BILL NUMBER: SB 1316 CHAPTERED 09/30/08 CHAPTER 714 FILED WITH SECRETARY OF STATE SEPTEMBER 30, 2008 APPROVED BY GOVERNOR SEPTEMBER 30, 2008 PASSED THE SENATE AUGUST 19, 2008 PASSED THE ASSEMBLY AUGUST 12, 2008 AMENDED IN ASSEMBLY JUNE 23, 2008 AMENDED IN SENATE MAY 27, 2008 AMENDED IN SENATE APRIL 23, 2008 AMENDED IN SENATE APRIL 1, 2008 INTRODUCED BY Senator Correa (Principal coauthor: Assembly Member Spitzer) (Coauthors: Assembly Members Benoit and Solorio) FEBRUARY 20, 2008 An act to amend Section 130240 of, and to add Sections 130244 and 130245 to, the Public Utilities Code, relating to transportation. LEGISLATIVE COUNSEL'S DIGEST SB 1316, Correa. Transportation facilities: tolls: Orange and Riverside Counties. Existing law provides for the Orange County Transportation Authority to assume responsibility for a toll lane on State Highway Route 91 in Orange and Riverside Counties under an assignment of a franchise agreement between the Department of Transportation and a private toll road operator. Existing law authorizes the authority to issue bonds and impose tolls relative to this toll lane, but not to extend beyond 2030, at which point the toll lane would revert to the department. Existing law requires toll revenues from the toll lane to be used for capital and operating expenses of the toll lane, including debt service, and for transportation purposes related to State Highway Route 91. Existing law creates an advisory committee to make recommendations to the authority regarding the toll lane and related issues. This bill would authorize the Orange County Transportation Authority to eliminate its rights, interests, and obligations in the Riverside County portion of the State Highway Route 91 toll lane by partial assignment to the Riverside County Transportation Commission or by amendment to the franchise agreement. The bill would delete the 2030 limitation on issuance of bonds and collection of tolls, and would provide for the reversion of the portion of the toll lane under the authority's control from the authority to the department at the expiration of the franchise agreement. The bill would authorize use of toll revenues for the toll lane and for other related transportation purposes in the Route 91 corridor. This bill would authorize the Riverside County Transportation Commission to impose tolls for 50 years on transportation facilities on its portion of State Highway Route 91, subject to extension beyond that time if reauthorized by the Legislature, and would authorize toll revenues to be used for capital and operating expenses of the facilities, including debt service, and for related transportation purposes in the Route 91 corridor. The bill would authorize the commission to issue bonds for transportation facilities within the Route 91 corridor. The bill would require reversion of the transportation facilities to the department after bonds are repaid unless tolls have been reauthorized by the Legislature. The bill would state that the commission is not entitled to compensation for the adverse effects on toll revenues from construction of competing facilities within the Route 91 corridor by the department or a local agency. These and other related provisions would only apply if the responsibility for the Riverside County portion of the Route 91 franchise agreement is transferred from the authority to the commission. The bill would delete the requirement for the existing State Highway Route 91 advisory committee and instead create a new advisory committee, with specified responsibilities. Members would be appointed by both the Orange County Transportation Authority and the Riverside County Transportation Commission, with costs of the committee to be shared by both entities. The bill would also require both entities to conduct an annual audit of toll revenues and expenditures. The bill would thereby 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. Section 130240 of the Public Utilities Code is amended to read: 130240. (a) "Transit" means as defined in Section 40005. (b) (1) The Orange County Transportation Authority may acquire, construct, develop, lease, jointly develop, own, operate, maintain, control, use, jointly use, or dispose of rights-of-way, rail lines, monorails, guideways, buslines, stations, platforms, switches, yards, terminals, parking lots, air rights, land rights, development rights, entrances and exits, and any and all other facilities for, incidental to, necessary for, or convenient for transit service, including, but not limited to, facilities and structures physically or functionally related to transit service, within or partly without the county, underground, upon, or above the ground and under, upon or over public streets, highways, bridges, or other public ways or waterways, together with all physical structures necessary for, incidental to, or convenient for the access of persons and vehicles thereto, and may acquire, lease, sell, or otherwise contract with respect to any interest in or rights to the use or joint use of any or all of the foregoing. However, installations on state freeways are subject to the approval of the Department of Transportation and installations in other state highways are subject to Article 2 (commencing with Section 670) of Chapter 3 of Division 1 of the Streets and Highways Code. (2) With respect to the segment of State Highway Route 91 between State Highway Route 15 and State Highway Route 55 only, the Orange County Transportation Authority may exercise all of the powers contained in paragraph (1) that apply to streets, highways, bridges, and connector roads. (3) The exercise of the powers provided to the Orange County Transportation Authority in paragraph (2) is subject to approval by the Board of Supervisors of Riverside County and the Riverside County