The Kansas Turnpike Authority (KTA) is an entity separate from the Kansas Department of Transportation (KDOT), but the two entities work together to serve the transportation needs of Kansas. This article discusses the statutory relationship between the KTA and KDOT.
KTA and KDOT
In 1953, the Kansas Legislature created the KTA as a separate, quasi-public organization. The KTA was tasked with constructing, operating, and maintaining Kansas Turnpike (Turnpike) projects. To pay for the projects, the KTA is authorized to issue bonds payable solely or partly from KTA revenues. The proceeds of those bonds are to be used only to pay for costs of the project or projects for which the bonds are issued, and the bonds are not a debt of the State or of any of its political subdivisions. The KTA has a statutory relationship with KDOT in terms of governance, contracts, and potentially adding Turnpike projects to the state highway system.
The KTA Board
A five-member board oversees KTA operations. Two of these members are appointed by the Governor for four-year terms.
The Governor’s appointees must be residents of Kansas and be owners of revenue bonds issued by the KTA. Additionally, one member must be the Secretary of Transportation (Secretary), and another must be the chairperson of the Senate Committee on Transportation.
The fifth member must be a member of the House Committee on Transportation and is appointed by the Speaker of the House of Representatives. The KTA elects one member as chairperson and another as vice-chairperson. The KTA also must elect a secretary- treasurer who need not be a member of the KTA (KSA 68-2003).
Thus, the KTA has always had a relationship with KDOT by virtue of the Secretary serving on the KTA board.
The Secretary’s role as a member of the KTA significantly expanded with enactment of 2013 HB 2234. Beginning July 1, 2013, the Secretary became the director of operations of the KTA. The provision was set to sunset July 1, 2016, but enactment of 2015 HB 2085 removed the sunset and changed the title to “director” (KSA 68-2003). As director of the KTA, the Secretary is responsible for the daily administration of the toll roads, bridges, structures, and facilities constructed, maintained, or operated by the KTA. The director or the director’s designee has such powers as necessary to carry out these responsibilities. The KTA’s chief executive officer (CEO) directs daily operations.
Contracts between the Secretary and the KTA
The KTA and KDOT may solidify their partnership by forming contracts with each other. The Secretary and KTA are authorized and empowered to contract with one another to provide personnel and equipment for preliminary project studies and investigations (KSA 68-2021). Generally, KSA 68-2021 allows the KTA to contract with KDOT for use of KDOT resources for certain types of work related to KTA projects. These provisions have remained essentially unchanged since 1955.
A statute added in 2013 authorizes the Secretary and KTA to contract with each other to provide personnel and equipment and other resources for recordkeeping, reporting, administrative, planning, engineering, legal, and clerical functions and for construction, operation, and maintenance of Turnpike projects and state highways (KSA 68-2021a). Additionally, KSA 68-2021a requires the two parties to minimize duplication of effort, facilities, and equipment in operation and maintenance of turnpikes and highways of the state.
KTA and KDOT contract with one another frequently to minimize duplication of efforts and provide cost savings to the State. According to the Secretary’s testimony on 2015 HB 2085, KDOT and KTA have worked together more since the partnership was formalized in 2013. According to testimony provided to legislative committees in 2017 and 2019, KTA and KDOT have partnered on bridge surveys, bridge inspections, and construction. Also, KDOT and KTA partnered with the City of Wichita on a major construction project on East Kellogg.
Potential for KTA Projects to Become Part of the State Highway System
Although the KTA and KDOT have a formalized partnership, the KTA retains its separate identity, powers, and duties (KSA 68-2021a). KTA maintains the integrity of bonded indebtedness, but when bonds issued under the provisions of KSA 68-2001 to KSA 68-2020 are paid or a sufficient amount for the payment of all bonds and the interest has been set aside for the benefit of bondholders, the project can become a part of the state highway system and therefore be maintained by KDOT (KSA 68-2017).
When a project becomes a part of the state highway system, the Secretary would have the power granted to the KTA under KSA 68-2009 to fix, revise, charge, and collect tolls for the use of such Turnpike project. The tolls, rents, and rates of the charges must be sufficient to maintain, repair, operate, regulate, and police such Turnpike (KSA 68-2017). However, bonds issued for maintenance and rebuilding have meant no Turnpike project has thus far become a part of the state highway system.
Adding Tolled Highways
KSA 68-2002 states no KTA toll road project shall be undertaken unless and until a project has been thoroughly studied and the study shows public funds for such a project are not available, construction could be financed solely or partly using private funds in toll road revenue bonds, and the project and indebtedness can be financed solely or partly through tolls and other income from operating the project.
