BILL ANALYSIS                                                                                                                                                                                                    ”

                                                                     AB 194

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          Date of Hearing:  April 29, 2015


                                 Jimmy Gomez, Chair

          194 (Frazier) - As Amended April 7, 2015

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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          This bill extends indefinitely the California Transportation  
          Commission's (CTC's) authority to approve regional  
          transportation agencies' applications to develop and operate  
          high-occupancy toll (HOT) lanes, and expands the authority to  


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          include applications submitted by Caltrans in cooperation with a  
          regional transportation agency. Specifically, this bill:  

          1)Authorizes Caltrans to apply to CTC to develop and operate HOT  
            lanes using essentially the same process previously used by  
            regional transportation agencies. 

          2)Extends indefinitely the process whereby CTC reviews and  
            approves applications from regional transportation agencies to  
            develop and operate HOT lanes.  

          3)Deletes the limitation on the number of HOT lane applications  
            (currently four) that CTC may approve.  

          4)Requires regional transportation agencies, but not Caltrans,  
            to reimburse CTC for its costs and expenses in reviewing HOT  
            lane applications.  

          5)Directs CTC to develop guidelines for the development and  
            operation of HOT lanes approved by the commission after  
            January 1, 2016, subject to the following minimum  

             a)   HOT lane facilities must be developed and operated in  
               cooperation between Caltrans and regional transportation  
               agencies and the CHP.

             b)   The applicant is responsible for establishing,  
               collecting, and administering tolls, and for paying for the  
               maintenance of the facilities from net toll revenues.

             c)   Toll revenue will be available to the applicant for  
               direct expenses, and excess revenue is to be used in the  
               corridor from which it was generated.

             d)   Development of a HOT lane shall not prevent competing  
               facilities from being constructed and the applicant shall  
               not be entitled to compensation for the adverse effects on  
               toll revenues because of competing facilities.


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          6)Provides authority for regional transportation agencies to  
            bond against toll revenues.

          7)Stipulates that none of the authority provided above allows  
            nor prohibits conversion of any existing non-tolled or  
            non-user-fee lanes into tolled or user-fee lanes, except for  
            the conversion of HOV lanes to HOT lanes.

          FISCAL EFFECT:

          Based on substantially similar legislation in 2014, the CTC will  
          need to update its guidelines for HOT lanes and implement and  
          oversee the approval process, as well as perform independent  
          financial analysis and operational analysis of HOT lane  
          applications. Ongoing costs for one senior-level position would  
          be around $190,000 (State Highway Account), and consulting costs  
          to review each application would be around $300,000. The  
          consulting costs would be reimbursed for applications by  
          regional transportation agencies.


          1)Background and Purpose. 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. This is intended to enhance mobility and  
            travel options in congested corridors and to take advantage of  
            underutilized HOV lanes.

            In 1993, the San Diego Association of Governments was first  
            granted legislative authority to operate a HOT lane, on  
            Interstate 15. AB 2032 (Dutra)/Statutes of 2004, authorized  
            HOT lane facilities in Alameda, San Diego, and Santa Clara  
            counties. With the successful implementation of these  
            programs, which were originally authorized as demonstration  


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            programs then extended indefinitely, the Legislature delegated  
            responsibility for approving toll facilities to the CTC (AB  
            1467 (Nunez)/Statutes of 2005). This delegation was limited to  
            no more than four projects.

            In 2013, the Governor directed the California State  
            Transportation Agency (CalSTA) to convene a workgroup to,  
            among other tasks, explore long-term, pay-as-you-go funding  
            options.  In February of last year, CalSTA released its vision  
            and interim recommendations, which included:  

             a)   Working 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  

             b)   Supporting efforts to maintain and expand the  
               availability of local funds dedicated to transportation  

            Consistent with this direction, SB 194 expands the potential  
            for HOT lanes in California by granting CTC broad, indefinite  
            authority to review and approve HOT lane applications  
            submitted by regional transportation agencies and by Caltrans.

          2)Related Legislation. The administration is proposing similar  
            legislation as a trailer bill to the 2015-16 Budget Act.

          3)Prior Legislation. SB 983 (HernŠndez), which was substantially  
            similar to this bill, was held on this committee's Suspense  

          Analysis Prepared by:Chuck Nicol / APPR. / (916)  


                                                                     AB 194

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