Connecticut Seal

General Assembly

File No. 635

    February Session, 2018

Substitute House Bill No. 5046

House of Representatives, April 23, 2018

The Committee on Finance, Revenue and Bonding reported through REP. ROJAS of the 9th Dist., Chairperson of the Committee on the part of the House, that the substitute bill ought to pass.

AN ACT CONCERNING THE SUSTAINABILITY OF TRANSPORTATION PROJECTS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective from passage) As used in this section and sections 2 to 8, inclusive, of this act:

(1) "Electronic tolling system" means an electronic system for recording, monitoring, collecting and paying for tolls on the highways of this state, including, but not limited to, transponders or other electronic transaction or payment technology devices or video toll transaction systems;

(2) "Department" means the Department of Transportation; and

(3) "Toll operator" means a private entity that operates an electronic tolling system, which duties may include, but need not be limited to, collecting tolls, administrative charges and penalties.

Sec. 2. (NEW) (Effective from passage) (a) The department may construct, maintain and operate electronic tolling systems. The department may operate such electronic tolling systems or contract with a toll operator to operate such systems.

(b) To carry out its duties and responsibilities under this section and sections 3 to 8, inclusive, of this act, and any regulations adopted under section 7 of this act, the department may enter into tolling agreements with the Federal Highway Administration and coordination agreements, intergovernmental agreements or other implementation agreements with any other federal, state or municipal entity or agency.

(c) The department may retain and expend funds for technical, traffic, revenue, financial, legal and other consultants and experts to assist in the development and implementation of electronic tolling systems.

(d) The department may procure, retain and expend funds for toll operators, vendors, suppliers, designers, engineers, software designers, installers, contractors, maintenance personnel, back-office and customer service personnel, collections, enforcement and for other equipment, materials, personnel and services in order to assist in the development and implementation of electronic tolling systems.

(e) (1) The department and the Department of Motor Vehicles may enter into reciprocal agreements with other states, jurisdictions and operators of toll facilities in other states that will enable said departments to obtain and share with said departments and any toll operator information regarding an out-of-state registered owner of a vehicle that has used a tolled highway, including the make of the vehicle, the vehicle's license plate and the name and address of the registered owner of the vehicle.

(2) The department and the Department of Motor Vehicles may enter into, or cause the toll operator on behalf of such departments to enter into, reciprocal agreements with other states, jurisdictions and operators of toll facilities in other states allowing for additional enforcement mechanisms for the efficient collection of tolls incurred by residents of states other than this state.

(3) The department and the Department of Emergency Services and Public Protection may enter into an agreement with each other for the provision of law enforcement assistance by the state police on tolled highways that are not otherwise provided by the state police on state roads and highways. All law enforcement officers of the state and any political subdivision of the state shall have the same powers and jurisdiction within the limits of a tolled highway as they have in their respective areas of jurisdiction, including the roads and highways of this state.

Sec. 3. (NEW) (Effective from passage) (a) The department may charge, collect, retain and fix the amount of all tolls for transit over or use of such highways, or portions thereof, as may be determined by the department. The department may retain and employ such assistance as may be necessary for the collection thereof.

(b) Toll amounts shall be fixed and changed by the department, so as to provide, at a minimum, funding that is sufficient to: (1) Pay costs related to tolled highways in this state, including, but not limited to, the cost of owning, maintaining, repairing, reconstructing, improving, rehabilitating, using, administering, controlling and operating such highways; (2) pay the principal of, redemption premium, if any, and interest on notes or bonds relating to tolled highways, as such principal, premium or interest become due and payable; and (3) create and maintain reserves established for any of the department's highway and bridge responsibilities under titles 13a and 13b of the general statutes for the operation and maintenance of tolled highways. Such sufficiency of funding may take into account the availability of funds from other sources.

(c) The department shall provide advance notice of the tolls that will be charged and the option for payment to motor vehicle operators before such operators enter a tolled highway, or portion thereof.

(d) Tolls established by the department under this section shall not be subject to supervision or regulation, except as otherwise provided by law, by any other commission, board, bureau, authority or agency of this state, or by any political subdivision of the state.

