BILL NUMBER: AB 144 CHAPTERED 07/18/05 CHAPTER 71 FILED WITH SECRETARY OF STATE JULY 18, 2005 APPROVED BY GOVERNOR JULY 18, 2005 PASSED THE ASSEMBLY JULY 13, 2005 PASSED THE SENATE JULY 7, 2005 AMENDED IN SENATE JULY 6, 2005 AMENDED IN SENATE JUNE 30, 2005 INTRODUCED BY Assembly Member Hancock (Coauthors: Senators Alquist and Torlakson) JANUARY 20, 2005 An act to amend Sections 188.4, 188.5, 30912, 30950.2, 30953, 30961, and 31010 of, to add Sections 182.2, 188.6, 30886, 30952.05, 30952.1, 30952.2, 30952.3, 30954, 30961.1, 31011, and 31021 to, and to repeal and add Section 31020 of, the Streets and Highways Code, relating to transportation, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 144, Hancock Bay Area state-owned toll bridges: financing. (1) Existing law specifies the powers and duties of the Department of Transportation, the Metropolitan Transportation Commission, and the Bay Area Toll Authority with respect to the collection and expenditure of toll revenue from the 7 state-owned toll bridges within the geographic jurisdiction of the commission. Existing law provides for a uniform $3 auto toll on those toll bridges. Under existing law, this toll revenue, other than revenue from a $1 seismic surcharge, is deposited into the Bay Area Toll Account and is controlled by the authority. Existing law requires the department and the authority to enter into a cooperative agreement that makes the department responsible for operating the bridges and for constructing improvements to the bridges financed by toll revenues. Existing law estimates the cost for seismic retrofit or replacement work on the Bay Area state-owned toll bridges at $4,637,000,000 and identifies funding to be made available for this purpose from various sources, including imposition of a $1 seismic surcharge. Under existing law, this surcharge revenue is deposited into the Toll Bridge Seismic Retrofit Account for expenditure by the department until completion of the seismic projects and payment of the bonds issued to finance those projects. Existing law specifies a particular single cable tower suspension replacement design for the eastern portion of the San Francisco-Oakland Bay Bridge. Existing law prescribes a specified formula for paying the maintenance costs of the Bay Area state-owned toll bridges from the State Highway Account and toll revenues. This bill would state the Legislature's findings that the amount previously identified for seismic retrofit and replacement of the state-owned toll bridges is insufficient and would identify additional funding sources of $3,600,000,000 for those projects, including revenues from an additional surcharge to be imposed by the authority, refinancing of existing bridge toll bonds, and various state funds, and would require a schedule to be adopted by the California Transportation Commission for allocation of those state funds. The bill would appropriate $75 million of specified Motor Vehicle Account funds and $125 million of other specified funds in that regard. The bill would authorize the authority to increase tolls on Bay Area state-owned toll bridges no earlier than January 1, 2007, for the purpose of completing the seismic program and for its other obligations under this bill, and would authorize the authority to refinance bridge toll bonds. The bill would require the existing seismic surcharge to be paid to the authority and deposited into the Bay Area Toll Account, except as necessary for payment of existing bond debt, and thereafter would require the department in that regard to transfer to the authority, for deposit into that account, all revenue from the surcharge. The bill would specify a formula for sharing of any future cost savings between the state and the authority and would require the authority to be responsible for any future cost overruns. The bill would require maintenance of each Bay Area state-owned toll bridge to be funded from toll revenues upon the completion of seismic work, other than from the seismic retrofit surcharge during the period that certain bond debt remains outstanding. The bill would require the department and the authority to amend their cooperative agreement to incorporate certain oversight and control responsibilities of each agency with respect to the seismic and other bridge construction projects. The bill would require the department to obtain the prior approval of the authority for contract specifications and bid documents and would authorize the department to include provisions to maximize the number of bidders for toll bridge seismic retrofit and replacement projects and to encourage the timely completion of those projects. The bill would also require the authority and the department to form a Toll Bridge Program Oversight Committee to review those projects. The bill would impose various risk management duties on the department. The bill would require the department to regularly report to the Toll Bridge Program Oversight Committee and the Legislature on various matters. The bill would specify the rate of overhead costs that may be charged by the department to the authority for toll bridge work. By requiring the authority to perform additional duties, the bill would impose a state-mandated local program. (2) Existing law, until June 30, 2005, exempts toll bridge seismic projects from various requirements of the California Environmental Quality Act and the Public Contract Code. This bill would provide that those exemptions shall continue to govern the toll bridge seismic