Section 1604(c) of the Act creates a new pilot program that will permit a State (or an interstate compact of States - see below) to collect tolls on a highway, bridge or tunnel on the Interstate System for the purpose of constructing Interstate highways. This program is limited to three "facilities" on the Interstate System. Eligibility criteria include "an analysis demonstrating that financing the construction of the facility with the collection of tolls under the pilot program is the most efficient and economical way to advance the project." (This language is more liberal than the standard for tolling under the existing interstate reconstruction pilot program discussed below).
Application Requirements. In addition to demonstrating the efficiencies and economies of tolling, applicants must also provide a facility management plan that includes:
(i) a plan for imposing tolls on the facility;
(ii) a schedule and finance plan for construction of the facility using toll revenues;
(iii) a description of the public transportation agency that will be responsible for implementation and administration of the pilot program; and
(iv) 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 facility.
Selection Criteria. The Secretary is responsible for selecting pilot projects based on a determination by the Secretary that:
(A) the State's conclusion as to the efficiency and economy of using tolls to finance the facility is reasonable;
(B) the State plan for implementing tolls takes into account the interests of local, regional, and interstate travelers;
(C) the State plan for using toll revenues to construct the facility is reasonable;
(D) the State will develop, manage, and maintain a system that will automatically collect the tolls; and
(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 the criteria for the Interstate System.
Interstate Compacts. This provision permits tolls to be collected by a State or an "interstate compact of States" to collect tolls on a facility. It should be noted that an interstate compact requires approval of the Congress under Article I, Section 10, clause 3 of the United States Constitution.
Electronic Tolling. Exclusive use of electronic tolling is not required under the Interstate Construction Toll Pilot Program.
Private Investment in Toll Facilities. The use of public-private partnerships to advance these pilot projects is clearly contemplated by subsection (6)(a)(ii) of Section Section 1604(c), which permits tolls to be used for, among other things, "reasonable return on investment of any private person financing the project." However, it would be advisable for FHWA to clarify certain other requirements that could be interpreted in a manner in inconsistent with an innovative procurement approach. Specifically, Subsection (c)(1) states that under the pilot program "a State or an interstate compact of States" may collect tolls. FHWA should clarify that this would permit a private entity that finances the facility to collect the tolls under agreement with a State or interstate compact of States. With respect to the preference for the use of a "public toll agency," FHWA should clarify that such a toll agency could contract with private entities for the financing, construction and operation of toll projects.
Non-Compete Provisions. The Express Lanes provisions (discussed above) do not prohibit non-compete covenants. By contrast, the Interstate Construction Toll Pilot Program requires that the State commit not to enter into an agreement with a private person under which "the State is prevented from improving or expanding the capacity of public roads adjacent to the toll facility to address conditions resulting from traffic diverted to such roads from the toll facility, including-(A) excessive congestion; (B) pavement wear; and (C) an increased incidence of traffic accident injuries or fatalities." It is not known whether FHWA would nevertheless preclude non-compete clauses for the Express Lanes program, or whether it would allow use of a "modern" non-compete clause in either program; such a clause does not bar the State from constructing other improvements, but only requires that the State compensate the tollroad owner for declines in revenue resulting from such improvements.