(e) All revenues received by the department from tolls shall be deposited into the Special Transportation Fund, established under section 13b-68 of the general statutes, and shall not be commingled with other funds and revenues. Such revenues shall be expended only for the purposes and subject to the provisions of 23 USC 129 (a)(3), as amended from time to time.

(f) Tolls shall not be subject to and shall be exempt from any sales, use, excise, gross receipts or any similar taxes.

Sec. 4. (NEW) (Effective from passage) (a) If an electronic tolling system uses a transponder or other electronic transaction or payment technology device, the device shall be located in or on the motor vehicle entering the tolling system in a manner prescribed by the department or toll operator and consistent with applicable law.

(b) All electronic tolling systems operated by the department or a toll operator shall be interoperable with all other electronic tolling systems in this state and shall otherwise comply with all state and federal interoperability requirements and standards. Such tolling system interoperability shall extend to system technology and the transfer of funds. The provisions of chapters 61 and 61b of the general statutes shall not apply to this subsection. The Commissioners of Transportation and Motor Vehicles shall consult with the Commissioner of Administrative Services to ensure coordination and compatibility of information system technology and data of any electronic tolling system.

Sec. 5. (NEW) (Effective from passage) Prior to commencing construction of an electronic tolling system on any highway, or portion thereof, of this state, the department shall hold at least one public informational meeting in the general vicinity of the proposed toll location to receive comments on the proposed toll, methodology for setting and changing the tolls and user classifications.

Sec. 6. (NEW) (Effective from passage) (a) The department shall develop and implement a privacy policy relating to any toll customer information and other data collected, received, maintained, archived, accessed and disclosed by the department to a toll operator.

(b) The department shall implement a privacy protocol to protect and appropriately limit access to toll customer information and other data collected, received, maintained and archived.

(c) Neither the department nor any toll operator shall sell or use any toll customer information or other data for commercial purposes unrelated to the charging, collection and enforcement of tolls, administrative fees and penalties. The prohibition set forth in this subsection shall not apply to toll customer information or other data that does not directly or indirectly identify a toll customer used for research purposes authorized by the department.

(d) (1) Except as required by applicable law or in connection with an administrative or court proceeding, all information that specifically identifies a toll customer and relates to a specific tolling transaction shall be destroyed not later than one year after the later of the tolling transaction or collection of the toll, whether through normal processes or enforcement.

(2) Except as required by applicable law or in connection with an administrative or court proceeding, all information relating to a toll customer account that specifically identifies a toll customer shall be destroyed not later than one year after the collection of all tolls and fees incurred by such toll customer, whether through normal processes, enforcement or closing of such account.

(e) Toll customer information and data shall not be deemed a public record, as defined in section 1-200 of the general statutes. The department may release toll customer information and data that does not directly or indirectly identify a toll customer for research purposes authorized by the department.

(f) Toll operators shall be subject to the provisions of chapter 62a of the general statutes.

Sec. 7. (NEW) (Effective from passage) (a) The Commissioner of Transportation shall adopt regulations, in accordance with the provisions of chapter 54 of the general statutes, to carry out the provisions of sections 2 to 6, inclusive, of this act.

(b) Such regulations may include, but need not be limited to: (1) Establishment of variable or dynamic toll rates that take into consideration the day of the week, level of congestion or anticipated congestions; (2) establishment of different fees based on the type of vehicle classification, size, weight, number of axles or vehicle occupancy; (3) establishment of reduced or discounted tolls for toll road users or classes of users registered in the state that are equipped with transponders or similar technology and have valid toll customer accounts with the department or the toll operator, as the case may be; (4) exemptions for high-occupancy commuter vehicles and motor vehicles leased to an agency of this state, owned by the state, used by a law enforcement unit, as defined in section 7-294a of the general statutes, used by a member of an emergency medical service organization, as defined in section 19a-175 of the general statutes, while responding to emergencies and used to provide public transit services; (5) the imposition of surcharges, premiums or additional fees for designated users or classes of users of a tolled highway who travel on such highway without a valid transponder or similar technology; and (6) the imposition of administrative charges and penalties for late payment and toll evasion.

(c) Such regulations shall include: (1) Due process procedures that include notice, the right to challenge a toll and associated charges, the opportunity for a hearing and a right to appeal; and (2) procedures for enforcement of any administrative decision.

