BILL ANALYSIS                                                                                                                                                                                                    

          SENATOR ALAN LOWENTHAL, CHAIRMAN               AUTHOR:  torrico
                                                         VERSION: 6/23/09
          Analysis by:  Jennifer Gress                   FISCAL:  yes
          Hearing date:  July 7, 2009


          Bay Area Express Lane Network


          This bill authorizes the Bay Area Toll Authority (BATA) to  
          acquire, administer, and operate a network of high-occupancy  
          toll (HOT) lanes in the Bay Area, provides authority to finance  
          the development of the network using toll revenues, and  
          establishes a process for regional cooperation. 


           Metropolitan Transportation Commission (MTC) and the Bay Area  
          Toll Authority (BATA)
           Existing law establishes the MTC as a local area planning agency  
          to provide comprehensive regional transportation planning for  
          the City and County of San Francisco and the Counties of  
          Alameda, Contra Costa, Marin, Napa, San Mateo, Santa Clara,  
          Solano, and Sonoma.

          Existing law establishes BATA as a public instrumentality  
          governed by the same board as that governing MTC, although BATA  
          is a separate legal entity from MTC.  BATA is responsible for  
          the programming, administration, and allocation of all toll  
          revenues, except revenues from the seismic retrofit surcharge,  
          from the seven state-owned toll bridges within the geographic  
          jurisdiction of MTC.
           HOT Lanes
           AB 713 (Goldsmith), Chapter 962, Statutes of 1993, was passed to  
          establish what would become California's first HOT lane project.  
           The bill authorized the San Diego Association of Governments  


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          (SANDAG) to allow single-occupant vehicles into the  
          high-occupancy vehicle (HOV) lanes on Interstate 15 in San Diego  
          County for a fee.  The project was part of a federal  
          demonstration program to assess the application of congestion  
          pricing and to increase revenues for transit development in the  
          I-15 corridor.

          In 2004, AB 2032 (Dutra), Chapter 418, authorized the Sunol  
          Smart Carpool Lane Joint Powers Authority, the Alameda County  
          Congestion Management Agency, the Santa Clara Valley  
          Transportation Authority, and SANDAG to develop and operate HOT  
          lane facilities using value or congestion pricing on a specified  
          number of transportation corridors within their jurisdictions,  
          subject to certain conditions.  

          AB 574 (Torrico), Chapter 498, Statutes of 2007, permitted those  
          agencies authorized to develop and operate HOT lanes under AB  
          2032 to issue bonds backed by projected toll revenues to pay for  
          the costs of developing the facilities.  

          AB 1467 (N??ez), Chapter 32, Statutes of 2006, authorizes, until  
          January 1, 2012, authorized four more HOT lane projects, two in  
          Northern California and two in Southern California. 

          Facilities authorized under AB 2032, as amended by AB 574  
          (Torrico), and under AB 1467 are subject to specified  
          conditions, including:

                     HOV lanes may only be operated as HOT lanes during  
                 the hours that the lanes are otherwise restricted to use  
                 by high-occupancy vehicles.
                     The lanes must be maintained at Level of Service C  
                 (generally characterized as good operation with slight  
                 delays), Caltrans expressly permits Level of Service D  
                 (fair operation with noticeable delays). 
                     Toll revenues are to be made available to the agency  
                 for the direct expenses related to the operation  
                 (including collection and enforcement), maintenance, and  
                 administration of the toll program.  All excess revenues  
                 are required to be used in the corridor from which the  
                 revenues were generated, exclusively for the  
                 preconstruction, construction, and other related costs of  
                 HOV facilities and transit service.  

          In total, 13 HOT lane projects are currently authorized  
          statewide for projects that are or will be located in the  


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          following counties:  Alameda, Orange, Los Angeles, Riverside,  
          San Diego, Santa Clara.  

          Of those authorized, two are currently in operation:  The SR 91  
          Express Lanes in Orange County and an 8-mile segment of  
          Interstate15 in San Diego County.  Five facilities authorized  
          under existing law are in development, including a 14-mile  
          segment of I-680 in Alameda County.  The southbound lane on  
          I-680 will involve a conversion of an existing lane while the  
          northbound lane will be new construction.  Also, the Santa Clara  
          Valley Transportation Authority has three projects in  
          development in Santa Clara County:  Segments of SR 85, U.S. 101,  
          and the SR 237/I-880 interchange, all of which involve the  
          conversion of existing HOV lanes into HOT lanes.
           This bill  authorizes BATA to acquire, administer, and operate a  
          network of HOT lanes in the Bay Area, referred to as the Bay  
          Area Express Lane Network (network), provides authority to  
          finance the development of the network using HOT lane and bridge  
          toll revenues, and establishes a process for regional planning  
          and development.  The major provisions are described below.

