by providing expanded flexibility under the 
following programs: HOV facilities; Interstate System Reconstruction 
and Rehabilitation Pilot; Interstate System Construction Toll Pilot; 
Express Lanes Demonstration Program; and Section 129 toll agreements. 
For more information on these programs, please refer to the notice in 
the January 6, 2006, Federal Register entitled, ``Safe, Accountable, 
Flexible, Efficient Transportation Equity Act: A Legacy for Users 
(SAFETEA-LU); Opportunities for State and Other Qualifying Agencies to 
Gain Authority to Toll Facilities Constructed Using Federal Funds'' (71 
FR 965).

Applicable Terms

    ``Value pricing,'' ``congestion pricing,'' ``peak-period pricing,'' 
``variable pricing,'' and ``variable tolling'' are all terms used to 
refer to direct non-constant 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, to non-motorized modes, 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 achieve congestion reduction, improved air quality, 
energy

[[Page 53480]]

conservation, and transit productivity goals.
    A ``value pricing project'' means any pre-implementation activities 
or implementation of value pricing concepts or techniques discussed in 
the ``Potential Project Types'' section of this notice and included 
under a State or local ``value pricing pilot program.'' A State is 
considered to have a value pricing pilot program if it has one or more 
approved value pricing projects. While the distinction between 
``project'' and ``program'' may appear to be merely a technical one, it 
is significant in that, as described in the ``Background'' section of 
this notice, the number of total VPP programs is statutorily limited to 
15, while there is no limit to the number of VPP projects allowed under 
each VPP program.
    A ``value pricing program'' means the combination of all value 
pricing projects within a State or local government or public 
authority. Any State or local government or public authority with a 
cooperative agreement for a value pricing program is deemed to have a 
value pricing program.
    ``Cooperative agreement'' means the agreement signed between the 
FHWA and a State to establish and implement value pricing pilot 
projects.
    ``Toll agreement'' means the agreement signed between the FHWA and 
a State and/or local government or public authority to provide for the 
statutorily authorized uses of toll revenues.

Program Objective

    The overall objective of the VPP 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 these effects. The VPP program's primary focus is on value 
pricing with road tolls, with a secondary focus on other market-based 
approaches for congestion relief that do not involve road tolls, such 
as congestion pricing at port facilities, mileage-based vehicle taxes 
and leasing fees, parking pricing, and car sharing.
    The FHWA is seeking applications for funding and/or tolling 
authority to use value pricing to reduce congestion, improve system 
performance, and promote mobility in a manner consistent with the DOT's 
National Strategy to Reduce Congestion on America's Transportation 
Network, announced in May 2006. This strategy consists of a six-point 
plan, designed to both reduce congestion in the short-term and to build 
the foundation for successful longer-term congestion reduction efforts. 
One of the six elements of the plan is to ``relieve urban congestion,'' 
under which ``[t]he Department will seek to enter * * * [a]greements 
with model cities, pursuant to which the cities and Department will 
commit to * * * implementing a broad congestion pricing or variable 
toll demonstration * * *'' Consistent with this objective, all 
proposals should incorporate significant pricing mechanisms intended to 
reduce the level of congestion.
    With successful examples of facility-specific pricing projects in 
operation in the U.S., the next step under the Value Pricing Pilot 
Program will focus on developing broader regionwide approaches. 
Metropolitan areas will be encouraged to develop pricing concepts and 
to collaborate with stakeholders to refine them and plan the process to 
deploy them in a phased manner. Some metropolitan areas, e.g., Los 
Angeles, San Francisco, Seattle, and Washington, DC, have begun the 
process for adoption of congestion pricing as a long-term strategy to 
finance and manage their transportation systems. An objective of this 
solicitation is to expand the number of metropolitan areas that are 
developing regionwide approaches to congestion pricing by providing 
incentive grants to a limited number of Metropolitan Planning 
Organizations on a competitive basis.

