More Grants Aim to Spur Solutions to Highway Trust Fund Solvency Issues

States are being encouraged to submit applications for the last two years of a grant program designed to test “alternative revenue mechanisms” built upon a user-fee structure to maintain the long-term solvency of the Highway Trust Fund.

A Notice of Funding Opportunity for the Surface Transportation System Funding Alternatives or STSFA program issued August 8 is providing a total pool of roughly $38 million worth of Fiscal Year 2019 and FY 2020 grants to states – or groups of states that form partnerships for regional or national proposals – to test “new ways” to finance highway and bridge projects in lieu of motor fuel taxes.

Congress authorized $95 million over five years to fund large-scale road user charge or RUC pilot studies by states or groups of states through the 2015 Fixing America’s Surface Transportation or FAST Act.

According to the NOFO issued by the Federal Highway Administration, the funding expires in FY 2020 so there will be two final application deadlines for grants under the STSFA program: October 15, 2019, and April 3, 2020.

The STSFA grants are only available to states, the NOFO said, and requires that a state department of transportation serve as the lead agency for administering the program funding through the Federal-aid highway program. However, another state agency can be responsible for providing day-to-day project oversight, it noted.

Photo by VDOT

FHWA added that STAFA 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 project deployment, the agency noted, but cannot be considered as part of the STSFA matching funds, which must come from non-Federal sources unless otherwise allowed by statute.

In February, FHWA awarded $10.2 million in STSFA grants to seven state DOTs to “investigate and evaluate various mileage-based and road-user charges, including for trucks and automated vehicles, and the implementation and operation of the technologies at a regional level.”

The California Department of Transportation, for example, is using its February STSFA grant to pilot test connecting its RUC program to Transportation Network Companies or TNCs that provide electric scooter and bikeshare services, as well as to autonomous vehicles.

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