(d) The Commissioner of Motor Vehicles shall adopt regulations, in accordance with the provisions of chapter 54 of the general statutes, consistent with its duties and responsibilities under sections 2 to 6, inclusive, of this act and shall coordinate and consult with the Commissioner of Transportation in the development of such regulations.

Sec. 8. (NEW) (Effective from passage) (a) The department, after notice and hearing, may impose a civil penalty of not more than one hundred dollars for each violation of a provision of the regulations adopted pursuant to section 7 of this act on any of the following persons with respect to toll nonpayment, toll evasion and related fees imposed pursuant to sections 2 to 7, inclusive, of this act: (1) The operator of a motor vehicle on a tolled highway; (2) the registered owner of a motor vehicle operated on a tolled highway, if other than the operator, if such vehicle was used or operated with the express or implied permission of the registered owner at the time of the tolling transaction; (3) the lessee of a motor vehicle operated on a tolled highway, if other than the operator, if such vehicle was used or operated with the express or implied permission of the lessee at the time of the tolling transaction; and (4) the lessor of a motor vehicle operated on a tolled highway.

(b) A copy of the motor vehicle rental agreement, lease, other contract document or affidavit identifying the lessee of the motor vehicle at the time of the tolling transaction shall be prima facie evidence that the person named in the rental agreement, lease, other contract document or affidavit was operating the motor vehicle at all relevant times relating to the tolling transaction. A lessor shall cooperate with the department or the toll operator, as the case may be, in providing the department or toll operator any requested information concerning the lessee contained in the lessor's record.

(c) The Department of Motor Vehicles shall provide the department and any toll operator with the information necessary to collect tolls and enforce penalties for toll nonpayment, toll evasion or other toll-related violations, including, but not limited to, information regarding the registered owner of a motor vehicle that was operated on a tolled highway and the make of the motor vehicle, the motor vehicle's license plate and the address of the registered owner of the motor vehicle.

This act shall take effect as follows and shall amend the following sections:

Section 1

from passage

New section

Sec. 2

from passage

New section

Sec. 3

from passage

New section

Sec. 4

from passage

New section

Sec. 5

from passage

New section

Sec. 6

from passage

New section

Sec. 7

from passage

New section

Sec. 8

from passage

New section

Statement of Legislative Commissioners:

In Section 3(b), "pay (1)" was changed to ": (1) Pay" "and (2)" was changed to "(2) pay", and ", and to" was changed to "; and (3)" for clarity and accuracy.

TRA

Joint Favorable C/R

FIN

FIN

Joint Favorable Subst.-LCO

 

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.


OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 19 $

FY 20 $

Treasurer, Debt Serv.

TF - Cost

See Below

See Below

Note: TF=Transportation Fund

Municipal Impact: None

Explanation

The bill may result in an initial cost to the Special Transportation Fund through Special Tax Obligation (STO) bond debt service for the construction of the electronic tolling system, although the state may be eligible to use Federal Funds if available. As the bill does not specify the state highways that electronic tolling will be placed on, it is estimated that once established the annual toll revenue may be between $600-$800 million which is dependent on several factors relating to toll rates and how many miles will be tolled.

The bill specifies that the toll revenue will be used according to federal law and be used for any debt service payments on the STO bonds.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future dependent on the installations of an electronic tolling system.

OLR Bill Analysis

sHB 5046

AN ACT CONCERNING THE SUSTAINABILITY OF TRANSPORTATION PROJECTS.

SUMMARY

This bill authorizes the Department of Transportation (DOT) to build, maintain, and operate electronic tolls on state highways, as may be determined by the department.

Under the bill, DOT may set toll rates and collect toll revenue, which must be deposited into the Special Transportation Fund (STF) and spent only as federal law allows (see BACKGROUND). Toll rates may vary based on the time of day or anticipated traffic congestion and may include toll discounts or exemptions for certain users, among other things. DOT must set the rates to cover, at a minimum, the cost of (1) tolled highway construction, maintenance, operation, and improvement and (2) debt service on obligations related to such highways.

The bill allows the department to hire consultants and enter into agreements necessary to implement tolling (e.g., a tolling agreement with the Federal Highway Administration (FHWA)). It also requires that any tolling system comply with all state and federal interoperability requirements.

