| House Transportation Committee's Special Subcommittee 4June 28, 2005
The first meeting 
        of the HouseTransporation 
        Committee's Special Subcommittee 4 was held on June 28, 2005. Members 
        are Leo C. Wardrup, Jr. (Chairman), Mamye E. BaCote, William H. Fralin, 
        Jr., Joe T. May, Ryan T. McDougle, Thomas Davis Rust, and Jackie T. Stump. 
        Transportation Secretary Pierce Homer and Acting Commonwealth Transportation 
        Commissioner Gregory Whirley were invited guests.
 BACKGROUND In opening remarks, 
        Delegate Wardrup explained that as Chairman of the House Committee on 
        Transportation he had, at the request of the Speaker, established the 
        present subcommittee to aid the House of Delegates in maintaining its 
        focus and leadership to ensure that Virginia's transportation program 
        continues to be reformed, funded, and improved. The Chairman reminded 
        the members and the audience, that the General Assembly had approved the 
        most comprehensive package of reforms of Virginia's transportation programs 
        in more than two decades providing more that $848 million in new revenue 
        for highways, rail and transit projects, airports, and seaports, as well 
        as supporting new initiatives regarding the way transportation services 
        are delivered in the Commonwealth. It will be necessary for the General 
        Assembly to oversee reform to ensure that it is implemented as the legislature 
        intended. The oversight process 
        will involve both the House and the Senate Transportation Committees, 
        working with the Virginia Department of Transportation (VDOT). The Chairman 
        pointed out that the Senate had also established a special transportation 
        program reform subcommittee and that he had been invited to work with 
        that group as an observer. The subcommittee will review transportation 
        issues and involve experts from both the private and public sectors in 
        the process. The Chairman announced 
        the appointment of Delegates Rust and Fralin to be responsible for recommending 
        changes in statutory formulas by which revenues dedicated to highway maintenance 
        and construction are allocated. He noted that the 2005 Session of the 
        General Assembly postponed the allocation date since projected state transportation 
        revenues would be inadequate in order to allow the necessary amounts to 
        be set aside to match federal revenues. SECRETARY HOMER 
        & COMMISSIONER WHIRLEY ADDRESS TRANSPORTATION CONCERNS Secretary Homer and 
        Commissioner Whirley answered questions from members of the subcommittee. 
        Delegate Wardrup asked whether it was true that only a small portion of 
        the approximately $40 million set aside by the 2005 Session for locally 
        controlled transportation projects had actually been requested by localities 
        and what actions VDOT was taking as a result. Secretary Homer explained 
        that increasing local responsibility for construction projects had begun 
        with the "First Cities" initiative of 2003, that further 2003 
        legislation had improved local accountability for urban street payments, 
        and that he expected this and other local involvement in both construction 
        and maintenance to increase between now and 2007. He noted that, with 
        the General Assembly's cooperation, existing project deficits had been 
        eliminated and prohibited for future projects, VDOT would be receiving 
        and expending federal funds to support maintenance and operations for 
        the first time, and the recently created Transportation Partnership Opportunity 
        Fund and new Public-Private Transportation Act (PPTA) guidelines would 
        be implemented by October 1 of this year. He believed that establishment 
        of the Fund to "jump start" PPTA projects, together with implementation 
        of the new guidelines would "...create a more stable investment climate..." 
        and lead to an increase in the number of proposals made to VDOT. He also 
        mentioned that changes to the PPTA had already attracted a proposal from 
        the Transurban Group (Fluor Daniels) for construction and operation of 
        high-occupancy toll (HOT) lanes parallel to the Capital Beltway. Members urged VDOT 
        and the administration to take full advantage of the power and flexibility 
        given them under the Transportation Partnership Opportunity Fund (established 
        by the 2005 Session of the General Assembly pursuant to House Bill No. 
