BILL ANALYSIS                                                                                                                                                                                                    ”



                                                                     AB 194


                                                                    Page  1


          Date of Hearing:  April 13, 2015



                        ASSEMBLY COMMITTEE ON TRANSPORTATION


                                   Frazier, Chair


          AB  
                        194 (Frazier) - As Amended April 7, 2015


          SUBJECT:  High-occupancy toll lanes

          SUMMARY:  Extends indefinitely the California Transportation  
          Commission's (CTC's) authority to authorize regional  
          transportation agencies to develop and operate high-occupancy  
          toll (HOT) lanes and expands the authority to include other toll  
          facilities; adds similar authority for the CTC to authorize the  
          California Department of Transportation (Caltrans) to develop  
          toll facilities.  Specifically,  this bill  :  

          1)Authorizes Caltrans to apply to CTC to develop and operate HOT  
            lanes and other toll facilities using essentially the same  
            process previously used by regional transportation agencies,  
            as follows:

             a)   Caltrans, in cooperation with a regional transportation  
               agency, if applicable, is authorized to apply to CTC to  
               develop and operate HOT lanes or other toll facilities,  
               including exclusive or preferential lanes for transit or  
               freight;

             b)   CTC is directed to develop guidelines to evaluate and  
               approve applications submitted by Caltrans, subject to  
               minimum requirements;

             c)   For applications submitted by Caltrans, the department  
               will develop and operate the facilities in cooperation with  
               regional transportation agencies, as applicable, and with  
               the active participation of the California Highway Patrol  







                                                                     AB 194


                                                                    Page  2


               (CHP).  Furthermore, Caltrans will be responsible for  
               establishing and collecting tolls;

             d)   Revenue generated by the facility will be available to  
               Caltrans for direct expenses related to the upkeep of the  
               toll facility; and

             e)   All excess revenue will be used in the corridor from  
               which it was generated pursuant to an expenditure plan  
               developed by Caltrans and approved by CTC.  

          2)Extends indefinitely the process whereby CTC reviews and  
            approves applications from regional transportation agencies,  
            in cooperation with Caltrans, to develop and operate HOT lanes  
            and other toll facilities, including preferential lanes for  
            transit and freight.  

          3)Deletes the limitation on the number (four) of HOT lane  
            applications CTC may approve, thereby granting open-ended  
            authority to approve applications.  

          4)Directs a regional transportation agency to reimburse CTC for  
            its costs and expenses in reviewing a HOT lane application.  

          5)Directs CTC to develop guidelines to evaluate and approve  
            applications submitted by regional transportation agencies for  
            the development and operation of HOT lanes and other toll  
            facilities, subject to the following minimum requirements:

             a)   Toll facilities must be developed and operated in  
               cooperation with Caltrans and with the active participation  
               of the CHP;

             b)   Regional transportation agencies will be responsible for  
               establishing, collecting, and administering tolls and for  
               paying for the maintenance of the facilities, pursuant to  
               an agreement with Caltrans;

             c)   Toll revenue will be available to the regional  
               transportation agency for direct expenses related to the  
               upkeep of the facility;

             d)   Excess revenue will be used in the corridor from which  







                                                                     AB 194


                                                                    Page  3


               it was generated pursuant to an expenditure plan adopted by  
               the regional transportation agency. 

          6)Explicitly provides that the authority being granted to  
            develop toll facilities does not prevent other agencies from  
            constructing facilities that compete with a toll facility.  

          7)Authorizes regional transportation agencies to bond against  
            toll revenue.  

          8)Requires a regional transportation agency to give a local  
            transportation agency within its jurisdiction the option to  
            enter into an agreement to govern a toll project authorized  
            under provisions of this bill; authorizes a local  
            transportation agency to be the lead agency for constructing  
            these projects.

          9)Defines regional transportation agencies.

          10)Explicitly provides that nothing in the bill authorizes or  
            prohibits the conversion of any existing nontoll or  
            nonuser-fee lane into tolled or user-fee lanes, except that a  
            high-occupancy vehicle lane may be converted into a HOT lane. 

          EXISTING LAW: 
          
          1)Specifically 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 CTC for authority to develop and operate  
            HOT lanes.  

          3)Limited CTC to approving no more than four applications:  two  
            in northern California and two in southern California.  (CTC  
            approved HOT lane facilities in the San Francisco Bay Area,  
            Los Angeles County, and Riverside County under this  
            provision.)  
          
          FISCAL EFFECT:   Unknown
          
          COMMENTS:  HOT lanes are increasingly being implemented in  
          metropolitan areas around the state and the nation, primarily to  







                                                                     AB 194


                                                                    Page  4


          deal with increased congestion.  HOT lanes allow single-occupant  
          or lower-occupancy vehicles to use a high-occupancy vehicle  
          (HOV) lane for a fee, while maintaining free or reduced travel  
          to qualifying HOVs.  The acknowledged benefits of HOT lanes  
          include enhanced mobility and travel options in congested  
          corridors and better usage of underutilized HOV lanes.  
          The San Diego Association of Governments (SANDAG) was the first  
          agency to be granted authority to operate a HOT lane, on  
          Interstate 15 [AB 713 (Goldsmith), Chapter 962, Statutes of  
          1993].  Subsequently, AB 2032 (Dutra), Chapter 418, Statutes of  
          2004, authorized HOT lane facilities in Alameda, San Diego, and  
          Santa Clara counties.  With the successful implementation of  
          these programs (which were all originally authorized as  
          demonstration programs then later extended indefinitely), the  
          Legislature delegated responsibility for approving toll  
          facilities under certain conditions to the CTC [AB 1467 (Nunez),  
          Chapter 32, Statutes of 2005] until January 1, 2012.  This  
          delegation was limited to no more than four projects total.  