           General Powers and Duties 
          This bill permits BATA to charge tolls for use of the network  
          and provides that BATA shall establish and revise the toll rate  
          schedule.  The initial toll schedule and any subsequent changes  
          shall be made available to the public for review and comment for  
          30 days prior to adoption by the authority.

          The toll schedule may include free or reduced rate passage for  
          HOVs, public transportation vehicles, low-emission or  
          energy-efficient vehicles, or motorcycles in a manner compliant  
          with federal law.

          BATA is required to implement the express lane development plan  
          (see below) in a collaborative manner with Caltrans, CHP, and  
          Bay Area congestion management agencies,  except  any element that  
          the authority determines are impracticable or infeasible, or  
          that may delay commencement of operation of the network or  
          materially and adversely affect the financial condition of the  
          network, BATA, or its credit rating.  BATA shall enter into  
          cooperative agreements with Caltrans and CHP that address all  
          matters related to design, construction, maintenance, and  
          operation of the network.  

          BATA shall enter into agreements with the Sunol Smart Carpool  


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          Lane Point Powers Authority, the Alameda County Congestion  
          Management Agency, and the Santa Clara Valley Transportation  
          Authority by January 1, 2011 providing for the transfer of HOT  
          lane facilities developed by those agencies to BATA.

          This bill also prohibits the state from authorizing either  
          publicly- or privately-owned HOT lanes within the jurisdiction  
          of MTC, other than those authorized by this bill.
          The bill establishes several provisions regarding financing the  
          development and operation of the network.  Specifically, this  

           Allows BATA to issue tax-exempt bonds secured by a pledge of  
            all or any part of network revenue. 

           Provides that expenditures for the network may be funded from  
            network revenues, revenue bonds issued by BATA, grants and  
            loans from federal, state, and local agencies, including  
            congestion management agencies and BATA.

           Allows toll bridge revenues to be expended on the network  
            provided that (a) funding from other sources is not available,  
            and, (b) the authority projects that funding the network will  
            not necessitate an increase in bridge toll rates or preclude  
            BATA from upholding its contractual and statutory obligations.  

           Allows BATA to pledge bridge toll revenues to secure bonds it  
            issues (a) if and to the extent that the authority determines  
            that funding for the network is not available on terms  
            acceptable to the authority without such a pledge, and, (b) if  
            BATA projects that those obligations will not necessitate an  
            increase in bridge toll rates or preclude the authority from  
            upholding its contractual and statutory obligations.

           Allows the authority to increase bridge toll rates if it  
            becomes necessary to meet its obligations to bondholders for  
            bonds issued to fund the network.   
          Use of Network Revenues  .
          All revenue generated from the network shall be deposited in the  
          Bay Area Express Lane Account, which BATA shall create.  Funds  
          may be expended for the following purposes:


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           To pay debt service on revenue bonds issued to finance the  
           To repay any loans.
           To pay or provide for expenses related to the administration,  
            acquisition, operation, maintenance, construction, and related  
            project development activities related to the network.

          Any revenues remaining after payment of these obligations is  
          considered "net corridor revenue," 5 percent of which is held in  
          reserves and 95 percent of which is allocated to the corridors  
          in proportion to the net revenue they generated to implement  
          programs and projects in the corridor investment plan.

           Regional Planning Process  
          The bill proposes organizational structures and establishes  
          processes to facilitate regional cooperation in the planning,  
          development, and operation of the network.

          The Project Oversight Committee and Network Development Plan.   
          BATA shall establish the Project Oversight Committee  
          (committee), which shall consist of a representative from each  
          of the following organizations:  BATA, who will serve as the  
          chair of the committee, Caltrans, CHP, and any congestion  
          management agency or countywide transportation planning agency  
          within MTC's jurisdiction that chooses to participate.   