        2793) to encourage the development of design-build transportation projects 
        and other transportation projects under the Public-Private Transportation 
        Act. The members encouraged the Commonwealth Transportation Board, in 
        consultation with the Secretary of Transportation and the Secretary of 
        Commerce and Trade, to proceed expeditiously to develop the guidelines 
        and criteria that would enable the Board to award grants and make loans 
        from the Fund to stimulate private sector participation in Virginia's 
        transportation infrastructure improvement program.  Discussion on 
        Federal Funding Delegate Rust asked 
        whether use of federal money for maintenance would mean more federal control 
        of VDOT's maintenance program and whether this would not result in the 
        creation of still another layer of bureaucracy. Commissioner Whirley responded 
        that a central issue for the federal government in this matter was the 
        number of inspectors that would be required for each federally funded 
        project, requiring a careful determination of which maintenance projects 
        would be "federal eligible." He observed that the federal government 
        was currently "more flexible" in these matters than they had 
        been previously. Delegate Wardrup 
        was concerned that Virginia was reported to have nearly $500 million in 
        unallocated federal balances, and whether these funds need to be obligated 
        by October of this year. The Secretary replied that this was correct, 
        that some of these funds might be used for maintenance projects, and hoped 
        to obligate all of the funds before the close of the fiscal year. Discussion on 
        PPTA Delegate May asked 
        whether the PPTA had become "...too public and not enough private." 
        Secretary Homer felt that there had to be a balance of public and private 
        involvement, and hoped that the new guidelines would address this issue, 
        as well as "risk-sharing" between the public and private entities. 
        This exchange sparked discussion between the Chairman, Secretary Homer, 
        and several of the members on the desirability of having VDOT more actively 
        engaged in soliciting PPTA proposals. Delegate May suggested that the 
        General Assembly should be make clear as to its intentions in this area. 
        The Secretary offered to share with the subcommittee a draft of its revised 
        PPTA guidelines for the members' comments before the guidelines were made 
        final. He suggested that VDOT improve the proposal consideration process 
        by rejecting unworkable or undesirable proposals earlier than has been 
        the case in the past. Discussion on 
        the Implementation of Transportation Reform Secretary Homer resumed 
        his comments on implementation of transportation reform legislation approved 
        by the 2005 Session of the General Assembly, by pointing out that rail 
        funding guidelines would be implemented by October 1 and that transit 
        capital commitments, local partnerships, and expanded revenue sharing programs were underway. 
        He hoped that these changes would eventually lead to production of statewide 
        rail and multi-modal transportation plans. Commissioner Whirley added 
        that VDOT is in transition, using increased out-sourcing, privatization, 
        asset management, and decentralization to evolve from "doing the 
        work" to "managing a
 program."
 Secretary Homer concluded 
        his remarks by returning to the subject of public-private partnerships. 
        He felt that reform had laid a legislative foundation that could successfully 
        be built upon through issuance of new guidelines (available for public 
        comment in July of this year) providing for a streamlined process, greater 
        public participation, and an expanded role for the Commonwealth Transportation 
        Board. He hoped these guidelines would lead to a stable investment climate 
        and envisioned projects that might involve tolls, special tax districts, 
        dedicated local revenues of economic assets, and possibly long-term concessions. 
        On the matter of tolls, Chairman Wardrup suggested that, if done properly, 
        "toll is no longer a four-letter word," and Delegate May urged 
        greater use of automated toll collection technologies that are also sensitive 
        to privacy concerns of the public. Delegate Fralin inquired 
        of the Secretary whether any consideration had been given to a PPTA project 
        structured so that the builder of a highway facility could benefit from 
        development of adjoining properties. The Secretary replied such a project 
        had not been considered. PUBLIC COMMENTS Mr. Peter Easter 
        hoped that the subcommittee would focus on Virginia's transportation needs 
        first, and then on ways to meet those needs. He doubted whether these 
        needs could be met through increased taxes, and suggested that tolls are 
        the ultimate user fee. FUTURE WORK PLAN 
        AND NEXT MEETING Chairman Wardrup 
        announced his intention to appoint a group of members of the subcommittee 
        to work with VDOT in considering PPTA issues. A planned briefing by Ms. 
        Anne Oman of the House Appropriations Committee staff on transportation 
        revenues and funding formulas was postponed until the next meeting on 
        August 29, 2005, in Richmond.
 Chairman:The Hon. Leo C. 
        Wardrup, Jr.
 For information, 
        contact:Alan Wambold, Stephanie 
        Bishop, DLS Staff
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