[Federal Register Volume 60, Number 28 (Friday, February 10, 1995)]
[Notices]
[Pages 8109-8111]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-3425]
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DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
[FHWA Docket No. 95-6]
Federal Highway Cost Allocation Study
AGENCY: Federal Highway Administration (FHWA), DOT.
ACTION: Notice; request for comments.
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SUMMARY: This notice requests public comment on issues related to a new
Federal highway cost allocation study (HCAS) that the FHWA is
initiating. Comments on recommendations emanating from an October 1994
cost allocation workshop are requested, in addition to comments on
other issues that should be considered in planning and conducting the
new study. Preliminary copies of the workshop proceedings are available
from Mr. James March, who may be contacted at the phone number shown
below.
DATES: This docket will remain open until the study is completed.
However, in order for comments responding to issues raised by this
notice to be considered during critical early stages of the study, they
should be received no later than April 11, 1995.
ADDRESSES: Submit written, signed comments to FHWA Docket No. 95-6,
Federal Highway Administration, Room 4232, HCC-10, Office of the Chief
Counsel, 400 Seventh Street, SW., Washington DC 20590. All comments
received will be available for examination at the above address between
8:30 a.m. and 3:30 p.m., Monday through Friday, except Federal
holidays. Those desiring notification of receipt of comments must
include a self-addressed, stamped envelope or postcard.
FOR FURTHER INFORMATION CONTACT: Mr. James March, Office of Policy
Development, at (202) 366-9237 or Mr. Steven Rochlis, Office of Chief
Counsel, at (202) 366-0780, Federal Highway Administration, Department
of Transportation, 400 Seventh Street, SW., Washington, DC 20590.
Office hours are from 7:45 a.m. to 4:15 p.m., e.t., Monday through
Friday, except Federal holidays.
SUPPLEMENTARY INFORMATION:
Background
The last comprehensive Federal HCAS was conducted from 1978 to
1982, pursuant to Section 506 of the Surface Transportation Assistance
Act (STAA) of 1978 (Pub. L. 95-599). That section stipulated that the
study was to investigate the distribution of Federal highway program
costs among the various classes of highway vehicles that occasion such
costs. It also called for an assessment of current Federal user charges
and recommendations for more equitable user charge alternatives. In
addition, Section 506 directed the Congressional Budget Office (CBO) to
develop guidelines for the cost allocation study, including procedures
to be employed in determining the equitable allocation of highway costs
and the information needed to apply those procedures.
Section 506 and the subsequent CBO guidelines established the
general scope of the 1982 Federal highway cost allocation study.
Specifically, the study was to focus on evaluating Federal highway
program costs, not highway costs incurred by State and local
transportation agencies. Also, the Federal user fee structure was to be
evaluated on the basis of equity rather than economic efficiency, with
equity measured in terms of the ratio of Federal user fees payments to
Federal program costs occasioned by different vehicle classes.
The CBO guidelines listed several factors underlying the need for
the 1982 Federal cost allocation study, including the effect of energy
policies on fuel consumption and tax revenues, the shift in the Federal
highway program's emphasis away from new construction and toward repair
and rehabilitation, the long time that had elapsed since the last
comprehensive Federal cost allocation study, and the fact that methods
used in previous studies could be improved upon in a number of
technical aspects and in the way they reflected the new mix of Federal
highway programs.
Similar factors are relevant today and suggest that a new Federal
cost allocation study would be timely. The last comprehensive highway
cost allocation study was completed over 12 years ago and much of the
data upon which that study was based are outdated. Energy and
environmental initiatives continue to affect fuel tax receipts, and
considerations leading up to reauthorization of the Intermodal Surface
Transportation Efficiency Act (ISTEA) of 1991, Public Law 102-240, 105
Stat. 1914, may require changes in current highway user fees. The ISTEA
made fundamental changes in the structure of the Federal-aid highway
program that have significant implications for cost allocation.
Proposals currently being discussed to consolidate Department of
Transportation programs could have even greater ramifications for
highway cost allocation.
The General Accounting Office recommended in its 1994 report,
Highway User Fees: Updated Data Needed to Determine Whether All Users
Pay Their Fair Share, (report number GAO/RCED-94-181) that a new
Federal cost allocation study be conducted as the basis for assessing
the equity of Federal highway user fees. Without explicit Congressional
guidance on the scope of a new cost allocation study, and recognizing
the many changes in the highway program since the last study was
completed, the FHWA conducted a two-day workshop in October 1994 to
discuss a range of policy and technical issues that might be considered
in the study. Over 75 persons representing Federal and State
transportation agencies, transportation industries, academic
institutions, consulting firms, and other organizations participated in
the workshop. Preliminary proceedings of that workshop, which include
many specific recommendations made by workshop participants, will be
available for inspection in the docket; copies may be requested by
calling Mr. James March at the phone number listed above under ``For
Further Information Contact:''. During the course of the cost
allocation study, working papers and other interim work products will
be placed in the docket.
Among other things, workshop participants recommended that the cost
allocation study consider:
(1) External costs of highway use and operation, such as
congestion, accident costs, and air and noise pollution costs, as well
as traditional highway agency costs;
(2) Alternative cost allocation methods, especially a marginal cost
approach, along with traditional cost allocation methods;
(3) Highway-related revenues and expenditures for all levels of
government, not just Federal revenues and expenditures; [[Page 8110]]
(4) Implications for highway cost allocation of multi-modal
investment programs; and
(5) Life-cycle cost analysis principles for estimating future
highway investment requirements.
