BILL ANALYSIS Ó SB 1298 Page 1 Date of Hearing: August 6, 2014 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair SB 1298 (Hernandez) - As Amended: June 17, 2014 Policy Committee: TransportationVote:12-1 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill repeals authority for the Los Angeles County Metropolitan Transportation Authority (LACMTA) to operate a value-pricing and transit development program involving high-occupancy toll (HOT) lanes on State Routes (SRs) 10 and 110 and instead provides LACMTA authority to operate the program indefinitely. The bill also recasts the program by: 1)Specifically authorizing LACMTA to continue requiring high-occupancy vehicles to have an electronic transponder for enforcement purposes. 2)Requiring revenue generated to also be used for maintenance of the state highway facilities related to the HOT lanes. 3)Allowing revenue generated beyond that needed to operate and maintain the program and facilities to also be used for improvements in the transportation corridor from where the revenue was generated. FISCAL EFFECT Caltrans indicates that the two HOT lanes have generated nearly $17 million in toll revenue in the first 10 months of operation. Under its agreement with LACMTA, Caltrans is reimbursed for its associated operational and maintenance expenditures. COMMENTS Background and Purpose . In 2008, the U.S. Department of Transportation awarded LACMTA and Caltrans a $210 million SB 1298 Page 2 federal grant to implement the LACMTA ExpressLanes Program, one of six Urban Partnership demonstration projects competitively selected to deploy innovative programs to reduce congestion through the implementation of congestion pricing. The one-year demonstration program, ratified by SB 1422 (Ridley-Thomas)/Statutes of 2008, provided for congestion pricing (by converting HOV lanes to HOT lanes) on SR 10 and SR 110, improved transit service, updated transit facilities, and demand-based parking pricing in downtown Los Angeles. Additionally, LACMTA instituted an equity plan to offer low-income Los Angeles County residents a one-time $25 toll credit and an automatic waiver of the monthly account maintenance fee. SB 1422 extended state authority for the program to January 2013, and AB 1224 (Eng)/Statutes of 2010 further extended authority until January 2015. The stated goals of LACMTA's ExpressLanes Program are to leverage pricing for sustainable change that creates travel time savings, increases trip reliability, creates cost savings, and improves air quality. LACMTA's federal Urban Partnership grant required a formal evaluation of the demonstration program by an independent firm retained by the Federal Highway Administration. Preliminary results of the evaluation indicate that the demonstration projects are generally accomplishing many of their goals and objectives. SB 1298 sets forth provisions to govern LACMTA's HOT lanes going forward after its successful demonstration period. These provisions generally mirror the original demonstration program except as described in the summary above. Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081