Bill Text: CA AB2742 | 2015-2016 | Regular Session | Introduced
Bill Title: Transportation projects: comprehensive development lease agreements.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2016-11-30 - From committee without further action. [AB2742 Detail]
Download: California-2015-AB2742-Introduced.html
BILL NUMBER: AB 2742 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Nazarian
FEBRUARY 19, 2016
An act to amend Section 143 of the Streets and Highways Code,
relating to transportation.
LEGISLATIVE COUNSEL'S DIGEST
AB 2742, as introduced, Nazarian. Transportation projects:
comprehensive development lease agreements.
Existing law authorizes the Department of Transportation and
regional transportation agencies, as defined, to enter into
comprehensive development lease agreements with public and private
entities, or consortia of those entities, for certain transportation
projects that may charge certain users of those projects tolls and
user fees, subject to various terms and requirements. These
arrangements are commonly known as public-private partnerships.
Existing law prohibits a lease agreement from being entered into
under these provisions on or after January 1, 2017.
This bill would allow a lease agreement to be entered into under
these provisions until January 1, 2030. The bill would include within
the definition of "regional transportation agency" the Santa Clara
Valley Transportation Authority, thereby authorizing the authority to
enter into public-private partnerships under these provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 143 of the Streets and Highways Code is amended
to read:
143. (a) (1) "Best value" means a value determined by objective
criteria, including, but not limited to, price, features, functions,
life-cycle costs, and other criteria deemed appropriate by the
department or the regional transportation agency.
(2) "Contracting entity or lessee" means a public or private
entity, or consortia thereof, that has entered into a comprehensive
development lease agreement with the department or a regional
transportation agency for a transportation project pursuant to this
section.
(3) "Design-build" means a procurement process in which both the
design and construction of a project are procured from a single
entity.
(4) "Regional transportation agency" means any of the following:
(A) A transportation planning agency as defined in Section 29532
or 29532.1 of the Government Code.
(B) A county transportation commission as defined in Section
130050, 130050.1, or 130050.2 of the Public Utilities Code.
(C) Any other local or regional transportation entity that is
designated by statute as a regional transportation agency.
(D) A joint exercise of powers authority as defined in Chapter 5
(commencing with Section 6500) of Division 7 of Title 1 of the
Government Code, with the consent of a transportation planning agency
or a county transportation commission for the jurisdiction in which
the transportation project will be developed.
(E) The Santa Clara Valley Transportation Authority established
pursuant to Part 12 (commencing with Section 100000) of Division 10
of the Public Utilities Code.
(5) "Public Infrastructure Advisory Commission" means a unit or
auxiliary organization established by the Transportation Agency that
advises the department and regional transportation agencies in
developing transportation projects through performance-based
infrastructure partnerships.
(6) "Transportation project" means one or more of the following:
planning, design, development, finance, construction, reconstruction,
rehabilitation, improvement, acquisition, lease, operation, or
maintenance of highway, public street, rail, or related facilities
supplemental to existing facilities currently owned and operated by
the department or regional transportation agencies that is consistent
with the requirements of subdivision (c).
(b) (1) The Public Infrastructure Advisory Commission shall do all
of the following:
(A) Identify transportation project opportunities throughout the
state.
(B) Research and document similar transportation projects
throughout the state, nationally, and internationally, and further
identify and evaluate lessons learned from these projects.
(C) Assemble and make available to the department or regional
transportation agencies a library of information, precedent,
research, and analysis concerning infrastructure partnerships and
related types of public-private transactions for public
infrastructure.
(D) Advise the department and regional transportation agencies,
upon request, regarding infrastructure partnership suitability and
best practices.
(E) Provide, upon request, procurement-related services to the
department and regional transportation agencies for infrastructure
partnership.
(2) The Public Infrastructure Advisory Commission may charge a fee
to the department and regional transportation agencies for the
services described in subparagraphs (D) and (E) of paragraph (1), the
details of which shall be articulated in an agreement entered into
between the Public Infrastructure Advisory Commission and the
department or the regional transportation agency.
(c) (1) Notwithstanding any other provision of law, only the
department, in cooperation with regional transportation agencies, and
regional transportation agencies, may solicit proposals, accept
unsolicited proposals, negotiate, and enter into comprehensive
development lease agreements with public or private entities, or
consortia thereof, for transportation projects.
(2) Projects proposed pursuant to this section and associated
lease agreements shall be submitted to the California Transportation
Commission. The commission, at a regularly scheduled public hearing,
shall select the candidate projects from projects nominated by the
department or a regional transportation agency after reviewing the
nominations for consistency with paragraphs (3) and (4). Approved
projects may proceed with the process described in paragraph (5).