Potential Project Types

    To help meet the objectives of DOT's National Strategy to Reduce 
Congestion on America's Transportation Network, FHWA is interested in 
funding projects that have the greatest potential to lead to 
significant, broad, and relatively near-term congestion relief. The 
FHWA will consider applications for funds that show that a project will 
achieve at least one of the following: (1) Build public support and a 
technical foundation for relatively near-term implementation of 
congestion pricing; (2) develop a pricing program with detailed plans 
and specifications leading to near-term implementation of congestion 
pricing; (3) perform a rigorous regional congestion pricing scenario 
study around a scenario that is both comprehensive and realistic, and/
or; (4) implement broad-based pricing and evaluate its effectiveness. 
For pre-implementation projects, applicants should demonstrate that 
there is already sufficient political support for their implementation, 
or that the project is well designed to bring about such support.
    Value pricing charges need to be targeted at a sizable number of 
vehicles that are causing congestion, and prices should be set at 
levels significantly variable to encourage drivers to use alternative 
times, routes, modes, or trip patterns, or to telecommute during 
congested periods.
    The FHWA is seeking VPP program applications from public entities 
to study or implement pricing that is broad and/or regional in nature 
and will no longer entertain applications for studying or implementing 
smaller projects. Applications should cover a significantly-sized 
geographical area and include multiple roadway facilities that are 
priced, an interconnected managed lane network, or cordon pricing, 
where, as in London and Stockholm, cars are charged a substantial fee 
to drive in a congested area on weekdays. Variable pricing of currently 
free and tolled facilities, pricing of multiple facilities or 
corridors, and/or combinations of road pricing and parking pricing will 
generally be required. Area-wide pricing applications that use 
technologies that provide travelers (including drivers and transit 
riders) with pre-trip and real-time congestion and pricing information 
on alternative travel modes and routes are especially encouraged to 
assist travelers in making efficient travel destination, mode and route 
choices. Cashless tolling (i.e., no toll booths) is required and 
dynamic pricing regimes based on real-time traffic conditions are 
preferred.
    As part of broad, regional pricing projects, the inclusion of new, 
innovative value pricing approaches is encouraged. Such approaches 
might entail pricing at major traffic bottlenecks, shifting from fixed 
to variable toll schedules on existing toll facilities (i.e., 
combinations of peak-period surcharges and off-peak discounts), and 
pricing of queue jumps, where paying motorists can bypass motorists who 
choose not to pay, typically by using special lanes with priority 
signals at freeway entrance ramps.
    Projects should be designed to reflect the needs of low-income or 
other transportation-disadvantaged groups. Mitigation strategies to 
address equity concerns may include bus rapid transit or other 
enhancements of transportation alternatives for peak-period travelers, 
special reduced toll rates for low-income travelers, limited monetary 
credits to all or just to low-income travelers that can be used to pay 
for tolls or transit fares (thereby allowing a limited amount of free 
travel before having to pay full fees), and credit-based

[[Page 53481]]

tolling programs such as toll credits earned by motorists in regular 
lanes or by transit users in the corridor which can later be used to 
pay tolls on priced lanes or for free transit trips.
    The FHWA is also interested in grant applications for projects that 
do not involve highway tolls. As discussed earlier, SAFETEA-LU sets 
aside at least $3 million per fiscal year for such projects. The FHWA 
encourages applicants to design such projects, to the extent possible, 
to complement or offer the potential for ``broad'' pricing as called 
for in the DOT's National Strategy to Reduce Congestion on America's 
Transportation Network. The FHWA in particular seeks tests of 
innovative port facility congestion pricing projects, such as the 
PierPass project currently operational at ports in the Los Angeles 
metropolitan area, and parking pricing strategies, including time-of-
day pricing and charges reflective of congested conditions, provided 
the level and coverage of proposed parking charges is sufficient to 
reduce congestion. Among the parking pricing strategies that could be 
considered innovative include: surcharges for entering or exiting 
parking facilities during or near peak periods; citywide, on-street 
parking pricing that varies by demand; and a range of parking cash-out 
policies, where cash is offered to employees in lieu of subsidized 
parking, parking operators reimburse monthly patrons for unused parking 
days, or renters or purchasers in multifamily housing developments are 
provided direct financial saving for not availing of car parking 
spaces.
    It is the intent of FHWA to additionally set aside approximately $5 
million to be made available to up to 10 Metropolitan Planning 
Organizations to develop comprehensive multimodal regional 
transportation packages that include congestion pricing as a key 
component, for eventual incorporation in the region's transportation 
plan. Studies are encouraged to include evaluation of benefits, costs, 
revenues, environmental impacts, distributional impacts, and financial 
feasibility of each alternative package of transportation improvements, 
in comparison with the region's currently adopted long range 
transportation plan. Development of alternative packages may involve 
stakeholder groups, including (among others) business groups, 
environmental groups, and advocates for social equity. Examples of the 
types of regional transportation studies already conducted include the 
Traffic Choices Study conducted by the Puget Sound Regional Council for 
the Seattle Metropolitan Area, and the Value Pricing Study conducted by 
the Metropolitan Washington Council of Governments.