Transportation Commission and in consultation with the advisory committee described in Section 130245 as it relates to the use of those powers in Riverside County under the terms of the franchise agreement described in subdivision (c). (c) If the Orange County Transportation Authority requests, the department shall approve the assignment to the Orange County Transportation Authority of the Amended and Restated Development Franchise Agreement, as amended, between the department and the California Private Transportation Company, L.P. (CPTC) for the State Highway Route 91 median improvements as authorized by Section 143 of the Streets and Highways Code, subject to the requirement that subdivisions (a) to (f), inclusive, of Section 2 of Article 3 of the restated franchise agreement be deleted in their entirety in the event that CPTC and the authority agree to the assignment of all of CPTC's interests in the franchise agreement to the authority. (d) The Orange County Transportation Authority shall have the authority to impose tolls for use of the State Highway Route 91 facilities as authorized by the franchise agreement. (e) (1) Toll revenues from the use of State Highway Route 91 facilities between State Highway Route 55 and the Orange and Riverside County line shall only be used by the Orange County Transportation Authority for the following expenditures relative to the State Highway Route 91 express lanes and for the purposes of paragraph (2): (A) Capital, operations, and maintenance, including, but not limited to, toll collection and enforcement. (B) Repair and rehabilitation. (C) Payment of purchase costs, debt service, and satisfaction of other covenants and obligations related to indebtedness. (D) Reserves. (E) Administration, which shall not exceed 3 percent of toll revenues and associated facility revenues. (2) Excess toll revenues beyond the expenditure needs of paragraph (1) may be expended for the following purposes: (A) To enhance transit service designed to reduce traffic congestion on State Highway Route 91 or to expand travel options along the State Highway Route 91 corridor. Revenues expended under this subparagraph may be used to maintain the enhanced transit service. Eligible expenditures include, but are not limited to, transit operating assistance, the acquisition of transit vehicles, improvements to commuter rail traveling between Riverside and Orange Counties, and those transit capital improvements otherwise eligible to be funded under the State Transportation Improvement Program pursuant to Section 164 of the Streets and Highways Code. (B) To make operational or capacity improvements designed to reduce congestion or improve the flow of traffic on State Highway Route 91. Eligible expenditures may include any phase of project delivery to make capital improvements to onramps, connector roads, roadways, bridges, or other structures that are related to the tolled and nontolled facilities on State Highway Route 91 between State Highway Route 57 to the west and the Orange and Riverside county line to the east. (3) The Orange County Transportation Authority, in consultation with the department and the Riverside County Transportation Commission, shall issue a plan and a proposed completion schedule for transportation improvements in the State Highway Route 91 corridor. The Orange County Transportation Authority shall update the plan on an annual basis. (f) The Orange County Transportation Authority may incur indebtedness and obligations, and may issue bonds, refund bonds, and assume existing bonds for purposes authorized by this section. Indebtedness and bonds issued under this section do not constitute a debt or liability of the state or any other public agency, other than the authority, or a pledge of the faith and credit of the state or any other public agency, other than the authority. Bonds issued under this section shall not be deemed to constitute a debt or liability of the state or any political subdivision thereof, other than the bank and the authority, or a pledge of the faith and credit of the state or of any political subdivision, but shall be payable solely from the revenues and assets pledged to the repayment of the bonds. All bonds issued under this section shall contain on the face of the bond a statement to the same effect. (g) Notwithstanding Section 143 of the Streets and Highways Code, the State Highway Route 91 facility constructed and operated under the authority of a franchise agreement approved pursuant to that section shall revert to the state at the expiration of the lease or termination of the franchise agreement at no cost to the state. Upon reversion, the facility shall be delivered to the department in a condition that meets the performance and maintenance standards established by the department. (h) The Orange County Transportation Authority shall not impose tolls for the use of nor construct and operate State Highway Route 91 facilities in the County of Riverside without prior approval by the Board of Supervisors of the County of Riverside, the Riverside County Transportation Commission, and the advisory committee. (i) The Orange County Transportation Authority shall not sell or assign its interest in the franchise agreement without approval by the Legislature by enactment of a statute provided that approval shall not be required in connection with granting rights and remedies to lenders under Article 16 of the restated franchise agreement. (j) If the Orange County Transportation Authority decides to sell or assign its interest in the franchise agreement, the Orange County Transportation Authority shall provide written notice at least 90 days in advance of the date they submit their request for approval by the department pursuant to this subdivision. The written notice shall be