program until that program is completed. (3) The bill would enact other related provisions. (4) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. (5) The bill would declare that it is to take effect immediately as an urgency statute. Appropriation: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 188.4 of the Streets and Highways Code is amended to read: 188.4. (a) Maintenance expenditures on all toll facilities owned by the state shall, for accounting purposes, be classified as Category A or Category B expenditures. Notwithstanding any other provision of law, the cost of maintenance of toll facilities in the geographic jurisdiction of the Metropolitan Transportation Commission shall be paid in accordance with the following: (1) Category A maintenance shall be paid from the State Highway Account and shall include all normal highway maintenance which would be performed by the state according to state procedures as if the facility was a toll-free state facility. (2) Category B maintenance shall be paid from toll revenues and shall include all maintenance and reconstruction work of those facilities such as toll facility administration buildings and toll booths which are constructed primarily for the purpose of collecting tolls. (b) In no event shall the Category A maintenance expenditures for the toll bridges in the geographic jurisdiction of the Metropolitan Transportation Commission be funded at a lower percentage than was established in accordance with procedures for funding Category A maintenance of the toll bridges during the 1986-87 fiscal year. (c) Notwithstanding subdivisions (a) and (b), for each toll bridge specified in Section 30910, maintenance expenditures shall be funded from toll revenues. However, for a toll bridge that is part of the program specified in Section 188.5, maintenance expenditures shall be funded from toll revenues commencing with the completion of the seismic retrofit or replacement work on that bridge as described in Section 188.5. For the purposes of this subdivision, until the obligations of the California Infrastructure and Economic Development Bank secured by the seismic retrofit surcharge imposed pursuant to subdivision (a) of Section 31010 are no longer outstanding, as that term is defined in the constituent instruments defining the rights of the holders of those obligations, the term "toll revenues" shall not include the seismic retrofit surcharge imposed pursuant to subdivision (a) of Section 31010, and the seismic retrofit surcharge imposed pursuant to subdivision (a) of Section 31010 shall remain pledged to the payment of obligations incurred by the California Infrastructure and Economic Development Bank under Chapter 4.6 (commencing with Section 31070). Maintenance expenses that are required to be funded with toll revenues and that would otherwise constitute Category A maintenance expenditures shall be funded from toll revenues remaining after provision is made for payment of all obligations secured by the lien on toll revenues created by subdivision (b) of Section 30960. SEC. 2. Section 188.5 of the Streets and Highways Code is amended to read: 188.5. (a) The Legislature finds and declares all of the following: (1) The department has determined that in order to provide maximum safety for the traveling public and to ensure continuous and unimpeded operation of the state's transportation network, six state-owned toll bridges are in need of a seismic safety retrofit, and one state-owned toll bridge is in need of a partial retrofit and a partial replacement. (2) The bridges identified by the department as needing seismic retrofit are the Benicia-Martinez Bridge, the Carquinez Bridge, the Richmond-San Rafael Bridge, the San Mateo-Hayward Bridge, the San Pedro-Terminal Island Bridge (also known as the Vincent Thomas Bridge), the San Diego-Coronado Bridge, and the west span of the San Francisco-Oakland Bay Bridge. The department has also identified the east span of the San Francisco-Oakland Bay Bridge as needing to be replaced. That replacement span will be safer, stronger, longer lasting, and more cost efficient to maintain than completing a seismic retrofit for the current east span. (3) The south span of the Carquinez Bridge is to be replaced pursuant to Regional Measure 1, as described in Section 30917. (4) The cost estimate to retrofit the state-owned toll bridges and to replace the east span of the San Francisco-Oakland Bay Bridge is four billion six hundred thirty-seven million dollars ($4,637,000,000), as follows: (A) The Benicia-Martinez Bridge retrofit is one hundred ninety million dollars ($190,000,000). (B) The north span of the Carquinez Bridge retrofit is one hundred twenty-five million dollars ($125,000,000). (C) The Richmond-San Rafael Bridge retrofit is six hundred sixty-five million dollars ($665,000,000). (D) The San Mateo-Hayward Bridge retrofit is one hundred ninety million dollars ($190,000,000). (E) The San Pedro-Terminal Island Bridge retrofit is sixty-two million dollars ($62,000,000). (F) The San Diego-Coronado Bridge retrofit is one hundred five million dollars ($105,000,000). (G) The west span of the San Francisco-Oakland Bay Bridge retrofit, as a lifeline bridge, is seven hundred million dollars ($700,000,000). (H) Replacement of the east span of the San Francisco-Oakland Bay Bridge is two billion six hundred million dollars ($2,600,000,000). (b) It is the intent of the Legislature that the following amounts from the following funds shall be allocated until expended, for