The bill contains provisions regarding public hearing and notice requirements, toll customer privacy, and toll enforcement and penalties. It also requires the DOT commissioner and motor vehicles (DMV) commissioner to adopt implementing regulations.

EFFECTIVE DATE: Upon passage

TOLL IMPLEMENTATION

The bill allows DOT to construct, maintain, and operate electronic tolling systems on state highways and to contract with a private entity to operate them (toll operator). Under the bill, an “electronic tolling system” records, monitors, collects, and enables payment of tolls. It includes transponders or other electronic transaction or payment technology devices or video toll transaction systems. If transponders or similar devices are used, the bill requires them to be placed in or on motor vehicles in the way DOT or a toll operator prescribes.

Tolling Agreements and Authorizations

Under the bill, DOT may:

The bill authorizes DOT and DMV to enter into reciprocal agreements with other states and jurisdictions, and with toll operators in other states, to share information on out-of-state vehicle owners who have used a tolled highway, including the name and address of the vehicle owner and the vehicle's make and license plate number. DOT, DMV, and the toll operator may enter into agreements with other states, jurisdictions, and toll operators for additional enforcement mechanisms to efficiently collect tolls from out-of-state residents.

The bill also allows DOT and the Department of Emergency Services and Public Protection to enter into an agreement to have state police enforce laws on tolled highways that they do not enforce elsewhere (e.g., laws on toll evasion). It gives state and local police the same powers on tolled roads as they have in their respective jurisdictions.

TOLL COLLECTION AND REVENUE

Under the bill, DOT may charge, collect, retain, and set the amount of tolls on highways or portions of highways, and retain and employ the assistance it needs to collect the tolls. Toll revenue (1) must be deposited into the STF, (2) cannot be commingled with other funds and revenues, and (3) must be spent only as federal law allows (see BACKGROUND).

The department must set the toll amounts to provide sufficient funding to cover specified costs, but it may consider the availability of funds from other sources in doing so. Under the bill, the revenue generated by tolls, plus such other available funding, must cover, at a minimum, the following costs:

DOT must provide drivers with advance notice of tolls, and how to pay them, before the operators enter a tolled highway.

Tolls DOT establishes are not subject to supervision or regulation by any other commission, board, bureau, authority, state agency, or political subdivision, except as otherwise provided by law.

Under the bill, tolls are not subject to, and are exempt from, the sales and use, excise, gross receipts, or similar taxes.

REGULATIONS

Toll Rates, Application, and Exemptions

The bill requires DOT to adopt implementing regulations, which may cover the following:

Due Process

DOT's regulations must include procedures for due process that include notice, the right to challenge a toll and associated charges, the opportunity for a hearing and right to appeal, and procedures for enforcing administrative decisions.

DMV

The bill also requires the DMV commissioner, in coordination and consultation with the DOT commissioner, to adopt regulations to carry out its responsibilities under the bill.

PUBLIC NOTICE AND PRIVACY

DOT must hold at least one public informational meeting near the proposed toll location before building a toll system, during which it must receive comments on the proposed toll, rate-setting methodology, and user classifications.

DOT must develop and implement a (1) privacy policy for toll customer information and other data collected, received, maintained, archived, accessed, and disclosed by DOT to a toll operator and (2) protocol to protect and limit access to toll customer information and other data collected, received, maintained, and archived.

Except as required by law or an administrative or court proceeding, all information relating to a specific transaction of a toll customer or to a “toll customer account” that specifically identifies the toll customer must be destroyed. In the case of a specific transaction, this information must be destroyed within one year after the later of the tolling transaction or toll collection, whether through normal processes or enforcement. In the case of a customer account, such information must be destroyed within one year after the collection of all tolls and fees the customer incurred, whether through normal processes, enforcement, or the account's closing. “Toll customer account” apparently refers to a billing account the customer establishes.

The bill prohibits DOT or a toll operator from selling or using any toll customer information or other data for commercial purposes unrelated to the charging, collection, and enforcement of tolls, administrative fees, and penalties. It exempts toll customer data and information from disclosure under the Freedom of Information Act and subjects toll operators to laws that apply to state contractors who receive confidential information. However, DOT may release customer information or other data that does not directly or indirectly identify a customer and is used only for department-authorized research purposes.