          Although to date only a handful of regional transportation  
          agencies have authority to operate HOT lanes and only on a  
          limited number of corridors, it is clear that California is in  
          the embryonic stage of what promises to be a substantial  
          build-out of toll facilities in the very near future.  In fact,  
          as part of the Governor's proposed budget in 2013, the Governor  
          directed the California State Transportation Agency (CalSTA) to  
          convene a workgroup consisting of state and local transportation  
          stakeholders to, among other tasks, explore long-term,  
          pay-as-you-go funding options.  As a result, CalSTA released in  
          February of last year its vision and interim recommendations in  
          a report entitled California Transportation Infrastructure  
          Priorities:  Vision and Interim Recommendations, commonly  
          referred to as CTIP.  Two of the recommendations were:  

          1)Work with the Legislature to expand Caltrans' 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.  

          2)Support efforts to maintain and expand the availability of  
            local funds dedicated to transportation improvements.  

          AB 194 is consistent with this direction.  It expands the  







                                                                     AB 194


                                                                    Page  5


          potential for toll facilities in California by granting CTC  
          broad, indefinite authority to review and approve toll facility  
          applications submitted by regional transportation agencies and  
          by Caltrans.  AB 194 builds on the authority previously granted  
          to regional transportation agencies and is consistent with  
          protocols that have evolved to guide development of the HOT lane  
          programs, such as the requirement that any excess revenue be  
          used in the corridor in which it was generated.

          Regional transportation agencies up and down the state, as well  
          as Caltrans, struggle with meeting the challenges of increasing  
          traffic congestion and decreasing transportation revenue.   
          Although HOT lanes should be primarily a congestion management  
          tool, they may have the added benefit of generating net revenue  
          that can be put back into the corridor from which it was  
          generated for additional improvements or other benefits.  Given  
          the success of multiple HOT lane demonstration programs to date,  
          it is appropriate now to provide an administrative process  
          whereby regional transportation agencies and Caltrans can work  
          together with CTC to develop and operate toll facilities.  

          AB 194 defines clear roles and responsibilities between Caltrans  
          and regional transportation agencies in the development of toll  
          facilities.  In cooperation with one another, AB 194  
          appropriately places control of a facility's tolling policy and  
          toll revenue with whatever agency is bearing the responsibility  
          and financial risk to develop the program, under prescribed  
          requirements.  Furthermore, AB 194 includes provisions that  
          ensure that not only do Caltrans and regional transportation  
          agencies work cooperatively but that a regional transportation  
          agency and local transportation agencies within its jurisdiction  
          work cooperatively as well.  Finally, AB 194 makes it clear that  
          the authority to develop toll lanes does not in any way include  
          the conversion of existing nontolled or nonuser-fee lanes into  
          tolled or user-fee lanes, either by authorizing them or  
          prohibiting them.  Any efforts to implement such a conversion  
          will require separate statutory authority.

          Writing in support of the bill, the California Pavement  
          Association asserts that "HOT lanes have proven to be an  
          important tool in the transportation management toolbox,  
          maximizing the utilization of selected corridors while helping  
          traffic engineers manage peak traffic flow and returning badly  







                                                                     AB 194


                                                                    Page  6


          needed dollars to depleted transportation funds designated to  
          the maintenance of the system."  Furthermore, the bill's  
          sponsor, the Self-Help Counties Coalition suggests that "AB 194  
          rightfully requires that revenue allocation and tolling policies  
          should rest with the agency assuming the project development,  
          construction, and financing risk."

          Previous legislation:  AB 2250 (Daly), Chapter 500, Statutes of  
          2014, requires any revenue generated in managed lanes to be used  
          in the corridor in which it was generated.

          SB 983 (HernŠndez) of 2014 was similar to this bill.  SB 983  
          passed out of this committee but was held in the Assembly  
          Appropriations Committee on the suspense file.

          SB 1298 (HernŠndez), Chapter 531, Statutes of 2014, repealed and  
          recast specific authority for the Los Angeles County  
          Metropolitan Transportation Authority to operate a value-pricing  
          and transit development program, including HOT lanes on State  
          Routes 10 and 110.  

          AB 1467 (Nunez), Chapter 32, Statutes of 2005, originally  
          granted authority to the CTC to review regional transportation  
          agencies' applications for HOT lanes, for up to four projects,  
          until January 1, 2012.  

          AB 2032 (Dutra), Chapter 418, Statutes of 2004, authorized HOT  
          lane facilities in Alameda, 
          San Diego, and Santa Clara counties.  

          AB 713 (Goldsmith), Chapter 962, Statutes of 1993, granted  
          SANDAG authority to operate a HOT lane on Interstate 15.

          REGISTERED SUPPORT / OPPOSITION:
          
          Support

          Self-Help Counties Coalition (Sponsor)
          American Council of Engineering Companies of California
          Bay Area Council
          California Asphalt Pavement Association
          California Transportation Commission








                                                                     AB 194


                                                                    Page  7


          Opposition
          
          None on file
          
          Analysis Prepared  
          by:              Janet Dawson/TRANS./(916) 319-2093