          The committee is required to recommend to the authority an  
          express lane development plan for the network.  In developing  
          the initial plan, the authority shall provide an estimate of the  
          funds available.  The first plan shall consist of two elements:   
          (a) a phasing plan, including a definition of the geographic  
          boundaries of each of the express lane corridors, and, (b) an  
          operational plan that recommends consistent standards for the  
          network regarding design, signage, technology, marketing,  
          pricing policies and goals, occupancy standards for  
          high-occupancy vehicles (HOVs), hours of operation, maintenance,  
          enforcement, and tort liability. 

          In developing the phasing plan, the committee shall first  
          prioritize those corridors that can be converted to express  
          lanes from HOV lanes or that demonstrate the ability to generate  
          sufficient fee revenue to cover their financing, operating, and  
          maintenance costs.  

          BATA shall review and accept or reject the development plan  
          submitted to it by the committee.  If BATA rejects the plan, it  


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          shall return the plan to the committee with its comments and the  
          committee shall revise and resubmit the plan.

          The express lane development plan shall be updated as needed,  
          but at least once every four years.

          Corridor working groups and corridor investment plans.  The  
          committee shall establish corridor working groups as  
          subcommittees of the committee.  The number of working groups  
          shall correspond to the number of express lane corridors as  
          specified in the development plan.  Each working group shall  
          consist of a representative from each of the following entities:  
           BATA, Caltrans, CHP, congestion management agencies whose  
          jurisdiction includes a portion or all of the working group's  
          corridor or whose residents comprise a significant share of the  
          potential travelers in the corridor.  

          Working groups shall establish its voting arrangements to  
          reflect the commuting patterns in the corridor and the level of  
          investment in corridor infrastructure, and shall select its  
          chair from among the staff representatives of the congestion  
          management agencies participating in the group.

          Each working group shall prepare a project initiation document  
          and a corridor investment plan.  The corridor investment plan  
          shall be submitted to the committee for approval, and shall  
          include proposals and recommendations regarding specified items.

          The committee shall review and approve each corridor investment  
          plan.  Once approved, the committee submits the plan to each  
          congestion management agency represented in the corridor working  
          group for a 60-day review.  If all congestion management  
          agencies approve the investment plan, the committee submits the  
          plan to BATA.  If an agency does not approve the plan, the bill  
          establishes a process whereby the committee and working group  
          work with the agency to revise the plan.  The agency is given 60  
          days to review and approve the revised plan.  If after 60 days  
          the agency still does not approve the plan, the committee shall  
          recommend the revised plan to BATA.  The corridor investment  
          plan may not be implemented until BATA provides final approval.

          The committee and working groups are subject to open meeting  
          requirements established by the Ralph M. Brown Act.


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           1.Purpose  .  The author states that express lanes, also known as  
            HOT lanes, are a form of congestion management that allow  
            carpoolers to travel free of charge in a carpool lane but   
            allows the lane's excess capacity to be used by  
            single-occupant vehicles (SOVs) for a fee.  These lanes  
            provide an opportunity to take advantage of existing, unused  
            capacity without forfeiting the benefits of carpooling and  
            express bus service.  In addition, the revenue generated would  
            help finance expansion of the carpool lane network and provide  
            funding for public transit improvements within the corridor.  

            Currently, only Alameda and Santa Clara Counties are  
            authorized to construct, operate, and maintain HOT lanes in  
            the Bay Area.  Much of the revenue generated by these lanes  
            will be used in the same corridor for preconstruction,  
            construction, and other related costs of HOV facilities and  
            the improvement and support of transit services within the  
            corridor.  Unfortunately, other Bay Area counties do not have  
            access to these potential benefits.

            The author and sponsor (MTC) argue that there are many gaps in  
            the current HOV lane system in the region.  Filling those gaps  
            would create a seamless network of unobstructed lanes, which  
            would provide a much faster commute for the carpooler and bus  
            riders who currently use them.  With existing revenues,  
            however, this network could not be completed for another 30  
            years.  Revenues generated by the express lane network could  
            fund its completion within the next 10 years.   

