[Federal Register Volume 75, Number 201 (Tuesday, October 19, 2010)]
[Notices]
[Pages 64397-64403]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-26298]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration


Value Pricing Pilot Program Participation, Fiscal Years 2010 and 
2011

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice; solicitation for participation.

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SUMMARY: This notice invites States, along with their local government 
partners and other public authorities, to apply to participate in the 
Value Pricing Pilot (VPP) program and presents guidelines for program 
applications for fiscal years (FY) 2010 and 2011. The notice seeks 
applications for a variety of types of transportation pricing studies 
and implementation projects.

DATES: 
    1. Applications for tolling authority only may be submitted at any 
time, however, it is recommended that applicants first submit an 
Expression of Interest, as detailed in the ``Who is Eligible to Apply'' 
section of this notice, to allow FHWA to guide applicants in 
determining whether the VPP program, or another program, is the 
preferable program under which to apply for such authority.
    2. Formal grant applications, however, must be submitted no later 
than January 18, 2011, to be assured consideration.
    3. For grant applications, applicants may also submit an optional 
``sketch'' or draft proposal by December 3, 2010, which FHWA will 
review and provide feedback on for the applicant to use in its formal 
grant application. Sketch or draft proposals received after this date 
may still be reviewed by and commented upon by FHWA at its discretion.
    4. For grant applications that had been submitted under the August 
5, 2009, (74 FR 39138) solicitation that were not funded (for a list of 
projects funded from that solicitation, see: 
http:[sol][sol]www.fhwa.dot.gov/pressroom/fhwa1029.htm), and where such 
applications would still be eligible for funding under the criteria 
provided by this notice, applicants may submit a letter to the 
Department by November 18, 2010, requesting comments on their previous 
applications.
    Application Submission: Grant applications may be submitted through 
http:[sol][sol]www.grants.gov. Applications for tolling authority only 
should be submitted through an expression of interest at the following 
Web site: http:[sol][sol]ops.fhwa.dot.gov/tolling--pricing/
participation.htm.

FOR FURTHER INFORMATION CONTACT: For questions about or to provide 
information to FHWA that responds to this notice, such as to submit a 
letter or sketch plan, or for general questions related to the VPP 
program, please contact Ms. Angela Jacobs, FHWA Office of Operations, 
at (202) 366-0076, <a href="/cdn-cgi/l/email-protection#16777871737a77387c77757974655672796238717960"><span class="__cf_email__" data-cfemail="adccc3cac8c1cc83c7cccec2cfdeedc9c2d983cac2db">[email protected]</span></a>. For technical questions 
related to the development of pricing projects involving tolls, please 
also contact Ms. Angela Jacobs, or contact Mr. Patrick DeCorla-Souza, 
FHWA Office of Innovative Program Delivery, at (202) 366-4076, 
<a href="/cdn-cgi/l/email-protection#57273623253e343c7933323438253b367a2438222d361733382379303821"><span class="__cf_email__" data-cfemail="fb8b9a8f89929890d59f9e989489979ad688948e819abb9f948fd59c948d">[email protected]</span></a>. For technical questions related to the 
development of pricing projects not involving tolls, please contact Mr. 
Allen Greenberg, FHWA Office of Operations, at (202) 366-2425, 
<a href="/cdn-cgi/l/email-protection#c1a0adada4afefa6b3a4a4afa3a4b3a681a5aeb5efa6aeb7"><span class="__cf_email__" data-cfemail="4b2a27272e25652c392e2e25292e392c0b2f243f652c243d">[email protected]</span></a>. For legal questions, please contact Mr. 
Michael Harkins, FHWA Office of the Chief Counsel, at (202) 366-4928, 
<a href="/cdn-cgi/l/email-protection#412c28222920242d6f2920332a282f3201252e356f262e37"><span class="__cf_email__" data-cfemail="ef82868c878e8a83c1878e9d8486819caf8b809bc1888099">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Electronic Access

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

[[Page 64398]]

