BILL ANALYSIS
AB 798
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CONCURRENCE IN SENATE AMENDMENTS
AB 798 (Nava)
As Amended June 24, 2009
Majority vote
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|ASSEMBLY: |51-25|(June 2, 2009) |SENATE: |29-4 |(September 3, |
| | | | | |2009) |
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Original Committee Reference: TRANS .
SUMMARY : Creates the California Transportation Financing
Authority (CTFA) to provide for increased construction of new
capacity or improvements for transportation systems through the
issuance of revenue bonds.
The Senate amendments add "bus" to the list of transportation
projects that would be eligible under this bill.
EXISTING LAW:
1)Authorizes local governmental agencies to enter into
agreements with private entities for the study, planning,
design, developing, financing, construction, maintenance,
rebuilding, improvement, repair, or operation, or any
combination thereof, by, and lease to or ownership by, that
entity of a revenue-generating infrastructure project, as
specified. Requires agreements entered into under these
provisions to include adequate financial resources for the
project and allows for terms of up to 35 years, after which
the project would revert to the local governmental agency.
Broadly prohibits the use of this authority for state
highways.
2)Establishes the 13-member California Transportation Commission
(CTC) to advise and assist the Secretary of the Business,
Transportation and Housing Agency and the Legislature in
formulating and evaluating state policies and plans for
transportation programs in the state.
3)Authorizes regional transportation agencies or the Department
of Transportation (Caltrans) to enter into an unlimited number
of comprehensive development lease agreement with public or
private entities for transportation projects, under the
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following key conditions:
a) Projects must be primarily designed to achieve improved
mobility, improved operations or safety, and quantifiable
air quality benefits;
b) At least 60 days prior to executing a final lease
agreement, the project sponsor (i.e., Caltrans or a
regional transportation agency) must secure approval by the
CTC then submit the agreement to the Legislature and to the
Public Infrastructure Advisory Committee (PIAC) for review;
c) Prior to submitting a proposal to the Legislature and
PIAC, the project sponsor would have to conduct a least one
public hearing;
d) Existing non-toll or non-user-fee lanes cannot be
converted to toll lanes except that high occupancy vehicle
(HOV) lanes can be converted to high occupancy toll (HOT)
lanes for vehicles not otherwise meeting the occupancy
level requirements for those lanes; and,
e) No lease agreements can be entered into after January 1,
2017.
4)Authorizes a regional transportation agency, in cooperation
with Caltrans, to apply to the CTC to develop and operate HOT
lanes, including the administration and operation of a
congestion-pricing program, using the following process:
a) CTC is to review each application for HOT lane
development;
b) For each project, CTC is required to conduct a least one
public hearing in northern California and one in southern
California;
c) Following the hearings, CTC is to submit the
application, including any public comments made at the
hearings, to the Legislature for rejection or approval;
d) Approval by the Legislature must be by statute;
e) The number of projects under this authority is limited
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to four, two in northern California and two in southern
California;
f) CTC, in cooperation with the Legislative Analyst, must
annually report to the Legislature on the progress of the
development and operation of HOT lanes; and,
g) No application may be approved under this authority
after January 1, 2012.
AS PASSED BY THE ASSEMBLY , this bill was substantially similar
to the version passed in the Senate.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
1)Though the CTFA's administrative costs would be charged to
participating project sponsors, it is not known how much
demand there will be for the financing tools offered by CTFA
and when sufficient revenues would be realized to fully cover
the administrative costs. Initial costs are to be borrowed
from available resources within the State Treasurer's Office
and paid back with interest once there is sufficient demand
for CTFA financing.
2)Initial workload is dependent upon demand, but this bill
requires the chair of CTFA to appoint an executive director
and authorizes employment of bond counsel and other
consultants, as necessary. Based on the cost of other
financing authorities under the State Treasurer's purview,
annual costs for CTFA would likely be in the range of $150,000
to $300,000.
COMMENTS : This bill would provide for what has become known as
"public-public partnerships" wherein government agencies partner
to finance public infrastructure. The process provided for in
this bill is permissive. State, regional, and local
transportation agencies may, if they choose, sponsor projects
using CTFA's authority to approve financing and tolls. However,
these agencies will not be required to use CTFA's services.
Furthermore, this bill provides flexibility in the issuance of
bonds. Transportation agencies may request CTFA to issue bonds
or they may request approval to issue bonds themselves.
This bill is nearly identical to AB 3021 (Nava) of 2008, which
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passed the Legislature with broad support and no opposition but
was vetoed by Governor Schwarzenegger who cited that, because of
budget delays, he could not sign the bill (or dozens of other
bills) at that time.
Ironically, supporters of AB 798 argue that budget woes are
exactly why this bill is needed.
According to this bill's sponsor, State Treasurer Bill Lockyer
(Treasurer), this bill will help increase transportation
capacity in our state by providing transportation entities with
the resources needed to meet growing transportation needs. The
Treasurer believes that this bill will "enable local and
regional entities to contribute more to the funding of
transportation projects, create a method for them to finance
projects in the municipal bond market, and ensure that projects
and funding are consistent with state transportation policy
objectives and "best practices" public finance criteria."
Additionally, the California Labor Federation supports AB 798
stating, "Critical state and local infrastructure needs have
gone unmet for too long and in these hard economic times, we
should look beyond traditional revenue streams."
Related legislation: SB 4 X2 (Cogdill), Chapter 2, Statutes of
2009, among other things, authorized Caltrans and regional
transportation agencies, until January 1, 2017, to enter into an
unlimited number of comprehensive development lease agreements
with public or private entities, or consortia thereof, for
transportation projects. SB 4 X2 provides the Legislature an
opportunity to submit written comments about a proposed
agreement to Caltrans or a regional transportation agency, but
vests the ultimate discretion for executing the final lease
agreement with Caltrans or the regional transportation agency.
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093
FN: 0002607