BILL NUMBER: AB 574 CHAPTERED 10/11/07 CHAPTER 498 FILED WITH SECRETARY OF STATE OCTOBER 11, 2007 APPROVED BY GOVERNOR OCTOBER 11, 2007 PASSED THE SENATE SEPTEMBER 10, 2007 PASSED THE ASSEMBLY SEPTEMBER 11, 2007 AMENDED IN SENATE SEPTEMBER 5, 2007 AMENDED IN SENATE AUGUST 28, 2007 AMENDED IN SENATE AUGUST 20, 2007 AMENDED IN SENATE JULY 17, 2007 AMENDED IN SENATE JUNE 27, 2007 AMENDED IN ASSEMBLY MAY 29, 2007 AMENDED IN ASSEMBLY APRIL 30, 2007 AMENDED IN ASSEMBLY APRIL 18, 2007 INTRODUCED BY Assembly Member Torrico (Coauthor: Senator Kehoe) FEBRUARY 21, 2007 An act to amend Sections 149.4, 149.5, and 149.6 of the Streets and Highways Code, relating to transportation. LEGISLATIVE COUNSEL'S DIGEST AB 574, Torrico. High-occupancy toll (HOT) lanes. (1) 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 involving high-occupancy toll (HOT) lanes. Existing law authorizes this program for each corridor for a period of 4 years after SANDAG first collects revenues for that corridor. This bill would authorize the SANDAG program to operate indefinitely by deleting the 4-year limitation provision. The bill would also authorize SANDAG to issue bonds backed by program revenues. (2) Existing law authorizes the Sunol Smart Carpool Lane Joint Powers Authority, consisting of the Alameda County Congestion Management Agency, the Alameda County Transportation Improvement Authority, and the Santa Clara Valley Transportation Authority, to conduct, administer, and operate a value pricing high-occupancy vehicle (HOT lane) program on the Sunol Grade segment of State Highway Route 680 in Alameda and Santa Clara Counties and authorizes the Alameda County Congestion Management Agency to conduct, administer, and operate a program on a corridor within Alameda County for a maximum of 2 transportation corridors in Alameda County. Existing law authorizes the operation of these programs for a period of 4 years after the administering agency first collects revenues for any of the authorized corridors. This bill would authorize these programs to operate indefinitely by deleting the provisions that limit the operation of these programs to a period of 4 years after the administering agency first collects revenues for any of the authorized corridors. The bill would also authorize the administering agency to issue bonds, refunding bonds, or bond anticipation notes backed by program revenues. (3) Existing law authorizes the Santa Clara Valley Transportation Authority (VTA) to conduct, administer, and operate a HOT lane program on any 2 of the corridors included in the high-occupancy vehicle lane system in Santa Clara County. Existing law authorizes the operation of this program for a period of 4 years after VTA first collects revenues from a HOT lane under the program. This bill would authorize the program to operate indefinitely by deleting the provisions that limit the operation of the program to a period of 4 years after VTA first collects revenues from a HOT lane under the program. The bill would also authorize VTA to issue bonds, refunding bonds, or bond anticipation notes backed by program revenues. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 149.4 of the Streets and Highways Code is amended to read: 149.4. (a) (1) Notwithstanding Sections 149 and 30800 of this code, and Section 21655.5 of the Vehicle Code, the San Diego Association of Governments (SANDAG) may conduct, administer, and operate a value pricing and transit development demonstration program on a maximum of two transportation corridors in San Diego County. (2) The program, under the circumstances described in subdivision (b), may direct and authorize the entry and use of high-occupancy vehicle lanes in corridors identified in paragraph (1) by single-occupant vehicles during peak periods, as defined by SANDAG, for a fee. The amount of the fee shall be established from time to time by SANDAG, and collected in a manner determined by SANDAG. A high-occupancy vehicle lane may only be operated as a high-occupancy toll (HOT) lane during the hours that the lane is otherwise restricted to use by high-occupancy vehicles. (b) Implementation of the program shall ensure that Level of Service C, as measured by the most recent issue of the Highway Capacity Manual, as adopted by the Transportation Research Board, is maintained at all times in the high-occupancy vehicle lanes, except that subject to a written agreement between the department and SANDAG that is based on operating conditions of the high-occupancy vehicle lanes, Level of Service D shall be permitted on the high-occupancy vehicle lanes. If Level of Service D is permitted, the department and SANDAG shall evaluate the impacts of these levels of service of the high-occupancy vehicle lanes, and indicate any effects on the mixed-flow lanes. Continuance of Level of Service D operating conditions shall be subject to the written agreement between the department and SANDAG. Unrestricted access to the lanes by high-occupancy