BILL NUMBER: SB 1486 CHAPTERED BILL TEXT CHAPTER 720 FILED WITH SECRETARY OF STATE SEPTEMBER 30, 2008 APPROVED BY GOVERNOR SEPTEMBER 30, 2008 PASSED THE SENATE AUGUST 19, 2008 PASSED THE ASSEMBLY AUGUST 13, 2008 AMENDED IN ASSEMBLY AUGUST 8, 2008 AMENDED IN ASSEMBLY JUNE 17, 2008 AMENDED IN SENATE MAY 27, 2008 AMENDED IN SENATE APRIL 23, 2008 AMENDED IN SENATE APRIL 9, 2008 INTRODUCED BY Senator Ducheny (Coauthor: Senator Kehoe) (Coauthor: Assembly Member Salas) FEBRUARY 21, 2008 An act to add Chapter 7 (commencing with Section 31460) to Division 17 of the Streets and Highways Code, relating to transportation. LEGISLATIVE COUNSEL'S DIGEST SB 1486, Ducheny. Otay Mesa East Toll Facility Act. Existing law authorizes regional transportation agencies, in cooperation with the Department of Transportation, to apply to the California Transportation Commission to develop and operate a value pricing program with high-occupancy toll (HOT) lanes, under which single-occupant vehicles may use designated high-occupancy vehicle lanes at certain times of day upon obtaining a permit and paying a fee. Existing law authorizes the San Diego Association of Governments (SANDAG) to conduct, administer, and operate a value pricing and transit development demonstration program on a maximum of 2 transportation corridors in San Diego County. This bill would enact the Otay Mesa East Toll Facility Act, which would authorize SANDAG to, among other things, solicit and accept grants of funds and to enter into contracts and agreements for the purpose of establishing highway toll projects to facilitate the movement of goods and people along the State Route 11 corridor in the County of San Diego or at the Otay Mesa East Port of Entry. The bill would provide SANDAG with various additional powers and duties, including, among others, authorizing SANDAG to issue bonds for the acquisition, construction, and completion of transportation facilities and to impose tolls and user fees for the use of the corridor, as defined. The bill would require toll revenues from the Otay Mesa toll facility project to be used to pay for specified costs, including, but not limited to, repaying bonds, the cost to SANDAG for operating the project, and the cost for capital improvements, pursuant to an expenditure plan, as specified. The bill would authorize SANDAG to enter into agreements with the County of San Diego or a city within that county to accept development impact fees for the construction of, and reimbursement for construction of, improvements in the county or city. Because the bill would impose additional duties on local governmental agencies, the bill would impose a state-mandated local program. 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. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Chapter 7 (commencing with Section 31460) is added to Division 17 of the Streets and Highways Code, to read: CHAPTER 7. OTAY MESA EAST TOLL FACILITY ACT 31460. The Legislature finds and declares all of the following: (a) It is essential for the economic well-being of San Diego County and for the maintenance of a high quality of life that the people of the State of California receive the full benefits of international trade with Mexico. (b) Trade is the fastest expanding component of the San Diego regional economy. Mexico is the United States' third largest trading partner, after Canada and China, and California's number one export market. (c) Trade passing through San Diego County's portion of the United States-Mexico border region benefits every state in the union and contributes heavily to the nation's trade with the countries of the Pacific Rim. (d) Commercial traffic between the United States and Mexico using California's ports of entry is placing extreme demands on the state's border transportation assets which were not designed for these purposes. (e) Congestion at the border causes increased wait times, which in turn increases commercial and noncommercial vehicle emissions. (f) Inadequate infrastructure capacity at the existing border crossings between San Diego County and Baja California currently creates traffic congestion and delays for crossborder personal trips and freight movements that cost the United States and Mexican economies an estimated $7.2 billion in foregone gross output and more than 62,000 jobs in 2007. (g) Public revenues to provide for an efficient border region transportation system have not kept pace with the growth of traffic and goods crossing the international border with Mexico. (h) The state must seek all reasonable alternatives to address unmet border transportation needs and to improve existing transportation facilities. (i) Public toll transportation facilities should be encouraged to supplement limited public resources and to support the development of new transportation system capacity. 