The Federal Highway Administration (FHWA) has initiated a new Highway Cost Allocation Study (HCAS) as mandated by the Infrastructure Investment and Jobs Act (IIJA) of 2021 (Public Law 117-58, Section 11530). This legislation requires the Secretary of Transportation, in coordination with State Departments of Transportation (DOTs), to determine the direct costs of highway use attributed to various types of users.

The last Federal HCAS was completed in 1997. Subsequently, FHWA developed and distributed a State HCAS Tool and guideline to enable states to conduct their own cost allocation studies using consistent methodologies. Several states have adopted FHWA’s State HCAS Tool to perform their own highway allocation studies, aligning state-level analyses with Federal methodology while tailoring inputs to local conditions. The emergence of electric vehicles, shifts in vehicle fleet compositions, and evolving travel modes have significantly altered how different users impact highway infrastructure. At the same time, advances in pavement and bridge deterioration models, combined with the availability of more and detailed datasets, necessitate a modernization of cost allocation methodologies.

This TPF study serves as a mechanism for FHWA to collaborate with State DOTs and other partners in supporting and contributing to the National Highway Cost Allocation Study (HCAS), and in making Federal methods and tools available for state level analyses.  Partners will pool funds and subject matter experts to strengthen their capability in conducting cost allocation studies at the state level. Due to the significant influence of the HCAS and the multidisciplinary expertise it requires, the products from this pooled fund will serve a broad range of surface transportation stakeholders, including:

     State Departments of Transportation (DOTs)

     Local Agencies / MPOs

     Private Sector and Academic Partners

     USDOT Surface Transportation Modal Administrations and other Federal Agencies

     Tribal Nations

This pooled fund project focuses on two primary objectives:

       Facilitate State DOT and other partner engagement: Provide structured forums and collaborative channels for data sharing, information exchange, and feedback collection, enabling State DOTs to actively contribute to the methodology and findings of the ongoing Federal HCAS.

       Support Adoption of Methodologies and Tools - Assist States and other partners in adopting the latest cost allocation methodologies and analytical tools developed through the Federal HCAS, thereby strengthening their capability to conduct future State-level cost allocation studies.

This pooled fund project will provide a structured framework for continuous collaboration between FHWA and State DOTs, ensuring active participation and meaningful contributions from States. Activities will include recurring virtual meetings, technical workshops, and periodic in-person sessions, serving as forums to review and gather feedback on interim Federal Highway Allocation Study (HCAS) findings, discuss methodologies, and collect state-specific data to address any gaps and improve the quality of inputs for cost allocation analysis. The project will establish secure communication platforms, standardized protocols for information exchange, and clear decision-making processes.

The project will also support States and MPOs in adopting and applying cost allocation methodologies and analytical tools developed through the Federal HCAS. Activities will include developing, reviewing, refining, validating these methodologies and analytical tools to ensure applicable across states with varying data availability, policy objectives, and system characteristics. Participants may choose to modernize the existing State HCAS tool, originally developed in 2000, using the latest methods and tools from the current Federal study. The pooled fund study will work with states to pilot the application of the analytical tools to test in real-world contexts, identifying required customizations and adjustments, and documenting best practices for implementation. Technical guidance will be prepared to support application in diverse state contexts.

Emphasis will be placed on reporting, documentation, and dissemination of results. Deliverables will include progress reports, comprehensive final reports, technical documentations, toolkits with source codes, and guidelines for future State-level studies. Findings and lessons learned will be shared on the Pooled Fund website, as well as through national and regional conferences, webinars, and peer exchange sessions to maximize adoption, and knowledge transfer.

FHWA’s Office of Transportation Policy States (HPTS) will lead the pooled fund with active participation from partner agencies. The TPF activities will be governed by a Steering Committee (or Technical Advisory Committee (TAC)) and focus on accelerating the AI COE's mission.

       Partners are requested to commit $10,000 a year over a five-year period. 

        Commitment Start Year:        2027

        Commitment End Year:          2031

        Commitments required to start: $100,000

       These funds will support adoption and application of methodologies and analytical tools for state-level HCAS analyses, along with reporting, documentation, and dissemination of results. It is estimated that approximately $1.5 million over 5- years would be required to complete these and related activities.

       Costs for subsequent years will be determined as part of the pooled fund discussions and based on the needs of the member states. Agencies may contribute additional funds, beyond the base contribution, for other specific research, training, and implementation activities that meet their needs. Different funding contributions are welcome and will be considered on an individual case basis. Please reach out to the lead agency contact for further questions. The number of state and local participants and funding amounts are for planning purposes and may vary.

       Agencies are expected to attend TAC meetings and provide staff support on a rotating basis to carry out the work of the project. FHWA will provide a contractor to manage the TPF.

       Work will be coordinated through virtual quarterly meetings, with occasional in-person meetings at events like the TRB Annual Meeting.

       The pooled fund has obtain a waiver to allow the use of 100% State Planning and Research (SP&R) funds.