BILL ANALYSIS AB 744 Page 1 Date of Hearing: April 27, 2009 ASSEMBLY COMMITTEE ON TRANSPORTATION Mike Eng, Chair AB 744 (Torrico) - As Amended: April 21, 2009 SUBJECT : Bay Area Toll Authority: Express Lane Network SUMMARY : Authorizes the Bay Area Toll Authority (BATA) to develop a Bay Area Express Lane Network (network). Specifically, this bill : 1)Declares the intent of the Legislature to authorize BATA to develop the network to provide the following objectives: a) Higher vehicle and passenger throughput and reduce travel delays; b) An efficient, effective, consistent, and seamless system for network customers; c) Benefits to travelers within each corridor commensurate with the revenues collected in that corridor; d) Expedited delivery of the network using a rapid delivery approach that, to the greatest extent possible relies on the existing highway right of way and minimizes environmental impacts; and, e) Use of network revenue to finance construction of the network and other corridor improvements, operation and maintenance of the network, and to provide transit services in the network corridors. 2)Further declares the intent of the Legislature that: a) Network policies be developed by BATA in collaboration with the California Department of Transportation (Caltrans), Department of the California Highway Patrol (CHP), and Bay Area congestion management agencies; b) The network use a corridor-based structure to recognize commute sheds and geographic communities of interest as the most effective and user-responsive models for implementation of the network; AB 744 Page 2 c) Network corridor revenues be reinvested in the corridor, based on corridor investment plans, to provide, for example, additional capital improvements on the freeway and parallel arterials, transit capital and service improvements, and enhanced operations and management of the corridor; and, d) The network provides customers with an efficient, easy-to-use system, including for example, consistent geometric design and signage. 3)Authorizes BATA to use toll bridge revenues for the network, under specified conditions and so long as BATA anticipates that funding the network will not necessitate an increase in the amount of tolls collected. 4)Authorizes BATA to pledge bridge toll revenues and other income to acquire, construct, administer, and operate the network if it determines that funding for the network is not available on acceptable terms without the pledge and provided it projects the additional obligations will not necessitate an increase in bridge tolls. 5)Authorizes, nonetheless, BATA to increase tolls if it is necessary to do so to meet its obligations. 6)Requires BATA to establish a Bay Area Express Lane Network Project Oversight Committee (committee) and prescribes its membership to include representatives of BATA, Caltrans, and CHP. The committee will also include a representative of each of the congestion management agencies within the geographic jurisdiction of BATA's sister agency, the Metropolitan Transportation Commission (MTC), that has: a) Committed substantial funding to the development of an express lane corridor; b) Adopted a policy in support of developing an express lane; or, c) Whose residents comprise a significant share of the potential users of the network. 7)Requires the committee to recommend a development plan, with AB 744 Page 3 prescribed elements, and policies for the network, and prescribes the approval process to be followed by BATA. 8)Sets forth procedures and requirements for the establishment of corridor working groups to develop corridor investment plans that provide consistency with the overall network yet reflect the needs of individual corridors; prescribe elements to be included in the corridor investment plans, including an examination of equity considerations and the impact of the proposed network segment on low-income travelers, transit riders, and carpoolers; provides procedures to govern the approval process of corridor investment plans by BATA. 9)Grants BATA broad authority to acquire, construct, administer, and operate an express lane network on state highways within the geographic jurisdiction of MTC, to be funded from network revenues, revenue bonds, and contributions and loans from federal, state, or local agencies. 10)Authorizes BATA to impose a fee for use of the network, based on a fee structure developed by BATA. 11)Sets forth requirements BATA must adhere to in setting and changing toll schedules, including providing public hearings. 12)Requires BATA to carry out the network in cooperation with Caltrans and CHP and to ensure minimum specific levels of service are maintained. 13)Continuously appropriates to Caltrans, for expenditures related to the network, all amounts paid to it by BATA; provides similar continuous appropriation authority for the CHP. 14)Requires agreements between BATA, Caltrans, and the CHP and requires the agreements to assign specific obligations, responsibilities, and liabilities. 15)Directs all revenue generated by the network to be deposited in BATA's Express Lane Network Account (account), created by this bill, and prescribes eligible expenditures from the account. 16) Prescribes allowable uses of "net corridor revenue," as AB 744 Page 4 defined; allows BATA to reserve up to 5% of the net corridor revenue as a reserve and directs all remaining net corridor revenue to be distributed to corridors for expenditure according to each corridor investment plan; also authorizes BATA to disburse net corridor revenue to approved recipients, including congestion management agencies. 17)Vests BATA with the responsibility to control and maintain the account. 