vehicles shall be available at all times. At least annually, the department shall audit the level of service during peak traffic hours and report the results of that audit at meetings of the program management team. (c) Single-occupant vehicles that are certified or authorized by SANDAG for entry into, and use of, the high-occupancy vehicle lanes identified in paragraph (1) of subdivision (a) are exempt from Section 21655.5 of the Vehicle Code, and the driver shall not be in violation of the Vehicle Code because of that entry and use. (d) SANDAG shall carry out the program in cooperation with the department pursuant to a cooperative agreement that addresses all matters related to design, construction, maintenance, and operation of state highway system facilities in connection with the value pricing and transit development demonstration program. With the assistance of the department, SANDAG shall establish appropriate traffic flow guidelines for the purpose of ensuring optimal use of the express lanes by high-occupancy vehicles without adversely affecting other traffic on the state highway system. (e) (1) Agreements between SANDAG, the department, and the Department of the California Highway Patrol shall identify the respective obligations and liabilities of those entities and assign them responsibilities relating to the program. 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 this program and shall include clear and concise procedures for enforcement by the Department of the California Highway Patrol of laws prohibiting the unauthorized use of the high-occupancy vehicle lanes. The agreements shall provide for reimbursement of state agencies, from revenues generated by the program, federal funds specifically allocated to SANDAG for the program by the federal government, or other funding sources that are not otherwise available to state agencies for transportation-related projects, for costs incurred in connection with the implementation or operation of the program. (2) The revenue generated from the program shall be available to SANDAG for the direct expenses related to the operation (including collection and enforcement), maintenance, and administration of the demonstration program. Administrative expenses shall not exceed 3 percent of the revenues. (3) All remaining revenue generated by the demonstration program shall be used in the corridor from which the revenue was generated exclusively for preconstruction, construction, and other related costs of high-occupancy vehicle facilities and the improvement of transit service, including, but not limited to, support for transit operations pursuant to an expenditure plan adopted by SANDAG. (f) (1) SANDAG may issue bonds at any time to finance any costs necessary to implement the value pricing program established pursuant to subdivision (a) and any expenditures as may be provided for in the expenditure plan adopted pursuant to paragraph (3) of subdivision (e), payable from the revenues generated from the program. (2) The maximum bonded indebtedness that may be outstanding at any one time shall not exceed an amount that may be serviced from the estimated revenues generated from the program. (3) The bonds shall bear interest at a rate or rates not exceeding the maximum allowable by law, payable at intervals determined by SANDAG. (4) Any bond issued pursuant to this subdivision 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, as the interest of this bond." (5) Bonds shall be issued pursuant to a resolution of SANDAG adopted by a two-thirds vote of its governing board. The resolution shall state all of the following: (A) The purposes for which the proposed debt is to be incurred. (B) The estimated cost of accomplishing those purposes. (C) The amount of the principal of the indebtedness. (D) The maximum term of the bonds and the interest rate. (E) The denomination or denominations of the bonds, which shall not be less than five thousand dollars ($5,000). (F) The form of the bonds. (g) Not later than three years after SANDAG first collects revenues from any of the projects described in paragraph (1) of subdivision (a), SANDAG shall submit a report to the Legislature on its findings, conclusions, and recommendations concerning the demonstration program authorized by this section. The report shall include an analysis of the effect of the HOT lanes on the adjacent mixed-flow lanes and any comments submitted by the department and the Department of the California Highway Patrol regarding operation of the lane. SEC. 2. Section 149.5 of the Streets and Highways Code is amended to read: 149.5. (a) (1) Notwithstanding Sections 149 and 30800 of this code, and Section 21655.5 of the Vehicle Code, the Sunol Smart Carpool Lane Joint Powers Authority (SSCLJPA), consisting of the Alameda County Congestion Management Agency, Alameda County Transportation Improvement Authority, and the Santa Clara Valley Transportation Authority, may conduct, administer, and operate a