User-Based Alternative Revenue Mechanism Programs Background
Surface Transportation System Funding Alternatives (STSFA) Program
The Fixing America’s Surface Transportation (FAST) Act of 2015, Pub. L. No. 114-94, § 6020, 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 2020, will be authorized from the Highway Research and Development Program for grants for the STSFA demonstration projects. The Continuing Appropriations Act, 2021 and Other Extensions Act (Pub. L. No. 116-159) extended Federal surface transportation programs through September 30, 2021, enabling the STSFA Program to continue at FY 2020 levels in FY 2021. 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 allowed 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 Department of Transportation (DOT) to enter into agreements with State authorities to demonstrate user-based alternative revenue mechanisms.
Strategic Innovation for Revenue Collection (SIRC) Program
The Bipartisan Infrastructure Law (BIL), enacted as the Infrastructure Investment and Jobs Act (IIJA) (Pub. L. No. 117-58), § 13001, authorized the Secretary of Transportation to establish the Strategic Innovation for Revenue Collection (SIRC) Program. The purpose of the SIRC Program is to provide grants to eligible entities to test the feasibility of a road usage fee and other user-based alternative revenue mechanisms to help maintain the long-term solvency of the Highway Trust Fund through pilot projects at the State, local, and regional level.
The BIL provides that $15 million annually from Fiscal Year (FY) 2022-2026 will be authorized from the Highway Research and Development Program, subject to obligation limitation. The Federal share of the cost of a SIRC project may not exceed 80 percent of the total project cost, or 70 percent of the total project cost if the recipient has received at least one prior SIRC grant.
Eligible entities include a State or group of States; a Metropolitan Planning Organization (MPO) or a group of MPOs; a local government or a group of local governments; and multi-jurisdictional groups. An eligible multi-jurisdictional group is any combination of States, local governments, or MPOs for which each member of the group has signed a written agreement to participate in the SIRC pilot project across multijurisdictional boundaries.
