In 1929, the New York State Legislature created the Niagara Frontier Bridge Commission for the purposes of constructing the Grand Island Bridges. This enabling legislation mandated that any tolls collected on the bridges were to be at the “lowest possible rate consistent with financing.” It further made clear that any “moneys referred to in the act” were to go toward the bridges’ construction, the “purposes incidental thereto”, and to “no other purpose whatsoever.” Subsequent amendments replaced the NFBC with the “Niagara Frontier Authority, and repealed this restrictive language. The law provided that tolls were to be used for the operation of the bridges “and the expenses of the Authority related thereto.” This appears to have remained the law until 1956, when the Niagara Frontier Authority and its assets were absorbed by the New York State Thruway Authority.
In 1956, the NYSTA assumed jurisdiction of the Grand Island Bridges. By statute, the NYSTA is authorized to issue bonds or notes for capital projects. Further, the NYSTA is authorized to charge tolls for use of the Thruway “in the amount necessary or convenient” “to produce sufficient revenue to meet the expense of maintenance and operation” and to fulfill the terms of agreement with bond or note holders. There is no distinction made between the Grand Island bridges and the rest of the Thruway. Accordingly, the NYSTA may allocate toll revenue to any part of the Thruway system, regardless of where it is collected, subject to the agreements with note or bondholders.
Toll collection on the Thruway was scheduled to halt in 1996 under an agreement reached with the Federal Highway Administration. In 1982, New York reached an agreement with the FHA to receive approximately 550 million dollars in federal funds to repair and rehabilitate the Thruway. As part of the deal, the NYSTA agreed toll collection would end in 1996, when all bonds were scheduled to be paid off. A subsequent agreement in 1992, however, allowed for toll collection to continue past the 1996 scheduled expiration. That same year, jurisdiction over the Erie Canal was transferred to the NYSTA, a measure that was part of a New York State initiative known as “Thruway 2000.” The deal was reached in part so toll revenue could continue to pay for NYSTA bonds issued for construction and maintenance costs associated with the Erie Canal. Further, the New York State Legislature gave the NYSTA the authority to transfer funds to the Canal Corporation, a subsidiary of the NYSTA created for purposes of maintaining Canal operations. Consequently, tolls continue to be collected on the Grand Island bridges under authorization from the State Legislature. In 2017, the Canal Corporation will become a subsidiary of the New York State Power Authority.
In 1982, Grand Island residents challenged a toll increase on the Grand Island bridges. The complaint was brought before the Federal Highway Administration on the grounds that the NYSTA toll hikes were not “just and reasonable” as required by federal law. Though hearings were held, the plaintiffs settled with the NYSTA in 1983. A similar suit cannot be brought today. Federal regulations in 1982 permitted any aggrieved citizen to challenge that a toll was not “just and reasonable” by filing a complaint with the Federal Highway Administration. Subsequent federal legislation removed citizens’ abilities to file these complaints. The Surface Transportation and Uniform Relocation Act of 1987 eliminated federal oversight of bridge tolls. Legislative history indicates Congress intended to remove federal oversight because it had become “burdensome, legally unproductive, and ha[d] interjected the Federal Government in the role of a mediator in disputes which could more appropriately be settled at the State and local level.” Further, Congress sought to give states and toll authorities “greater flexibility in operating toll facilities.”
Under the Federal-Aid Highway Act, tolls on the Grand Island bridges must still be “just and reasonable.” It is unclear, however, whether a private right of action exists to challenge a toll under this statute. The court also noted disagreements with the reasoning used by Third Circuit’s to reach the conclusion that no private right of action existed. Thus, the issue of whether a private right of action exists under section 508 is not settled. Even so, without the availability of administrative review sought by the 1982 plaintiffs, it remains unclear whether the tolls may be challenged on similar grounds.
In 2006, tolls were removed from the Niagara section of the I-190 pursuant to State Legislation enacted for that purpose. Article 2-C, titled “Niagara Thruway Toll Removal Fund” and was enacted with the express purpose of removing tolls on the Niagara portion of the Thruway. Under Article 2-C of the Transportation Law, federal funds received under the Federal-Aid Highway Act and two and half million dollars from the New York State Treasury were to be dedicated to removing the Niagara tolls. The law required that “tolls shall be removed” after the first of the federal payments were made to the State. The tolls were removed only after then Erie County Executive Joel Giambra and businessman Carl Paladino sued the NYSTA under Article 2-C. The complaint alleged, among other things, that though the NYSTA had received the federal funds, it impermissibly allocated them to other NYSTA and transportation projects and continued toll collection in violation of the law. In addition to the lawsuit, Congressman Brian Higgins added political pressure by threatening to introduce a Congressional bill that would withhold federal funds from the NYSTA if the tolls were not removed. These acts alone lead to the removal of the tolls, as the case did not proceed through the courts.
The Grand Island tolls may not be challenged under Article 2-C. Though the Grand Island bridges are part of the Niagara Thruway section, the law makes an explicit exception for bridges, stating purpose of fund “shall be to provide a means for elimination of existing tolls, except bridge tolls, along the Niagara section of the [Thruway]”