BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 2250
                                                                  Page  1

          Date of Hearing:   April 21, 2014

                        ASSEMBLY COMMITTEE ON TRANSPORTATION
                               Bonnie Lowenthal, Chair
                     AB 2250 (Daly) - As Amended:  April 24, 2014
           
          SUBJECT  :  California Department of Transportation:  managed  
          lanes

           SUMMARY  :  Requires any revenue generated in managed lanes to be  
          used in the corridor in which it was generated.  Specifically,  
           this bill  :  

          1)Directs the California Department of Transportation  
            (Caltrans), when entering into a cooperative agreement with a  
            local agency for managed lanes on the state highway system, to  
            ensure that any revenue generated by the lanes is expended  
            within the corridor in which the lanes are located.  

          2)Defines "managed lanes" to include high-occupancy vehicle  
            lanes (HOV), high-occupancy toll lanes (HOT), and express toll  
            lanes, each as further defined.  

           EXISTING LAW  :

          1)Authorizes HOT lane facilities in Alameda, San Diego, and  
            Santa Clara counties.  

          2)Until January 1, 2012, authorized any regional transportation  
            agency to apply to the California Transportation Commission  
            (CTC) to establish HOT lanes.  The CTC found HOT lane  
            facilities in the San Francisco Bay Area, Los Angeles County,  
            and Riverside County eligible under this provision.  

          3)Authorizes a network of toll roads in Orange County (State  
            Routes 73, 133, 241, and 261), financed by revenue bonds.  

          4)Authorizes Caltrans and regional transportation agencies,  
            until January 1, 2017, to enter into comprehensive development  
            lease agreements with public and private entities for  
            transportation projects that may charge users of those  
            projects tolls.  

           FISCAL EFFECT  :  Unknown









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           COMMENTS  :  Managed lanes-particularly HOT lanes-are increasingly  
          being implemented in metropolitan areas around the state and the  
          nation.  HOT lanes allow single-occupant or lower-occupant  
          vehicles to use an HOV lane for a fee, while maintaining free or  
          reduced travel to qualifying HOVs.  The purported benefits of  
          HOT lanes include enhanced mobility and travel options in  
          congested corridors and better usage of underutilized HOV lanes.  
           

          California is currently in the embryonic stage of what is sure  
          to be a substantial build out of HOT lanes around the state in  
          the very near future.  The Metropolitan Transportation  
          Commission, for example, is in the midst of developing a  
          regional HOT lane network that will extend for hundreds of miles  
          from Sonoma County in the north to Gilroy in the south.  How  
          these lanes are managed and operated will likely depend on  
          efforts currently underway within the Administration to develop  
          managed lane policies.  

          One of these efforts began last year as part of the Governor's  
          proposed budget.  In it, he directed the California State  
          Transportation Agency (CalSTA) to convene a workgroup consisting  
          of state and local transportation stakeholders to refine the  
          transportation infrastructure needs assessment; explore  
          long-term, pay-as-you-go funding options, and evaluate the most  
          appropriate level of government to deliver high-priority  
          investments to meet the state's infrastructure needs.  Toward  
          this end, CalSTA released in February of this year its vision  
          and interim recommendations in a report entitled California  
          Transportation Infrastructure Priorities:  Vision and Interim  
          Recommendations.  Two of the recommendations were:  

          1)Support efforts to maintain and expand the availability of  
            local funds dedicated to transportation improvements, albeit  
            with conditions; and,

          2)Work with the Legislature to expand the department's use of  
            pricing and express lanes to better manage congestion and the  
            operation of the state highway system while generating new  
            revenues for preservation and other corridor improvements.  

          Discussions with stakeholders during development of this report  
          raised concerns that regional transportation agencies may be  
          called upon by the Administration to contribute funding for the  
          state's underfunded highway maintenance program using, in part,  








                                                                  AB 2250
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          revenue generated from managed lanes.  

          Indeed, the state's highway maintenance program is underfunded.   
          Funding to pay for most maintenance and repair on the state  
          highway system comes from taxes on gasoline and diesel fuel.   
          Revenue from these taxes is declining because of reduced fuel  
          consumption and funding shortfalls in the Federal Highway Trust  
          Fund.  The projected funding available for the preservation of  
          state highway infrastructure is estimated at $1.8 billion  
          annually.  However, the need for the rehabilitation and  
          reconstruction of the state highway system is about $7 billion  
          annually.  

          Regional transportation agencies have been much more successful  
          in funding transportation improvements, primarily from  
          self-imposed sales taxes for transportation.  These self-help  
          counties contribute over $3 billion annually in sales tax  
          revenue to California's transportation systems.  Increasingly,  
          these agencies are using, or plan to use, sales tax revenues to  
          fund development of managed lanes to improve the performance of  
          major highway corridors.  Revenue generated by managed lanes is  
          used to cover costs associated with debt service, operations,  
          maintenance, and law enforcement of the managed lanes.  Any  
          excess revenue is typically returned to the corridor from which  
          it is generated by way of increased transit service or highway  
          improvements.  

          Existing law does not currently provide specific additional  
          authority to develop HOT lanes (although there is limited  
          authority to develop tolled facilities under provisions  
          authorizing public-private partnerships).  However, as the  
          Administration is currently looking to develop a broader managed  
          lane program, the author introduced this bill to ensure that the  
          state's managed lane policies and practices strike an  
          appropriate balance between the roles of Caltrans and local  
          agencies, including the need to ensure revenue generated by  
          managed lanes stays in the transportation corridor from which it  
          was generated.  This policy is consistent with the Legislature's  
          previous specific HOT lane authorizations.  

          Furthermore, managed lanes are designed primarily to improve  
          overall corridor performance through enhanced throughput and any  
          excess revenue should be used to that end.  Excess revenue from  
          managed lanes should not be used to maintain the state highway  
          system beyond the managed lanes.  If this is allowed, it would  








                                                                  AB 2250
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          likely have a chilling effect on regional transportation  
          agencies' willingness to assume financial risk associated with  
          financing construction and operation of managed lanes, to the  
          detriment of overall corridor management.  Instead, revenue  
          should be used to further improve corridor performance, either  
          through transit, technology, or operational improvements.  

          Writing in support of this bill, the Self-Help Counties  
          Coalition (SHCC) asserts that its member agencies-local county  
          transportation agencies charged with delivering voter-approved  
          transportation sales tax measures-develop managed lanes to help  
          address the state's transportation needs.  SHCC contends that  
          decisions over revenue allocation and tolling policies need to  
          rest with the agency assuming the project development,  
          construction, and financing risk and should remain available for  
          expenditure by the local agency in the respective corridor.  

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          American Council of Engineering Companies
          California Asphalt Pavement Association
          Self-Help Counties Coalition

           Opposition 
           
          None on file
           

          Analysis Prepared by  :   Janet Dawson / TRANS. / (916) 319-2093