(3) The projects authorized pursuant to this section shall be
primarily designed to achieve the following performance objectives:
(A) Improve mobility by improving travel times or reducing the
number of vehicle hours of delay in the affected corridor.
(B) Improve the operation or safety of the affected corridor.
(C) Provide quantifiable air quality benefits for the region in
which the project is located.
(4) In addition to meeting the requirements of paragraph (3), the
projects authorized pursuant to this section shall address a known
forecast demand, as determined by the department or regional
transportation agency.
(5) At least 60 days prior to executing a final lease agreement
authorized pursuant to this section, the department or regional
transportation agency shall submit the agreement to the Legislature
and the Public Infrastructure Advisory Commission for review. Prior
to submitting a lease agreement to the Legislature and the Public
Infrastructure Advisory Commission, the department or regional
transportation agency shall conduct at least one public hearing at a
location at or near the proposed facility for purposes of receiving
public comment on the lease agreement. Public comments made during
this hearing shall be submitted to the Legislature and the Public
Infrastructure Advisory Commission with the lease agreement. The
Secretary of Transportation or the chairperson of the Senate or
Assembly fiscal committees or policy committees with jurisdiction
over transportation matters may, by written notification to the
department or regional transportation agency, provide any comments
about the proposed agreement within the 60-day period prior to the
execution of the final agreement. The department or regional
transportation agency shall consider those comments prior to
executing a final agreement and shall retain the discretion for
executing the final lease agreement.
(d) For the purpose of facilitating those projects, the agreements
between the parties may include provisions for the lease of
rights-of-way in, and airspace over or under, highways, public
streets, rail, or related facilities for the granting of necessary
easements, and for the issuance of permits or other authorizations to
enable the construction of transportation projects. Facilities
subject to an agreement under this section shall, at all times, be
owned by the department or the regional transportation agency, as
appropriate. For department projects, the commission shall certify
the department's determination of the useful life of the project in
establishing the lease agreement terms. In consideration therefor,
the agreement shall provide for complete reversion of the leased
facility, together with the right to collect tolls and user fees, to
the department or regional transportation agency, at the expiration
of the lease at no charge to the department or regional
transportation agency. At the time of the reversion, the facility
shall be delivered to the department or regional transportation
agency, as applicable, in a condition that meets the performance and
maintenance standards established by the department or regional
transportation agency and that is free of any encumbrance, lien, or
other claims.
(e) Agreements between the department or regional transportation
agency and the contracting entity or lessee shall authorize the
contracting entity or lessee to use a design-build method of
procurement for transportation projects, subject to the requirements
for utilizing such a method contained in Chapter 6.5 (commencing with
Section 6800) 6820) of Part 1 of
Division 2 of the Public Contract Code, other than Sections
6802, 6803, and 6813 of that code, if those provisions are enacted by
the Legislature during the 2009-10 Regular Session, or a 2009-10
extraordinary session. 6821 and 6822 of that code.
(f) (1) (A) Notwithstanding any other provision of this chapter,
for projects on the state highway system, the department is the
responsible agency for the performance of project development
services, including performance specifications, preliminary
engineering, prebid services, the preparation of project reports and
environmental documents, and construction inspection services. The
department is also the responsible agency for the preparation of
documents that may include, but need not be limited to, the size,
type, and desired design character of the project, performance
specifications covering the quality of materials, equipment, and
workmanship, preliminary plans, and any other information deemed
necessary to describe adequately the needs of the department or
regional transportation agency.
(B) The department may use department employees or consultants to
perform the services described in subparagraph (A), consistent with
Article XXII of the California Constitution. Department resources,
including personnel requirements, necessary for the performance of
those services shall be included in the department's capital outlay
support program for workload purposes in the annual Budget Act.
(2) The department or a regional transportation agency may
exercise any power possessed by it with respect to transportation
projects to facilitate the transportation projects pursuant to this
section. The department, regional transportation agency, and other
state or local agencies may provide services to the contracting
entity or lessee for which the public entity is reimbursed,
including, but not limited to, planning, environmental planning,
environmental certification, environmental review, preliminary
design, design, right-of-way acquisition, construction, maintenance,
and policing of these transportation projects. The department or
regional transportation agency, as applicable, shall regularly
inspect the facility and require the contracting entity or lessee to
maintain and operate the facility according to adopted standards.
Except as may otherwise be set forth in the lease agreement, the
contracting entity or lessee shall be responsible for all costs due
to development, maintenance, repair, rehabilitation, and
reconstruction, and operating costs.