value pricing high-occupancy vehicle program on the Sunol Grade segment of State Highway Route 680 (Interstate 680) in Alameda and Santa Clara Counties and the Alameda County Congestion Management Agency may conduct, administer, and operate a program on a corridor within Alameda County for a maximum of two transportation corridors in Alameda County pursuant to this section in coordination with the Metropolitan Transportation Commission and consistent with Section 21655.6 of the Vehicle Code. (2) The program, under the circumstances described in subdivision (b), may direct and authorize the entry and use of the high-occupancy vehicle lanes in the corridors identified in paragraph (1) by single-occupant vehicles for a fee. The fee structure for each corridor shall be established from time to time by the administering agency. A high-occupancy vehicle lane may only be operated as a high-occupancy toll (HOT) lane during the hours that the lane is otherwise restricted to use by high-occupancy vehicles. (3) The administering agency for each corridor shall enter into a cooperative agreement with the Bay Area Toll Authority to operate and manage the electronic toll collection system. (b) Implementation of the program shall ensure that Level of Service C, as measured by the most recent issue of the Highway Capacity Manual, as adopted by the Transportation Research Board, is maintained at all times in the high-occupancy vehicle lanes, except that subject to a written agreement between the department and the administering agency that is based on operating conditions of the high-occupancy vehicle lanes, Level of Service D shall be permitted on the high-occupancy vehicle lanes. If Level of Service D is permitted, the department and the administering agency shall evaluate the impacts of these levels of service on the high-occupancy vehicle lanes, and indicate any effects on the mixed-flow lanes. Continuance of Level of Service D operating conditions shall be subject to the written agreement between the department and the administering agency. Unrestricted access to the lanes by high-occupancy vehicles shall be available at all times. At least annually, the department shall audit the level of service during peak traffic hours and report the results of that audit at meetings of the administering agency. (c) Single-occupant vehicles that are certified or authorized by the administering agency for entry into, and use of, the high-occupancy vehicle lanes identified in paragraph (1) of subdivision (a) are exempt from Section 21655.5 of the Vehicle Code, and the driver shall not be in violation of the Vehicle Code because of that entry and use. (d) The administering agency shall carry out the program in cooperation with the department pursuant to a cooperative agreement that addresses all matters related to design, construction, maintenance, and operation of state highway system facilities in connection with the value pricing high-occupancy vehicle program. With the assistance of the department, the administering agency shall establish appropriate traffic flow guidelines for the purpose of ensuring optimal use of the high-occupancy toll lanes by high-occupancy vehicles without adversely affecting other traffic on the state highway system. (e) (1) Agreements between the administering agency, the department, and the Department of the California Highway Patrol shall identify the respective obligations and liabilities of those entities and assign them responsibilities relating to the program. 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 programs of this nature. The agreements shall include clear and concise procedures for enforcement by the Department of the California Highway Patrol of laws prohibiting the unauthorized use of the high-occupancy vehicle lanes, which may include the use of video enforcement. The agreements shall provide for reimbursement of state agencies, from revenues generated by the program, or other funding sources that are not otherwise available to state agencies for transportation-related projects, for costs incurred in connection with the implementation or operation of the program. (2) The revenue generated from the program shall be available to the administering agency for the direct expenses related to the operation (including collection and enforcement), maintenance, construction, and administration of the program. Administrative expenses shall not exceed 3 percent of the revenues. (3) All net revenue generated by the program that remains after payment of direct expenses pursuant to paragraph (2) shall be allocated pursuant to an expenditure plan adopted biennially by the administering agency for transportation purposes within the program area. The expenditure plan may include funding for the following: (A) The construction of high-occupancy vehicle facilities, including the design, preconstruction, construction, and other related costs of the northbound Interstate 680 Sunol Smart Carpool Lane