In the 2007 Legislative Session, Senate Bill 2375 (codified as MS Code of 1972, 65-43-1 through 39 ) was passed. This bill was the enabling legislation for tolling in Mississippi.  In the 2008 First Extraordinary Legislative Session, House Bill 3 (view the bill ) amended this statute and other applicable provisions of the Mississippi Code to extend the maximum contract term length, provide for an enforcement and collection system, and clarify property tax exemptions relating to toll roads.  This legislation gave the Mississippi Transportation Commission, county boards of supervisors and/or the governing authorities of municipalities the authority to:

• construct, operate and maintain, individually or jointly with other governmental entities, one or more new toll roads or toll bridges in the state for motor vehicle traffic
• and/or contract, individually or jointly with other governmental entities, with any persons, corporations, partnerships or other businesses licensed to do business in the State of Mississippi for the purpose of designing, financing, constructing, operating and maintaining one or more new toll roads or toll bridges in the state for motor vehicle traffic

• There must be a free alternate route
• The governmental entity may accept unsolicited proposals for a proposed new toll road or solicit proposals
• An existing road or any segment of an existing road may not be part of a new toll road
• Reconstruction and repair of an existing road may not be tolled
• Tolled roads must be built and maintained at not less than the minimum design standards established by the governmental entity
• If the governmental entity enters into a contract to design, build, operate, and/or maintain the toll facility, the term of the contract shall not exceed 50 years and shall not be extended or renewed
• Throughout the term of the contract, the government entity shall conduct periodic inspections of the project to ensure compliance by the company
• Upon termination or expiration of the contract, the collection of tolls shall cease
• If the toll road is a designated evacuation route, the collection of tolls shall cease during a state of emergency
• The existing traffic laws that govern state-owned roads will apply to the Airport Parkway
• Establishes an enforcement and collection system for unpaid tolls, similar to that found to be effective in other states
• Explicitly states that since the governmental entity is the title owner of the toll road, the development and operational rights of the private company under the concession agreement are not subject to property taxation

P3s are contractual agreements between a public agency (like MDOT) and a private sector team that allow for greater private sector participation in constructing, financing and operating of a facility (e.g. toll road)

• The skills and assets of each sector (public and private) are shared in delivering a facility for general public use
• Each party shares in the potential risks and rewards in facility construction, financing and operation
• In return for building and/or operating the toll road, the private partner receives payments from the government entity and/or has the right to collect revenues from the project (in the form of a toll)

The legislature funds MDOT’s program of highway construction and maintenance through the state fuel tax. The state fuel tax rate was last increased in 1989 to 18 cents per gallon. Bringing this tax rate into today’s dollar, it is now worth just 10.6 cents per gallon, which is only 59 percent of its original purchasing power. This inflation has greatly constrained the state’s transportation revenue. Another major impact on this revenue is the dramatic increase in the cost of construction. Since 2001, the cost of highway construction in our state has increased 94%, which is an average of 16% a year or 5 times the increase of the Consumer Price Index (CPI). While MDOT’s revenue has been deteriorating, the state’s transportation needs have been escalating. The state’s highway and bridge needs include preserving the current transportation system, modernizing this system to conform to current safety and design standards, and expanding this system with new roads and added capacity on existing roads. The projected highway and bridge needs for the state will total $12.5 billion by the year 2016 while MDOT’s projected revenues will only total $8.5 billion, which is a $4 billion funding gap.

Tolling and Public-Private Partnerships (P3) can provide sources of funding in specific situations that warrant the use of them, mainly unfunded projects in areas of high congestion where there are alternate free routes available. Although tolling and P3s will not solve the state’s transportation funding gap, they will be a useful tool for financing much needed unfunded projects in congested urban areas.

A concessionaire is typically a private sector firm (or firms) formed by one or more equity investors to design, finance, build, maintain and operate a facility (toll road) under a contractual agreement with a public entity. The concessionaire team will also include key subcontractors, including the project designer, builder and operator, who may or may not be equity investors in the concessionaire.

A P3 delivery method offers the following benefits to the project:

• Provision of a finance mechanism. Other than a $32 million earmark that has largely been expended on design and right-of-way acquisition, the Airport Parkway is an unfunded project
• Accelerated project schedule and delivery: the concessionaire will raise all required money upfront and will be able to build the entire parkway in a much shorter time period. If this project were funded through MDOT revenues, the project would have a span a large number of years since only a small portion of MDOT funds could be allocated to this project every year
• Transfer of substantial risk for project cost and time overruns and the long-term cost of maintenance and operations to a concessionaire

The concessionaire will finance, build the project, and operate and maintain the system under a long-term (30-50 year) concession contract with MDOT. The concessionaire will finance the project up front and then collect tolls through the term of the agreement.

MDOT is the legal owner and title owner of the highway and right-of-way during the term of the concession contract.

The concessionaire's operating rights terminate and MDOT assumes maintenance on the highway. The tolls cease and the public enjoys the benefits of another state highway at little or no cost to the taxpayers.

• Tolls are currently collected on 4,600 miles of roads in 25 states
• There are approximately 25 Interstate toll roads and 65 significant non-Interstate toll roads in operation
• Toll-generated revenues equaled $7.75 billion in 2005. In 2005, that represented 5 percent of total highway revenues