            According to the author, a regional, express lane network will  
            provide Bay Area commuters with an effectively managed freeway  
            system with higher vehicle and passenger throughput and a  
            reduction in delay within each travel corridor.  In comparison  
            to a traditional carpool lane system, a regional HOT lane  
            network would save 10 million metric tons of carbon dioxide,  
            and also result in significantly lower particulate matter and  
            nitrous oxide emissions.  The author concludes that an express  
            lane network would provide an efficient, effective,  
            consistent, and seamless freeway system for Bay Area  

          2.Description of the project  .  The proposed network would be  
            developed by converting 500 miles of existing or fully funded  
            HOV lanes to HOT lanes and constructing an additional 300  
            miles of new lanes. Of the 300 miles of new lanes, 180 miles  
            are to close gaps in the existing HOV lane network, while 120  


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            miles represents an extension of the system to new areas.  The  
            lanes would remain free of charge for carpools and buses, but  
            would be accessible to vehicles not meeting the occupancy  
            requirement for a variable toll that would be collected  
            electronically via FasTrak and adjusted in real time to  
            maintain free-flow conditions in the HOT lanes.

           3.Policy shifts  .  The express lane network proposed by this bill  
            may signal two significant policy shifts from HOV and HOT lane  
            policies that the state has adopted heretofore.  The first  
            relates to the fundamental purpose served by HOV lanes, while  
            the second policy concerns the use of revenues derived from  
            HOT lanes.  The extent of the shift will depend, in large  
            part, on the revenues generated by each corridor in the  
            network and decisions regarding the management of demand for  
            HOT lanes over time.  

            Increasing throughput vs. raising revenue.  The purpose of HOV  
            facilities is to increase the total number of people moved  
            through a congested corridor by offering two kinds of travel  
            incentives: a substantial savings in travel time and to  
            provide a reliable and predictable travel time.  Because HOV  
            lanes carry vehicles with a higher number of occupants, they  
            move significantly more people during congested periods, even  
            if the number of vehicles that use the HOV lane is lower than  
            on the adjoining general purpose lanes.  In general,  
            carpoolers, vanpoolers, and bus patrons are the primary  
            beneficiaries of HOV lanes by allowing them to move through  

            To the extent there is excess capacity in an HOV lane,  
            allowing SOVs to access the lane for a fee provides a more  
            efficient use of existing highway capacity while also  
            generating revenue that may be reinvested in the  
            transportation system.  If HOV lane volumes are low,  
            converting to HOT lanes makes good use of excess capacity and  
            improves the overall efficiency of the freeway system. 

            Two conditions exist that raise a potential conflict between  
            the traditional purpose of HOV lanes to increase throughput  
            and the purpose to generate revenue:  several HOV segments are  
            currently congested during peak hours and many nontolled,  
            general purpose lanes are projected to become increasingly  
            congested in the future.  As the nontolled, general purpose  
            lanes become more congested, there will be greater demand for  


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            the HOT lanes, which will contribute to revenue growth.  If  
            congestion develops in a HOT lane, however, the lane will  
            generate little revenue and may fail to cover its operating  

            Congestion in an HOV lane due to carpoolers signals a need to  
            increase occupancy standards for vehicles authorized to access  
            the lane.  Congestion in a HOT lane, however, may be due to  
            either carpoolers or SOVs and so may be addressed by  
            increasing either occupancy standards or the price of the  
            toll.  This situation raises several questions the committee  
            may wish to consider:

                 Once HOV lanes are converted into HOT lanes, how will  
               the authority determine how much congestion is due to  
               carpoolers vs. SOVs?  Will it opt to increase occupancy  
               standards in order to accommodate SOVs?

                 What impact will raising occupancy standards have on  
               carpooling, especially on segments where the occupancy  
               standard is currently 3+?  Will drivers and their  
               passengers choose or be able to incorporate another person  
               in the carpool or will adding another become infeasible?

                  If the goal is to enhance throughput, would it be  
               appropriate to charge vehicles with 2 or 3 occupants the  
               same toll as an SOV?
                 At what point does the tolling policy, which accounts  
               for an occupancy standard, favor revenue-generating SOVs  
               rather than throughput-enhancing HOVs?  Is that point  

            The bill does not speak to these situations.  In response to  
            some of these questions, the sponsor notes that in cases where  
            congestion exists in an HOV lane presently, occupancy  
            standards should be increased regardless of whether or not  
            SOVs are permitted access.  Further, the sponsor suggests that  
            it could raise the occupancy standard, and vary toll rates  
            according to the occupancy of the vehicle such that free  
            passage would be granted to those who meet the standard and  
            reduced rate passage to those who carpool but do not meet the  

