The California state legislature on Friday gave final approval to a measure designed to expand the use of tolling throughout the state. Introduced on behalf of State Treasurer Bill Lockyer (D), Assembly Bill 3021 creates the California Transportation Financing Authority as a taxpayer-funded entity empowered to issue toll road bonds and authorize local authorities to convert existing high occupancy vehicle lanes on four freeways into toll projects without further legislative approval. The bill, which passed the state Senate 23-10 and the Assembly 49-29, will become law with the expected signature of Governor Arnold Schwarzenegger (R).

Supporters insist that the measure avoids many of the common pitfalls of conventional public-private partnership tolling projects including non-compete clauses, lease terms of up to 99 years and other provisions designed solely to generate massive profit for private entities. Although the bill does not exclude such partnerships, the projects under the proposed law would be financed through the state instead of the private sources that impose these restrictive terms.

"AB3021 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," Lockyer said in a statement.

The measure allows project sponsors to issue bonds for any project deemed financially viable. Project tolls must be high enough to pay off debt, fund reserves and maintain the road, but excess tolling profit may also be funneled into mass transit projects as long as that profit is generated for "environmental benefits" through congestion tolls that hit commuters hardest in the morning and evening rush hours. Last minute state Senate amendments ensured that the financing authority would not impose tolls on neighborhood side streets and removed the requirement for "strong support" of the local community before imposing tolls. Instead, tolling plans only need to be made available for public inspection thirty days before being approved.

AAA's Northern and Southern California branches came out in opposition to the plan.

"We support the use of tolls as one option to pay for new infrastructure; however, because the very broad toll authority proposed in this bill is not limited to new construction and because revenue from the tolls could be used for a wide array of transportation and related efforts (well beyond the roads, streets, and highways used by toll payers), we must oppose the bill," the insurance industry group wrote. "Those goals should not inappropriately be placed on the shoulders of motorists by allowing the widespread tolling of facilities already paid for by existing taxes without clear and direct benefits for the toll payers."

The full text of the bill is available in a 210k PDF file at the source link below.