BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1938


                                                                    Page  1





          Date of Hearing:   April 4, 2016


                        ASSEMBLY COMMITTEE ON TRANSPORTATION


                                 Jim Frazier, Chair


          AB 1938  
          (Baker) - As Introduced February 12, 2016


          SUBJECT:  Toll facilities:  Metropolitan Transportation  
          Commission


          SUMMARY:  Clarifies that the existing 1% limit on the amount of  
          money that the Bay Area Toll Authority (BATA) may contribute to  
          the Metropolitan Transportation Commission (MTC) applies to any  
          revenues derived from bridge tolls, fees, or taxes, regardless  
          of classification.  


          EXISTING LAW:  


          1)Created MTC as a local area planning agency to provide  
            comprehensive regional transportation planning for the  
            nine-county Bay Area region comprised of the City and County  
            of San Francisco and the Counties of Alameda, Contra Costa,  
            Marin, Napa, San Mateo, Santa Clara, Solano, and Sonoma.  



          2)Created BATA to administer all toll revenues for the  
            state-owned Bay Area toll bridges (except for revenues derived  
            from a $1 seismic toll surcharge).  The same board that  
            governs MTC governs BATA.  








                                                                    AB 1938


                                                                    Page  2








          3)Grants BATA broad authority, including the authority to: 



             a)   Acquire, construct, manage, maintain, lease, or operate  
               any public facility or improvements; 



             b)   Invest any money not required for its immediate  
               necessities; and,



             c)   Make contributions, up to 1% of gross annual bridge  
               revenues, to MTC in furtherance of BATA's powers, including  
               contributions of personnel services, office space,  
               overhead, and other funding necessary to carry out the  
               function of the authority.  



          FISCAL EFFECT:  Unknown


          COMMENTS:  In 2011, MTC and BATA formed a joint powers agency,  
          the Bay Area Headquarters Authority, for the purposes of  
          acquiring an office building in San Francisco to create a joint  
          regional government co-location facility.  The building is  
          initially to serve as a regional headquarters for MTC, the Bay  
          Area Air Quality Management District and the Bay Conservation  
          and Development Commission and may later house the Association  
          of Bay Area Governments and the San Francisco Bay Area  
          Conservation and Development Commission.  MTC's purchase of the  
          building caused significant controversy.  Questions were raised  
          as to why bridge toll revenues from BATA were used to purchase a  








                                                                    AB 1938


                                                                    Page  3





          building, which is much larger than the amount of office space  
          the co-locating agencies need, with the intent to rent out extra  
          space.  


          In response to concerns regarding the purchase and planned  
          moved, the Joint Legislative Audit Committee requested the State  
          Auditor to investigate the proposed move and specifically the  
          use of toll revenues to fund the purchase and improvements of  
          the office building.  The audit was released in August 2012 and  
          found, in part, that BATA's use of toll bridge revenues to  
          purchase a regional headquarters building in San Francisco is  
          likely legally permissible.  However, the audit raised concerns  
          that MTC may not realize anticipated cash flow needs sufficient  
          to repay contributed toll revenues by a range of $1.5 million to  
          $53.7 million over 30 years.  

          Ultimately, the State Auditor recommended to the Legislature  
          that, if it believes state law provides BATA too much discretion  
          over its use of toll revenues, then the Legislature should  
          consider amending state law to more narrowly define how toll  
          revenues that are not immediately needed for bridge maintenance  
          or debt service may be spent or invested.  

          In response to the Auditor's recommendation, the Legislature  
          passed, and the Governor signed, SB 613 (DeSaulnier), Chapter  
          603, Statutes of 2013, to ensure bridge tolls are not used in  
          the future to purchase property that is not "solely for the  
          management of state-owned toll bridges.  SB 613 also limited  
          BATA's authority to contribute to MTC to no more than 1% of the  
          gross annual bridge revenues, as defined.  

          In November 2014, however, BATA transferred $33 million to MTC  
          to fund construction costs of the new headquarters in San  
          Francisco, an amount greater than the 1% direct contribution  
          limit.  (One percent of annual toll bridge revenues equals about  
          $7 million.)  These funds were savings resulting from the early  
          debt retirement and were classified by BATA as "non-bridge toll  
          revenue."  Because of this classification, the contribution to  








                                                                    AB 1938


                                                                    Page  4





          MTC presumably fell outside the limit imposed by SB 613 the year  
          before.  

          The author introduced AB 1938 to close this loophole and to  
          ensure that BATA's revenues are used for their intended  
          infrastructure purposes rather than "risky real estate  
          ventures."  

          Double referral:  This bill will be referred to the Assembly  
          Appropriations Committee should it pass out of this committee.


          Previous legislation:  SB 613 (DeSaulnier) Chapter 603, Statutes  
          of 2013, placed limitations on the use of toll revenues from the  
          seven state-owned toll bridges within the jurisdiction of BATA,  
          including a prohibition from acquiring any office space or  
          facility in addition to the offices it recently acquired in San  
          Francisco and limiting BATA's authority to contribute to MTC to  
          no more than 1% of the gross annual bridge revenues.  


          AB 1384 (Baker) of 2015, an earlier iteration of this bill, was  
          scheduled to be heard by this committee in January 2016 but was  
          withdrawn by the author prior to the hearing. 


          REGISTERED SUPPORT / OPPOSITION:




          Support


          Howard Jarvis Taxpayer's Association












                                                                    AB 1938


                                                                    Page  5





          Opposition


          None on file




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