Provisions enacted in 2019 Senate Sub. for HB 2007, specifically amendments to KSA 68-20,120, authorize the Secretary to construct a toll or turnpike project separate from the KTA if certain requirements are met. The requirements include a proposal prepared jointly by KDOT and local units of government, the project must add capacity or be a new bridge or highway, the project has been determined to be feasible, revenues from such a project are used only for the project for which the tolls are collected, and the project must be approved by the KTA and the State Finance Council. In neutral testimony on SB 192 on this topic, the KTA CEO stated the KTA was prepared to be a partner with KDOT, local communities, and other stakeholders on such projects.
Differentiating Between Tolls and Taxes
The issue of whether a toll is considered a tax has arisen in the U.S. Supreme Court, in federal district courts, and in several individual states. In the case of Sands v. Manistee River Imp. Co., 123 U.S. 288, 294, 8 S. Ct. 113, 115, 31 L. Ed. 149 (1887), the Supreme Court found there is no analogy between the imposition of taxes and the levying of tolls for improvement of highways. Taxes are levied for the support of government and their amount is regulated by its necessities. Tolls, on the other hand, are the compensation for the use of another’s property, or of improvements made. The cost of a toll is determined by the cost of the property, improvements of the property, and considerations of the return such values or expenditures should yield.
State supreme courts and federal courts in at least six states agree tolls are not taxes. It is also clear toll revenue cannot be used to fund projects outside of a state’s transportation system.
Florida. In City of Boca Raton v. State, 595 So.2d 25 (Fla. 1992), the Florida Supreme Court distinguished taxes imposed by sovereign right to support functions the government is called upon to perform from user fees the user could avoid. In McGovern v. Lee Cnty., 346 So. 2d 58, 64 (Fla. 1977), the Florida Supreme Court found toll revenues can be used for approaches and approach roads if a significant portion of its traffic moves onto the tolled facility.
Illinois. In 1945, the Illinois Supreme Court (in People ex rel. Curren v. Schommer, 392 Ill. 17, 20, 63 N.E.2d 744, 746) determined the act creating the Illinois State Superhighway Commission was constitutional and found a clear distinction between tolls and taxes. Illinois courts have not stated whether toll revenue from one toll facility can be used to fund another toll facility.
Massachusetts. In Murphy v. Massachusetts Tpk. Auth., 462 Mass. 701, 971 N.E.2d 231 (2012), the plaintiffs alleged tolls charged by the Massachusetts Turnpike Authority (MTA) but used on overhead, maintenance, and capital costs of un-tolled Metropolitan Highway System (MHS) facilities were an unconstitutional tax. The Massachusetts Supreme Judicial Court found the Legislature had specifically authorized such use of toll revenues, the tolls were collected to compensate the MTA for expenses incurred in operating the MHS, and this use was not unconstitutional.
Montana. In Monarch Min. Co. v. State Highway Commn, 128 Mont. 65, 70, 270 P.2d 738, 740 (1954), the Montana Supreme Court made a clear distinction between taxes and tolls. A tax is a demand of the sovereignty levied for support of the government and its amount is regulated by government necessities. Tolls are the demands of proprietorship, exacted as compensation for use of another’s property.
Rhode Island. In December 2019, the U.S. Court of Appeals, First Circuit, found that tolls of the state of Rhode Island aimed at commercial trucks and to be used to maintain I-95 bridges were fairly described as tolls and were not taxes under the Tax Injunction Act (TIA). See American Trucking Associations Inc. v. Alviti, 944 F.3d 45 (2019). The case was returned to the U.S. District Court for Rhode Island. The U.S. District Court had previously found such fees to be taxes under Rhode Island state law and dismissed the case, finding the federal court did not have jurisdiction under TIA.
Virginia. The Metropolitan Washington Airports Authority (MWAA) was formed in 1986 as an entity independent from Virginia, the District of Columbia, and the federal government. However, it possessed powers delegated to it by the District of Columbia and Virginia, and Congress explicitly granted the MWAA the power to “levy fees or other charges.” Virginia had repeatedly authorized its Commonwealth Transportation Board to use toll revenue to fund mass transit projects within the Dulles Corridor before it transferred control of those assets to the MWAA. The U.S. Court of Appeals for the Fourth Circuit, in Corr v. Metro. Washington Airports Auth., 740 F.3d 295, 297 (2014), found tolls were not taxes and agreed with the MWAA and Virginia that Metrorail expansion and the Dulles Toll Road are part of a single interdependent transit project, and therefore tolls could be used for Metrorail expansion. In 2019, this view was upheld in the decision of the U.S. District Court for the Eastern District of Virginia in Schneider v. Metro. Washington Airports Auth. (WL 1931752).
Jill Shelley, Principal Research Analyst
Andrew Finzen, Research Analyst