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 VPP program. Value pricing 
encompasses a variety of strategies to manage congestion on highways, 
including tolling of highway facilities through congestion pricing, as 
well as other strategies that do not involve tolls, such as mileage-
based car insurance and parking pricing. The congestion pricing concept 
of charging variable fees based upon usage and 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.
    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 VPP programs, each 
including an unlimited number of projects. The FHWA invites interested 
States to apply to participate in the VPP program for funds remaining 
from FY 2010 and provided in FY 2011. While direct submissions by local 
governments and public authorities are allowable under SAFETEA-LU, FHWA 
strongly prefers applications to be submitted through State departments 
of transportation, since that would allow the potential for multiple 
VPP program projects within a State counting as only 1 of the 15 
allowable partnerships.
    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 1 of the 15 available VPP program slots, 
as also noted in both the September 16, 2008, and August 5, 2009, 
notices for VPP program participation (73 FR 53478 and 74 FR 39138, 
respectively). An agreement will be considered ``active'' by FHWA under 
either of the following two conditions: (1) During the period of 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 progress in moving 
forward to use its VPP program funding or tolling authority is 
unsatisfactory, FHWA may withdraw its approval for inactive agreements 
in favor of other applicants seeking to obtain VPP program funding or 
tolling authority.
    Congress authorized $12 million for FY 2010 to be made available to 
carry out the VPP program, and, as of the date of this notice, Congress 
has also authorized $3 million for FY 2011 for this same purpose. 
Congress may subsequently choose to authorize additional funds beyond 
the $3 million for FY 2011. Of the funds that Congress makes available 
for the VPP program in any fiscal year, at least 25 percent must, 
according to statute, be spent for projects that do not involve highway 
tolls. The FHWA most recently solicited for applications for what 
remained of FY 2009 funds and for FY 2010 funds in an August 5, 2009, 
Federal Register notice (74 FR 39138). On August 2, 2010, the FHWA 
announced the awarding of 10 grants totaling $9,768,000, some of which 
came from FY 2009 funds and, after such funds were exhausted, the rest 
from FY 2010 funds. After these grants were awarded, and considering 
the new funds Congress has made available for FY 2011, at least $10.5 
million is being made available under this solicitation. If Congress 
does provide additional VPP program funds for FY 2011 beyond what it 
has already provided, it is FHWA's intention to subsequently award 
these funds based upon responses to this solicitation, if merited by 
the applications that are received.
    The Federal share payable under the VPP program is up to 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 VPP 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 an 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) of ISTEA, the potential financial 
effects of value pricing projects on low-income drivers shall be 
considered. Where such effects are expected to be both negative and 
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. Additional measures include methods 
to facilitate convenient cash payment by those who do not have bank 
accounts or credit cards, or who choose not to tie their toll accounts 
to their bank accounts or credit cards. 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

[[Page 64399]]

construction and reconstruction, promote efficiency in the use of 
highways, and support congestion reduction. Expanded flexibility to 
toll is provided under the following programs: HOV-to-HOT Conversion 
Program (23 U.S.C. 166); Interstate System Reconstruction and 
Rehabilitation Pilot Program; Interstate System Construction Toll Pilot 
Program; 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, ``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'' and ``congestion pricing'' refer to direct and 
transparent charges for vehicle use and parking, as well as variable 
charges for road use, possibly fluctuating based upon 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 alternative 
routes away from priced facilities, or by encouraging consolidation of 
trips, congestion pricing promotes economic efficiency. It also helps 
achieve congestion reduction, reductions in greenhouse gas emissions, 
improved air quality, energy conservation, transit ridership, and 
revenue generation goals.
    A ``value pricing project'' means any pre-implementation activities 
or implementation of congestion pricing concepts or techniques included 
under a State or local ``value pricing pilot program.'' A State is 
considered to have a VPP 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 public agency 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. At FHWA's discretion, the 
toll agreement may be subsumed within the cooperative agreement.

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 VPP programs, to provide for the execution, monitoring, and 
evaluation of value pricing projects included in such programs, and to 
report on these effects. The effects of interest include impacts on 
congestion, travel behavior, traffic volumes, transit ridership, air 
quality, and funding for transportation improvements. The FHWA is 
seeking applications for funding and/or tolling authority to use 
congestion pricing to reduce congestion, improve system performance, 
and advance the Department's priorities of growing the economy, 
enhancing livability, and promoting environmental sustainability. All 
proposals should incorporate significant pricing mechanisms that are 
designed to substantially advance these objectives.
    This notice seeks applications focused on less tested, innovative 
strategies that advance pricing in furtherance of FHWA's livability, 
sustainability, and other goals. An objective of this solicitation is 
to provide incentive grants to expand the number of metropolitan areas 
that are developing innovative approaches that advance congestion 
pricing.
    Some non-toll pricing applications, such as carsharing, have 
already proven their success and are in wide use, and thus do not 
require VPP program funding for their success to be sustained. 
Deployment of other non-toll pricing strategies, such as pricing of 
parking meters to achieve a certain parking space utilization level, 
are much newer in the U.S., but the advancement of such strategies has 
already secured substantial funding under the VPP and other programs 
(e.g., in San Francisco), and thus other non-tolling strategies, 
discussed below, will instead receive priority consideration under this 
solicitation.
    For both tolling and non-tolling projects, FHWA is interested in 
tests that advance the state of the practice in behavioral economics. 
Specifically, applications are sought that strive to improve the 
understanding of the ways that the structure, timing and salience of 
pricing, and how payments themselves are handled, affect responses to 
pricing.