            Tolling technology in its present state does not possess the  
            capability of distinguishing the number of people in a  


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            vehicle.  A pilot study is beginning in the I-15 corridor in  
            San Diego County to assess whether infrared cameras are  
            capable of doing so, but even if that technology proves  
            capable, it will be many years before it would become  
            available for use on a large scale.  
            While it is the sponsor's intent to allow carpoolers to access  
            the lanes for free, the shift in policy from an emphasis on  
            enhancing throughput to one of generating revenue is  
            reinforced by language in the bill that permits, but does not  
            require, BATA to offer free or reduce rate passage to  

            The committee may wish to consider the extent to which it  
            wants to preserve the function of HOV lanes in encouraging  
            higher vehicle occupancy travel.  To this end, the committee  
            may wish to consider amending the bill to:

                 Require explicitly free passage for carpoolers; 
                 State explicitly that a toll policy should maximize  
               throughput over revenue generation; and/or
                 Establish, or require the authority to establish, a  
               standard at which point access to the HOT lanes by SOVs  
               would be denied.
            Source of revenue vs. use of revenue.  A policy reflected in  
            every HOT lane bill the Legislature has considered is the  
            requirement that toll revenues be reinvested into the same  
            corridor from which they were generated.  The premise for this  
                                     policy is two-fold.  First is the belief that those who pay  
            for the facility should benefit from that investment. The  
            second is, to the extent that toll lanes may benefit some user  
            groups more than others, revenues can be invested in  
            infrastructure or service that offsets those disproportionate  
            benefits.  For example, if higher-income drivers benefit more  
            from tolled lanes, then revenue from those lanes can be used  
            for either nontolled lanes or transit service from which  
            lower-income drivers may also benefit.  

            The bill speaks to this principle by requiring that 95 percent  
            of net revenue be reinvested in the corridor in proportion to  
            the toll revenue generated from it.  The extent to which there  
            is net corridor revenue, however, depends on many factors,  
            including the costs to develop the facility and the extent to  
            which the facility generates sufficient revenue to cover the  
            costs of construction, operation, and maintenance.


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            MTC estimates the project will cost approximately $7.6 billion  
            to build, finance, and operate the network over the next 25  
            years and generate $13.7 billion in revenue, leaving a net  
            revenue of $6.1 billion.  

            Professor Pravin Varaiya with the University of California,  
            Berkeley raises question about some of the revenue forecasts  
            used by MTC, as well as other toll road operators around the  
            country.  In his analysis, Professor Varaiya suggests that  
            toll revenues from I-680 South would be unlikely to cover its  
            operational costs, let alone its capital costs.  While the  
            capital costs for I-680 will mostly be derived from other  
            sources, Professor Varaiya suggests that over-estimating  
            revenue is a common problem among toll operators (and their  
            consultants) around the country.  
            Additionally, the capital costs of some projects will depend  
            on the extent to which BATA is able to utilize what is  
            referred to as a "rapid delivery approach" on some projects.   
            A rapid delivery approach assumes converting existing HOV  
            lanes into HOT lanes with design exceptions approved by  
            Caltrans.  Design exceptions allow BATA to avoid expanding the  
            highway right-of-way and ensure more timely delivery.  Without  
            them, some projects will require right-of-way acquisition and  
            may create environmental impacts, thereby increasing costs and  
            time.  It is unclear that design exceptions for all highway  
            segments for which they would be sought are appropriate or  
            will be granted.  The Contra Costa County Transportation  
            Authority, for example, has raised safety and operational  
            concerns about converting HOV lanes on segments of I-80 and  
            I-680 in Contra Costa County.

            Finally, if toll revenues from each corridor in the network  
            are pooled together to finance the development of HOT lanes  
            throughout the network and the goal is to build the network  
            within the next seven to eight years, how much net revenue is  
            reasonable to expect in the short-term?  How will it be  
            calculated, particularly for those corridors in which  
            high-performing HOT lanes end up subsidizing the development  
            of HOT lanes in other corridors?   

            In sum, the idea of redistributing net revenues to the  
            corridors to fund projects and programs in the corridor  
            investment plan is in keeping with the spirit of previous HOT  
            lane authorities contained in statute, but questions remain  


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            regarding which corridors would actually receive revenue, when  
            the revenue would be forthcoming, and how much the corridors  
            would receive.