31461. This chapter may be cited as the Otay Mesa East Toll Facility Act. All references to the "act" in this chapter shall mean the Otay Mesa East Toll Facility Act. 31462. For purposes of this chapter, the following definitions shall apply: (a) "Board" means the board of directors of SANDAG. (b) "Bonds" means any bonds, notes, variable rate and variable maturity securities, and any other evidence of indebtedness issued pursuant to this chapter. (c) "Corridor" means State Route 11 in the County of San Diego, as defined in Section 311. (d) "Costs" includes the cost of construction or acquisition; the cost of the acquisition of all land, rights-of-way, property, rights, easements, and interests acquired by SANDAG for the construction; the cost of demolishing or removing any buildings or structures on land acquired, including the cost of acquiring any lands to which buildings or structures may be moved; the cost of all machinery and equipment, financing charges, interest before and during construction and, if considered advisable by SANDAG, costs of accounting, consulting, printing, advertising and travel, cost of traffic estimates and of engineering and legal services, plans, specifications, surveys, estimates of cost and of revenues, and other expenses necessary or incident to determining the feasibility or practicability of constructing, repairing, or improving a project; administrative expenses; and such other expenses as may be necessary or incident to the construction, repair, or improvement of a project, the financing of the project, the placing and maintaining of a project in operation, and any payments to an entity to cover all or a portion of the costs described in this chapter. Any money paid or advanced to SANDAG with its approval for traffic surveys, borings, preparation of plans and specifications, and other engineering services in connection with the construction, repair, or improvement of a project shall be regarded as a part of the cost of a project and may be reimbursed out of the proceeds of the revenue bonds issued for a project as authorized in this chapter. Cost includes the cost to operate, maintain, repair, or improve a project. (e) "Department" means the Department of Transportation. (f) "Design-build" means a procurement process in which both the design and construction of a project are procured in a single phase. (g) "Design sequencing" means a procurement process that enables the sequencing of design activities to permit each construction phase to commence when design for that phase is complete, instead of requiring the design for the entire project to be completed before commencing construction. (h) "Entity" means the United States or any agency or department of the United States, any State of California agency, department or political subdivision of the state, or any public or private corporation, company, partnership, joint venture, foundation, trust, estate, individual, or other legal business organization. (i) "Federal agency" means any agency or department of the United States. (j) "Project" or "projects" means any property and related facilities, whether or not now in existence, acquired to facilitate the movement of goods and people along the corridor or at the Otay Mesa East Port of Entry, including property suitable for any of the following purposes: (1) International ports of entry. (2) International border crossing facilities. (3) Transportation facilities, including highway and roadway, public transit, and nonmotorized facilities, and other projects supporting any transportation facility designed, constructed, maintained, or operated with toll revenues. (4) A bridge or tunnel, overpasses, underpasses, entrance plazas, toll houses, administration, storage and other buildings and facilities, and all equipment therefor, and may include terminal facilities, customs and immigration facilities, and such approaches and approach highways as may be determined by SANDAG to be necessary to facilitate the flow of traffic or to connect a project with the existing highway systems, together with all property, rights, easements, and interests acquired by SANDAG for the construction or operation of a project, including, but not limited to, energy and communication lines. (k) "Property" means land, improvements to land, buildings, improvements to buildings, machinery and equipment of any kind, operating capital, and any other real or personal property necessary for a project. (l) "SANDAG" means the San Diego Association of Governments, as referenced in the San Diego Regional Transportation Consolidation Act, Chapter 3 (commencing with Section 132350) of Division 12.7 of the Public Utilities Code. (m) "Trustee" means any financial institution or trust company actually doing business in this state. 31463. This act, being necessary for the welfare of the state and its inhabitants, shall be liberally construed to effect its purposes. 31465. This chapter shall provide an additional and alternative method for doing the things authorized by this chapter and shall be regarded as supplemental and additional to any powers and rights conferred on SANDAG by other laws. When carrying out its responsibilities under this chapter, SANDAG shall comply with the requirements imposed by the San Diego Regional Transportation Consolidation Act (Chapter 3 (commencing with Section 132350) of Division 12.7 of the Public Utilities Code) not in conflict with this chapter, including, but not limited to, noticing, holding, and conducting its meetings in accordance with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code). 