project. (B) Transit capital and operations that directly serve the authorized corridors. (f) (1) The administering agency may issue bonds, refunding bonds, or bond anticipation notes, at any time to finance construction and construction-related expenditures of programs adopted pursuant to subdivision (a) and construction and construction-related expenditures that are included in the expenditure plan adopted pursuant to paragraph (3) of subdivision (e), payable solely from the revenues generated from the respective programs. (2) The maximum bonded indebtedness that may be outstanding at any one time shall be an amount equal to the sum of the principal of, and interest on, the bonds, but not to exceed the estimated revenues generated from the respective programs. (3) Bonds shall be issued pursuant to a resolution adopted by a two-thirds vote of the governing board of the administering agency. The resolution shall state all of the following: (A) The purposes for which the proposed debt is to be incurred. (B) The estimated cost of accomplishing those purposes. (C) The amount of the principal of the indebtedness. (D) The maximum term the bonds proposed to be issued shall run before maturity. (E) The maximum rate of interest to be paid, which shall not exceed the maximum allowable by law. (F) The denomination or denominations of the bonds, which shall not be less than five thousand dollars ($5,000). (G) The form of the bonds, including, without limitation, registered bonds and coupon bonds, to the extent permitted by federal law, the registration, conversion, and exchange privileges, if any pertaining thereto, and the time when all of, or any part of, the principal becomes due and payable. (H) Any other matters authorized by law. (4) The bonds shall bear interest at a rate or rates not exceeding the maximum allowable by law, payable at intervals determined by the administering agency. (5) The full amount of bonds may be divided into two or more series and different dates of payment fixed for the bonds of each series. A bond shall not be required to mature on its anniversary date. (6) Any bond issued pursuant to this subdivision 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 on, this bond." (g) Not later than three years after the administering agency first collects revenues from the program authorized by this section, the administering agency shall submit a report to the Legislature on its findings, conclusions, and recommendations concerning the demonstration program authorized by this section. The report shall include an analysis of the effect of the HOT lanes on the adjacent mixed-flow lanes and any comments submitted by the department and the Department of the California Highway Patrol regarding operation of the lane. SEC. 3. Section 149.6 of the Streets and Highways Code is amended to read: 149.6. (a) Notwithstanding Sections 149 and 30800, and Section 21655.5 of the Vehicle Code, the Santa Clara Valley Transportation Authority (VTA) created by Part 12 (commencing with Section 100000) of the Public Utilities Code may conduct, administer, and operate a value pricing program on any two of the transportation corridors included in the high-occupancy vehicle lane system in Santa Clara County in coordination with the Metropolitan Transportation Commission and consistent with Section 21655.6 of the Vehicle Code. (1) VTA, under the circumstances described in subdivision (b), may direct and authorize the entry and use of those high-occupancy vehicle lanes by single-occupant vehicles for a fee. The fee structure shall be established from time to time by the authority. A high-occupancy vehicle lane may only be operated as a high-occupancy toll (HOT) lane during the hours that the lane is otherwise restricted to use by high-occupancy vehicles. (2) VTA shall enter into a cooperative agreement with the Bay Area Toll Authority to operate and manage the electronic toll collection system. (b) Implementation of the program shall ensure that Level of Service C, as measured by the most recent issue of the Highway Capacity Manual, as adopted by the Transportation Research Board, is maintained at all times in the high-occupancy vehicle lanes, except that subject to a written agreement between the department and VTA that is based on operating conditions of the high-occupancy vehicle lanes, Level of Service D shall be permitted on the high-occupancy vehicle lanes. If Level of Service D is permitted, the department and VTA shall evaluate the impacts of these levels of service on the high-occupancy vehicle lanes, and indicate any effects on the mixed-flow lanes. Continuance of Level of Service D operating conditions shall be subject to the written agreement between the department and VTA. Unrestricted access to the lanes by high-occupancy vehicles shall be available at all times. At least annually, the department shall audit the level of service during peak traffic hours and report the results of that audit at meetings