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

           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  


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          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,  


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               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.


          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.

          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  


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          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)


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           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  

          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
          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,  


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                                                                    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,  
          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

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