(g) (1) In selecting private entities with which to enter into
these agreements, notwithstanding any other provision of law, the
department and regional transportation agencies may utilize, but are
not limited to utilizing, one or more of the following procurement
approaches:
(A) Solicitations of proposals for defined projects and calls for
project proposals within defined parameters.
(B) Prequalification and short-listing of proposers prior to final
evaluation of proposals.
(C) Final evaluation of proposals based on qualifications and best
value. The California Transportation Commission shall develop and
adopt criteria for making that evaluation prior to evaluation of a
proposal.
(D) Negotiations with proposers prior to award.
(E) Acceptance of unsolicited proposals, with issuance of requests
for competing proposals. Neither the department nor a regional
transportation agency may award a contract to an unsolicited bidder
without receiving at least one other responsible bid.
(2) When evaluating a proposal submitted by the contracting entity
or lessee, the department or the regional transportation agency may
award a contract on the basis of the lowest bid or best value.
(h) The contracting entity or lessee shall have the following
qualifications:
(1) Evidence that the members of the contracting entity or lessee
have completed, or have demonstrated the experience, competency,
capability, and capacity to complete, a project of similar size,
scope, or complexity, and that proposed key personnel have sufficient
experience and training to competently manage and complete the
design and construction of the project, and a financial statement
that ensures that the contracting entity or lessee has the capacity
to complete the project.
(2) The licenses, registration, and credentials required to design
and construct the project, including, but not limited to,
information on the revocation or suspension of any license,
credential, or registration.
(3) Evidence that establishes that members of the contracting
entity or lessee have the capacity to obtain all required payment and
performance bonding, liability insurance, and errors and omissions
insurance.
(4) Evidence that the contracting entity or lessee has workers'
compensation experience, history, and a worker safety program of
members of the contracting entity or lessee that is acceptable to the
department or regional transportation agency.
(5) A full disclosure regarding all of the following with respect
to each member of the contracting entity or lessee during the past
five years:
(A) Any serious or willful violation of Part 1 (commencing with
Section 6300) of Division 5 of the Labor Code or the federal
Occupational Safety and Health Act of 1970 (Public Law 91-596).
(B) Any instance where members of the contracting entity or lessee
were debarred, disqualified, or removed from a federal, state, or
local government public works project.
(C) Any instance where members of the contracting entity or
lessee, or its owners, officers, or managing employees submitted a
bid on a public works project and were found to be nonresponsive or
were found by an awarding body not to be a responsible bidder.
(D) Any instance where members of the contracting entity or
lessee, or its owners, officers, or managing employees defaulted on a
construction contract.
(E) Any violations of the Contractors' State License Law (Chapter
9 (commencing with Section 7000) of Division 3 of the Business and
Professions Code), including, but not limited to, alleged violations
of federal or state law regarding the payment of wages, benefits,
apprenticeship requirements, or personal income tax withholding, or
Federal Insurance Contributions Act (FICA) withholding requirements.
(F) Any bankruptcy or receivership of any member of the
contracting entity or lessee, including, but not limited to,
information concerning any work completed by a surety.
(G) Any settled adverse claims, disputes, or lawsuits between the
owner of a public works project and any member of the contracting
entity or lessee during the five years preceding submission of a bid
under this article, in which the claim, settlement, or judgment
exceeds fifty thousand dollars ($50,000). Information shall also be
provided concerning any work completed by a surety during this
five-year period.
(H) If the contracting entity or lessee is a partnership, joint
venture, or an association that is not a legal entity, a copy of the
agreement creating the partnership or association that specifies that
all general partners, joint venturers, or association members agree
to be fully liable for the performance under the agreement.
(i) No agreement entered into pursuant to this section shall
infringe on the authority of the department or a regional
transportation agency to develop, maintain, repair, rehabilitate,
operate, or lease any transportation project. Lease agreements may
provide for reasonable compensation to the contracting entity or
lessee for the adverse effects on toll revenue or user fee revenue
due to the development, operation, or lease of supplemental
transportation projects with the exception of any of the following:
(1) Projects identified in regional transportation plans prepared
pursuant to Section 65080 of the Government Code.
(2) Safety projects.
(3) Improvement projects that will result in incidental capacity
increases.
(4) Additional high-occupancy vehicle lanes or the conversion of
existing lanes to high-occupancy vehicle lanes.
(5) Projects located outside the boundaries of a public-private
partnership project, to be defined by the lease agreement.