31466. SANDAG shall have and may exercise all rights and powers, expressed or implied, that are necessary to carry out the purposes and intent of this chapter, including the power to do all of the following: (a) Issue bonds payable from and secured by a pledge of SANDAG of all or any part of the revenues of SANDAG to finance the activities authorized by this act and for the purpose of financing the cost of acquiring or operating any project or to purchase, refund, or otherwise acquire, at or before maturity, any outstanding bonds meeting the requirements provided in this chapter, and to sell those bonds at public or private sale in the form and on the terms and conditions as SANDAG shall approve. (b) Consult with counties, cities, towns, and other agencies and political subdivisions of this state and Mexico relating to plans and projects authorized by this chapter. (c) Fix and revise from time to time and charge and collect tolls and other charges for the use of a project. (d) Acquire by dedication, gift, purchase, or eminent domain, and hold and dispose of any interests in property whether real or personal in the exercise of its powers and the performance of its duties under this chapter. (e) Establish and enforce policies, rules, and regulations for the administration, operation, and maintenance of facilities and services. (f) Pledge all or any part of the revenues of projects to secure bonds and any repayment or reimbursement obligations of SANDAG to any provider of bond insurance or letter of credit or line of credit facility determined to be appropriate by SANDAG to provide for the payment of debt service on any bonds of SANDAG, and the state hereby pledges to, and agrees with, the holders of bonds that the state will not limit, alter, or restrict the rights hereby vested in SANDAG to fulfill each pledge of revenues and any other terms of any agreement made with or for the benefit of the holders of bonds or in any way impair the rights or remedies of the holders of the bonds or the providers of bond insurance or letter of credit or line of credit facilities. (g) Do all acts necessary and convenient for the full exercise of the powers granted in this chapter. 31467. (a) Highway projects constructed pursuant to the act shall, at all times following construction, be owned by the department. International port of entry facilities constructed pursuant to the act shall, at all times following construction, be owned by a federal agency. All other property and facilities constructed pursuant to this chapter shall be owned by SANDAG, unless transferred to a state or federal agency upon agreement between SANDAG and the relevant agency. (b) The plans and specifications for a transportation project developed, maintained, repaired, rehabilitated, reconstructed, or operated pursuant to the act shall comply with the relevant standards of the department for state transportation projects. Ports of entry projects shall meet the relevant federal agency's published design standards and legal requirements. SANDAG may approve the location, design, and the materials of construction for a project constructed pursuant to this chapter after consultation with the department or the relevant federal agency, as applicable. (c) SANDAG shall carry out its highway projects in cooperation with the department and shall consult the department in the operation of a project and on matters related to highway design and construction. (d) For the purpose of facilitating a project, the agreements between SANDAG and other entities may include provisions for the lease of rights-of-way in, and airspace over or under, highways, public streets, rail, or related facilities for the granting of necessary easements, and for the issuance of permits or other authorizations to enable the construction or operation of a project. (e) Agreements between SANDAG, appropriate local, state, or federal agencies, or any other entity may be executed to identify the respective obligations and liabilities of one or more of those entities and assign them responsibilities relating to a project. The agreements entered into pursuant to this section shall be consistent with agreements between the department and the United States Department of Transportation relating to a project and may include procedures for enforcement by the Department of the California Highway Patrol. (f) Any project utilizing the department's services shall be included in the department's capital outlay support program for workload purposes. 31468. (a) The Legislature has recognized the merits of alternative project delivery methods such as the design-build procurement process in the past by authorizing its use for projects undertaken by school districts, the University of California, specified local government projects, state office buildings, and public transit projects. (b) It is the intent of the Legislature to provide optional, alternative procedures for bidding and building the international port of entry facility and ancillary border crossing projects pursuant to this act. SANDAG may utilize an alternative project delivery method authorized in this section on the international port of entry facility and ancillary border crossing projects, after evaluation of the traditional design, bid, and build process of construction and of the design-build process in a public meeting, the governing board makes written findings that use of an alternative project delivery method on the specific project under consideration will accomplish at least one of the following objectives: reduce comparable project costs, expedite a project's completion, or provide features not achievable through the traditional design-bid-build method. (c) SANDAG may utilize the following alternative project delivery methods if the conditions in this section are met: (1) Design-build. (2) Design sequencing. (d) If the conditions in this section for utilizing an alternative delivery method