BILL ANALYSIS SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: AB 1224 SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: Eng VERSION: 4/27/10 Analysis by: Jennifer Gress FISCAL: yes Hearing date: June 15, 2010 SUBJECT: High-occupancy toll (HOT) lanes in Los Angeles DESCRIPTION: This bill extends the sunset and reporting dates for the HOT lane facilities under development on state highway routes 10 and 110 in Los Angeles by two years from January 2013 to January 2015. ANALYSIS: In 2008, the Legislature passed and the Governor signed SB 1422 (Ridley-Thomas), Chapter 547, to allow the Los Angeles County Metropolitan Transportation Authority (Metro), in cooperation with the California Department of Transportation (Caltrans), to operate a value- pricing and transit development demonstration program. Under this program, which Metro refers to as "ExpressLanes," the high-occupancy vehicle (HOV) lanes on portions of I-10 and I-110 in Los Angeles County will be converted to HOT lanes whereby single-occupant vehicles may access the HOV lane for a fee. HOT lanes typically employ a pricing method known as value pricing or congestion pricing. Under this scheme, the amount of the fee (toll) varies in accordance with traffic congestion levels such that as congestion on the HOT lanes increases so too will the toll amount. As the price to use the facility goes up, fewer people will choose to use it thereby reducing demand for the facility and maintaining free-flow travel conditions. SB 1422 established the conditions under which Metro may implement the program, including the following: AB 1224 (ENG) Page 2 Metro may not change the minimum vehicle occupancy standard for access to the HOV lane during the demonstration period. Each proposed HOT lane shall have nontolled alternatives available for public use in the same corridor. Toll revenues generated from the program may be used for the direct expenses related to the maintenance, administration, and operation, including collection and enforcement, of the demonstration program. Administrative expenses are capped at three percent of toll revenues. All revenues in excess of those necessary for the implementation of the program shall be used in the corridor from which the revenue was generated exclusively for preconstruction, construction, and related costs of HOV facilities and the improvement of transit service in the corridor, pursuant to an expenditure plan adopted by Metro. In addition, Metro is required to conduct a public outreach plan to solicit input in the development of the demonstration program. It is also required to identify the affected communities and work with those communities to identify impacts and develop measures to mitigate those impacts. Under existing law, Metro and Caltrans shall, by December 31, 2012, provide a report to the Legislature on the impacts of the program. The authority to operate the value-pricing and transit development program expires January 15, 2013. This bill : Extends by two years the sunset date on the value-pricing and transit development program in Los Angeles from January 15, 2013 to January 15, 2015. AB 1224 (ENG) Page 3 Extends by two years the date that a report on the program is due to the Legislature from December 31, 2012 to December 31, 2014. COMMENTS: 1.Purpose . According to the author, Metro received $210 million from the U.S. Department of Transportation (U.S. DOT) to develop and operate the Express Lanes project. The project is governed by a Memorandum of Understanding (MOU) between it, Caltrans, and U.S. DOT. The MOU originally indicated that the ExpressLanes would be operational by December 2010, however, Metro and Caltrans believe the ExpressLanes would operate more efficiently if some critical infrastructure projects were completed in advance of starting operations. U.S. DOT agreed and, with the understanding that certain infrastructure projects would be completed, the Express Lanes are now expected to begin operating in 2012. While opening the lanes in 2012 would still allow the demonstration program to operate for a portion of time (less than a year), Metro would like the additional time to allow for a fair evaluation of congesting pricing in Los Angeles. The author contends that the $210 million in federal funding is at risk if Metro obtains less than 12 months of data from the demonstration program. In order to ensure a fair evaluation of congestion pricing in Los Angeles County and remain eligible for the full amount of federal funding, Metro would like to complete critical road improvements that enhance capacity and relieve bottlenecks in the corridors. 2.Why the delay ? According to Caltrans and Metro, there are several reasons for the delay. First, when Metro initially applied for the federal funds, it assumed the environmental document would be a Finding of No Significant Impact (FONSI) and that only nominal construction would be needed as the project would be converting existing HOV lane facilities into HOT lanes. Because the Metro Board of Directors raised concerns about bottlenecks on SR 110 and SB 1422 prohibited Metro from increasing occupancy standards on the HOV/HOT lanes during the demonstration period, increasing operational efficiency on the HOV/HOT lanes on both SR 10 and SR 110 prior to implementing the demonstration program became a priority. Metro identified several physical improvements to both. The work on SR 110, however, is being coordinated with that which is occurring on the Expo Line Light Rail project in the same AB 1224 (ENG) Page 4 area. The work on SR 10 conflicts with a rehabilitation project that is currently underway (and behind schedule). Finally, Metro opted to complete a full Environmental Impact Report for the demonstration program, which requires more time to complete than if Metro had made a finding of no significant impact. 3.Length of demonstration program . When SB 1422 was heard in this committee in August 2008, the MOU between U.S. DOT, Caltrans, and Metro stipulated that the HOT lanes must be placed in service by December 31, 2010. With a sunset date of January 15, 2013, SB 1422 established a demonstration program of about two years in length. With the physical improvements planned, Metro estimates that SR 110 will become operational in September 2012 and SR 10 will become operational in December 2012, which will keep the demonstration program at just over two years in length. 4.Description of Metro's ExpressLanes project . The intent of the ExpressLanes project is to test innovative strategies to alleviate congestion, maximize freeway capacity, and enhance transit alternatives in the I-10 and I-110 corridors. A large component of the program is to convert certain segments of HOV lanes into HOT lanes whereby single-occupant vehicles may access the lane for a fee. In addition to allowing single-occupant vehicles to use the lanes for a fee, Metro intends to increase bus service that currently operates in those HOV lanes and make a variety of improvements to transit facilities in the region. I-110 currently has two HOV lanes in each direction. Metro's proposal involves converting the 11-mile segment of the HOV lane that extends in both directions from 182nd Street/Artesia Transit Center to Adams Boulevard into a HOT lane. The minimum occupancy standard for this facility is 2+ persons per vehicle. The I-10 HOV lane is a single lane in each direction. Metro will convert a14-mile segment extending from Alameda Street/Union Station to I-605 into a HOT lane. Under the demonstration program, a buffer zone that currently exists within that 14-mile segment will be removed in order to establish a second HOT lane. This second lane will extend for 9 of the 14 miles. The minimum occupancy standard for this facility is 2+ per vehicle except for during peak commute hours at which time the minimum is increased to three. AB 1224 (ENG) Page 5 Both facilities will involve electronic tolling using technology similar to FasTrak utilized on other toll facilities in the state. There will be no tollbooths where motorists may pay their toll in cash. The HOT lanes will utilize dynamic pricing whereby the price of tolls may change as frequently as once every five minutes to manage demand for use of the facility. The HOT lanes had been expected to become operational in January 2011 with conclude January 2013. Assembly votes are not relevant. POSITIONS: (Communicated to the Committee before noon on Wednesday, June 9, 2010) SUPPORT: Los Angeles County Metropolitan Transportation Authority (sponsor) OPPOSED: None received.