The Virginia General Assembly has passed legislation to amend how the 14-mile Dulles Greenway in Loudoun County is regulated.
On Tuesday, the Senate passed House Bill 1832 with a vote of 33-5. Del. Suhas Subramanyam (D-87th) carried the measure.
Sen. John Bell (D-13th) carried the companion bill that passed the House of Delegates last week. Both bills are heading to the governor for review.
Opened in 1995, the Dulles Greenway is among a small number of privately owned highways in the U.S. Tolls for a two-axle vehicle along the 14-mile Greenway are $5.80 during peak periods and $4.75 during off-peak periods, according to the Virginia State Corporation Commission (SCC).
“This bill is about common sense. It simply asks that the toll road operators not discourage use of the road by increasing tolls, which was a condition for allowing the road in the first place,” Subramanyam said. “While the population of Loudoun has increased dramatically, the traffic on the road has decreased because of the tolls. We need to do something to ensure proper oversight, and that’s what we are doing with this bill.”
Subramanyam said if TRIP II wants to make any changes or if another entity wants to purchase the roadway, they would be required to show financial fitness to the State Corporation Commission (SCC) before any changes are made.
“If they are going to sell the road or do anything with the road, they need to show they are financially fit, and that matters because if they are not financially fit, then the costs they incur due to lack of financial fitness as to interest on bonds gets transferred in the form of higher tolls,” Subramanyam said. “Bad financial fitness generally leads to higher tolls. So we wanted to make sure that they are financially fit or if they are going to sell the road they are financially fit and able to take on the responsibility of the road.”
TRIP II would be required to share its financial plan for the operation of the roadway and show evidence of its creditworthiness to the SCC. The operator would also need to have the financial capability to pay off debt incurred in any refinancing of any loan. Proof that refinancing is necessary to operate the roadway is required. The operator must also show that the refinancing will not increase toll rates and that its in the public interest.
The bill clarifies that any proposed toll rates should be “reasonable to the users in relation to the benefit obtained, not materially discourage use of the roadway, and provide the operator no more than a reasonable rate of return.” If any toll rates fail to satisfy these criteria, the bill says the SCC may not approve the refinancing application.
Other highlights of the bill require that analyses included in any toll rate increase application must have reasonable projections of anticipated traffic levels, including the impact of expected social and economic conditions among drivers.
The Virginia Department of Transportation (VDOT) must review the analyses before the SCC considers approving any toll rate increase. The SCC would not be allowed to approve more than one year of toll increases in a single proceeding.
Law firm Hunton Andrews Kurth, which represents the Greenway, said the operators opposed the bill at a recent Senate committee meeting.
Myles Louria, senior director of governmental affairs at Hunton Andrews Kuth, said the bill does not address lower tolls and making an equitable tolling system. He said it will lead to the SCC and Loudoun County using resources in each toll adjustment case every year.
“The only way the citizens of Loudoun County and northern Virginia are going to get lower tolls and distance-based pricing is if the rhetoric and political grandstanding stops and meaningful negotiations between the stakeholders begin,” Louria said.
Another measure aimed at addressing the toll roads was killed in a recent Senate Transportation Committee meeting.
Del. David Reid (D-32nd) carried House Bill 2104, which the Loudoun County Board of Supervisors opposed.
“After many years of advocating for a resolution to the ever-increasing toll rates on the Dulles Greenway, we have reached a legislative understanding to follow the Board of Supervisors approach on a way forward,” Reid, who also supported Subramanyam’s bill, said in a prepared statement. “I have always been dedicated to creating legislation that reduces tolls and implements distance-based pricing. We have a bipartisan coalition that is, now more than ever, dedicated to representing the people’s interests with the Greenway, and I am proud to have worked with my colleagues in fighting for the best possible outcome.”
With HB 2104, the Board of Supervisors was concerned about the potential loss of millions in tax revenue and how much input it would be able to provide during the discussions with the commonwealth and the operators of the Greenway on a new agreement.
Had the bill passed — Gov. Ralph Northam’s administration backed the measure — the agreement with the operators of the Greenway would have been abolished and officials would have worked on a new plan in hopes of reducing tolls. The measure passed the Virginia House of Delegates.
Hunton Andrews Kurth said the Greenway owners supported Reid’s proposal.
Staff from the Loudoun County Commissioner of Revenue’s Office said on Feb. 2 that while revenue was steady in 2019 for the Greenway, production value was a result in expenses, a higher capitalization rate and an increase in long-term capital expenditures. Staff projected devaluation will decline due to less revenue generated during the COVID-19 pandemic.