the seismic retrofit or replacement of state-owned toll bridges: (1) Six hundred fifty million dollars ($650,000,000) from the 1996 Seismic Retrofit Account in the Seismic Retrofit Bond Fund of 1996 for the seven state-owned toll bridges identified by the department as requiring seismic safety retrofit or replacement. (2) One hundred forty million dollars ($140,000,000) in surplus revenues generated under the Seismic Retrofit Bond Act of 1996 that are in excess of the amount actually necessary to complete Phase Two of the state's seismic retrofit program. These excess funds shall be reallocated to assist in financing seismic retrofit of the state-owned toll bridges. (3) Fifteen million dollars ($15,000,000) from the Vincent Thomas Toll Bridge Revenue Account. (4) The funds necessary to meet both of the following: (A) A principal obligation of two billion two hundred eighty-two million dollars ($2,282,000,000) from the seismic retrofit surcharge, including any interest therefrom, imposed pursuant to Section 31010, subject to the limitation set forth in subdivision (c) and subdivision (b) of Section 31010. (B) All costs of financing, including capitalized interest, reserves, costs of issuance, costs of credit enhancements and any other financial products necessary or desirable in connection therewith, and any other costs related to financing. (5) Thirty-three million dollars ($33,000,000) from the San Diego-Coronado Toll Bridge Revenue Fund. (6) Not less than seven hundred forty-five million dollars ($745,000,000) from the State Highway Account to be used toward the eight hundred seventy-five million dollars ($875,000,000) state contribution, to be achieved as follows: (A) (i) Two hundred million dollars ($200,000,000) to be appropriated for the state-local transportation partnership program described in paragraph (7) of subdivision (d) of Section 164, prior to its repeal by Chapter 622 of the Statutes of 1997, for the 1998-99 fiscal year. (ii) The remaining funds intended for that program and any program savings to be made available for toll bridge seismic retrofit. (B) A reduction of not more than seventy-five million dollars ($75,000,000) in the funding level specified in paragraph (4) of subdivision (d) of Section 164, prior to its repeal by Chapter 622 of the Statutes of 1997, for traffic system management. (C) Three hundred million dollars ($300,000,000) in accumulated savings by the department achieved from better efficiency and lower costs. (7) Not more than one hundred thirty million dollars ($130,000,000) from the Transit Capital Improvement Program funded by the Public Transportation Account in the State Transportation Fund to be used toward the eight hundred seventy-five million dollars ($875,000,000) state contribution. If the contribution in subparagraph (A) of paragraph (6) exceeds three hundred seventy million dollars ($370,000,000), it is the intent that the amount from the Transit Capital Improvement Program shall be reduced by an amount that is equal to that excess. (8) (A) The funds necessary to meet principal obligations of not less than six hundred forty-two million dollars ($642,000,000) from the state's share of the federal Highway Bridge Replacement and Rehabilitation (HBRR) Program. (B) If the project costs exceed four billion six hundred thirty-seven million dollars ($4,637,000,000), the department may program not more than four hundred forty-eight million dollars ($448,000,000) in project savings or other available resources from the Interregional Transportation Improvement Program, the State Highway Operation and Protection Program, or federal bridge funds for that purpose. (C) None of the funds identified in subparagraph (B) may be expended for any purpose other than the conditions and design features described in paragraph (9). (9) The estimated cost of replacing the San Francisco-Oakland Bay Bridge listed in subparagraph (H) of paragraph (4) of subdivision (a) is based on the following conditions: (A) The new bridge shall be located north adjacent to the existing bridge and shall be the Replacement Alternative N-6 (preferred) Suspension Structure Variation, as specified in the Final Environmental Impact Statement, dated May 1, 2001, submitted by the department to the Federal Highway Administration. (B) The main span of the bridge shall be in the form of a single tower cable suspension design and shall be the Replacement Alternative N-6 (preferred) Suspension Structure Variation, as specified in the Final Environmental Impact Statement, dated May 1, 2001, submitted by the department to the Federal Highway Administration. (C) The roadway in each direction shall consist of five lanes, each lane will be 12 feet wide, and there shall be 10-foot shoulders as an emergency lane for public safety purposes on each side of the main-traveled way. (c) If the actual cost of retrofit or replacement, or both retrofit and replacement, of toll bridges is less than the cost estimate of four billion six hundred thirty-seven million dollars ($4,637,000,000), there shall be a reduction in the amount provided in paragraph (4) of subdivision (b) equal to the proportion of total funds committed to complete the projects funded from funds generated from paragraph (4) of subdivision (b) as compared to the total funds from paragraphs (6), (7), and (8) of subdivision (b), and there shall be a proportional reduction in the amount specified in paragraph (8) of subdivision (b). (d) If the department determines that the actual costs exceed