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FTA Proposes New Policies For Conversion Of High Occupancy Vehicle Lanes Into High Occupancy Toll Lanes

By: Stanley S. Taylor

The Federal Transit Administration has proposed a modification of its current rules related to the conversion of high occupancy vehicle (HOV) lanes into high occupancy toll (HOT) lanes.  The new rule would clarify the conditions under which an HOV lane can be converted without losing its status as "fixed guideway miles" for purposes of federal transit funding formulas.  The proposed policy would expand on and clarify current FTA policies, with the following results:

  • Only HOV facilities eligible for inclusion in fixed guideway miles funding formulas would be eligible for conversion and retention of that status;
  • In order to maintain their status as fixed guideway miles, HOT lanes would have to be continuously monitored to make certain that performance standards ensuring free flow are maintained;
  • Program revenues after payment of costs of operation and capital can be used for any eligible transit purposes; and
  • It is not necessary to link minimum HOT lane single occupant vehicle tolls and transit fares. 

Parties wishing to comment on the proposed policy may do so, provided comments are received by the FTA no later than October 10, 2006.  Comments can be submitted electronically either to or to  



HOT lanes have been recognized as an alternative demand management strategy for several years, potentially combining HOV and pricing strategies to maximize use of HOV lanes by allowing single occupant vehicles (SOVs) to access HOV lanes by paying a toll.  HOT lanes can provide multiple benefits, particularly to metropolitan areas that are experiencing worsening congestion on mixed flow lanes and declining participation in HOV lanes.  HOT lanes can expand mode options to allow SOVs to increase their reliability of travel times by paying a toll to use HOV facilities that operate at free flow conditions, and can improve the efficiency of HOV lanes by allowing SOVs to use excess lane capacity for a toll.  SOV tolls for use of HOT lanes can also generate new revenues to pay for maintenance of the facilities and for transportation improvements, including enhanced transit services.

Prior to the enactment of the Safe, Accountable, Flexible, Efficient Transportation Efficiency Act: A Legacy for Users (SAFETEA-LU), several HOT lane projects were authorized by project-specific authorization.  In 2005 Congress enacted section 1121 of SAFETEA-LU (codified at 23 U.S.C. §166) to grant generic statutory authorization to states to permit use of HOV lanes by SOVs, provided that the performance of the lanes is continuously monitored and the lanes continue to meet performance standards.  Performance standards are maintained by pricing SOV access based on congestion and time of day, in addition to other management techniques.  Several metropolitan planning organizations have implemented or are considering conversion of HOV to HOT lanes.

The Federal Transit Administration (FTA) has had a policy since 2002 of continuing to classify lanes converted from HOV to HOT lanes as fixed guideway miles for funding formula purposes (thus enhancing the availability of FTA funding), provided the conversion meets two conditions: (i) the HOT lanes must be managed so as not to impede free flow of transit and HOV vehicles using the facility; and (ii) generally, toll revenues in excess of revenues used for capital and maintenance costs are used for mass transit purposes. 


The FTA has stated that the purpose of the proposed policy change is to ensure that funding for transit in congested urban areas is not decreased by the conversion from HOV to HOT lanes, to address traffic congestion and improve air quality, and to maximize throughput of existing HOV facilities.  The proposed policy would also promote uniformity, particularly in the application by federal agencies of the provisions of section 1121 of SAFETEA-LU, and would support the Administration's policy of encouraging HOV to HOT lane conversions.

The proposed policy would classify HOT lanes as fixed guideway miles, provided each of the following conditions is met:

ü       The HOT lanes were converted from HOV lanes reported in the National Transit Database as "fixed guideway miles" for purposes of the funding formulas under 49 U.S.C. §§ 5307(b) and 5309(a)(E).  HOV facilities not eligible as fixed guideway miles would remain ineligible upon conversion to HOT lanes.

ü       The HOT lanes must be continuously monitored  and must continue to meet performance standards that preserve free flow conditions as specified in 23 U.S.C. §166(d).  Facilities constructed using capital funds under 49 U.S.C. §§ 5309(d) or (e) could be required to meet higher standards. 

ü       Program income from use of HOT lanes may only be applied to "permissible uses."  Permissible uses include debt service, a reasonable return on investment for privately financed and operated HOT lanes, costs necessary for proper operation and maintenance of the facility (including reconstruction and rehabilitation), and, provided the operator certifies that the preceding uses have been properly administered, any other purpose related to a project carried out under Title 49 U.S.C. §5301 et seq. (the "transit law.")  If the facility receives federal funding from other federal agencies, only that portion of revenues allocable to FTA's share of such funding would be subject to the foregoing limitation. (No consideration is given for reducing the FTA share by any amount of funding from state or local sources.)

The proposed policy also resolves an issue that has been under consideration without action for several years; i.e., the question of whether tolls and fares for passengers of transit vehicles using HOT lanes should be linked.  The FTA policy proposal makes clear that tolling authorities and the transit agencies using their HOT lanes are free to develop their own independent fare and toll structures.  Finally, the proposed policy statement confirms that HOV facilities constructed with FTA New Starts money would have no obligation to return those funds to the federal agency upon their conversion to HOT lanes, provided the HOT lanes are operated in accordance with the proposed FTA policies.  

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