provided to the advisory committee created pursuant to Section 130245 and to the Riverside County Transportation Commission. (k) The Orange County Transportation Authority shall be authorized to eliminate its rights, interests, and obligations relative to State Highway Route 91 in Riverside County, either by partial assignment to the Riverside County Transportation Commission, or by amendment to the restated franchise agreement, as amended. In the event of a partial assignment or amendment, the department shall consent and the term of the restated franchise agreement, as amended by the partial assignment or amendment, shall be extended to a date determined by the authority, which date shall be no later than December 31, 2065. (l) If the Riverside County Transportation Commission constructs and operates toll facilities on State Highway Route 91 between the Orange County border and State Highway Route 15, then it is the intent of the Legislature that the Riverside County Transportation Commission and the Orange County Transportation Authority enter into an agreement providing for the coordination of the respective toll facilities operated by each entity on State Highway Route 91. SEC. 2. Section 130244 is added to the Public Utilities Code, to read: 130244. (a) For the purposes of this section, the following terms shall have the following meanings: (1) "Authority" means the Orange County Transportation Authority. (2) "Bonds" means bonds, notes, or other evidences of indebtedness authorized to be issued pursuant to paragraph (4) of subdivision (c). (3) "Commission" means the Riverside County Transportation Commission. (4) "Department" means the Department of Transportation. (5) "Franchise agreement" means the franchise agreement assigned to the authority pursuant to subdivision (c) of Section 130240. (6) "Transportation facilities" means one or more of the following on State Highway Route 91 between the Orange and Riverside County line to the west and State Highway Route 15 to the east: (A) general purpose toll lanes; (B) lanes or facilities where the tolls may be levied and may vary according to levels of congestion anticipated or experienced or according to the occupancy of the vehicle; and (C) facilities or lanes utilizing combinations of or variations on (A) or (B), or other strategies the commission may determine appropriate on a facility-by-facility basis. (7) "Transportation project" means the planning, design, development, financing, construction, reconstruction, rehabilitation, improvement, acquisition, lease, operation, or maintenance, or any combination of these, with respect to tolled and nontolled facilities, structures, onramps, connector roads, bridges, and roadways that are on, necessary for, or related to the construction or operation of State Highway Route 91 between the Orange and Riverside County line to the west and State Highway Route 15 to the east. (b) Pursuant to subdivision (l) of Section 130240, the authority may amend, assign, or terminate the Riverside County portion of the franchise agreement in the interest of advancing the transportation project described in paragraph (7) of subdivision (a). The department, upon request of the authority, shall approve an amendment to the franchise agreement to eliminate any portion of State Highway Route 91 within Riverside County from the franchise agreement. (c) (1) The commission shall have the authority to set, levy, and collect tolls, user fees, or other similar charges payable for use of the transportation facilities, and any other incidental or related fees or charges, in amounts as required for the following expenditures relative to the transportation facilities as defined in paragraph (6) of subdivision (a) and for purposes of paragraph (2): (A) Capital outlay, including the costs of design, construction, right-of-way acquisition, and utility adjustment. (B) Operations and maintenance, including, but not limited to, toll collection and enforcement. (C) Repair and rehabilitation. (D) Indebtedness incurred, including related financing costs. (E) Reserves. (F) Administration, which shall not exceed 3 percent of toll revenues and associated facility revenues. (2) Excess toll revenues beyond the expenditure needs of paragraph (1) may be expended for the following purposes: (A) To enhance transit service designed to reduce traffic congestion on State Highway Route 91 or to expand travel options along the State Highway Route 91 corridor. Revenues expended under this subparagraph may be used to maintain the enhanced transit service. Eligible expenditures include, but are not limited to, transit operating assistance, the acquisition of transit vehicles, improvements to commuter rail traveling between Riverside and Orange Counties, and those transit capital improvements otherwise eligible to be funded under the State Transportation Improvement Program pursuant to Section 164 of the Streets and Highways Code. (B) To make operational or capacity improvements designed to reduce congestion or improve the flow of traffic on State Highway Route 91. Eligible expenditures may include any phase of project delivery to make capital improvements to onramps, connector roads, roadways, bridges, or other structures that are related to the tolled and nontolled facilities on State Highway Route 91 between the Orange and Riverside county line to the west and State Highway Route 15 to the east. (3) The commission, in consultation with the authority and the department, shall issue a plan of transportation improvements for the State Highway Route 91 corridor, which shall include projected costs, the use of toll revenues, and a proposed completion schedule. This plan shall be updated annually. The plan and each annual update shall be made available for public review and comment no less