the amounts identified in subparagraph (B) of paragraph (8) of subdivision (b), the department shall report to the Legislature within 90 days from the date of that determination as to the difference and the reason for the increase in costs. (e) Notwithstanding any other provision of law, the commission shall adopt fund estimates consistent with subdivision (b) and Section 188.6 and provide flexibility so that state funds can be made available to match federal funds made available to regional transportation planning agencies. (f) For the purposes of this section, "principal obligations" are the amount of funds generated, either in cash, obligation authority, or the proceeds of a bond or other indebtedness. (g) (1) Commencing on January 1, 2004, and quarterly thereafter until completion of all applicable projects, the department shall provide quarterly seismic reports to the transportation committees of both houses of the Legislature and to the commission for other seismic retrofit programs. (2) The reports shall include all of the following: (A) A progress report for each program. (B) The program baseline budget for support and capital outlay construction costs. (C) The current or projected program budget for support and capital outlay construction costs. (D) Expenditures to date for support and capital outlay construction costs. (E) A comparison of the current or projected schedule and the baseline schedule. (F) A summary of milestones achieved during the quarterly period and any issues identified and actions taken to address those issues. SEC. 3. Section 188.6 is added to the Streets and Highways Code, to read: 188.6. (a) (1) The Legislature finds and declares that on August 16, 2004, the department reported to the Legislature that the funds identified in Section 188.5 are insufficient to complete the state toll bridge seismic retrofit program, including the replacement of the east span of the San Francisco-Oakland Bay Bridge, due to cost overruns for the program now estimated at three billion six hundred million dollars ($3,600,000,000). (2) By enacting this section, it is the intent of the Legislature to identify additional funds from various sources, as described in subdivision (b), in order to fund this shortfall and so that the toll bridge seismic retrofit and replacement program, as described in Section 188.5, as that section read on January 1, 2005, may proceed to completion without further costly delay. (b) The following amounts from the following funds shall be allocated until expended in order to eliminate the shortfall identified in subdivision (a) and to complete the seismic retrofit or replacement of state-owned toll bridges as expeditiously as possible: (1) Not less than two billion one hundred fifty million dollars ($2,150,000,000) from the Bay Area Toll Account, derived from an additional one dollar ($1) surcharge on the state-owned toll bridges within the geographic jurisdiction of the Metropolitan Transportation Commission to be effective no sooner than January 1, 2007. (2) Not less than eight hundred twenty million dollars ($820,000,000) for the seismic retrofit or replacement of the state-owned toll bridges in the geographic jurisdiction of the Metropolitan Transportation Commission made available through the consolidation of all toll revenues under the management of the Bay Area Toll Authority and from the authorization for the authority to refinance debt secured by toll revenues. (3) The amount of three hundred million dollars ($300,000,000) to fund the cost of demolition of the existing east span of the San Francisco-Oakland Bay Bridge from funding sources supporting the state highway operations and protection program, from available state resources from project savings, or from the federal Highway Bridge Replacement and Rehabilitation program. (4) The amount of three hundred thirty million dollars ($330,000,000) from the following accounts: (A) One hundred thirty million dollars ($130,000,000) from the State Highway Account from accumulated savings by the department achieved from better efficiency, operational savings, and lower costs. (B) One hundred twenty-five million dollars ($125,000,000) of any excess funds that would otherwise have been transferred in the 2006-07 fiscal year pursuant to subparagraph (F) of paragraph (1) of subdivision (a) of Section 7102 of the Revenue and Taxation Code, as amended by Senate Bill 62 or Assembly Bill 127 of the 2005-06 Regular Session, shall instead be transferred to the Bay Area Toll Account and are hereby appropriated to the department for the purposes of this section. If sufficient funds are not available from this source for this purpose during the 2006 -07 fiscal year, the funding required under this paragraph shall be made available from additional accumulated savings by the department achieved from better efficiency, operational savings, lower costs pursuant to subparagraph (A), or from other state transportation fund accounts as determined by the department in consultation with the California Transportation Commission. (C) Seventy-five million dollars ($75,000,000) from the fund reserve in the Motor Vehicle Account for the 2005 -06 fiscal year which is hereby appropriated. (c) If the amount of the overruns estimated by the department, as described in subdivision (a), is less than three billion six hundred million dollars ($3,600,000,000), the savings shall be shared between the state and the authority in the same proportion as their proportional contribution to