Section 301 of title 23, United States Code, requires that all roads constructed with Federal-aid funding be free from tolls of all kinds, except as provided under 23 U.S.C. 129 and two pilot programs. Section 129 of title 23 U.S.C. establishes a restrictive basic program to permit Federal participation in certain toll highways, bridges, or tunnels. The basic program authorized under section 129 includes restrictions on ownership of the facility. To be eligible to participate in the program, the facility must be publicly owned, or it may be privately owned provided the public authority having jurisdiction over the facility enters into a contract with the private entity and retains responsibility for compliance with all applicable title 23 requirements. Section 129 also restricts the use of toll revenues by the owner, by requiring that revenues generated by the toll facility be used first for debt service, then for a reasonable return on any private investments, and then for the costs necessary for the proper operation and maintenance of the facility.[292] Among other things, 23 U.S.C. 129 does not permit a toll-free Interstate System highway to be converted into a toll facility, except bridges and tunnels. Nevertheless, two other provisions of Federal law provide limited opportunities for such tolling.
Section 1216(b) of the TEA-21 established the Interstate Reconstruction and Rehabilitation Pilot Program.[293] This program allows three Interstate facilities (one facility in three different States) to be tolled for purposes of reconstructing or rehabilitating existing Interstate facilities that cannot be functionally maintained or adequately improved without the collection of tolls. Under this program, toll revenues may only be applied toward debt service, reasonable return on investment of private parties financing the project, and operation and maintenance of the facility.
In addition, section 1012(b) of the ISTEA, as amended by section 1216(a) of TEA-21 established what is now called the Value Pricing Pilot Program (VPPP).[294] Under the VPPP, the Secretary may enter into cooperative agreements with up to 15 States, local governments, or public authorities to implement projects aimed at reducing congestion with variable tolls. This program permits entities to enter into an unlimited number of pilot facilities within that State (budget-permitting). This provision includes the authority to toll an Interstate highway. Toll revenues under this program must first be used to implement the project, and excess revenues may be used only on title 23 eligible projects. The Administration's SAFETEA proposal would establish a variable toll pricing program that would permit tolling on any highway, bridge, or tunnel, including the Interstate System to manage congestion or reduce emissions. This proposal is discussed in more detail in Chapter VI.
The private sector needs a non-governmental revenue stream to recoup an investment in a highway project. As discussed, the sections of highways that could generate the most revenue, highways on the Interstate System, are prohibited from being tolled, with limited exceptions. Lifting or further easing this restriction would encourage public-private partnership formation since the private sector would be investing in projects with better and greater revenue potential.