18)Requires BATA to, within one year from the effective date of this bill, assume all rights and obligations of the following agencies with respect to their individual authorities to construct and operate value-pricing, high-occupancy toll (HOT) lanes: a) Sunol Smart Carpool Lane Joint Powers Authority; b) Alameda County Congestion Management (ACCM) Agency; and, c) Santa Clara Valley Transportation Authority (VTA). 19)Grants BATA authority to issue bonds secured by network revenues, with the stipulation that the state will not authorize fee-based publicly or privately owned express lanes or high-occupancy vehicle (HOV) lanes within the geographic jurisdiction of the MTC, other than express lanes authorized in the network. EXISTING LAW: 20)Created MTC as the transportation planning, coordinating, and financing agency for the nine-county San Francisco Bay Area and prescribed its membership and responsibilities. 21)Created BATA, within MTC, to administer all tolls on the San Francisco Bay Area's seven state-owned toll bridges and to provide joint oversight of the toll bridge construction program with Caltrans and the CTC . Caltrans owns and operates the state-owned bridges. 22)Authorizes a joint powers authority (consisting of the ACCM Agency, Alameda County Transportation Improvement Authority, and VTA to conduct, administer, and operate a value-pricing HOT lane program on the Sunol Grade on State Route 680 in AB 744 Page 5 Alameda and Santa Clara Counties. 23)Authorizes the ACCM Agency to conduct, administer, and operate a value-pricing HOT lane program on a corridor within in Alameda County and VTA to operate a value-pricing HOT lane program on any two corridors in its HOV lane system. 24)Authorizes the San Diego Association of Governments to conduct, administer, and operate a value-pricing and transit development program on no more than two corridors within San Diego County. Allows the HOV lanes to be used as HOT lanes. 25)Authorizes regional transportation agencies or Caltrans to enter into an unlimited number of comprehensive development lease agreement with public or private entities for transportation projects, under the following key conditions: a) Projects must be primarily designed 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 submit the agreement to the Legislature and to the Public Infrastructure Advisory Committee for review; c) Prior to submitting a proposal, 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 HOV lanes can be converted to HOT 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. FISCAL EFFECT : Unknown COMMENTS : AB 744 authorizes BATA to finance, construct, and operate an 800-mile express lane network, involving conversion of 500 miles of existing or fully funded HOV lanes to congestion-priced express lanes. The network is expected to provide free-flowing traffic for carpools, buses, and toll AB 744 Page 6 payers, using congestion pricing. Tolls for non-carpools using the express lanes will be collected electronically. MTC estimates that the network will: 26)Generate $6.1 billion in revenue over 25 years. 27)Cost $7.6 billion to build, finance, and operate over the next 25 years. 28)Complete funding and construction of the 800-mile network of congestion-free lanes for carpools, buses, and toll payers. 29)Boost worker productivity by $100 billion by reducing freeway delay. 30)Reduce CO2 by 10 million metric tons. This bill is intended to create a framework for collaboration and partnership in development of the network. It establishes BATA as the lead agency to plan, finance, and manage the HOT network. Expenditure plans will be developed from a "bottoms up" process in each individual travel corridor, led by congestion management agencies. Although AB 744 represents a region-wide congestion pricing plan that is bolder than most that have come before the Legislature, it is not the first. Congestion pricing HOT lanes have already been approved by the Legislature in specific corridors in both northern and southern California. Furthermore, just last year the Legislature passed congestion-pricing authorizations for Riverside County and Los Angeles County, not to mention broad authority for public-private partnerships passed already this session. According to the California Automobile Association (AAA) of Northern California, writing in support of this bill, "Research from the first HOT lane projects built in the late 1990s in Southern California and the Houston area shows that the toll lanes are used by motorists of all income levels on an as-needed basis?HOT lanes in California and Texas also gained support among motorists who didn't use them regularly because they were seen as diverting more vehicles from the regular lanes. To that end, AAA of Northern California believes that a HOT lane network is supportable so long as there are parallel free existing lanes AB 744 Page 7 for commuters and that toll revenue is used to improve the corridor(s) in which it is collected." Related legislation : SBX2 4 (Cogdill), Chapter 2, Statutes of 2009, grants broad authority for pubic-private partnerships for transportation. AB 798 (Nava) of 2009 would create 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. That bill is in Assembly Appropriations Committee. AB 2032 (Dutra), Chapter 418, Statutes of 2004, authorized HOT lane programs in Alameda, San Diego, and Santa Clara Counties. AB 574 (Torrico), Chapter 498, Statutes of 2007, struck the sunset date on the authority to administer HOT lanes in these three counties. REGISTERED SUPPORT / OPPOSITION : Support Metropolitan Transportation Commission (sponsor) AAA of Northern California Opposition Paul Thiebaut, III (an individual) Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093