the estimated cost overruns, as provided in paragraphs (1), (3), and (4) of subdivision (b). (d) If the actual amount of the overruns exceeds the amount estimated by the department, as described in subdivision (a), the authority shall utilize funds generated under the powers granted to it in Sections 30886, 30950.2, 30954, 30961, and 31011 by the act adding this section in the 2005-06 Regular Session to provide additional financial resources to complete the state toll bridge seismic retrofit program. (e) Funds made available under this section and Section 188.5 for the replacement of the east span of the San Francisco-Oakland Bay Bridge shall only be expended for the structure described in paragraph (9) of subdivision (b) of Section 188.5 as that section read on January 1, 2005. SEC. 4. Section 30886 is added to the Streets and Highways Code, to read: 30886. To maximize the availability of funding necessary to complete the state toll bridge seismic retrofit program, to more efficiently manage the toll revenues from the toll bridges located within the region under the jurisdiction of the commission, and to expeditiously complete the seismic retrofit and replacement of the toll bridge facilities identified in paragraph (2) of subdivision (a) of Section 188.5, it is necessary and in the public's interest to consolidate the financial management of all of the toll revenues that are imposed by Sections 30916, 31010, and 31011 and that the Bay Area Toll Authority manage all of those toll revenues. SEC. 5. Section 30912 of the Streets and Highways Code is amended to read: 30912. (a) Revenue derived from tolls on all bridges may be expended, subject to the adopted annual budget of the authority, for any of the following purposes: (1) Safety and operational costs, including toll collection and maintenance costs in accordance with Section 188.4. (2) Costs of bridge construction and improvement projects, including seismic retrofit and replacement projects, and including debt service and sinking fund payments on bonds issued by the authority for those projects. The repayment of any advances from other state funds may be made from the toll revenue or bond proceeds. (b) The revenue determined by the authority as derived from the toll increase approved in 1988, and authorized by Section 30917 for class I vehicles on the San Francisco-Oakland Bay Bridge shall be used, to the extent specified in paragraph (4) of subdivision (a) of Section 30914, for the construction of rail extensions specified in Section 30914 or for payment of the principal of, and interest on, bonds issued for those projects, including payments into a sinking fund maintained for that purpose. SEC. 6. Section 30950.2 of the Streets and Highways Code is amended to read: 30950.2. (a) Except as provided in subdivision (b), the authority is responsible for the administration of all toll revenues from state-owned toll bridges within the geographic jurisdiction of the Metropolitan Transportation Commission. (b) Notwithstanding any other provision of law, until such time as obligations of the California Infrastructure and Economic Development Bank secured by the seismic retrofit surcharge imposed pursuant to subdivision (a) of Section 31010 are no longer outstanding, as that term is defined in the constituent instruments defining the rights of the holders of those obligations, both of the following apply: (1) The phrase "toll revenues" as used in Chapter 4 (commencing with Section 30910) and this chapter shall not include the seismic retrofit surcharge imposed pursuant to subdivision (a) of Section 31010. (2) The seismic retrofit surcharge imposed pursuant to subdivision (a) of Section 31010 shall remain pledged to the payment of obligations incurred by the California Infrastructure and Economic Development Bank under Chapter 4.6 (commencing with Section 31070). SEC. 7. Section 30952.05 is added to the Streets and Highways Code, to read: 30952.05. (a) The authority and the department shall amend the cooperative agreement required by Section 30952 to incorporate the project oversight and control responsibilities described in this section relative to the construction of the Benicia-Martinez Bridge, as described in Section 30917, and the state toll bridge seismic retrofit program, as described in Section 188.5 as that section read on January 1, 2005. (b) The department shall develop specifications and bid documents and invite bids and award contracts for the Benicia-Martinez Bridge, as described in Section 30917, and the state toll bridge seismic retrofit program projects. All contract specifications and bid documents shall be reviewed and approved by the authority prior to their release. (c) The Toll Bridge Program Oversight Committee, created pursuant to Section 30952.1, shall implement a project oversight and project control process for the Benicia-Martinez Bridge project and the state toll bridge seismic retrofit program projects. The committee's project oversight and control processes shall include, but not be limited to, reviewing bid specifications and documents, providing field staff to review ongoing costs, reviewing and approving significant change orders and claims (as determined by the committee), and preparing project reports. (d) The authority may contract with, and oversee, one or more consulting firms to provide the services described in subdivision (c) and subdivision (a) of Section 30952.1. All contracts shall be reviewed and approved by the committee prior to their execution. The