Surface Transportation System Funding Alternative

Fixing America's Surface Transportation (FAST) Act of 2015, Pub. L. No. 114-94, H.R. 22, § 6020, H.R. 22, 114th Cong. (2015) authorized the Secretary of Transportation to establish the Surface Transportation System Funding Alternatives (STSFA) program. The purpose of the STSFA program is to provide grants to States to demonstrate user-based alternative revenue mechanisms that utilize a user fee structure to maintain the long-term solvency of the Federal Highway Trust Fund. The FAST Act provides that $15 million in Fiscal Year (FY) 2016 and $20 million annually from FY 2017 through FY 2020 will be made available from the Highway Research and Development Program for grants for STSFA demonstration projects. These grants shall make up no more than 50 percent of total proposed project costs, with the remainder coming from non-Federal sources. Other Federal funds using their appropriate matching share may be leveraged for the deployment but cannot be considered as part of the STSFA matching funds, which must come from non-Federal sources unless otherwise supported by statute. On August 1 of each year, if there are insufficient grant applications that meet program requirements, any excess funds must be transferred back to the Federal Highway Administration (FHWA) Highway Research and Development program. The grants are only available to States; however, groups of States can form partnerships for regional or national proposals. Section 6020 of the FAST Act authorizes the DOT to enter into agreements with State authorities to demonstrate user-based alternative revenue mechanisms. However, this solicitation requires that a State department of transportation (State DOT) serve as the lead agency for administering the program funding through the Federal-aid highway program. Another State agency or a State agency in a different State (if the project involves a group of States) may be responsible for providing day-to-day project oversight. It is expected that all relevant State agencies (e.g., Department of Motor Vehicles, Department of Revenue) needed to initiate a full-scale deployment of the proposed revenue mechanism will be actively involved in the planning and operation of the demonstration.