Pre-Implementation Studies

    States are encouraged to carry out pre-implementation study 
activities designed to lead to implementation of a regional value 
pricing project in the relatively near-term, consistent with the 
objectives of the DOT's National Strategy to Reduce Congestion on 
America's Transportation Network. The intent of the pre-implementation 
study phase is to support efforts to identify and evaluate value 
pricing project alternatives, and to prepare the necessary groundwork 
for relatively near-term regional implementation. As indicated above, 
FHWA intends to set aside approximately $5 million to fund region-wide 
studies by Metropolitan Planning Organizations. So as to focus VPP 
program resources in a manner consistent with the DOT Congestion 
Initiative, FHWA will not fund purely academic studies of value pricing 
or studies that involve major expansions of existing facilities or 
area-wide planning studies covering many topics besides pricing and 
incorporating value pricing only as one of a number of options. Such 
studies may be funded with regular Federal-aid highway or transit 
planning funds. Applications for pre-implementation studies will be 
evaluated based on the likelihood that they will lead to relatively 
near-term implementation of broad value pricing conforming to the 
objectives described in the previous section.

Project Costs Eligible for Grant Funding

    The FHWA will provide up to the statutorily allowable 80 percent 
share of the estimated costs of an approved project. Funds available 
for the VPP program can be used to support pre-implementation study 
activities and also to pay for implementation costs of value pricing 
projects. Costs of planning for, setting up, managing, operating, 
monitoring, evaluating, and reporting on local value pricing pilot 
projects are eligible for reimbursement, but neither pre-implementation 
study costs nor implementation costs may be reimbursed for longer than 
3 years. The 3-year funding limitation will begin on the date of the 
first disbursement of Federal funds for project activities. Examples of 
specific pre-implementation and implementation costs eligible for 
reimbursement include the following:
    1. Pre-Implementation Study Costs--Covered activities include those 
undertaken to advance two key priority focus areas: foundation building 
and regional program development.
    a. Foundation building activities may be reimbursed, such as public 
participation, consensus building, marketing, modeling, and technology 
assessments; and
    b. Regional program development activities are also eligible for 
reimbursement, including project and financial planning, project 
design, creating project specifications, and activities required to 
meet Federal or State environmental or other planning requirements.
    2. Implementation Costs--Allowable costs for reimbursement under 
this priority focus area include those for setting up, managing, 
operating, evaluating, and reporting on a value pricing project, 
including:
    a. Necessary salaries and expenses, or other administrative and 
operational costs, such as installation of equipment for operation of a 
pilot project (e.g., Electronic Toll Collection (ETC) technology, video 
equipment for traffic monitoring, and other instrumentation), 
enforcement costs, costs of monitoring and evaluating project 
operations, and costs of continuing public relations activities during 
the period of implementation;
    b. ``[M]itigation measures to deal with any potential adverse 
financial effects on low-income drivers[,]'' per section 1012(b)(7) of 
ISTEA as amended, including costs of providing transportation 
alternatives, such as new or expanded transit or ridesharing services 
provided as an integral part of the value pricing project. Funds are 
not available to replace existing sources of support for these 
services.
    Project implementation costs can be supported until such time that 
sufficient revenues are being generated by the project to fund such 
activities without Federal support, but in no case for longer than 3 
years. Each implementation project included in a value pricing pilot 
program will be considered separately for this purpose.
    Funds may not be used to pay for activities conducted prior to 
approval for VPP program participation. Also, funds made available 
through the VPP program may not be used to construct new highway lanes 
or bridges, 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 lane 
construction, the implementation of traffic control systems, or transit 
projects can be funded through other highway and transit programs under 
SAFETEA-LU and from new revenues

[[Page 53482]]

raised as a result of a pilot. VPP program applicants are encouraged to 
explore opportunities for combining VPP program funds with other funds. 
Federal funds may not, however, be used to match VPP program funds 
unless there is specific statutory authority to do so.

