[Federal Register Volume 74, Number 149 (Wednesday, August 5, 2009)]
[Notices]
[Pages 39138-39143]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-18699]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration


Value Pricing Pilot Program Participation, Fiscal Years 2009 and 
2010

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 2009 and 2010. Unlike with previous 
notices, the purpose of this notice is to seek only applications for 
statewide, regionwide, or areawide transportation pricing studies and 
for transportation pricing implementation projects that do not entail 
tolling roadways. This notice seeks applications for fiscal year 2009 
funding, and if Congress chooses to extend Safe, Accountable, Flexible, 
Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) 
VPP program funding, for such funds made available in fiscal year 2010.

DATES: 1. Applications for tolling authority only may be submitted at 
any time.
    2. Formal grant applications, however, must be submitted no later 
than November 3, 2009, to be assured consideration.
    3. Applicants may also submit an optional ``sketch'' or draft 
proposal by September 21, 2009, which FHWA will review and provide 
general 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 applications that had been submitted under the September 16, 
2008 (73 FR 53478) solicitation that were not funded (for a list of 
projects funded from that solicitation, see: http://www.fhwa.dot.gov/pressroom/fhwa0913.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 September 4, 2009, 
requesting comments on their previous applications.
    Application Submission: Applications may be submitted through 
http://www.grants.gov.

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, please contact Ms. Angela Jacobs, FHWA Office of 
Operations, at (202) 366-0076, angela.jacobs@dot.gov. 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, allen.greenberg@dot.gov. For technical questions 
related to the development of regional pricing projects, please contact 
Mr. Patrick DeCorla-Souza, FHWA Office of Innovative Program Delivery, 
at (202) 366-4076, patrick.decorla-souza@dot.gov. For legal questions, 
please contact Mr. Michael Harkins, FHWA Office of the Chief Counsel, 
at (202) 366-4928, michael.harkins@dot.gov.

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 (VPP) 
program. Congestion 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 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 the remainder of 
FY 2009 and also for FY 2010, if SAFETEA-LU funding is extended. 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 the September 16, 2008, notice for VPP program 
participation (73 FR 53478). 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

[[Page 39139]]

seeking to obtain VPP program funding or tolling authority.
    A maximum of $12 million is authorized for FY 2009 to be made 
available to carry out the VPP program, and Congress may choose to 
authorize additional funds for FY 2010. Of the $12 million, $3 million 
per fiscal year must be set-aside for VPP projects that do not involve 
highway tolls. FHWA previously solicited for FY 2009 applications in a 
September 16, 2008, Federal Register notice (73 FR 53478) and on May 
14, 2009, announced the awarding of five grants totaling $6,137,000, 
thereby leaving less than $6 million to fund additional grants in FY 
2009 under this notice. Since none of the five most recent grants are 
supporting projects that do not involve highway tolls, at least $3 
million of the remaining FY 2009 funds must be used for such projects. 
If Congress does provide additional VPP program funds for FY 2010, 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 congestion 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 an 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 congestion 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 
congestion 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 congestion 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. Expanded flexibility to toll is provided 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, ``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, 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 
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 VPP program if it has one or more 
approved congestion 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 congestion 
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 congestion 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 VPP programs, to provide for the monitoring and evaluation of 
congestion 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. For the purpose of this 
solicitation, the VPP program focuses both on market-based approaches 
for congestion relief that do not involve road tolls, such as mileage-
based car insurance and parking pricing,

