BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 1670 (Beall) Hearing Date: 08/12/2010 Amended: 07/15/2010 Consultant: Mark McKenzie Policy Vote: T&H 8-0 _________________________________________________________________ ____ BILL SUMMARY: AB 1670 would authorize the California Transportation Commission (CTC) to relinquish specified portions of State Highway Route (SR) 82 and SR 130 to the City of San Jose. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund Caltrans improvements unknown one-time costs (minor to millions) Special* prior to relinquishment (see staff comments) Caltrans maintenance Unknown long-term savings following Special* and repair relinquishment CTC administration minor costs to administer agreementsSpecial* ____________ * State Highway Account _________________________________________________________________ ____ STAFF COMMENTS: SUSPENSE FILE. The Legislature has provided statutory authorization to CTC to relinquish a number of state highway segments to local jurisdictions under specified conditions. Relinquishment provides the recipient agency with greater control over local transportation projects and relieves Caltrans of any further responsibility to improve, maintain, or repair infrastructure related to the relinquished segment of state highway. Generally, relinquishments are subject to terms and conditions of agreements between Caltrans and a local jurisdiction seeking control of a local highway segment. CTC must determine that the agreement for relinquishment, which involves a one-time payment of State Highway Account funds to the local entity, is in the best interests of the state. Caltrans annually sets aside $12 million of State Highway Operations and Protection Plan (SHOPP) funding for rehabilitation necessary for highway relinquishments. AB 1670 would authorize CTC, upon a determination that the terms and conditions are in the state's best interest, to relinquish to the City of San Jose the portion of SR 82 from SR 101 to SR 880, and the portion of SR 130 that is located within the city limits. The relinquished segments would cease to be a part of the state highway system, and would be ineligible for future adoption as a state highway. San Jose would be required to ensure the continuity of traffic on the relinquished segment, including and traffic signal progression. The portions of SR 82 and SR 130 specified in the bill, locally known as the Alameda and Monterey Highway and Alum Rock Avenue, respectively, are local arterial streets in Page 2 AB 1670 (Beall) the San Jose city limits. Relinquishment of these segments would allow San Jose to make pedestrian and multimodal transportation improvements and other community enhancements without the constraints of Caltrans' state highway design standards, encroachment permit processes, and other state requirements. Staff notes that Caltrans usually provides State Highway Account funding to a local entity that is assuming control over state highway segments in order to bring the roadway up to a "state of good repair." The actual amounts vary for each relinquished highway segment and are determined by a negotiation of terms and conditions between Caltrans and the local jurisdiction. Caltrans does not currently have a specific cost estimate for the relinquishment of these particular state highway segments, but based on other relinquishments, one-time costs range from minimal up to $1 million per centerline mile of roadway depending on numerous factors such as roadway condition, projected maintenance costs, and any planned capital projects. The segment of SR 82 specified in the bill is approximately 11 miles long, so initial costs could be minimal but may be as high as $11 million. The segment of Alum Rock Avenue is approximately 2.5 miles long, so relinquishment costs could be as high as $2.5 million. The relinquishment of these segments, however, would relieve Caltrans of any future maintenance and repair costs, resulting in unknown long-term annual savings. Staff notes that while long-term savings will eventually exceed up-front costs, actual costs and savings to Caltrans for this relinquishment would be more certain if legislation to authorize relinquishment followed, rather than preceded, an agreement between Caltrans and the City of San Jose. However, Caltrans does not typically enter into negotiations until legislative authority for relinquishment has been provided.