States should partner with Interstate 5 businesses, not compete

THREE West Coast governors have made a proposal, which is a violation of a long-standing federal law, that seeks to commercialize the states' rest areas along Interstate 5 and provide not only alternative fuels, but food and other services.

If the states have their way, private businesses at the exit interchanges would be forced to compete with the subsidized, government-run operations along the right-of-way. These businesses, most of which are independently owned, small businesses, are already facing significant challenges with the stalled economy, and this proposal places the thousands of jobs provided by these businesses at risk.

The transportation departments of Washington, Oregon and California knowingly submitted an application to the Federal Highway Administration that violates a federal statute that bans commercial activity at state-operated rest areas located along interstate highways. The ban, which has been in place since 1960, was implemented to foster economic development along the interstate highway system. This policy has been wildly successful, with more than 60,000 interstate-based businesses nationwide providing a host of services in a highly competitive environment.

Should this scheme go forward, the newly commercialized rest areas along I-5 with direct access from the highway would have a significant competitive advantage over existing businesses — which invested millions of dollars in their property relying on this long-standing ban restricting state governments from competing against them.

Unfortunately, these businesses have had no public opportunity to weigh in on this proposal, which was quietly submitted to the U.S. Department of Transportation last fall under a "Special Experimental Project" application. And while the alternative-fuels portion of the plan has been highly touted, the proposal doesn't stop there. Their application included the request to offer "food and other services." This program places at risk more than 3,500 businesses located on Interstate 5 in these three states, including some 1,600 restaurants and more than 550 gas stations, truck stops and convenience stores.

A more cost-effective solution would be for the states to partner with existing businesses along I-5 to create incentives to aid in the installation of various alternative-fuel dispensers. Today's travel-center operators are investing heavily to bring more alternative fuels to market, and the ability to provide such fuels will serve as a primary differentiator among fueling businesses in the future.

The current economy has prevented many businesses from making the necessary capital investments to further alternative fuels at retail, especially with demand for these fuels so low, but many are hopeful that the funding provided in the recently enacted economic-stimulus legislation will help small business to take the next steps.

There are options the states could consider that would strengthen, rather than threaten, existing businesses. Oregon is the first state in the nation to implement the federal Interstate Oasis program, which classifies qualified interstate-based businesses as oasis facilities where passengers can rest and relax while on the highway. The use of these oasis facilities as locations for these alternative-fueling sources will enable the states to meet their objective of bringing these fuels to market without upsetting the competitive balance that currently exists among interstate businesses.

Providing these fuels at existing facilities will also help grow state and local revenues, as sales taxes from travel centers and other highway businesses often rank among a city or county's highest tax receipts. Travel centers currently contribute approximately $31 billion in federal, state and local taxes annually.

The states of Washington, Oregon and California should reconsider their current effort to compete with the small businesses of their states, which have heavily invested along the interstate-based operations and which provide needed services to travelers, in addition to jobs for the citizens of these states.

We invite the states to work with business, rather than against it, to support their efforts to bring not only alternative fuels but a variety of needed services to the marketplace.

Lisa Mullings is president and CEO of NATSO Inc., a national trade association representing travel plaza and truck stop owners and operators.