BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 620


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          Date of Hearing:   April 27, 2015


                        ASSEMBLY COMMITTEE ON TRANSPORTATION


                                 Jim Frazier, Chair


          AB 620  
          (Roger Hernández) - As Introduced February 24, 2015


          SUBJECT:  High-occupancy toll lanes:  exemptions from tolls


          SUMMARY:  Expands the low-income assistance program associated  
          with the Los Angeles County Metropolitan Transportation  
          Authority's (Metro's) value-pricing and transit development  
          program (Express Lanes Program).  Specifically, this bill:  


          1)Expands the requirement that Metro work with low-income  
            commuters in communities affected by the Express Lanes Program  
            in the Interstate 10 (I-10) and Interstate 110 (I-110)  
            corridors to require that mitigation measures (such as reduced  
            toll charges and toll charges for transit users) be extended  
            also to moderate-income commuters and transit users; refers to  
            provisions within the state's housing and home finance laws to  
            define "moderate- and low-income."  


          2)Requires Metro to exempt commuters from Express Lanes toll  
            charges if they meet the eligibility requirements for any one  
            of the following public assistance programs:


             a)   California Work Opportunity and Responsibility to Kids  
               Act (CalWORKS Program);








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             b)   State Supplementary Program for Aged, Blind and  
               Disabled;


             c)   County Aid Relief to Indigents;


             d)   CalFresh (a.k.a. Food Stamp Program);


             e)   Food Assistance Program for Legal Immigrants; or


             f)   Cash Assistance Program for Aged, Blind, and Disabled  
               Legal Immigrants.


          EXISTING LAW:  


          1)Authorizes Metro to conduct, administer, and operate the  
            Express Lanes Program on I-10 and I-110 in Los Angeles County.  



          2)Requires Metro, when implementing the program, to work with  
            affected communities in the two highway corridors and provide  
            mitigation measures for low-income commuters, including  
            reduced toll charges and toll credits for transit users. 


          3)Requires that participants in the low-income assistance  
            program meet eligibility requirements for any one of several  
            specific public assistance programs.


          4)Requires Metro and the California Department of Transportation  








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            (Caltrans) to report to the Legislature by January 15, 2015,  
            on the results of the demonstration program.





          FISCAL EFFECT:  None


          COMMENTS:   SB 1422 (Ridley-Thomas), Chapter 547, Statutes of  
          2008, authorized Metro, until January 15, 2013, to develop and  
          operate a value-pricing and transit development demonstration  
          program involving HOT lanes, referred to as Express Lanes.  The  
          program was primarily funded with a $210 million congestion  
          reduction demonstration grant from the U.S. Department of  
          Transportation.  Tolling began on November 10, 2012, on the  
          I-110 and February 23, 2013, on the I-10.  AB 1224 (Eng),  
          Chapter 441, Statutes of 2010, extended the sunset and reporting  
          dates for the Express Lanes program from January 2013 to January  
          2015, and SB 1298 (Hernández), Chapter 531, Statutes of 2013,  
          recast the program and extended it indefinitely.






          According to Metro, its low-income assistance program is the  
          first in the nation to address equity concerns on toll lane  
          projects.  Metro supported provisions in enabling legislation  
          that require it to work with communities affected by the Express  
          Lanes Program.  The low-income assistance program was developed  
          by an independent consultant through extensive outreach with  
          affected communities and designed to reflect community concerns.  
           Metro reports that the program was subsequently reviewed and  
          endorsed by a peer review team of individuals representing the  
          Environmental Defense Fund, the University of California, Los  
          Angeles, and the University of Southern California.  








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          Eligibility criteria for the low-income assistance program  
          require that the applicant be a Los Angeles County resident with  
          an annual household income at or below two times the federal  
          poverty level (i.e., $39,060 in 2013).  Qualifying residents  
          receive a $25 credit when they set up an account, which can be  
          applied to either the transponder deposit or pre-paid toll  
          deposit.  The monthly account maintenance fee is waived.  As of  
          December 31, 2014, 5,740 households were enrolled in the  
          low-income assistance program.  Under AB 620, commuters whose  
          annual income is roughly $75,000 or less would be eligible for  
          reduced toll charges and toll credits for transit.