[[Page 39140]]

and congestion pricing with road tolls, such as pricing all lanes on 
limited access highways or all roads within a zone or network.
    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, whether through non-toll pricing strategies or toll pricing 
applications, that are designed to substantially advance these 
objectives.
    With successful examples of facility-specific pricing projects 
already in operation in the U.S., this solicitation, in addition to its 
focus on non-toll pricing applications, focuses on developing broader 
areawide approaches to toll-based pricing. Some metropolitan areas, 
such as Los Angeles, San Francisco, Seattle, and Washington, DC, have 
begun the process of developing areawide or regionwide congestion 
pricing scenarios and modeling their effects on long-term system 
performance and financing. An objective of this solicitation is, as 
described below, to provide incentive grants to expand the number of 
metropolitan areas that are developing areawide or regionwide 
approaches to congestion pricing.
    Similar to the case with facility-specific tolling applications, 
some non-toll pricing applications, such as carsharing, have already 
proven their success and do not require VPP program funding for their 
success to be sustained. Deployment of other strategies, such as 
pricing of parking meters to achieve a certain occupancy 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.

Potential Project Types

    The FHWA will consider applications for funds that show that a 
project will achieve at least one of the following: (1) Perform a 
rigorous areawide or regionwide congestion pricing scenario study 
around one or more scenarios that are comprehensive and potentially 
acceptable to the public; or (2) implement new and innovative non-toll 
pricing strategies, as detailed below. For pre-implementation projects, 
applicants should demonstrate that there is already sufficient 
political support for their implementation, or that the project is 
designed to bring about such support.
    Congestion pricing charges need to be targeted at a sizable number 
of vehicles that are causing congestion, and prices should be set at 
levels significant enough to encourage drivers to use alternative 
times, routes, modes, or trip patterns, or to telework and avoid 
commuting during congested periods.
    The FHWA is particularly interested in grant applications for 
projects that do not involve highway tolls. As discussed earlier, 
SAFETEA-LU sets aside a minimum of $3 million per fiscal year for such 
projects. 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.
    Strategies that FHWA believes would meet this test include: (1) 
Pay-per-mile 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 the level and coverage 
of parking charges is sufficient to bring about substantial and 
measurable reductions in congestion. For parking pricing, FHWA seeks 
applications for: (1) Citywide surcharges for entering or exiting 
parking facilities during or near peak travel periods; (2) parking 
cash-out, where a city or State passes, and then requests financial 
support to implement, an ordinance 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; and (3) a city 
or State seeking support to implement a law that requires or provides 
sizable financial incentives for housing developers to build more 
livable communities with reduced car parking, in part by offering 
renters or purchasers in multifamily housing developments direct and 
substantial financial savings for not using car parking spaces. 
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, thereby expanding affordable 
transportation options while mitigating equity issues associated with 
pricing.
    The FHWA is also seeking VPP program applications from public 
entities to study one or more scenarios for broad-scale areawide or 
regionwide tolling and pricing that have a high probability of getting 
public support. Applications for areawide or regionwide pricing studies 
should cover a significantly-sized geographical area and include 
multiple roadway facilities that are priced, including zone-based 
pricing, where, as implemented in London and Stockholm, vehicles are 
charged a substantial fee to drive in a congested area on weekdays. 
Consideration of variable pricing of multiple facilities or corridors, 
or of an entire area, will generally be required. Area-wide pricing 
applications using technologies that provide travelers (including 
drivers and transit riders) with pre-trip and real-time congestion and 
pricing information for multiple travel modes and a variety of routes, 
and that facilitate dynamic ridesharing, are especially encouraged to 
assist travelers in making efficient travel destination, mode and route 
choices. Cashless tolling (i.e., no toll booths) is a required element 
of these approaches in order to be considered for VPP program funding.
    As part of broad, areawide or regionwide pricing scenario studies, 
the inclusion of new, innovative congestion pricing approaches is 
encouraged. Examples of new ideas that FHWA would like to have further 
explored are included in an article on congestion pricing published in 
the March/April issue of Public Roads, available at: http://www.tfhrc.gov/pubrds/09mar/04.htm.
    Areawide or regionwide transportation pricing 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. An example of 
the sort of regional transportation study that has already been 
undertaken for which FHWA seeks new applications is the Traffic Choices 
Study conducted by the Puget Sound Regional Council for the Seattle 
Metropolitan Area, which led to the Transportation 2040 Draft

[[Page 39141]]

Environmental Impact Statement (May 2009), available at: http://psrc.org/projects/trans2040/deis/index.htm.
    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 travelers 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 
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.