ENFORCEMENT AND PENALTIES

Under the bill, DOT, after notice and a hearing, may impose a civil penalty of up to $100 for each violation of the regulations related to not paying a toll, toll evasion, or any related fees. It may impose the penalty on (1) a vehicle's driver or (2) its owner or lessee if the vehicle was operated by someone else with the owner's or lessee's permission. The penalty also may be imposed on a vehicle's lessor. A copy of a motor vehicle rental agreement, lease, or other contract or affidavit identifying the lessee at the time of the tolling transaction is prima facie evidence that the person named in the agreement was operating the vehicle at all relevant times related to the toll.

The bill requires vehicle lessors to cooperate with DOT or the toll operator in providing any information about the lessee that DOT or the toll operator requests from the lessor's record (presumably, the lease agreement or contract). DMV must provide DOT or the toll operator any information it needs to collect tolls and enforce penalties for nonpayment, toll evasion, or other violations, including information on the vehicle's owner and his or her address, and the vehicle's make and license plate number.

TOLL SYSTEM INTEROPERABILITY

The bill requires that the tolling system be compatible with other electronic tolling systems in the state and comply with all state and federal interoperability requirements and standards, including system technology and fund transfers. (Interoperability refers to the ability of computer systems to exchange and use information.) The DOT and DMV commissioners must consult with the administrative services commissioner to ensure coordination and compatibility of information system technology and data.

The bill specifies that, for purposes of interoperability, state laws on state information and telecommunications systems and geospatial information systems do not apply to electronic tolling systems. These include laws on, among other things, interagency agreements, legislative access to state agency records, and hiring of state employees by, and disqualification of, contractors and subcontractors.

BACKGROUND

Tolling and Federal Law

Although states are free to toll roads, bridges, and tunnels built without federal funds, federal law limits the imposition of tolls on existing federal-aid highways, especially interstate highways. But recent federal laws have expanded states' abilities to allow tolling in certain instances, such as when building new interstate routes or when adding a new lane to an existing interstate highway (23 U.S.C. 129).

Federal law also has several pilot programs, such as the Value Pricing Pilot Program, in which participating states use “congestion pricing” to try to manage traffic flow and reduce traffic congestion. (Congestion pricing is the practice of charging higher tolls when traffic is heaviest and lower or no tolls at other times.) Connecticut is participating in the Value Pricing Pilot Program.

Toll Revenue Restrictions

Under federal law, toll revenue must be used first on the facility being tolled, including (1) debt service for the tolled road; (2) a reasonable return on investment of any private person financing the road; (3) road maintenance, operating, and improvement costs; and (4) if applicable, payments that the entity that controls tolling revenue owes to another party under a public-private partnership agreement (23 U.S.C.  129(a)(3)(A)).

If the public authority with jurisdiction over the toll road has met the annual financial obligations related to the toll road and certifies that the road is adequately maintained, any additional toll revenue may be used for other roads and other uses allowed under federal highway law (e.g., maintenance and improvement of other highways, congestion mitigation and air quality improvements, highway safety initiatives, and certain public transit improvements).

Special Transportation Fund

The STF is a dedicated fund used to finance the state's transportation infrastructure program and operate DOT and DMV (CGS 13b-68). The law requires specified tax revenue (e.g., fuel taxes and a portion of sales and use tax revenue) and various transportation-related fees, fines, and charges to be credited to the STF. By law, STF revenue is pledged to STO bonds issued for transportation projects through DOT's capital program (CGS 13b-74 to 13b-77), and its resources must be used first to pay off STO bond debt service.

Connecticut statutes contain a “lockbox” provision, which makes the STF a perpetual fund, requires its current revenue sources to continue to be placed in the fund as long as the state collects them, and restricts the use of its resources to transportation purposes (CGS 13b-68(b)). In 2017, the legislature approved a constitutional amendment to provide these “lockbox” protections in the constitution. The amendment will be placed on the November 2018 general election ballot.

Related Bills

Several bills favorably reported by the Transportation Committee contain provisions related to tolling:

COMMITTEE ACTION

Transportation Committee

Joint Favorable Change of Reference - FIN

Yea

20

Nay

16

(03/23/2018)

Finance, Revenue and Bonding Committee

Joint Favorable

Yea

26

Nay

25

(04/05/2018)

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