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2008 SESSION

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SB 778 Tolls; State Corporation Commission authority to approve or revise rates charged.

Introduced by: Mark R. Herring | all patrons    ...    notes | add to my profiles | history

SUMMARY AS PASSED:

Virginia Highway Corporation Act; authority of SCC.  Directs the State Corporation Commission (SCC), in setting tolls under the Virginia Highway Corporation Act of 1988 during the period January 1, 2013, through January 1, 2020, to approve requests to increase toll rates by a percentage that (i) is equal to the increase in the consumer price index from the date the Commission last approved a toll increase, plus one percent, (ii) is equal to the increase in the real gross domestic product from the date the Commission last approved a toll increase, or (iii) 2.8 percent, whichever is greatest.  In addition, the SCC shall allow the operator to include, in its tolls, the amount by which its local property taxes paid in the immediately preceding calendar year increased by more than the annual percentage increase above such payments for the previous calendar year.  The SCC may allow a greater increase in the tolls if the operator provides an independent grade traffic and revenue study and a finding by the Commission that (a) the toll rates will not be sufficient to permit the operator to maintain the minimum coverage ratio set forth in the rate covenant provisions of its bond indenture or similar credit agreement, (b) such greater proposed tolls are reasonable to the user in relation to the benefit obtained and will not materially discourage use of the roadway by the public, and (c) the greater proposed tolls provide the operator no more than a reasonable rate of return; however, the Commission shall not approve an increase that exceeds the percentage increase necessary to permit the operator to maintain the minimum coverage ratio, and such request shall not be made as a result of a change in control of the operator or the project roadway.  Other provisions (i) direct the SCC, in determining whether the operator's costs are improper or excessive, to consider the contractual relationships between the operator and individuals or entities that are closely associated or affiliated with the operator to assure that the terms on such contractual relationships are no less favorable or unfavorable to the operator than what it could obtain in an arm's-length transaction; (ii) require the operator to provide a verified copy of its annual audited financial statements; (iii) require the SCC, when there is a change in the ownership of an operator, to ensure in any subsequent toll rate proceeding that the price paid in connection with the change in ownership or control, and any costs and other factors attributable to or resulting from the change in ownership or control, if they would contribute to an increase in the level of the toll, are excluded from the Commission's determination of the operator's reasonable return; and (iv) direct that the proceeds and funding provided to the operator from any future bond indenture or similar credit agreement must be used for certain purposes related to the roadway property, unless otherwise authorized by the SCC.  HB 1140 is identical.

SUMMARY AS PASSED SENATE:

Virginia Highway Corporation Act of 1988; tolls on the Dulles Greenway.  Authorizes the State Corporation Commission (SCC) in any toll rate case under the Virginia Highway Corporation Act of 1988 to exclude from the accounts of the operator any payment to an affiliated interest for any services rendered or property or service furnished, if it is not consistent with the public interest.  In addition, if there is a change in the ownership of an operator, the SCC, in any subsequent toll rate proceeding, shall ensure that any costs, changes in capital and debt structure, and other factors attributable to or resulting from the change in ownership that would contribute to an increase in the level of the toll are excluded from the operator's reasonable return.  The measure also requires the operator to provide copies of annual audited financial statements and requests the Office of the Attorney General to provide findings of an independent financial review of the operator of a facility under the Act.

SUMMARY AS INTRODUCED:

Virginia Highway Corporation Act of 1988; tolls on the Dulles Greenway.  Authorizes the State Corporation Commission (SCC) in any toll rate case under the Virginia Highway Corporation Act of 1988 that follows a change in the ownership of an operator to ensure that any costs, changes in capital and debt structure, and other factors attributable to or resulting from the change in ownership that would contribute to an increase in the level of the toll are excluded from the operator's reasonable return. Other provisions (i) require the operator to provide copies of annual audited financial statements and (ii) make operators subject to the Utility Transfers Act, which authorizes the SCC to review the acquisition or disposition of control of an operator, its assets, and securities.