Eligible Uses of Revenues

    Section 1012(b)(2) of ISTEA provides that revenues generated by any 
value pricing pilot project must be applied first to pay for pilot 
project operating costs. Any project revenues in excess of pilot 
project operating costs may, according to section 1012(b)(3) of ISTEA, 
be used for any projects eligible under Title 23, United States Code. A 
project's operating costs include, but are not limited to, any costs 
necessary for a project's execution; mitigation measures to deal with 
adverse financial effects on low-income drivers; the proper maintenance 
of the facility; any construction (including reconstruction, 
rehabilitation, restoration, or resurfacing) of the facility; any debt 
service incurred in implementing the project; and a reasonable return 
on investment by any private entity financing the project. States are 
encouraged to consider using excess revenue for projects designed to 
provide benefits to those traveling in the corridor where the project 
is being implemented.
    For VPP toll projects, FHWA and the public authority (including the 
State transportation department) having jurisdiction over a facility 
must enter into a toll agreement concerning the use of toll revenue to 
be generated under a value pricing project. The toll agreement will 
provide that the public authority use the revenues in accordance with 
the applicable statutory requirements. The execution of a toll 
agreement will facilitate oversight of a State's compliance with 
revenue use requirements of the VPP program.

Who Is Eligible To Apply?

    Qualified applicants for either tolling authority or grants (or 
both) include State or local governments or public authorities, such as 
tolling agencies. Although project agreements must be with the 
aforementioned public entities, and preferably with State departments 
of transportation in order to preserve participation slots, a VPP 
program partnership may also include private tolling authorities, for-
profit companies, and non-profit organizations.

The Value Pricing Pilot Program Applications

    Formal applications should be submitted online directly by the 
State department of transportation to http://www.grants.gov.
    There is no particular format that is required for tolling 
authority applications or grant applications, although specific 
information is requested. Applications should include the following 
background information:
    a. The name, title, e-mail address, and phone number of the person 
who will act as the point of contact on behalf of the requesting 
agency, authority, or authorities;
    b. A description of the agency, authority, or authorities 
requesting funding and/or tolling authority;
    c. A statement as to whether only funding, both funding and tolling 
authority, or only tolling authority via the VPP program is being 
sought to support either pre-implementation or implementation 
activities as permitted; and
    d. A description of the public agency or agencies that will be 
responsible for operating, maintaining, and enforcing the tolling 
program, if applicable.
    The core of the application should include the following:
    1. A description of the congestion problem being addressed (current 
and projected);
    2. A description of the proposed pricing program and its goals;
    3. An identification of the facilities that will be covered, 
including whether any of the subject facilities is an Interstate 
facility, whether any HOV lanes currently exist on any of the 
facilities, and whether any construction related activities would be 
needed to implement the project and, if so, whether this is new 
construction, expansion, rehabilitation, reconstruction, or other;
    4. Where applicable, a plan for implementing or modifying tolls, 
and a related timetable. Where known, the range of anticipated tolls 
and the strategies to vary toll rates (i.e., the formulas for variable 
pricing), the technology to be used, enforcement programs, and 
operating details;
    5. Anticipated effects of the pricing program on reducing 
congestion, altering travel behavior, and encouraging the use of other 
transportation modes;
    6. Preliminary estimates of the social and economic effects of the 
pricing program, including potential equity impacts, and a plan or 
methodology for further refining such estimates;
    7. The role of alternative transportation modes in the project;
    8. A description of the tasks to be carried out as part of each 
phase of the project;
    9. A detailed project timeline broken down by tasks and phases;
    10. An itemized budget broken down by task and funding year (i.e., 
Year 1, Year 2, etc.), which is only required for grant applications;
    11. Plans for monitoring and evaluating implementation projects, 
including plans for data collection and analysis, before and after 
assessment, and long-term monitoring and documenting of project 
effects;
    12. 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, and proposed 
uses of revenues; and a plan for projects to become financially self-
sustaining (without Federal support) within 3 years of implementation, 
all of which is only required for grant applications;
    13. A discussion of previous public involvement, including public 
meetings, in the development of the proposed pricing program; any 
expressions or declarations of support from State or local government 
officials or the public; future plans for involving key affected 
parties, coalition building, and media relations, and more broadly for 
ensuring adequate public involvement prior to implementation;
    14. Plans for meeting all Federal, State and local legal and 
administrative requirements for project implementation, including 
relevant Federal-aid planning and environmental requirements;
    15. A description of how, if at all, any private entities are 
involved in the project either in the up-front costs to enact tolling, 
or the cost sharing or debt retirement associated with revenues; and
    16. An explanation about how electronic toll collection project 
components will be compatible with other ETC systems in the region.
    If some of these items are not available or fully developed at the 
time the formal application is submitted, applications will still be 
considered for grant funding support if they meet the interests of 
FHWA, as described earlier in the section entitled ``Potential Project 
Types,'' and if there is a strong indication that these items will be 
completed within a short time.