           4.Related legislation  .  SB 1175 (Torlakson), among other things,  
            adds the Antioch and Dumbarton bridges to the state toll  
            bridge seismic retrofit program and requires BATA to increase  
            bridge toll rates for purposes of completing those projects.    

           5.Use of bridge toll revenues  .  Under this bill, toll bridge  
            revenues may be used to fund the network or be pledged to  
            secure bonds to raise funds for the network, and it allows  
            BATA to increase toll rates if necessary to uphold its  
            obligations to bondholders.  This provision creates the  
            possibility that drivers who use any of the seven state-owned  
            bridges may bear the cost of projects within the network if  
            they fail to perform as projected.  

            According to MTC, with BATA's credit rating, pledging bridge  
            toll revenues dramatically reduces the financing costs  
            associated with the network.  MTC further argues that pledging  
            bridge toll revenues will be a secondary form of credit  
            support, behind projected toll revenues from the HOT lane  
            facility for which financing is being sought and projected  
            toll revenues from the network as a whole.  Finally, MTC  
            indicates that in the event that bridge toll revenues are used  
            to fund the network, they would likely come from BATA's  
            reserves in the form of loans.  

            One question the committee may wish to consider concerns the  
            extent to which it is comfortable pledging bridge tolls for  
            the network and whether it may be appropriate to establish  
            some parameters for the use of those revenues. 
           6.BATA's powers  .  This bill expands BATA's authority in a  
            significant manner and establishes broad control over the  
            network without specifying limits or parameters.  Currently  
            BATA's authority is limited to the Bay Area toll bridges, but  
            under this measure, BATA would have authority for 800 miles of  
            HOT lanes.  Under current law, HOT lanes would be developed by  
            either Caltrans or the county-wide transportation agency in  
            cooperation with Caltrans.  Other ways in which the bill  
            grants BATA broad control over the network include:

                 The bill gives BATA the authority to develop HOT lanes  


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               within the "network," but the bill does not define the  
               network.  Instead, the authority, along with the oversight  
               committee, would determine the geographic boundaries of the  
               network and the corridors within it.  Furthermore, while  
               MTC does not appear to intend to convert general purpose  
               lanes into HOT lanes, this bill does not preclude BATA from  
               doing so.  

                 Corridor working groups offer proposals and  
               recommendations to the authority for the corridor  
               investment plan, but BATA retains authority to approve or  
               reject the plan, regardless of whether county congestion  
               management agencies approve it.

                 The bill specifies that toll revenues generated from the  
               network shall be used to pay debt service, repay loans, and  
               provide for direct expenses of operating the network.   
               Excess revenues, or net revenues, may be used for programs  
               and policies in the corridor investment plan.  There are no  
               requirements or limitations on what may be included in a  
               corridor investment plan, other than priority shall be  
               given to projects that reduce emissions and provide  
               transit.  The committee may wish to consider whether it  
               would like to establish parameters for the use of net  
               revenue, for example, limiting it to projects that improve  
               throughput through the corridor.  

                 The bill gives BATA authority for elements of highway  
               projects that typically fall under the purview of Caltrans.  
                For example, Caltrans is the lead agency for all projects  
               on the state highway system unless it agrees to relinquish  
               that authority, however, this bill authorizes BATA to be  
               the lead agency.  Additionally, the bill provides that  
               corridor working groups should make recommendations as to  
               which state, regional, or local agency should perform work  
               described in the corridor investment plan.  The regional  
               HOT lane network will be part of the state highway system  
               and as such, Caltrans should maintain its responsibilities  
               for these lanes as it does for the rest of the system.  For  
               this reason, the committee may wish to consider an  
               amendment to either delete this provision or specify that  
               Caltrans is the lead agency unless it relinquishes its  
               authority to BATA.  
                 The bill seeks to prohibit the state from authorizing  
               other HOT lane facilities in the Bay Area.  Any HOT lanes  


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               developed within the nine-county jurisdiction of MTC would  
               be operated by BATA. 