Pre-Implementation Studies

    Applicants are encouraged to carry out pre-implementation study 
activities designed to lead to implementation of an areawide or 
regionwide congestion pricing project in the relatively near-term. The 
intent of the pre-implementation study phase is to support efforts to 
identify and evaluate congestion pricing project alternatives, and to 
prepare the necessary groundwork for relatively near-term 
implementation.
    FHWA will not fund purely academic studies of congestion pricing or 
studies that involve major expansions of existing facilities or area-
wide 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 broad congestion 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 congestion 
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 
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 congestion 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. ``[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 congestion 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. 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. 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 
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, 
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 cooperative agreement concerning the use of toll 
revenue to be generated under a congestion 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 a project under the VPP program, and 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 
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.

[[Page 39142]]

The Value Pricing Pilot Program Applications

    Formal applications shall be submitted through Grants.gov at http://www.grants.gov by close of business November 3, 2009.
    No particular format 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 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.
    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, 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 to http://www.grants.gov by close of 
business November 3, 2009, to be assured consideration for FY 2009 
funds and, if made available, FY 2010 funds, as well. Applicants may 
also submit an optional ``sketch'' or draft proposal, in a format 
selected by the applicant, to angela.jacobs@dot.gov by September 21, 
2009, 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 September 16, 2008 (73 FR 53478) solicitation 
that were not funded (for a list of projects funded from that 
solicitation, see: http://www.fhwa.dot.gov/pressroom/fhwa0913.htm), and 
where such applications would still be eligible for funding under the 
criteria provided by this notice, applicants may submit a letter to 
angela.jacobs@dot.gov at FHWA September 4, 2009, 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).
Proposal Evaluation Criteria
    All proposals will be evaluated based on:
    (1) The degree to which they reduce congestion, improve system 
performance, and support economic growth, enhance livability through 
support of alternatives to driving, and promote environmental 
sustainability by reducing fuel consumption and greenhouse gas 
emissions;
    (2) The degree to which they encourage drivers to use alternative 
times, routes, modes, or trip patterns, or to telework and avoid 
commuting during congested periods;
    (3) The degree to which new, innovative congestion pricing 
approaches are included; and

[[Page 39143]]

    (4) The degree to which proposals are designed to reflect the needs 
of low-income or other transportation-disadvantaged groups.
    In addition, area-wide and region-wide pricing proposals will be 
evaluated based on:
    (5) The degree to which proposals 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;
    (6) The degree to which further development of alternative packages 
will involve stakeholder groups, including (among others) business 
groups, environmental groups, and advocates for social equity;
    (7) The degree to which they are likely to lead to relatively near-
term implementation;
    (8) The scale of the congestion pricing strategy, i.e., the extent 
of the geographic area, or the number of roadway facilities or 
corridors that are to be priced;
    (9) The degree to which the proposed pricing scenarios are 
comprehensive involving synergistic combinations of multimodal 
investment strategies, Intelligent Transportation System technologies 
and travel demand management strategies; and
    (10) The degree to which proposed pricing scenarios have a 
probability of getting public support.
    Further, non-toll pricing proposals will be evaluated based on the 
degree to which they demonstrate especially promising strategies such 
that their implementation will likely then be replicated broadly.

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. Each 
congestion 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 congestion 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 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 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, 
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), Public Law 105-178, 112 
Stat. 107; Public Law 109-59; 117 Stat. 1144)

    Issued on: July 30, 2009.
V[iacute]ctor M. Mendez,
Federal Highway Administrator.
[FR Doc. E9-18699 Filed 8-4-09; 8:45 am]
BILLING CODE 4910-22-P