VPP Program Process

A. Requests for Funding

    To ensure that all projects receive fair and equal consideration 
for the limited available funds, FHWA requires formal grant 
applications to be submitted no later than November 7, 2008, for FY 
2009 funds to http://www.grants.gov.

[[Page 53483]]

B. Projects for Which No Funds Are Requested

    Although most projects under the VPP program involve program funds, 
some projects do not, and instead only seek tolling authority under the 
program. In such cases, and especially where a State is not already 
part of the VPP program, FHWA recommends that the public authority 
investigate the other opportunities to gain authority to toll that are 
listed in the notice in the January 6, 2006, Federal Register, entitled 
``Safe, Accountable, Flexible, Efficient Transportation Equity Act: A 
Legacy for Users (SAFETEA-LU); Opportunities for State and Other 
Qualifying Agencies to Gain Authority to Toll Facilities Constructed 
Using Federal Funds'' (71 FR 965).

Post-Selection Process

    If approved, a formal cooperative agreement will be prepared 
between the FHWA and the State. The cooperative agreement will include 
a refined scope of work developed from the original funding application 
and subsequent discussions with FHWA. Federal statutes will govern the 
cooperative agreement. Regulations cited in the agreement, and 49 CFR 
Part 18, Uniform Administrative Requirements for Grants and Cooperative 
Agreements to State and Local Governments, will also apply. As a 
practical matter, each value pricing project must have a separate 
cooperative agreement. Although, in the past, the FHWA has allowed some 
States to have a master cooperative agreement that is subsequently 
amended for each approved project, in the future the FHWA will execute 
a separate agreement for each project. For value pricing projects that 
involve only toll authority and that do not involve requests for 
Federal funds, a cooperative agreement must still be executed.
    Where the implementation of tolling is part of the VPP project, 
Federal tolling authority is required. To secure such authority for a 
VPP project, a cooperative agreement will be executed, regardless of 
whether VPP program funding is being provided. The cooperative 
agreement must include all of the information normally required as part 
of a tolling agreement (stipulating the terms of the tolling, providing 
details on the dispensation of revenues, etc.). A separate tolling 
agreement will not be required. As discussed previously, revenues must 
generally first be used to cover debt service, provide reasonable 
return on private party investments, and operate and maintain the 
facility. Any remaining revenues may then be used for other Title 23, 
United States Code eligible purposes.
    Where tolling authority is secured through a VPP program 
cooperative agreement, such an agreement, like tolling agreements 
providing the authority to toll under other Federal provisions and 
programs, will be signed by the Executive Director of FHWA. If tolling 
authority is not required, the cooperative agreement will be signed by 
the FHWA Division Administrator of the State Division Office. All 
cooperative agreements will be administered jointly by FHWA's Office of 
Operations and FHWA's State Division Office.

Other Requirements

    Prior to FHWA approval of pricing project implementation, value 
pricing programs must be shown to be consistent with Federal 
metropolitan and statewide planning requirements (23 U.S.C. 134 and 
135; and, if applicable, 49 U.S.C. 5303 and 5304).
    Implementation projects involving tolls 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 involving tolls 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 section 1203(h)(5) or (i)(2) of TEA-21; 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; Pub. L. 109-59; 117 Stat. 1144.

    Issued on: September 9, 2008.
Thomas J. Madison, Jr.,
Federal Highway Administrator.
[FR Doc. E8-21517 Filed 9-15-08; 8:45 am]
BILLING CODE 4910-22-P


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