Participants also recommended that, while many new issues deserve
consideration in the cost allocation study, a primary focus of the
study should be on allocating Federal costs using methods consistent
with the 1982 study.
Comments are requested on these recommendations and on other
technical issues and recommendations included in the workshop
proceedings.
A preliminary plan for the new cost allocation study has been
developed. The study will be divided into four phases: (1) Issues
analysis and workplan development; (2) update and refinement of highway
cost allocation data and methods; (3) analysis of highway cost
responsibility and the equity of the user fee structure; and (4)
evaluation of alternative cost allocation procedures. Work envisioned
under each phase is summarized below. Comments are requested on this
plan.
Phase I--Issues Analysis and Workplan Development
Many issues were raised at the October workshop concerning the
scope of the next cost allocation study and the advantages and
disadvantages of pursuing alternative highway cost allocation methods.
Several issues could have major implications for the direction of the
next study, including: (1) The extent to which marginal costs can and
should be reflected in the study; (2) the extent to which revenues and
expenditures by all levels of government can be estimated and
incorporated in the study; and (3) the extent to which cost allocation
can be applied to multi-modal transportation investment programs that
will replace mode-specific investment programs in the future. White
papers will be prepared to evaluate issues related to the analysis of
these and other concerns in the next cost allocation study. An
important factor that will affect the extent to which these issues can
be considered is the availability of needed data and analytical
methods. An assessment of data needs to evaluate the emerging cost
allocation issues will be conducted during this initial phase of the
study.
The FHWA has maintained a continuing research program to update
highway cost allocation data and methods. Research has focused
primarily on refining data and methods used in the 1982 study. A review
of current cost allocation data and methods is already underway.
Working papers will be prepared which discuss current methods for
analyzing cost responsibility for: Pavement, bridge, and other highway
costs; sources of data on vehicle miles of travel, operating weight
distributions, and registered weight/operating weight distributions;
estimates of highway user revenue contributions by each vehicle class;
and other aspects of highway cost allocation. Additional research and
data needs will be discussed in those working papers.
At the end of the first phase, the study work plan will be reviewed
based on analysis and data needs identified in the white papers and
technical working papers. Input from internal and external review
committees will be sought.
Phase II--Update and Refine Highway Cost Allocation Data and
Methods
Based upon the revised study plan developed in Phase I, data and
analytical tools will be updated and refined. Among the areas where
significant work already can be foreseen are improving pavement cost
models, improving the consideration of life cycle costs, improving
estimates of highway travel by different vehicle classes, improving
operating weight distributions for different vehicle classes, improving
estimates of operating weight/registered weight distributions, and
improving other data needed to estimate revenues generated by different
highway user fees. Data and information needed to apply alternative
cost allocation approaches identified at the workshop will be
collected, consistent with the relative importance of each approach and
the resources available.
Phase III--Analyze Highway Cost Responsibility and the Equity of
Alternative User Fee Structures
In this phase information from Phase II will be used to analyze the
highway cost responsibility and user fee contributions of different
vehicle classes and to evaluate the equity of the current user fee
structure. Alternative user fee structures will be analyzed to evaluate
improvements in equity and efficiency that potentially could be
realized through changes in highway user fees. Sensitivity analyses
will be performed throughout the course of this phase to evaluate the
most critical factors that affect cost allocation results.
Phase IV--Evaluate Alternative Cost Allocation Procedures
In this phase alternative approaches to highway cost allocation
will be evaluated, including application of a marginal cost approach,
analysis of the responsibility of different vehicle classes for
external highway costs and benefits, estimates of the overall
responsibility of different vehicle classes for highway costs at all
levels of government, evaluation of the overall equity of highway user
fees imposed by all levels of government, and consideration of applying
cost allocation principles to costs and revenues for all surface
transportation modes. The level of analysis for these issues will
depend on several factors, including the availability of data, the
relevance of each issue to broader policy objectives, and the time and
resources available to analyze the issues. Docket comments will be
considered in evaluating the type and level of analysis required for
these and other emerging cost allocation issues.
In addition to comments on this broad study plan, comments also are
requested on the following questions that arose from the cost
allocation workshop:
1. ISTEA provides greater flexibility in the use of Federal-aid
highway funds for transit and other expenditures not directly related
to the construction, operation, and maintenance of the highway system.
Many of these newly eligible costs are intended to promote broad
societal goals that extend beyond transportation goals. Should
expenditures of Federal-aid highway funds for such non-transportation
costs be allocated to highway users, and if so how? Is there a
rationale for allocating certain transit expenditures to highway users
and not others? Should all highway users share equally in such costs?
Should fuel taxes for deficit reduction be considered in cost
allocation, and if so, how?
2. Previous cost allocation studies have been criticized for using
different approaches to allocate different types of costs. Should cost
allocation methods be varied according to the types of costs and
differences in the incidence of those costs among highway users or
should the same approach be used for all types of costs?
3. The workshop did not explicitly consider alternative user fees,
but user fee issues will be important considerations in the cost
allocation study. Several alternative highway user fees were analyzed
in the 1982 cost allocation study and in subsequent FHWA studies.
Comments are requested on the advantages and disadvantages of potential
modifications to the existing user fee structure including new types of
fees that might be imposed, on the desirability of maintaining current
tax exemptions such as for various [[Page 8111]] alternative fuels, and
on other user fee issues.
Authority: 23 U.S.C. 315; 49 CFR 1.48.
Issued on: February 3, 1995.
Rodney E. Slater,
Federal Highway Administrator.
[FR Doc. 95-3425 Filed 2-10-95; 8:45 am]
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