BILL ANALYSIS                                                                                                                                                                                                    

          SENATOR MARK DESAULNIER, CHAIRMAN              AUTHOR:  desaulnier
                                                         VERSION: 4/23/13
          Analysis by:  Eric Thronson                    FISCAL:  no
          Hearing date:  April 30, 2013


          Restricting the use of Bay Area toll bridge revenues


          This bill restricts the use of toll revenues in the San  
          Francisco Bay Area.


          The Metropolitan Transportation Commission (MTC) is the  
          transportation planning, coordinating and financing agency for  
          the nine-county San Francisco Bay Area.  MTC is governed by a  
          19-member policy board primarily comprised of local elected  

          The Bay Area Toll Authority (BATA) is an independent legal  
          entity governed by the board of MTC.  BATA manages and invests  
          revenues from all tolls levied on the state-owned toll bridges  
          in the Bay Area.  As part of these activities, BATA funds the  
          administration of day-to-day operations and maintenance, as well  
          as the long-term capital improvement and rehabilitation of the  

          Existing law authorizes BATA to do all acts necessary for the  
          exercise of its power, including, but not limited to:

                 Entering into contracts;
                 Employing agents or employees;
                 Acquiring, constructing, leasing or operating any public  
               facility or improvements;
                 Suing or being sued in its own name;
                 Issuing bonds or other obligations of debt;
                 Receiving funds from federal or state agencies; and
                 Investing any money not immediately required to fulfill  
               its duties.


          SB 613 (DESAULNIER)                                    Page 2


          Further, existing law authorizes BATA to make contributions to  
          MTC without limit to support BATA in its fulfillment of its  

           This bill  restricts BATA's use of toll revenues.  Specifically,  
          this bill:

           Restricts BATA from purchasing or otherwise acquiring any  
            office space in addition to the facilities located at 390 Main  
            Street in San Francisco.

           Restricts BATA's contributions to MTC to no more than one  
            percent of the gross annual bridge revenues.
           Allows BATA to loan up to an additional one percent of the  
            gross annual bridge revenues beyond its contribution to MTC,  
            to be repaid with interest.

           1.Purpose  .  According to the author, this bill is necessary to  
            clear up the purpose of toll revenues and ensure that these  
            revenues are not used in the future to purchase property that  
            is not "solely for the management of state-owned toll  
            bridges."  With the recent use of toll revenues to purchase a  
            building much larger than the amount of office space necessary  
            to house MTC and BATA, the author questions why MTC is  
            entering the real estate business and becoming a commercial  
            landlord.  This bill enacts the following recommendation from  
            the State Auditor:  "If the Legislature believes state law  
            provides the toll authority with too much discretion over its  
            use of toll revenues, it should consider amending state law to  
            more narrowly define how toll revenues that are not  
            immediately needed for bridge maintenance or debt service may  
            be spent or invested."

           2.The building controversy  .  In 2011, MTC and BATA formed a  
            joint powers agency for the purposes of acquiring an office  
            building in San Francisco to create a joint regional  
            government co-location facility.  The building is initially to  
            serve as a regional headquarters for MTC, the Bay Area Air  
            Quality Management District, and the Bay Conservation and  
            Development Commission.  It may later house the Association of  
            Bay Area Governments.  

            In spring of 2012, in response to legislative concerns  
            regarding the use of toll revenues for the planned relocation,  


          SB 613 (DESAULNIER)                                    Page 3


            the Joint Legislative Audit Committee requested that the State  
            Auditor investigate the purchase of the building and  
            specifically the use of toll revenues to fund the proposed  
            move.  The Auditor concluded that MTC's decision to acquire a  
            new headquarters building likely was legally permissible.

            At the same time, upon request of the author of this bill,  
            Legislative Counsel opined that the information regarding the  
            purchase of the building could serve as a basis for judicial  
            determination that the use of the bridge toll revenues to fund  
            the purchase of the new building was not authorized by law.   
            Legislative Counsel based this opinion, at least in part, on  
            the fact that MTC and BATA plan to occupy less than half of  
            the planned office space and, instead, use the building  
            primarily for operation of a regional governance co-location  
            facility.  As MTC and BATA do not have legislative authority  
            to provide a regional governance co-location facility,  
            Legislative Counsel believes the purchase of the building  
            using toll revenues may be an impermissible use of those  

            This bill removes the ambiguity of existing law and restricts  
            the future use of toll revenues in an effort to resolve this  
            controversy.  While enacting this bill will not affect the  
            purchase of the new MTC/BATA headquarters, it will limit the  
            use of toll revenues for the purchase of future office  

          POSITIONS:  (Communicated to the committee before noon on  
          Wednesday,                                             April 24,  

               SUPPORT:  None received.

               OPPOSED:  None received.