Types of Projects Being Sought That Do Not Involve Tolls

    The FHWA is especially interested in grant applications for 
projects that do not involve highway tolls. As discussed earlier, 
SAFETEA-LU sets aside a minimum of 25 percent of VPP program funds for 
such projects and FHWA may choose to make available more of the VPP 
program funds for this purpose. The FHWA in particular seeks tests of 
non-toll pricing strategies that will substantially improve livability 
in an area and advance environmental sustainability in a major way, 
either directly through the benefits the project itself brings, or by 
demonstrating especially promising strategies such that their 
implementation will likely be replicated broadly.
    Examples of strategies that FHWA believes would meet this test 
include: (1) Pay-per-mile or pay-per-minute car insurance, where 
insurance premiums are converted from an annual or bi-annual charging 
scheme to one that is instead based primarily on miles or minutes of 
driving (with rates that still reflect actuarial risks and the 
coverages that are selected); and (2) highly innovative parking pricing 
strategies, provided that the level and coverage of parking charges is 
sufficient to bring about substantial and measurable reductions in 
congestion. For pay-per-mile or pay-per-minute insurance, FHWA is 
especially interested in applications that cover areas not included in 
previous VPP program-funded projects, such as actuarial studies of the 
potential benefits of pay-as-you-drive pricing models, tests of 
previously untested pricing protocols, and explorations of pricing 
approaches that utilize both mileage or time in operation and other 
usage-based factors that would affect per-mile or per-minute claims' 
risks. For parking pricing, FHWA seeks applications for: (1) Citywide 
surcharges for entering or exiting parking facilities during or near 
peak travel periods; and (2) parking cash-out, where a city or State 
passes, and then requests financial support to implement, a local 
ordinance or State law requiring employers to offer cash to their 
employees in lieu of subsidized parking, or provides substantial 
incentives for employers to offer such cash-out options. As mentioned 
above, pricing of parking meters to influence parking space utilization 
levels has already received substantial funding and will receive lower 
priority in considering grant applications.

[[Page 64400]]

    Applications are also encouraged that utilize appropriate 
technologies and provide sufficient participation incentives to deploy 
dynamic ridesharing (flexible, single-trip carpooling) with the 
necessary critical mass of users to succeed. To be considered eligible, 
dynamic ridesharing applications must be coupled with some 
transportation pricing, such as parking pricing or direct financial 
incentives for ridesharing, thereby expanding affordable transportation 
options while mitigating equity issues associated with pricing.

Pre-Implementation Studies

    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 
implementation. The FHWA will not fund purely academic studies of 
congestion pricing, or studies that involve major expansions of 
existing facilities, or areawide or regionwide planning studies 
covering many topics besides pricing and incorporating congestion 
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 congestion pricing conforming to the objectives 
described in the section on Program Objectives.

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 congestion 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 
for foundation building, such as public participation, consensus 
building and marketing, modeling, and technology assessments.
    2. Implementation Costs--Allowable costs for reimbursement under 
this 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, costs of monitoring and evaluating project operations, 
and costs of continuing public relations activities during the period 
of implementation;
    b. Mitigation 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 VPP 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. 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 raised as a result of a 
pilot. The 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 Toll Revenues

    Section 1012(b)(2) of ISTEA as amended provides that toll revenues 
generated by any congestion 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 as amended, be used for any projects eligible under 
Title 23, U.S.C. 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 toll revenue 
for projects designed to provide benefits to those traveling in the 
corridor where the project is being implemented.
    For VPP toll implementation projects, FHWA and the public authority 
(including the State transportation department) having jurisdiction 
over a facility must enter into a cooperative agreement concerning the 
use of toll revenue to be generated under a value pricing project. The 
cooperative agreement will provide that the public authority use the 
revenues in accordance with the applicable statutory requirements. The 
execution of a cooperative agreement is necessary to the establishment 
of an implementation project under the VPP program, and will facilitate 
oversight of a State's compliance with revenue use requirements of the 
VPP program. Additionally, the toll collection system must meet FHWA 
requirements for interoperability at 23 CFR part 950.