are not met, SANDAG shall use the design-bid-build delivery method for construction of a project. (e) It is the intent of the Legislature that alternative project delivery methods as authorized in this section shall not be construed to extend, limit, or change in any manner the legal responsibility of public agencies and contractors to comply with existing laws. 31472. This chapter does not authorize SANDAG or the department to do either of the following: (a) Lease or otherwise convey a toll road to a private-sector entity. (b) Convert any existing nontoll or non-user-fee highway lane into a tolled or user-fee highway lane. 31473. (a) The cities and county in the San Diego region are authorized and empowered to lease, lend, grant, or convey to SANDAG at its request upon such terms and conditions as the city or county considers reasonable and fair and without the necessity for any advertisement, order of court, or other action of formality, other than the regular and formal action of the governing body of the cities or county, any real property that may be necessary or convenient to the effectuation of the authorized purposes of SANDAG, including public highways and other real property already devoted to public use. (b) If a reasonable price cannot be agreed upon, or if the owner is legally incapacitated, absent, unknown, or unable to convey valid title, SANDAG is hereby authorized and empowered to acquire by condemnation or by the exercise of the power of eminent domain any lands, property, rights, rights-of-way, easements, and other property, including highways or parkways, or parts thereof or rights therein, of any person, copartnership, association, railroad, public service, public utility or other corporation, municipality, or political subdivision considered necessary or convenient for the construction, repair, or improvement or the efficient operation of a project or necessary in restoration of public or private property damaged or destroyed, but not including any of the rights of any franchisee, lessee, or owner of airspace rights in the demonstration toll road project known as State Route 125 in the County of San Diego. (c) Any proceedings pursuant to subdivision (b) shall be conducted in accordance with and subject to the relocation assistance guidelines in Chapter 16 (commencing with Section 7260) of Division 7 of Title 1 of the Government Code. Title to any property acquired by SANDAG shall be taken in the name of SANDAG or the department. (d) If the owner, lessee, or occupier of any property to be condemned refuses to remove his or her personal property from the property or give up possession of the property, SANDAG may proceed to obtain possession in any manner now or hereafter provided by law. 31474. (a) SANDAG may only impose tolls and user fees for the use of the corridor. (b) Within two years following the opening of a tolled project by SANDAG and at least biennially thereafter, SANDAG shall review the adequacy of the toll rates established to cover the costs of the project. The board shall make available any proposed revisions to toll rates to the public no less than 30 days prior to adoption by the board as described in subdivision (a) of Section 31476. (c) SANDAG's toll structure may include discounts and premiums to encourage efficient use of tolled projects and reduction of congestion and emission of greenhouse gases, including, without limitation, discounts for high-occupancy vehicles, electronic toll collection, and off-peak travel, and premiums for on-peak travel. (d) SANDAG's toll structure may include adjustments to toll rates to reflect economic factors, including, but not limited to, the Consumer Price Index or other cost indices. 31475. (a) Toll revenues from a project may be used to reimburse or finance the costs of state agencies and federal agencies incurred in connection with the implementation or operation of a project, including reimbursement of federal funds specifically allocated to SANDAG for a project by the federal government or other funds from funding sources that are not otherwise available to state agencies for transportation-related projects. SANDAG shall be reimbursed for administrative costs in an amount that shall not exceed 3 percent of project revenues. (b) Toll revenues shall be used to pay for costs in the categories below in the following priority: (1) Payments pursuant to bonds and resolutions, indentures, and other constituent instruments defining the rights of the holders of bonds and any repayment or reimbursement obligations of SANDAG to any providers of bond insurance or letters of credit or lines of credit related to bonds. (2) SANDAG costs for operations, toll collection, and administration of the facility. (3) Reimbursement to federal, state, and local agencies for costs incurred by those agencies for services provided to a project that are reimbursable pursuant to a written agreement between SANDAG and the respective agency. (4) Costs for capital improvements to repair or rehabilitate a project, to expand project capacity, to improve project operations, or to increase public transit and nonmotorized options in the corridor. (5) Excess revenues shall be used pursuant to the plan approved by the board pursuant to subdivision (b) of Section 31476 that specifies the expenditure of toll revenues for projects that increase transportation options in the corridor, including, but not limited to, public transit and nonmotorized transportation that would result in reduced vehicle miles traveled. 