of the program management team. (c) Single-occupant vehicles that are certified or authorized by the authority for entry into, and use of, the high-occupancy vehicle lanes in Santa Clara County are exempt from Section 21655.5 of the Vehicle Code, and the driver shall not be in violation of the Vehicle Code because of that entry and use. (d) VTA shall carry out the program in cooperation with the department pursuant to a cooperative agreement that addresses all matters related to design, construction, maintenance, and operation of state highway system facilities in connection with the value pricing program. With the assistance of the department, VTA shall establish appropriate traffic flow guidelines for the purpose of ensuring optimal use of the high-occupancy toll lanes by high-occupancy vehicles without adversely affecting other traffic on the state highway system. (e) (1) Agreements between VTA, the department, and the Department of the California Highway Patrol shall identify the respective obligations and liabilities of those entities and assign them responsibilities relating to the program. 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 this program. The agreements shall include clear and concise procedures for enforcement by the Department of the California Highway Patrol of laws prohibiting the unauthorized use of the high-occupancy vehicle lanes, which may include the use of video enforcement. The agreements shall provide for reimbursement of state agencies, from revenues generated by the program, federal funds specifically allocated to the authority for the program by the federal government, or other funding sources that are not otherwise available to state agencies for transportation-related projects, for costs incurred in connection with the implementation or operation of the program. (2) The revenues generated by the program shall be available to VTA for the direct expenses related to the operation (including collection and enforcement), maintenance, construction, and administration of the program. The VTA's administrative costs in the operation of the program shall not exceed 3 percent of the revenues. (3) All remaining revenue generated by the program shall be used in the corridor from which the revenues were generated exclusively for the preconstruction, construction, and other related costs of high-occupancy vehicle facilities and the improvement of transit service, including, but not limited to, support for transit operations pursuant to an expenditure plan adopted by the VTA. (f) (1) The VTA may issue bonds, refunding bonds, or bond anticipation notes, at any time to finance construction and construction-related expenditures necessary to implement the value pricing program established pursuant to subdivision (a) and construction and construction-related expenditures that are provided for in the expenditure plan adopted pursuant to paragraph (3) of subdivision (e), payable from the revenues generated from the program. (2) The maximum bonded indebtedness that may be outstanding at any one time shall not exceed an amount that may be serviced from the estimated revenues generated from the program. (3) The bonds shall bear interest at a rate or rates not exceeding the maximum allowable by law, payable at intervals determined by the authority. (4) Any bond issued pursuant to this subdivision 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 on, this bond." (5) Bonds shall be issued pursuant to a resolution of VTA adopted by a two-thirds vote of its governing board. The resolution shall state all of the following: (A) The purposes for which the proposed debt is to be incurred. (B) The estimated cost of accomplishing those purposes. (C) The amount of the principal of the indebtedness. (D) The maximum term of the bonds and the interest rate. (E) The denomination or denominations of the bonds, which shall not be less than five thousand dollars ($5,000). (F) The form of the bonds, including, without limitation, registered bonds and coupon bonds, to the extent permitted by federal law, the registration, conversion, and exchange privileges, if applicable, and the time when all of, or any part of, the principal becomes due and payable. (G) Any other matters authorized by law. (6) The full amount of bonds may be divided into two or more series and different dates of payment fixed for the bonds of each series. A bond shall not be required to mature on its anniversary date. (g) Not later than three years after VTA first collects revenues from any of the projects described in paragraph (1) of subdivision (a), VTA shall submit a report to the Legislature on its findings, conclusions, and recommendations concerning the demonstration program authorized by this section. The report shall include an analysis of the effect of the HOT lanes on adjacent mixed-flow lanes and any comments submitted by the department and the Department of the California Highway Patrol regarding operation of the lanes.