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 
toll 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.
    In many cases where only tolling authority is being sought, it may 
be preferable to secure such authority through a Federal program other 
than the VPP program even if such authority could also be granted 
through the VPP program. This issue was covered in detail in a January 
6, 2006, Federal Register notice covering non-grant tolling programs, 
which 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). The notice established a process whereby applicants seeking 
only tolling authority from FHWA (not grant funding) were requested to 
first

[[Page 64401]]

submit an Expression of Interest document to allow FHWA to guide 
applicants in determining whether the VPP program, or another program, 
is the preferable program under which to apply for such authority. The 
Expression of Interest is a document--in letter, memo, or report 
format--that provides the rationale for funding or tolling authority 
and information about the intended project. A complete Expression of 
Interest will enable the DOT Tolling and Pricing Team to provide the 
best assistance and identify the range of options possible to meet 
intended goals and timeframes. For details, please see: http://www.fhwa.dot.gov/ipd/revenue/road_pricing/tolling_pricing/index.htm.

The Value Pricing Pilot Program Applications

    Formal grant applications shall be submitted through Grants.gov at 
http://www.grants.gov by close of business January 18, 2011. Projects 
requesting tolling authority only should submit an Expression of 
Interest to FHWA. For details, see: http://www.fhwa.dot.gov/ipd/revenue/road_pricing/tolling_pricing/index.htm.
    No particular format is required for tolling authority applications 
or grant applications, although specific information is requested in 
Grants.gov. 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 and description of the facilities, systems, or 
area that will be covered;
    4. Anticipated effects of the pricing program on reducing 
congestion, altering travel behavior, and encouraging the use of other 
transportation modes;
    5. An identification of how the proposal addresses goals related to 
livability, sustainability, equity, congestion reduction, safety, and 
state of good repair as outlined in the Evaluation Criteria section 
below;
    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 spending grant funds or in cost 
sharing or debt retirement associated with revenues; and
    16. If tolling authority is sought, an explanation about how 
electronic toll collection project components will, if applicable, be 
compatible with other electronic toll collection systems in the region 
and allow motorists to pay toll charges incurred on any regional 
facility through a single account.
    If some of these items are not available or fully developed at the 
time a formal application for grant funding is submitted, applications 
will still be considered for funding support if they meet the interests 
of FHWA 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 to http://www.grants.gov by close of 
business January 18, 2011 to be assured consideration for available FY 
2010 and FY 2011 funds. Applicants may also submit an optional 
``sketch'' or draft proposal, in a format selected by the applicant, to 
<a href="/cdn-cgi/l/email-protection#54353a333138357a3e35373b362714303b207a333b22"><span class="__cf_email__" data-cfemail="9ffef1f8faf3feb1f5fefcf0fdecdffbf0ebb1f8f0e9">[email protected]</span></a> by December 3, 2010, which FHWA will review and 
provide feedback on for the applicant to use in its formal grant 
application. Sketch or draft proposals received after this date may 
still be reviewed by and formally commented upon by FHWA at its 
discretion. For applications that had been submitted under the August 
5, 2009, (74 FR 39138) solicitation that were not funded (for a list of 
projects funded from that solicitation, see: http://www.fhwa.dot.gov/pressroom/fhwa1029.htm), and where such applications would still be 
eligible for funding under the criteria provided by this notice, 
applicants may submit a letter to <a href="/cdn-cgi/l/email-protection#4a2b242d2f262b64202b292528390a2e253e642d253c"><span class="__cf_email__" data-cfemail="adccc3cac8c1cc83c7cccec2cfdeedc9c2d983cac2db">[email protected]</span></a> at FHWA by 
November 18, 2010, requesting comments on their previous applications.

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 
``SAFETEA-LU; Opportunities for State and Other Qualifying Agencies to 
Gain Authority to Toll Facilities Constructed Using Federal Funds'' (71 
FR 965).