However, compensation to a contracting entity or lessee shall only
be made after a demonstrable reduction in use of the facility
resulting in reduced toll or user fee revenues, and may not exceed
the difference between the reduction in those revenues and the amount
necessary to cover the costs of debt service, including principal
and interest on any debt incurred for the development, operation,
maintenance, or rehabilitation of the facility.
(j) (1) Agreements entered into pursuant to this section shall
authorize the contracting entity or lessee to impose tolls and user
fees for use of a facility constructed by it, and shall require that
over the term of the lease the toll revenues and user fees be applied
to payment of the capital outlay costs for the project, the costs
associated with operations, toll and user fee collection,
administration of the facility, reimbursement to the department or
other governmental entity for the costs of services to develop and
maintain the project, police services, and a reasonable return on
investment. The agreement shall require that, notwithstanding
Sections 164, 188, and 188.1, any excess toll or user fee revenue
either be applied to any indebtedness incurred by the contracting
entity or lessee with respect to the project, improvements to the
project, or be paid into the State Highway Account, or for all three
purposes, except that any excess toll revenue under a lease agreement
with a regional transportation agency may be paid to the regional
transportation agency for use in improving public transportation in
and near the project boundaries.
(2) Lease agreements shall establish specific toll or user fee
rates. Any proposed increase in those rates not otherwise established
or identified in the lease agreement during the term of the
agreement shall first be approved by the department or regional
transportation agency, as appropriate, after at least one public
hearing conducted at a location near the proposed or existing
facility.
(3) The collection of tolls and user fees for the use of these
facilities may be extended by the commission or regional
transportation agency at the expiration of the lease agreement.
However, those tolls or user fees shall not be used for any purpose
other than for the improvement, continued operation, or maintenance
of the facility.
(k) Agreements entered into pursuant to this section shall include
indemnity, defense, and hold harmless provisions agreed to by the
department or regional transportation agency and the contracting
entity or lessee, including provisions for indemnifying the State of
California or the regional transportation agency against any claims
or losses resulting or accruing from the performance of the
contracting entity or lessee.
(l) The plans and specifications for each transportation project
on the state highway system developed, maintained, repaired,
rehabilitated, reconstructed, or operated pursuant to this section
shall comply with the department's standards for state transportation
projects. The lease agreement shall include performance standards,
including, but not limited to, levels of service. The agreement shall
require facilities on the state highway system to meet all
requirements for noise mitigation, landscaping, pollution control,
and safety that otherwise would apply if the department were
designing, building, and operating the facility. If a facility is on
the state highway system, the facility leased pursuant to this
section shall, during the term of the lease, be deemed to be a part
of the state highway system for purposes of identification,
maintenance, enforcement of traffic laws, and for the purposes of
Division 3.6 (commencing with Section 810) of Title 1 of the
Government Code.
(m) Failure to comply with the lease agreement in any significant
manner shall constitute a default under the agreement and the
department or the regional transportation agency, as appropriate,
shall have the option to initiate processes to revert the facility to
the public agency.
(n) The assignment authorized by subdivision (c) of Section 130240
of the Public Utilities Code is consistent with this section.
(o) A lease to a private entity pursuant to this section is deemed
to be public property for a public purpose and exempt from
leasehold, real property, and ad valorem taxation, except for the
use, if any, of that property for ancillary commercial purposes.
(p) Nothing in this section is intended to infringe on the
authority to develop high-occupancy toll lanes pursuant to Section
149.4, 149.5, or 149.6.
(q) Nothing in this section shall be construed to allow the
conversion of any existing nontoll or nonuser-fee lanes into tolled
or user fee lanes with the exception of a high-occupancy vehicle lane
that may be operated as a high-occupancy toll lane for vehicles not
otherwise meeting the requirements for use of that lane.
(r) The lease agreement shall require the contracting entity or
lessee to provide any information or data requested by the California
Transportation Commission or the Legislative Analyst. The
commission, in cooperation with the Legislative Analyst, shall
annually prepare a report on the progress of each project and
ultimately on the operation of the resulting facility. The report
shall include, but not be limited to, a review of the performance
standards, a financial analysis, and any concerns or recommendations
for changes in the program authorized by this section.
(s) Notwithstanding any other provision of this section, no lease
agreement may be entered into pursuant to the section that affects,
alters, or supersedes the Memorandum of Understanding (MOU), dated
November 26, 2008, entered into by the Golden Gate Bridge Highway and
Transportation District, the Metropolitan Transportation Commission,
and the San Francisco County Transportation Authority, relating to
the financing of the U.S. Highway 101/Doyle Drive reconstruction
project located in the City and County of San Francisco.
(t) No A lease agreements
may agreement shall not be entered into under
this section on or after January 1, 2017.
2030.