authority's expenses incurred for project oversight and control services may be reimbursed by toll revenue collected pursuant to Section 30916, 31010, or 31011. (e) To ensure that the department manages the risks associated with the toll bridge seismic retrofit projects, the department shall, at a minimum, take all of the following actions: (1) Establish a comprehensive risk management plan that clearly defines roles and responsibilities for risk management and addresses the process by which it will identify and quantify project risks, implement and track risk response activities, and monitor and control risks throughout the duration of the project. (2) Quantify the effect of identified risks in financial terms. (3) Develop and maintain documents to track identified risks and related mitigation steps. (4) Regularly update its estimates of capital and capital outlay support costs. (5) Regularly reassess its reserves for potential claims and unknown risks, incorporating information related to risks identified and quantified through its risk assessment processes. (6) Regularly integrate estimates for capital, capital outlay support costs, and contingency reserves into a programwide report. (7) Ensure that reports to the Federal Highway Administration and others reflect current data and provide an accurate representation of the project's status. (8) When unexpected events occur, quickly inform the committee created in Section 30952.1 describing the effects of these key events on the project's overall budget and schedule. SEC. 8. Section 30952.1 is added to the Streets and Highways Code, to read: 30952.1. (a) The authority and the department shall establish a Toll Bridge Program Oversight Committee, which shall consist of the director, the authority's executive director, and the executive director of the California Transportation Commission. The committee may establish a project management team to assist it in performing the duties required of it under this section and Section 30952.05. (b) The Toll Bridge Program Oversight Committee shall review project status, program costs, and schedules; resolve project issues; evaluate project changes; develop and regularly update cost estimates, risk assessments, and cashflow requirements for all phases of the toll bridge projects; and provide program direction. (c) In addition to the duties described in subdivision (b), the committee shall review project staffing levels and structures, and consultant and contractor services related to the Benicia-Martinez Bridge construction project, as described in Section 30917, and the state toll bridge seismic retrofit program, as described in Section 188.5. (d) Expenses incurred by the department, the authority, and the California Transportation Commission for costs directly related to duties required by this section, Section 30952, and Section 30952.05 shall be reimbursed by toll revenue collected pursuant to Section 30916, 31010, or 31011. (e) The Toll Bridge Program Oversight Committee is not a state body as that term is defined in Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code. SEC. 9. Section 30952.2 is added to the Streets and Highways Code, to read: 30952.2. (a) The department shall provide monthly reports to the Toll Bridge Program Oversight Committee, including, but not limited to, the construction status, actual expenditures, and forecasted costs and schedules for the Benicia-Martinez Bridge construction project and the state toll bridge seismic retrofit program projects. (b) (1) Commencing August 15, 2005, and quarterly thereafter until completion of all applicable projects, the Toll Bridge Program Oversight Committee shall provide quarterly reports within 45 days of the end of each quarter to the transportation and fiscal committees of both houses of the Legislature and the California Transportation Commission for the toll bridge seismic retrofit program in subdivision (a) of Section 188.5. (2) The report shall include details of each toll bridge seismic retrofit project and all information necessary to clearly describe the status of the project, including, but not limited to, all of the following: (A) A progress report. (B) The baseline budget for capital and capital outlay support costs for the revised program cost estimate, as described in Section 188.6. (C) The current or projected budget for capital and capital outlay support costs. (D) Expenditures to date for capital and capital outlay support costs. (E) A comparison of the current or projected schedule and the baseline schedule that was assumed. (F) A summary of milestones achieved during the quarterly period and any issues identified and actions taken to address those issues. (G) A summary of the expenses incurred by the Toll Bridge Program Oversight Committee to perform the duties required by Sections 30952.05 and 30952.1. (H) A summary of the expenses incurred by the department pursuant to Section 30952.3. (3) The report described in paragraph (1) shall also include a programwide summary of the program's budget status for capital and capital outlay support costs. SEC. 10. Section 30952.3 is added to the Streets and Highways Code, to read: 30952.3. Notwithstanding any other provision of law, the department may, from the resources provided in Sections 188.5 and 188.6, include incentives and disincentives, or both, to maximize the number of bidders participating in a bid process relative to toll bridge seismic retrofit and replacement projects, and to encourage the timely and