BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 613| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 613 Author: DeSaulnier (D) Amended: 4/23/13 Vote: 21 SENATE TRANSPORTATION & HOUSING COMMITTEE : 11-0, 4/30/13 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 officials. 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 CONTINUED SB 613 Page 2 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 duties. Further, existing law authorizes BATA to make contributions to MTC without limit to support BATA in its fulfillment of its responsibilities. 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. Comments Purpose . According to the author's office, this bill is necessary to clear up the purpose of toll revenues and ensure CONTINUED SB 613 Page 3 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 invested." 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, 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 revenues. CONTINUED SB 613 Page 4 FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 5/1/13) City of Oakland JA:k 5/2/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED