BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 254 (Allen) - State highways:  relinquishment
          
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          |Version: April 22, 2015         |Policy Vote: T. & H. 11 - 0     |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: May 28, 2015      |Consultant: Mark McKenzie       |
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          SUSPENSE FILE. AS AMENDED.







          Bill  
          Summary:  SB 254 would establish procedures for the  
          administrative relinquishment of state highway segments that do  
          not serve an interregional purpose.


          Fiscal Impact (as approved on May 28,  
          2015):  
           Unknown costs to Department of Transportation (Caltrans), from  
            minor to low millions for each relinquishment, depending on  
            the terms of agreements with local agencies.  Any one-time  
            costs for each relinquishment would be offset in future years  
            due to avoided maintenance costs on the relinquished segment.  
            (State Highway Account)  See staff comments.








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           Caltrans staffing costs:  approximately $90,000 in ongoing  
            staff time to develop additional cost-benefit analyses, and an  
            additional $96,000 in 2016-17 and 2017-18 to conduct a  
            thorough assessment of relinquishment candidates and estimate  
            future maintenance costs.  These limited-term costs may be  
            extended depending on requirements specified in guidelines.  
            (State Highway Account)

           California Transportation Commission (CTC) costs of  
            approximately $120,000 annually to adopt guidelines, review  
            and evaluate more relinquishment proposals, and adopt those  
            proposals in a public hearing. (State Highway Account)


          Background:  Existing law identifies the California state highway system  
          (SHS) through a description of segments of the state's regional  
          and interregional roads that are owned and operated by Caltrans.  
           Existing law requires the CTC to relinquish to cities and  
          counties segments of state highways that have been deleted from  
          the SHS by legislative enactment.  The CTC is prohibited from  
          relinquishing a segment of state highway to a city or county  
          that has been superseded by relocation until Caltrans has placed  
          the highway into a "state of good repair," which includes litter  
          removal, weed control, and tree and shrub trimming, but does not  
          obligate Caltrans for widening, new construction, or major  
          reconstruction, unless directed by the CTC. 

          The Legislature has provided statutory authorization to CTC to  
          relinquish a number of state highway segments to local  
          jurisdictions under specified conditions.  Relinquishment  
          provides the recipient agency with greater control over local  
          transportation projects and relieves Caltrans of any further  
          responsibility to improve, maintain, or repair infrastructure  
          related to the relinquished segment of state highway.   
          Generally, relinquishments are subject to negotiated agreements  
          between Caltrans and a local jurisdiction seeking control of a  
          local highway segment.  CTC must determine that the agreement  
          for relinquishment, which has typically involved a one-time  
          payment of State Highway Account funds to the local entity, is  
          in the best interests of the state.  The actual amounts vary for  
          each relinquished highway segment and are determined by a  
          negotiation of terms and conditions between Caltrans and the  
          local jurisdiction, but those costs are based upon a  
          cost-benefit analysis covering a ten-year period, which is  








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          included in a Project Scope Summary Report prepared for  
          legislative relinquishments.  Historically, Caltrans has  
          annually set aside $12 million of State Highway Operations and  
          Protection Plan (SHOPP) funding for rehabilitation necessary for  
          highway relinquishments.  In recent years, however, Caltrans has  
          not set aside funding to rehabilitate relinquished highways.  


          Proposed Law:  
            SB 254 would establish procedures for the relinquishment of  
          portions of the state highway system without explicit  
          legislative authorization.  Specifically, this bill would:
           Authorize CTC to relinquish a portion of a state highway to a  
            city or county, if the segment is within the boundaries of the  
            local agency, and the segment is not an interstate highway or  
            a part of the interregional road system, as specified.  
           Prohibit CTC from relinquishing a segment of state highway  
            until Caltrans has entered into an agreement with the  
            recipient agency and has placed the highway in a state of good  
            repair.
           Require Caltrans, by April 1, 2016, and every two years  
            thereafter, to report to CTC on which highway segments  
            primarily serve regional travel rather than facilitating  
            interregional movement of people and goods.  From this report  
            Caltrans must identify which routes and segments are the best  
            candidates for future relinquishment and include aggregate  
            costs of future maintenance and preservation of each route.   
            CTC must develop guidelines for this report in consultation  
            with Caltrans.
           Require CTC to compile a list of relinquished highway and  
            segments in the previous 12 months and include this  
            information in its annual report to the Legislature.




          Related  
          Legislation:  SB 461 (Hernandez), currently on this Committee's  
          Suspense File, would authorize the CTC to relinquish a specified  
          segment of State Highway Route 164 to the County of Los Angeles.


          Staff  
          Comments:  Staff notes that the Governor has proposed budget  








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          trailer bill language this year that is intended to broaden and  
          streamline the state process for relinquishing state highway  
          routes that are deemed to no longer serve an interregional  
          purpose, and instead operate primarily as regional or local  
          routes.  The Senate Budget Subcommittee #2 rejected the trailer  
          bill proposal at its hearing on April 16, 2015, without  
          prejudice, so that it could be considered instead by the Senate  
          Transportation and Housing Committee.  SB 254 is the vehicle  
          containing a legislative proposal for relinquishments in  
          response to the Subcommittee's action.
          Existing law only requires Caltrans to bring a segment of  
          highway proposed for relinquishment up to a "state of good  
          repair" if the segment has been superseded by relocation.   
          Caltrans may at times find it to be in the state's best interest  
          to negotiate with the local agency a level of work or  
          contribution of funds to facilitate the relinquishment to ensure  
          that the facility is safe and drivable, but the department is  
          under no statutory obligation to bring the roadway up to a state  
          of good repair for relinquishments by legislative enactment.   
          This bill would prohibit CTC from relinquishing any segment of  
          state highway until Caltrans has entered into an agreement with  
          the recipient agency and placed the highway in a state of good  
          repair.  This new requirement, combined with the likelihood that  
          there will likely be an increase in highway relinquishments due  
          to the streamlined process, will result in the expenditure of  
          additional State Highway Account maintenance funds, potentially  
          in the millions annually.  There would likely be reductions of  
          payments to local agencies in the negotiated agreements as a  
          result of the mandatory maintenance expenditures, which would at  
          least partially offset those additional maintenance costs.  In  
          either case, relinquishing a segment of state highway will  
          eventually result in long-term savings in terms of reduced  
          maintenance and liability.


          Committee amendments (as adopted on May 28, 2015): Committee  
          amendments would remove the requirement that Caltrans bring a  
          segment of highway up to a state of good repair prior to  
          relinquishment, unless the relinquished segment has been  
          superceded by relocation.


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