Skip to main content
Transportation Funding & Financing

State Toll Road Legislation

When a state or local government embarks on a toll road program, it is likely that new legislation will be required to allow the collection of tolls (Typically this is banned on the majority of public sector roads.) Similarly, if private sector involvement is considered, this often needs specific enabling legislation.

Although each agency's enabling act is unique in some way, the following provisions are common:

  • Creation of an authority or commission, including the legal name and nature of the newly created entity;
  • Scope, purpose, and function of the new entity;
  • Definition of terms;
  • Delineation of district within which the entity operates;
  • Details about the entity's governing board, including the number, composition, selection or appointment process, compensation, and term of members, voting/procedural rules for governing board action, and meeting requirements;
  • The legal powers of the commission/authority, including the ability to establish rules and regulations, hire employees, sue and be sued, enter into contracts, construct facilities, acquire property, use the power of eminent domain, and impose fees;
  • The authority to issue and refund bonds and use tolls and revenues in associated trust indentures,
  • The authority to set and revise tolls and any applicable guidelines or formulas,
  • The ability to invest bond proceeds;
  • Administrative requirements, which may include periodic audits, competitive bidding, annual reports, public notice and/or hearing requirements;
  • Any constraints or rules on the use of funds;
  • The rights and remedies of bondholders;
  • Tax-exempt status of authority property and bonds;
  • The venue and jurisdiction of legal actions against the authority/commission;
  • Police powers;
  • Operating, maintenance, and repair obligations; and
  • Relationship to other entities, e.g., for oversight, reporting, etc.

Florida Turnpike Enterprise Law

The Florida Turnpike Enterprise Law is a sample of good generic legislation creating a state turnpike authority. The law has several different sections which govern the selection of projects, acquisition of property, bonding, concessions, fiscal management, and related issues.

Minnesota Authority for Toll Facility

The following statutes from Minnesota provide the legal framework for implementing toll roads in that state.

160.85 Authority for toll facility.
160.86 Toll facility development agreements; mandatory provisions.
160.87 Toll facility cost recovery.
160.88 Public toll facilities.
160.89 Toll facility revenue bonds.
160.90 Law enforcement on toll facilities.
160.91 Joint authority over toll facility.
160.92 Toll facility replacement projects.

Florida Expressway Authority Act and Related Provisions

Traditionally, states and localities have established special purpose authorities to levy tolls on specific facilities. States have a great amount of flexibility in implementing tolls on routes that are not part of the Interstate Highway system. For example, several counties in Florida have developed local toll roads. This is due in great part to the following state legislation which provides strong support to counties interested in developing toll roads.

The Florida Expressway Authority Act and Related Provisions legislation allows counties to create expressway authorities by authority of the county commission. The provisions grant powers and duties to the authority and gives state DOT powers to provide operations and maintenance services for new road infrastructure. This is an innovative measure in that it covenants maintenance services to the expressway authorities, enabling them to provide a gross pledge of the toll revenues for bonding purposes.

Under this legislation, "any county, or two or more contiguous counties located within a single district of the [Florida DOT] may, by resolution adopted by the board of county commissioners, form an expressway authority" (16). The Act further provides that an authority can enter into a lease-purchase agreement with FDOT performs certain operational functions on the facility under lease from the authority; upon completion of the lease agreement, title to the facility is transferred to the state. To date, Dade County Expressway Authority in the Miami area is the only authority governed by the terms of Chapter 348, Part I, but future toll authorities will be subject to its provisions. Most of Florida's existing toll authorities were created before the 1990 enactment of this legislation.

Virginia Highway Corporation Act of 1988

http://law.justia.com/codes/virginia/2006/toc5600000/toc56000000020000000000000.html

Virginia is another state with a number of recently developed local toll roads, including the Dulles Greenway, which was the first privately financed highway in the modern era in the United States. The Virginia Highway Corporation Act of 1998 authorized the construction of the Dulles Greenway, with the provision that it be supervised by the State Corporation Commission, much like a public utility. The structure established here treats the highway concession like a public utility. The authorities provided in this Act have also been used as the basis for developing public toll roads such as the Chesapeake Expressway.

