BILL ANALYSIS                                                                                                                                                                                                    


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                                    THIRD READING

          Bill No:  SB 613
          Author:   DeSaulnier (D)
          Amended:  4/23/13
          Vote:     21

          AYES:  DeSaulnier, Gaines, Beall, Cannella, Galgiani, Hueso,  
            Lara, Liu, Pavley, Roth, Wyland

           SUBJECT  :    Restricting the use of Bay Area toll bridge revenues

           SOURCE  :     Author

           DIGEST  :    This bill prohibits the Bay Area Toll Authority  
          (BATA) from purchasing or otherwise acquiring, directly or  
          indirectly, office space and office facilities in addition to  
          the office space and office facilities located at 390 Main  
          Street in San Francisco.  

           ANALYSIS :    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  

          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  


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          improvement and rehabilitation of the bridges. 

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

           1. Entering into contracts;

           2. Employing agents or employees;

           3. Acquiring, constructing, leasing or operating any public  
             facility or improvements;

           4. Suing or being sued in its own name;

           5. Issuing bonds or other obligations of debt;

           6. Receiving funds from federal or state agencies; and

           7. Investing any money not immediately required to fulfill its  

          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:

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

           2. Restricts BATA's contributions to MTC to no more than 1% of  
             the gross annual bridge revenues.

           3. Allows BATA to loan up to an additional 1% of the gross  
             annual bridge revenues beyond its contribution to MTC, to be  
             repaid with same interest rate that applies for toll bridge  
             revenue bonds of the same duration.

           Purpose  .  According to the author's office, this bill is  
          necessary to clear up the purpose of toll revenues and ensure  



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          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's office 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  

           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  

          In spring of 2012, in response to legislative concerns regarding  
          the use of toll revenues for the planned relocation, the Joint  
          Legislative Audit Committee requested that the 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 (LC) 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.  LC  
          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, LC believes the purchase of the building  
          using toll revenues may be an impermissible use of those  



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           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No   Local:  

           SUPPORT  :   (Verified  5/1/13)

          City of Oakland

          JA:k  5/2/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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