than 30 days prior to adoption by the commission. (4) The commission is authorized to issue bonds to finance the costs of the transportation project, including the costs of issuing the bonds and paying credit enhancement and other fees related to the bonds, which bonds are payable from the tolls authorized pursuant to paragraph (1), sales tax revenues, development impact fees, federal grant funds, or any other source of revenues available to the commission that may be used for these purposes. The bonds may be sold pursuant to the terms and conditions set forth in a resolution adopted by the governing board of the commission. Bonds shall be issued pursuant to a resolution adopted by a two-thirds vote of the commission. Any bond issued pursuant to this paragraph 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 or interest of this bond." (5) The department is authorized to enter into any lease, easement, permit, or other agreement with the commission necessary to accomplish the purposes of this section. (6) The commission shall have the authority to impose tolls for use of the transportation facilities for 50 years following the opening of the transportation facilities for public use, after which time the commission shall have no further authority to impose or to collect a toll for use of transportation facilities on State Highway Route 91, unless reauthorized by the Legislature. The transportation facilities shall revert to the department after the bonds issued pursuant to this section are paid off in their entirety, unless tolls have been reauthorized by the Legislature. Upon reversion, the facilities shall be delivered to the department in a condition that meets the performance and maintenance standards established by the department. (7) The commission shall make available for public review and comment the toll schedule and any subsequent proposed changes to the schedule no less than 30 days prior to the adoption by the commission of a toll schedule. (d) This section shall be supplemental and in addition to any other authority of the commission to undertake the transportation project. (e) This section shall not prevent the department or any local agency from constructing facilities within the State Highway Route 91 corridor that compete with the transportation project, and in no event shall the commission be entitled to compensation for the adverse effects on toll revenues due to those facilities. (f) If any provision of this section or the application thereof is held invalid, that invalidity shall not affect other provisions or applications of this section that can be given effect without the invalid provision or application, and to this extent the provisions of this section are severable. (g) This section shall not apply to State Highway Route 91 between the Orange and Riverside County line and State Highway Route 15 unless the authority amends or partially assigns the restated franchise agreement, as amended, between the department and the authority to exclude that portion of State Highway Route 91 from the restated franchise agreement, as amended. SEC. 3. Section 130245 is added to the Public Utilities Code, to read: 130245. (a) An advisory committee shall be created to review issues and make recommendations to the Orange County Transportation Authority and the Riverside County Transportation Commission regarding the facilities authorized pursuant to Sections 130240 and 130244, including tolls imposed, operations, maintenance, interoperability, and use of toll revenues, and improvements in the State Highway Route 91 corridor, including the identification and siting of alternative highways. The committee shall consist of 10 voting members and three nonvoting members, as follows: (1) Five members of the Board of Directors of the Orange County Transportation Authority appointed by that board. (2) Five members of the Riverside County Transportation Commission appointed by that commission. (3) One member of the San Bernardino Associated Governments appointed by that body, and the district directors of Districts 8 and 12 of the Department of Transportation, all of whom shall be nonvoting members. (b) The advisory committee shall establish rules for the conduct of committee meetings, which rules shall be approved by both the Orange County Transportation Authority and the Riverside County Transportation Commission. The authority and the commission may appoint alternates to the committee. (c) When reviewing the initial toll structure proposed by the Orange County Transportation Authority and the Riverside County Transportation Commission or any changes to the toll structure, the advisory committee shall place an information item on a regularly scheduled agenda for public comment and consideration of the advisory committee. (d) The Orange County Transportation Authority shall conduct an audit on an annual basis of the toll revenues collected and expenditures made during its operation of the facilities authorized in Section 130240. The audit shall review revenues and expenditures related to those facilities for consistency with that section and shall be provided to the advisory committee. (e) The Riverside County Transportation Commission shall conduct an audit on an annual basis of the toll revenues collected and expenditures made during its operation of the facilities authorized in Section 130244. The audit shall review revenues and expenditures related to those facilities for consistency with that section and shall be provided to the advisory committee. (f) The Orange County Transportation Authority and the Riverside County Transportation Commission shall equally share all costs associated with this section. None of these costs shall be paid from state funds. SEC. 4. 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.