           7.Who is doing what  ?  The bill authorizes BATA to "acquire,  
            administer, and operate" a regional HOT lane network.  Because  
            the HOT lanes developed under this bill would be part of the  
            state highway system, it is unclear what is meant by  
            "acquire."  Furthermore, the bill does not grant BATA  
            authority to "construct," "maintain," or "rehabilitate" these  
            roads.  Who is responsible for these activities?  In response  
            to questions regarding how "project" would be defined and what  
            entity would be responsible for constructing a project, MTC  
            offers that "decisions on these have not yet made and would be  
            appropriately made on a case-by-case basis as a one-size fits  
            all approach almost certainly wouldn't be the best solution."   
            The bill could maintain flexibility with regard to what agency  
            will be responsible for certain activities while also  
            authorizing BATA to conduct them, such as maintenance.  The  
            committee may wish to consider amending the bill to specify  
            BATA's authority with regard to constructing, maintaining, and  
            rehabilitating segments.  

           8.Greenhouse gas emissions and transit investment  .  The author  
            asserts that the development of the express lane network will  
            result in a reduction of approximately 10 million metric tons  
            of carbon dioxide over the next 40 years.  The reduction in  
            greenhouse gas emissions is attributed principally to the  
            reduction in congestion that may accompany the effective  
            expansion of capacity and to the completion of the HOV system  
            sooner than anticipated, which will provide increased  
            opportunities for carpooling.  The Sierra Club, writing in  
            opposition to this measure, argues:  "Research on freeway  
            construction projects shows that while increasing freeway  
            capacity may yield a short-term decrease in emissions, we can  
            expect a much larger emissions increase in the long-run as  
            reduced congestion induces more demand."  The Sierra Club  
            points to research by the San Francisco Planning and Urban  
            Research League that estimates the network will ultimately  
            produce 67,000 tons of carbon dioxide annually. 

            To address mobility, social equity, and environmental goals,  
            the bill specifically highlights transit investment as an  
            element of the corridor investment plan and requires that  
            corridor working groups consult with transit operators when  
            developing their investment plan.  The extent to which transit  
            service is enhanced, however, will depend on the extent to  


          AB 744 (TORRICO)                                          Page 15


            which there are sufficient net revenues available after paying  
            for construction, operations, and maintenance, and to which  
            transit service is a priority of the corridor working group  
            and the authority.  Transit investment is not guaranteed nor  
            is it required.  Furthermore, while the bill requires working  
            groups to consult with transit operators, transit operators  
            are not included in corridor working groups.  One question the  
            committee may wish to consider is whether the transit  
            provisions of this bill could be strengthened, for example, by  
            requiring upfront investment in enhanced transit service to  
            occur concurrently with highway expansion, by requiring that  
            transit operators be included in corridor working groups, or  
            by establishing a set-aside of net corridor revenue that must  
            be used for enhanced transit.   
          9.Social equity  .  To critics, HOT lanes are best characterized  
            as "Lexus Lanes" as new facilities are developed for those  
            motorists who can afford to pay to use them, leaving those  
            unable to pay mired in traffic congestion.  Not only is new  
            capacity built for those who can pay, but there is also  
            concern that improvements made to the facility over time may  
            become concentrated in the tolled lanes.  

            To help address this issue, the bill provides that corridor  
            investment plans shall include an analysis of equity issues  
            and a proposal for how to minimize any inequities identified.   
            The sponsor notes that most HOT lane users are lower- and  
            middle-income drivers, and points to a Cal Poly San Luis  
            Obispo study of the State Route 91 Express Lanes in Orange  
            County, which found use to be more closely tied to current  
            travel conditions and trip needs than to income.  

            Focusing on the value of time instead of the price of the toll  
            presents a different story.  In operating its value-pricing  
            demonstration program in San Diego County, the San Diego  
            Association of Governments (SANDAG) has suggested that  
            lower-income drivers are occasional users of the facility and  
            access HOT lanes when on-time arrival is particularly  
            important.  SANDAG suggests that the value of time savings may  
            be greater to lower-income drivers who may be more negatively  
            impacted by being delayed by traffic congestion.  If work,  
            such as painting or cleaning houses, requires traveling, it  
            may be worth more to accommodate an additional job or  
            appointment.  HOT lanes provide lower-income drivers an option  
            when presented with difficult circumstances, for example,  
            being late to work on occasion or having to commute long  


          AB 744 (TORRICO)                                          Page 16


            distances due to a lack of affordable housing near their place  
            of employment.