31476. (a) At least 30 days prior to setting the initial toll rates for a project, and thereafter when adjustments to the toll rates are proposed, the board shall provide a public comment period regarding the proposed rates. The board shall also take public testimony at one or more public meetings during this time period. (b) The expenditure plan for toll revenues shall be updated and approved by the board on an annual basis beginning on July 1 following implementation of a toll. Approval of the initial and annual expenditure plan shall take place at a public meeting held by the board following a notice of at least 30 days to the public. (c) Collection of tolls on a project financed with bond revenues shall cease following repayment of the bonds and other project costs in full unless an extension of the time for toll collection is approved by a two-thirds vote of the board at a public meeting following a notice of at least 30 days to the public. (d) The board shall arrange for a postaudit of the revenues expended pursuant to this chapter to be made at least annually by a certified public accountant. 31477. (a) SANDAG may enter into one or more agreements with the County of San Diego or a city within the County of San Diego to accept fees imposed by that city or the county pursuant to the Subdivision Map Act (Division 2 (commencing with Section 66410) of Title 7 of the Government Code) or the Mitigation Fee Act (Chapter 5 (commencing with Section 66000), Chapter 6 (commencing with Section 66010), Chapter 7 (commencing with Section 66012), Chapter 8 (commencing with Section 66016), and Chapter 9 (commencing with Section 66020) of Division 1 of Title 7 of the Government Code), to reimburse SANDAG for costs it has or will incur to mitigate development that will have a negative impact on the movement of people or goods along the State Route 11 corridor or the Otay Mesa East Port of Entry. (b) Fees paid to a city or the county and transferred to SANDAG pursuant to this section shall be expended by SANDAG solely for the construction or reimbursement for construction of the improvement serving the area to be benefited and from which the fees transferred from the city or county were collected. (c) The agreement may provide for the acceptance of considerations in lieu of the payment of fees. (d) If the provisions of this section, or provisions implementing this section contained in any ordinance adopted pursuant to this section, are held invalid, that invalidity shall not affect other provisions of this section or of the ordinance adopted pursuant thereto, which can be given effect without the invalid provision, and to this end the provisions of this section and of an ordinance adopted pursuant thereto are severable. 31481. (a) SANDAG 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 any of the purposes authorized by this chapter. SANDAG shall constitute a "local agency" within the meaning of Section 54307 of the Government Code. The operation of SANDAG projects or any grouping or units thereof shall constitute an "enterprise" within the meaning of that section. (b) Article 3 (commencing with Section 54380) of Chapter 6 of Part 1 of Division 2 of Title 5 of the Government Code does not apply to the issuance and sale of bonds pursuant to this chapter and SANDAG shall authorize the issuance of such bonds by resolution of its board. (c) Any bond issued pursuant to this section shall contain on its face a statement to the following effect: "Neither the full faith and credit nor the taxing power of the State of California is pledged to the payment of principal of, or the interest of this bond." (d) SANDAG may bring an action to determine the validity of any of its bonds pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure. (e) Before issuing any new or increased toll revenue bonds, the board shall conduct at least one public meeting following at least 30 days' notice to the public at which public testimony shall be taken regarding the proposed bond issuance. Issuance of new or increased toll revenue bonds pursuant to this act shall require approval by at least two-thirds of the board's voting members. 31482. (a) SANDAG, its income and property, all bonds issued by it, and the interest on the bonds are exempt from all taxation by this state or any political subdivision of this state. (b) Bonds issued by SANDAG are legal investments for all trust funds, the funds of all insurance companies, banks, trust companies, executors, administrators, trustees, and other fiduciaries. The bonds are securities that may legally be deposited with, and received by, any state or municipal officer or agency or political subdivision of the state for any purpose for which the deposit of bonds or obligation of the state is now, or may hereafter be, authorized by law, including deposits to secure public funds. (c) Nothing in this chapter is intended to infringe upon the rights of the state to make transportation improvements that may impact use of transportation facilities in the corridor. SEC. 2. 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. 3. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district are the result of a program for which legislative authority was requested by that local agency or school district, within the meaning of Section 17556 of the Government Code and Section 6 of Article XIII B of the California Constitution.