Virginia Public Finance Act of 1991

http://law.justia.com/codes/virginia/2006/toc5600000/toc56000000020000000000000.html
http://law.justia.com/codes/virginia/2006/toc1502000/15.2-2600.html

This legislation from the Commonwealth of Virginia codifies the process through which local governing bodies may issue bonds, subject to the approval of a majority of voters within local jurisdictions. The procedures described in this Act are typical of those governing the issuing of local public debt in other states.

City of Chesapeake City Charter

Section 2.03 the Charter of the City of Chesapeake * addresses the powers of the city. It includes specific language the City's right to operate toll roads. This type of language could be adopted in most local charters enabling local governments to engage in tolling when allowed by state law. Per Section 203 of the City of Chesapeake Charter, the City is authorized: "To acquire, construct, own, maintain and operate or authorize the construction and maintenance of roads within the city limits, and to charge or authorize the charging of tolls for use of such roads by the public, and to require compensation for such use by public utility, transmission or transportation companies, except as the right to require such compensation is affected by any contract heretofore or hereafter made with the company concerned."

Sec. 2.03. Special taxes; construction, etc., of bridges, canals, docks, etc. Without limiting the generality of the foregoing, but in addition thereto, the city shall have the following additional powers:

  1. To levy a higher tax in such areas of the city as desire additional or more complete services of government than are desired in the city as a whole, provided that such higher tax rate shall not be levied for school, police or general government services but only for those services which prior to the effective date of this Charter were not offered in all the territory within the boundaries of the city and provided further that the proceeds from such higher tax rate shall be so segregated as to enable the same to be expended in the areas in which raised. Such higher tax shall not be levied unless there has been filed with the council a petition of not less than two-thirds of the landowners in such areas requesting such higher taxes.

  2. To acquire, construct and maintain or authorize the construction and maintenance of bridges, viaducts, subways or underpasses over or under the Elizabeth River or any other stream, creek or ravine when any portion of such bridge, viaduct, subway or underpass is within the city limits, and to charge or authorize the charging of tolls for their use by the public, and to require compensation for their use by public utility, transmission or transportation companies, except as the right to require such compensation is affected by any contract heretofore or hereafter made with the company concerned.

    b1. To acquire, construct, own, maintain and operate or authorize the construction and maintenance of roads within the city limits, and to charge or authorize the charging of tolls for use of such roads by the public, and to require compensation for such use by public utility, transmission or transportation companies, except as the right to require such compensation is affected by any contract heretofore or hereafter made with the company concerned.

  3. To acquire, construct, own, maintain and operate, within and without the city, landings, wharves, docks, canals and the approaches to and appurtenances thereof, tracks, spurs, crossings, switchings, terminals, warehouses and terminal facilities of every kind and description necessary or useful in the transportation and storage of goods, wares and merchandise; perform any and all services in connection with the receipt, delivery, shipment and transfer in transit, weighing, marking, tagging, ventilating, refrigerating, icing, storing and handling of goods, wares and merchandise; prescribe and collect charges from vessels coming into or using any of the facilities above described; provide for the management and control of such facilities or any of them by a department of the city government or by a board, commission or agency specially established by ordinance for the purpose; lease any or all of such facilities or any concessions properly incident thereto to any person, firm or corporation or contract with any person, firm or corporation for the maintenance and operation of any or all of such facilities on such terms and conditions as the council may determine by ordinance; apply to the proper authorities of the United States to grant to the city the privilege of establishing, maintaining and operating a foreign trade zone within the city; regulate the use of other landings, wharves and docks located on the Elizabeth River within the city; prevent and remove obstructions from the harbor of the Elizabeth River and in, upon or near the landings, wharves, docks, or canals adjacent thereto, and collect from the person or persons responsible for such obstructions the cost of their removal; close or discontinue the use of any such wharf, landing, dock or canal now owned or hereafter acquired by the city and upon the closing or discontinuance of such use the same shall thereupon be forever discharged from any public use or easement or from any obligation therefore imposed by reason of such public use or easement by statute or otherwise.

  4. To levy and provide for the assessment and collection of license taxes on all public service corporations doing business within the city in such manner as the city council shall deem expedient in accordance with the laws of this state; such authority shall be in addition to other provisions of law permitting the imposition of license taxes on businesses, trades, professions, occupations and callings and upon the persons, firms and corporations engaged therein within the city. (1989 Acts, Ch. 194, ยง 1)