           10.Access to low-emission vehicles  .  Federal law permits states  
            to allow certain low-emission vehicles to use HOV lanes  
            regardless of the vehicle's occupancy.  Under this authority,  
            state law allows certain low-emission vehicles may access HOV  
            lanes if they have proper insignia.  All-electric and some  
            compressed natural gas vehicles are issued white stickers and  
            hybrids are issued yellow stickers.  White-stickered vehicles  
            using the HOV lane may use the Bay Area toll bridges without  
            being charged a toll.  Access to HOV lanes by these vehicles  
            expires January 1, 2011, however, there are several pending in  
            the Legislature that would extend this sunset date for  
            white-stickered vehicles or allow a new class of low-emission  
            vehicle to access the lanes. 
            This bill allows the authority to grant free or reduced rate  
            passage on the HOT lanes to low-emission vehicles in a manner  
            compliant with federal law, but in doing so, allows the  
            authority to disregard state law.  In other words, the bill  
            gives BATA the authority to determine whether or not to allow  
            low-emission vehicles to access HOT lanes without paying a  
            toll, even if state law permits it.  MTC argues that this  
            provision gives the authority flexibility to adopt a fee  
            structure that protects the operational and financial needs of  
            the network.

            In granting such access to low-emission vehicles, the  
            Legislature did not contemplate not allowing access on certain  
            facilities or in certain areas, and currently low-emission  
            vehicles are permitted on all HOV/HOT facilities in the state.  
             Furthermore, allowing a vehicle to access a HOT lane in one  
            area but not in another may detract from the purpose of  
            incentivizing the purchase of low-emission vehicles while also  
            confusing the drivers of those vehicles.  

            The committee may wish to consider whether it would like to  
            establish a consistent, statewide policy with regard to  
            allowing low-emission vehicles to access HOV/HOT lanes.
          11.  Maintenance  .  Maintenance of the network is not clearly  
            addressed in the bill.  Given the shortage of funding for the  
            State Highway Operations and Preservation Program (SHOPP),  
            maintenance of the facilities should be funded by toll  
            revenues.  While the bill provides that toll revenues may be  


          AB 744 (TORRICO)                                          Page 17


            spent on maintenance, it does not explicitly require BATA to  
            use toll revenues for that purpose.  The committee may wish to  
            consider an amendment stating that BATA shall be responsible  
            for funding the maintenance of the HOT lane facilities  
            developed under this authority. 
           12.  Reporting  . The bill contains no reporting.  The committee  
            may wish to consider that BATA provide an annual report to the  
            Legislature and to the CTC that describes its activities,  
            including but not limited to, the following elements:

             a.   A description of the network and each corridor.
             b.   A description of the projects that are planned, under  
               development, and in operation, including the lead agencies  
               for each project and the date the facility is or is  
               expected to be placed in service.
             c.   The costs of each project and an explanation of the  
               project's financing plan.
             d.   The amount of toll revenues collected in each corridor  
               and for the network as a whole.
             e.   Expenditures made from toll revenues for each corridor  
               and for the network as a whole.
             f.   The amount of net revenue distributed to each corridor  
               and a description of how those funds will be or are used  
               for each corridor.

          AB 798 (Nava) establishes the California Transportation  
          Financing Authority to assist transportation agencies in  
          obtaining financing, primarily through issuing bonds backed by  
          specified sources of revenue, to develop transportation  
          projects.  In doing so, the bill allows the authority to permit  
          agencies to impose tolls for use of facilities constructed.
          AB 1175 (Torlakson), among other provisions, adds the Antioch  
          and Dumbarton bridges to the state toll bridge seismic retrofit  
          program and allows BATA to increase bridge toll rates for  
          purposes of completing those projects. 
          Assembly Votes:
               Floor:    58-18
               Appr: 13-4
               Trans:    12-1

          POSITIONS:  (Communicated to the Committee before noon on  


          AB 744 (TORRICO)                                          Page 18


                     July 1, 2009)

               SUPPORT:  Metropolitan Transportation Commission (sponsor)
                         AAA of Northern California
                         Alameda County Congestion Management Agency (in  
                         Alameda County Transportation Improvement Agency  
          (in concept)
                         Alameda-Contra Costa Transit District
                         California Alliance for Jobs
                         California Transit Association
                         Silicon Valley Leadership Group
                         Solano County Board of Supervisors
                         Solano Transportation Authority
                         Santa Clara Valley Transportation Authority
               OPPOSED:  Contra Costa County Transportation Authority
                         Sierra Club
                         West Contra Costa County Transportation Advisory