thorough completion of contracts awarded for those projects. SEC. 11. Section 30953 of the Streets and Highways Code is amended to read: 30953. Toll revenues and all other income derived from bridges pursuant to Chapter 4 (commencing with Section 30910) shall be deposited in the Bay Area Toll Account, which is hereby created. SEC. 12. Section 30954 is added to the Streets and Highways Code, to read: 30954. At such time as obligations of the California Infrastructure and Economic Development Bank secured by the seismic retrofit surcharge imposed under subdivision (a) of Section 31010 are no longer outstanding, as that term is defined in the constituent instruments defining the rights of the holders of those obligations, all revenues, interest earned, and existing fund balances in the Toll Bridge Seismic Retrofit Account shall be transferred to the authority for deposit in the Bay Area Toll Account. SEC. 13. Section 30961 of the Streets and Highways Code is amended to read: 30961. Toll bridge revenue bonds shall be issued pursuant to a resolution adopted at any time, and from time to time, by the authority by a majority vote of all members of the authority. (a) The authority may from time to time issue bonds in accordance with the Revenue Bond Law of 1941 (Chapter 6 (commencing with Section 54300) of Part 1 of Division 2 of Title 5 of the Government Code), for the purpose of constructing, improving, or equipping any of the bridges or for any of the purposes authorized by this chapter, Chapter 4 (commencing with Section 30910), or Chapter 4.5 (commencing with Section 31000). Operation of the bridges or any grouping or units thereof shall constitute an "enterprise" within the meaning of Section 54309 of the Government Code, and the authority shall constitute a "local agency" within the meaning of Section 54307 of the Government Code. Article 3 (commencing with Section 54380) of Chapter 6 of Part 1 of Division 2 of Title 5 of the Government Code shall not apply to the issuance and sale of bonds pursuant to this chapter. Instead, the authority shall authorize the issuance of bonds by resolution, and that resolution shall specify all of the following: (1) The purposes for which the bonds are to be issued. (2) The maximum principal amount of the bonds. (3) The maximum term for the bonds or commercial paper. (4) The maximum rate of interest to be payable upon the bonds or commercial paper. That interest rate shall not exceed the maximum rate specified in Section 53531 of the Government Code. The rate may be either fixed or variable and shall be payable at the times and in the manner specified in the resolution. (b) The authority shall keep full and complete accounts for toll revenues and expenses of the toll bridges and shall annually prepare balance sheets showing the financial condition of the entire toll bridge enterprise as well as toll revenues and operating costs for each toll bridge. The accounts and related reports shall be maintained and prepared in accordance with generally accepted accounting practices and shall be subject to an annual audit conducted by an independent certified public accountancy firm licensed to practice in the state. (c) The authority may issue toll bridge revenue bonds to provide the department with sufficient funds to combine with the unspent proceeds of outstanding obligations of the California Infrastructure and Economic Development Bank under Chapter 4.6 (commencing with Section 31070) to establish that those obligations are no longer outstanding, as that term is defined in the constituent instruments defining the rights of the holders of those obligations. (d) As and when requested by the authority, the department and the California Infrastructure and Economic Development Bank shall take all actions necessary or appropriate to promptly establish that obligations of the bank under Chapter 4.6 (commencing with Section 31070) are no longer outstanding and to effect the consolidation of toll revenues in accordance with Section 188.6. SEC. 14. Section 30961.1 is added to the Streets and Highways Code, to read: 30961.1. Not later than December 31, 2005, the California Transportation Commission, in consultation with the department and the authority, shall adopt a schedule for the payment of the remaining state contributions identified in Sections 188.5 and 188.6 for the toll bridge seismic retrofit and replacement projects identified in Section 188.5. The schedule shall include the timing and sources of the state contributions to the state toll bridge seismic retrofit and replacement program. The schedule shall provide for the state contributions to be made available for expenditure commencing in the fiscal year 2005-06, and in a manner that distributes the state contributions over the years during which construction of the toll bridge seismic retrofit and replacement program occurs and ensures that the state contributions are made in a manner that provides a timely balance between those sources and the contribution from toll revenues. The schedule shall include and make available for expenditure, the state contribution identified in subparagraph (B) of paragraph (8) of subdivision (b) of Section 188.5 commencing in fiscal year 2008-09, and shall distribute it over that fiscal year and each of the fiscal years during which construction of the state toll bridge seismic retrofit and replacement program occurs. The California Transportation Commission, in consultation with the department and the authority, may update