BILL ANALYSIS                                                                                                                                                                                                    

                                                                     AB 194

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          194 (Frazier)

          As Amended  September 4, 2015

          Majority vote

          |ASSEMBLY:  |      | (June 3,      |SENATE: |27-10 | (September 10,  |
          |           |62-17 |2015)          |        |      |2015)            |
          |           |      |               |        |      |                 |
          |           |      |               |        |      |                 |

          Original Committee Reference:  TRANS.

          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.  

          The Senate amendments:

          1)Combine statutes specific to Caltrans with statutes specific  
            to regional transportation agencies.

          2)Add legislative declarations regarding highway tolling.


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          3)Set forth specific eligibility criteria for the CTC to use in  
            evaluating applications for toll facilities.

          4)Limit agencies' administrative expenses related to the  
            operation of the facilities to no more than 3% of toll  

          5)Require agencies to demonstrate that projects involving the  
            conversion of high-occupancy vehicles (HOV) lanes to HOT lanes  
            will result in improved efficiency in the corridor.  

          6)Impose requirements for agreements between regional  
            transportation agencies, Caltrans, and the California Highway  

          7)Expand the lists of purposes for which toll revenue can be  

          8)Allow agencies to require the use of electronic toll  
            collection transponders.

          9)Protect statutory authority already granted to the  
            Transportation Corridors Agency related to the development and  
            operation of toll facilities in Orange County.

          10)Make enactment of this bill contingent on enactment of AB 914  
            (Brown) of the current legislative session, which authorizes  
            tolling for the San Bernardino County Transportation  

          FISCAL EFFECT:  According to the Senate Appropriations  


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          1)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  

          2)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.

          3)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 Metropolitan Transportation Authority  
            generate approximately $17 million annually.  Excess revenues  
            must be used within the corridor from which it was generated.

          COMMENTS:  HOT lanes are increasingly being implemented in  
          metropolitan areas around the state and the nation, primarily to  
          deal with increased congestion.  HOT lanes allow single-occupant  
          or lower-occupancy vehicles to use an 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.  

          This bill expands the 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.  This bill 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  


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          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.  

          This bill defines clear roles and responsibilities between  
          Caltrans and regional transportation agencies in the development  
          of toll facilities.  In cooperation with one another, this bill  
          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, this bill 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, this bill makes it clear  
          that the authority to develop toll lanes does not in any way  
          include the conversion of existing non-tolled 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.

          Analysis Prepared by:                                             
                          Janet Dawson / TRANS. / (916) 319-2093  FN:  


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