C. Proposal Evaluation Criteria

    All proposals will be evaluated based on these core outcome 
measures, with

[[Page 64402]]

pre-implementation proposals evaluated based upon their projected 
effects on these measures if they are later to lead to implementation:

Livability

    To what extent will the project directly enhance livability by:
    <bullet> Improving neighborhood design and facilitating compact 
form (e.g., if parking pricing curtails demand, thus allowing 
alternative uses for land dedicated to surface parking).
    To what extent will forecasted reductions in traffic make 
available:
    <bullet> An opportunity for traffic calming and human-scale design 
enhancements.
    <bullet> More road space to accommodate pedestrians and bicyclists 
by reducing the amount of road space needed to accommodate motor 
vehicles in motor vehicle travel lanes.
    <bullet> Faster bus travel and better bus stop designs.
    To what extent will revenue from pricing contribute to:
    <bullet> Infrastructure costs for pedestrian and bicycle 
improvements.
    <bullet> Transit infrastructure and operations.
    <bullet> Ridesharing programs.

Sustainability

    To what extent will forecasted reductions in traffic:
    <bullet> Reduce greenhouse gas emissions, improve energy 
efficiency, and reduce dependence on fossil fuels.
    <bullet> Reduce air, water, and noise pollution and damage to 
ecosystems.
    <bullet> Support transit-oriented land development.
    To what extent will revenue from pricing contribute to:
    <bullet> Funding of a multimodal transportation system that meets 
the sustainability objectives listed immediately above.

Equity

    To what extent will costs and benefits be distributed so that:
    <bullet> Low-income travelers or other transportation disadvantaged 
groups pay less on average for their travel or have a better travel 
experience at the same cost.
    To what extent will revenues be used to:
    <bullet> Provide accommodations that are especially important to 
low-income travelers or other transportation disadvantaged groups.
    To what extent are equity impacts mitigated so that:
    <bullet> Concerns of low-income or other transportation 
disadvantaged groups are addressed.

Congestion Reduction

    To what extent will forecasted reductions in traffic:
    <bullet> Reduce traffic congestion and delay experienced by the 
freight sector.
    <bullet> Reduce traffic congestion and delay experienced by 
personal travelers.
    <bullet> Maximize economic return on existing investment by 
optimizing use of the existing transportation infrastructure.
    To what extent will revenue from road pricing:
    <bullet> Provide signals for where new multimodal transportation 
capacity (including transit, bike, pedestrian, ridesharing, etc.) is 
really needed and provide revenues to pay for it, while at the same 
time reducing the need for highway expansion.

Safety

    To what extent will direct safety benefits be provided by:
    <bullet> Shifts from driving alone to safer modes of travel.
    <bullet> Reduced driving overall, and unsafe driving in particular, 
for example by rewarding drivers with reduced insurance premiums for 
cutting exposure to crashes and insurance claims.
    To what extent will forecasted reductions in traffic:
    <bullet> Reduce collisions, including secondary crashes caused by 
stalled traffic.
    <bullet> Make more road space available to provide safer pedestrian 
and bicycle accommodations.
    To what extent will revenue from pricing contribute to:
    <bullet> Costs for roadway safety improvements.
    <bullet> Costs for pedestrian and bicycle improvements.

State of Good Repair

    To what extent will forecasted reductions in traffic:
    <bullet> Reduce highway expansion needs thereby making more 
existing revenues available to repair, reconstruct and rehabilitate the 
existing system.
    To what extent will revenue from pricing be used to:
    <bullet> Repair, reconstruct, and rehabilitate the existing 
highway, transit, bikeway, and pedestrian systems.
    In addition to these outcome-oriented goals, FHWA will also 
evaluate proposals based on the following criteria:
    (1) The degree to which new, innovative value pricing approaches 
are included;
    (2) The degree to which stakeholder groups, including (among 
others) business groups, environmental groups, and advocates for social 
equity, are involved in and supportive of the project, and the project 
is likely to win broad public support;
    (3) The degree to which the project is likely to lead to relatively 
near-term implementation; and
    (4) The degree to which it is demonstrated that the project is 
testing especially promising strategies such that their implementation 
will likely then be replicated broadly.

Post-Selection Process

    If a proposal is 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. 
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 generally not be required unless the FHWA determines 
that a separate agreement is the most efficient mechanism in light of 
the particular circumstances of the project. As discussed previously, 
revenues must generally first be used to cover the project's operating 
costs, including debt service, provide reasonable return on private 
party investments, and be used for the costs necessary to properly 
operate and maintain the facility. Any remaining revenues may then be 
used

[[Page 64403]]

for other Title 23, U.S.C. eligible purposes.
    Where tolling authority is secured through a VPP program 
cooperative agreement, such an agreement 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, 
congestion 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 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: October 12, 2010.
V[iacute]ctor M. Mendez,
Federal Highway Administrator.
[FR Doc. 2010-26298 Filed 10-18-10; 8:45 am]
BILLING CODE 4910-22-P


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