and revise the schedule as it determines is necessary. SEC. 15. Section 31010 of the Streets and Highways Code is amended to read: 31010. (a) There is hereby imposed a seismic retrofit surcharge equal to one dollar ($1) per vehicle for passage on the Bay Area state-owned toll bridges, except for vehicles that are authorized toll-free passage on these bridges. (b) Funds generated pursuant to subdivision (a) that are in excess of those needed to meet the toll commitment as specified by paragraph (4) of subdivision (b) of Section 188.5 shall be available to the authority for funding, consistent with Sections 30913 and 30914, the purposes and projects described in those sections. (c) Except as provided in subdivision (d), funds generated pursuant to subdivision (a) shall be paid to the authority directly and deposited in the Bay Area Toll Account pursuant to Section 30950.2 and shall constitute revenues of the tolls imposed on the bridges described in Section 30910 for all purposes of Chapter 4.3 (commencing with Section 30950). (d) Funds generated pursuant to subdivision (a) shall be used exclusively to repay obligations issued by the California Infrastructure and Economic Development Bank and secured by the surcharge imposed by subdivision (a) until they are no longer outstanding, as that term is defined in the constituent instruments defining the rights of the holders of those obligations. This subdivision shall become inoperative when the obligations are no longer outstanding, as that term is defined in the constituent instruments defining the rights of the holders of those obligations. (e) The department may increase the amount of the seismic retrofit surcharge identified in subdivision (a) for debt service purposes only on the obligations issued by the California Infrastructure and Economic Development Bank under Chapter 4.6 (commencing with Section 31070) and only for as long as those obligations are outstanding, as that term is defined in the constituent instruments defining the rights of the holders of those obligations, if circumstances exist that have resulted in a reduction in the funds generated by subdivision (a) so as to jeopardize the payment of debt service on those obligations. This subdivision shall become inoperative when those obligations are no longer outstanding due to their retirement or defeasance. SEC. 16. Section 31011 is added to the Streets and Highways Code, to read: 31011. (a) The authority may increase the amount of the surcharge described in Section 31010 for the purpose of completing the state toll bridge seismic program described in Section 188.5 and to meet its obligations under the act adding this section in the 2005-06 Regular Session. No increase shall be made effective prior to January 1, 2007. (b) Notwithstanding any other provision of law, revenues generated by an increase imposed pursuant to this section shall be deposited in the Bay Area Toll Account. (c) The authority shall hold at least two public meetings at least 45 days before taking any action pursuant to subdivision (a) to increase the amount of the surcharge. (d) The authority may reduce the amount of the surcharge described in subdivision (a) to encourage electronic toll payment. SEC. 17. Section 31020 of the Streets and Highways Code is repealed. SEC. 18. Section 31020 is added to the Streets and Highways Code, to read: 31020. Notwithstanding Section 30953, as amended by the act adding this section in the 2005-06 Regular Session, revenue generated from the seismic retrofit surcharge imposed pursuant to subdivision (a) of Section 31010 shall be deposited in the account until obligations secured by that seismic retrofit surcharge and issued by the California Infrastructure and Economic Development Bank under Chapter 4.6 (commencing with Section 31070) are no longer outstanding as that term is defined in the constituent instruments defining the rights of the holders of those obligations. After obligations of the bank secured by toll funds are no longer outstanding, all toll revenues generated from bridges in the geographic jurisdiction of the Metropolitan Transportation Commission shall be deposited in the Bay Area Toll Account. SEC. 19. Section 31021 is added to the Streets and Highways Code, to read: 31021. Projects in the state toll bridge seismic retrofit and replacement program described in Section 188.5 are not subject to administrative overhead cost assessments by the department because they are within the duties described in Section 30952. SEC. 20. Section 182.2 is added to the Streets and Highways Code, to read: 182.2. Notwithstanding any other provision of law, toll bridge seismic retrofit and replacement projects described in Section 188.5 shall continue to be governed by the provisions of former Article 4.9 (commending with Section 180), as added by Chapter 15 of the Statutes of 1994 and subsequently amended, as that article read on January 1, 2005, other than former Section 180.7 relative to repeal. This section shall become inoperative when all toll bridge seismic retrofit and replacement projects described in Section 188.5 are complete. SEC. 21. The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application. SEC. 22. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code. SEC. 23. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to provide financing necessary to complete the state-owned toll bridge seismic retrofit and replacement program as quickly as possible, it is necessary that this act take effect immediately.