          Numerous economic studies show that the biggest burden on family  
          incomes is the cost of housing and transportation.  For example,  
          a report by Smart Growth America found that transportation is  
          the second largest expense for American households, costing more  
          than food, clothing, and health care.  Furthermore, it has been  
          documented that the working poor spend a fraction of what other  
          workers spend on commuting expenses, but those costs amounted to  
          a significantly higher proportion of their income.   
          Consequently, concerns about the impact that Metro's Express  
          Lanes Program could have on low-income families are well  
          founded.  






          Although studies indicate that low-income commuters heartily  
          support the Express Lanes Program, data show that they do not  
          use the toll lanes in large numbers.  In fact, Metro reports  
          that participants in its low-income assistance program made up  
          only 1.2% of the tolled lane usage. Arguably, these numbers  
          support the author's belief that Metro's low-income assistance  








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          program is underperforming.  Of the nearly 200,000 Express Lanes  
          account holders, just over 4,000 are enrolled in the low-income  
          assistance program.  



          In 2008, when congestion pricing was in its infancy in the  
          United States, the Federal Highway Administration (FHWA)  
          published a primer entitled, "Income-Based Equity Impact of  
          Congestion Pricing."  According to the report, a well-designed  
          value-pricing program like Express Lanes can be less burdensome  
          to low-income citizens than current systems of highway financing  
          that are based on regressive taxes, such as car registration  
          fees, sales taxes, and the gas tax.  The report found that,  
          while fewer low-income drivers use express lanes than those in  
          other income categories, they are as likely to approve of the  
          lanes as drivers with higher incomes.   This is not surprising  
          given that studies have shown that lower income individuals face  
          the greatest financial harm when they are denied adequate travel  
          choices.  Lack of choice to pay a toll in exchange for reliable  
          travel times can result in lost wages or late fees for daycare,  
          for example.  



          AB 620 requires Metro to expand its low-income program for  
          commuters to include moderate-income commuters and transit users  
          as well.  Furthermore, AB 620 would require Metro to offer  
          toll-free passage to commuters that are eligible for any of the  
          above-listed public assistance programs.



          Writing in opposition to the bill, Metro argues that the overall  
          goal of the Express Lanes is to improve mobility for commuters  
          in the two corridors.  Metro is concerned that AB 620 could  
          allow a significantly larger number of vehicles into the Express  
          Lanes and could obviate the usefulness of tolling as a  
          congestion management tool.  Furthermore, Metro argues that AB  








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          620 could have far-reaching, unintended consequences by reducing  
          the toll revenues used to operate enhanced transit services in  
          the corridor.  Finally, Metro is concerned that AB 620 would  
          significantly impair its ability to secure the financing  
          necessary to extend or implement additional Express Lanes, among  
          other transportation improvements.


          Committee concerns:  More can and should be done to reduce the  
          disproportionate impact that transportation costs have on  
          low-income families, but AB 620 goes too far.  Allowing  
          significantly more commuters into the lanes for toll-free or  
          reduce-rate passage diminishes the ability of the Express Lanes  
          Program to manage congestion and reduces revenue from  
          toll-paying commuters.  This is a "no-win" scenario.  The lanes  
          will be congested and transit service in the corridors will be  
          harmed.  





          Previous legislation:  SB 1298 (Hernández), Chapter 531,  
          Statutes of 2013, recast the program and extended it  
          indefinitely.

          AB 1224 (Eng),Chapter 441, Statutes of 2010, extended the sunset  
          and reporting dates for the Express Lanes program from January  
          2013 to January 2015.



          SB 1422 (Ridley-Thomas), Chapter 547, Statutes of 2008,  
          authorized, until January 15, 2013, Metro to operate the Express  
          Lanes Program. 


          









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          REGISTERED SUPPORT / OPPOSITION:




          Support


          None on file




          Opposition


          Los Angeles County Metropolitan Transportation Authority




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