BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 194| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 194 Author: Frazier (D), et al. Amended: 9/4/15 in Senate Vote: 21 SENATE TRANS. & HOUSING COMMITTEE: 10-0, 7/14/15 AYES: Beall, Cannella, Allen, Gaines, Galgiani, Leyva, McGuire, Mendoza, Roth, Wieckowski NO VOTE RECORDED: Bates SENATE APPROPRIATIONS COMMITTEE: 5-1, 8/27/15 AYES: Lara, Beall, Hill, Leyva, Mendoza NOES: Bates NO VOTE RECORDED: Nielsen ASSEMBLY FLOOR: 62-17, 6/3/15 - See last page for vote SUBJECT: High-occupancy toll lanes SOURCE: Author DIGEST: This bill authorizes regional transportation agencies and the California Department of Transportation (Caltrans) to develop high-occupancy toll (HOT) lanes and other toll facilities without limitation. Senate Floor Amendments of 9/4/15 require that a toll facility sponsored by a regional transportation agency shall develop a plan for expending revenues in excess of that needed to fund the cost of the toll facility in consultation with Caltrans. For toll facilities sponsored by Caltrans, it shall develop a plan for expending excess revenues in consultation with the regional AB 194 Page 2 transportation agency. The amendments also make enactment of this bill contingent on the enactment of AB 914 (Brown, 2015), a bill which authorizes the San Bernardino County Transportation Commission to create HOT lanes or other toll facilities. ANALYSIS: Existing law limits the number of HOT lane projects to four, two each in Northern and Southern California. This bill: 1)Authorizes regional transportation agencies and Caltrans to build and operate HOT lanes or other toll facilities without limit, subject to review and approval by the California Transportation Commission (CTC). 2)Requires the CTC to hold at least one public hearing before approving a toll facility. 3)Requires the CTC to develop eligibility criteria, which include a demonstration that the proposed facility will improve the corridor's performance, that the proposed facility is consistent with the regional transportation plan, and evidence of cooperation between Caltrans and the regional transportation authority. 4)States that the sponsor of new toll facilities shall: a) Enter into an agreement with Caltrans addressing all matters related to the design, construction, maintenance, and operation of the facility; b) Be responsible for reimbursing Caltrans for its costs related to the toll facility; c) Be responsible for establishing, collecting, and administering tolls; and d) Ensure that the revenues generated from the operation of the facilities shall pay for the direct expense of operating the facilities, including the repayment of debt; that administrative expenses are limited to 3%; and that all remaining revenue be used in the corridor in which it is was generated pursuant to an expenditure plan adopted by the governing board of the regional transportation agency, AB 194 Page 3 or by the CTC if the sponsor is Caltrans. 5)Authorizes regional transportation agencies to issue bonds to finance the construction of toll facilities. Such bonds shall be tax-free and not covered by the full faith and credit of the state. Background HOT lanes are lanes where carpools can travel for free or at a reduced charge and other vehicles may travel upon payment of a higher charge, which varies based on congestion. An agency operating a HOT lane essentially sells excess capacity in undersubscribed high-occupancy vehicle lanes to single-occupant vehicle drivers by charging a toll. HOT lanes typically employ a pricing method known as value pricing or congestion pricing. Under this scheme, the amount of the toll varies in accordance with the level of congestion in that particular lane, such that as congestion increases, so too will the toll amount. As the price to use the lane goes up, fewer people presumably will choose to use it, thereby reducing demand for the facility and maintaining free-flow travel conditions. With this mechanism, an agency can ensure that operation of the toll facility does not undermine the intended benefits of promoting carpooling with access to the faster high-occupancy vehicle lane. HOT lanes are increasingly being implemented in metropolitan areas around the state and nation. Transportation agencies have been hot for HOT lanes for years, viewing them as a way to more efficiently use freeway capacity and to help fund expansion of high-occupancy vehicle, or carpool, lanes and transit service. The California Transportation Agency has established a goal of expanding the use of HOT lanes. [California Transportation Infrastructure Priorities: Vision and Interim Recommendations, California State Transportation Agency; February 5, 2014.] The counties of Los Angeles, Orange, San Diego, Santa Clara, and Alameda all have existing HOT lanes. Comments Purpose. According to the author, it is clear that California is in the embryonic stage of a substantial build-out of HOT lanes. Regional transportation agencies, as well as Caltrans, struggle with meeting the challenges of increasing traffic AB 194 Page 4 congestion and decreasing transportation revenue. 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 the CTC to develop and operate HOT lane facilities. No more bills needed. The primary purpose of this bill is to make the decision of allowing a toll lane or toll road administrative, through the CTC, rather than legislative. Recent California legislative history has supported toll lanes and roads; they are no longer unique or unusual. All of the bridges across San Francisco Bay are toll bridges, five state routes in Southern California are toll only, and HOT lanes are widespread throughout the state. As tolling becomes more widespread, questions about social equity arise. While there may well be economic justification for allowing drivers to buy their way into the carpool lane, resentment from those who can't afford to pay is understandable, given that all drivers pay gas taxes, registration fees, and vehicle license fees. This bill does not direct any of the toll revenue to improving public transit service or assisting disadvantaged communities. Those decisions are left to the regional transportation agencies. Supporters argue that HOT lanes generate revenue that can be used to benefit those who don't use the lanes. In Los Angeles, tolls from the HOT lanes on State Routes 10 and 110 have generated tens of millions of dollars for the Los Angeles Metro, which has used that funding to increase bus service. FISCAL EFFECT: Appropriation: Yes Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee: CTC costs of approximately $200,000 per application for due diligence reviews and approvals of project proposals. Costs to review proposals submitted by regional transportation agencies will be reimbursed by the applicant, but CTC would need additional resources for each proposal submitted by Caltrans. (State Highway Account) AB 194 Page 5 Unknown costs to Caltrans and regional transportation agencies to develop and operate HOT lanes. This bill authorizes Caltrans and regional transportation agencies to retain up to 3% of toll revenues for administrative expenses related to the operation of the facilities. Unknown toll revenue gains for Caltrans and regional transportation agencies related to the operation of HOT lanes and other toll facilities. For illustrative purposes, HOT lanes administered by the Metropolitan Transportation Authority generate approximately $17 million annually. Excess revenue must be used within the corridor from which it was generated. SUPPORT: (Verified9/8/15) American Council of Engineering Companies of California American Society of Civil Engineers Bay Area Council California Asphalt Pavement Association California Association of Councils of Governments California Transit Association California Transportation Commission City/County Association of Governments of San Mateo County HNTB Los Angeles County Metropolitan Transportation Authority Metropolitan Transportation Commission Santa Clara Valley Transportation Authority Self-Help Counties Coalition OPPOSITION: (Verified9/8/15) None received ASSEMBLY FLOOR: 62-17, 6/3/15 AYES: Achadjian, Alejo, Baker, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gipson, Gomez, Gonzalez, Gordon, Gray, AB 194 Page 6 Roger Hernández, Holden, Irwin, Jones-Sawyer, Lackey, Linder, Lopez, Low, Maienschein, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Waldron, Weber, Williams, Wood, Atkins NOES: Travis Allen, Bigelow, Brough, Dahle, Beth Gaines, Gallagher, Gatto, Grove, Hadley, Harper, Jones, Kim, Levine, Mathis, Patterson, Wagner, Wilk NO VOTE RECORDED: Chang Prepared by:Randy Chinn / T. & H. / (916) 651-4121 9/8/15 16:19:45 **** END ****