California has issued four legislations related to public private partnerships for transportation projects that have become law with the Governor's approval, including Senate Bill (SB) 4 that was signed by Governor Schwarzenegger on February 20, 2009.10
This appendix lists the current and past legislations passed in California to facilitate partnerships with the private sector for the private capital investment and expertise for future transportation infrastructure projects in the state in reverse chronological order.
1. Senate Bill (SB) 4, Second Extraordinary Session (Cogdill) Chapter 2, Statutes of 2009
This legislation has been approved by Governor Schwarzenegger on February 20, 2009. It provides the legislative authority to regional transportation agencies and Caltrans to enter into an unlimited number of Public-Private Partnerships (PPP) until January 1, 2017. This legislation removed the constraints under the prior legislation on the number and type of projects that public agencies in California may undertake, and require the projects to address mobility, operations, safety, and quantifiable air quality benefits.
This bill eliminated prohibition of amendment of lease agreements by the Legislature and the provision in AB 1467 that requires approval or rejection of the Legislature in 60 legislative days. Instead, this bill requires all lease agreements to be approved by the California Transportation Commission as well as reviewed by the Legislature and the Public Infrastructure Advisory Commission. Under this legislation, regional transportation agencies can accept unsolicited proposals, while awarding contracts to such an unsolicited bidder requires at least another responsible bid to be reviewed. An award of contact is based on either the lowest bid or best value criterion.
SB 4, Second Extraordinary Session also provides the legislative authority until January 1, 2014, for the state to have a total of up to 15 design-build demonstration projects, combining:
∙ the maximum of five projects (local street or road, bridge, tunnel, or public transit projects) for the local transportation agencies, and
∙ the maximum of ten projects (state highway, bridge, or tunnel projects) for Caltrans.
This bill provides in demonstration projects an opportunity to examine the benefits and challenges of design-build contracting in evaluation criteria, such as reduction in project costs, expedition of project time, or design features that the traditional design-bid-build method does not achieve.
This bill requires transportation entities to report to the California Transportation Commission, which is required to provide a mid-term and a final report to the Legislature, regarding the design-build process. The bill also specified a procedure for bidding submission, including a requirement for design-build entities to provide a statement of qualifications to the transportation entity.
2. Assembly Bill (AB) 521 (Runner) Chapter 542, Statutes of 2006
This assembly bill was approved by Governor Schwarzenegger on September 28, 2006. This legislation modified provisions in AB 1467 to allow the California State Legislature to act within 60 legislative days after submittal of a Public-Private Partnerships (PPP) negotiated lease agreement. The rejection of agreement requires the passage of a resolution by both houses of the Legislature within this specified time period.
3. Assembly Bill (AB) 1467 (Nunez) Chapter 32, Statutes of 2006
This assembly bill was approved by Governor Schwarzenegger on May 19, 2006, and became in effect on January 1, 2007. This legislation authorized the Department of Transportation (Caltrans) and "regional transportation agencies 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" until January 1, 2012.
The number of projects under these provisions is limited to 4, with 2 in each of northern California and southern California, and would be selected by the California Transportation Commission with a primary focus on improvement of goods movement. This legislation also provides authority to regional transportation agencies, in cooperation with Caltrans, to apply to the commissions to develop and operate high-occupancy toll (HOT) lanes. Such projects include the "administration and operation of a value pricing program and exclusive or preferential lane facilities for public transit."
This legislation requires all negotiated lease agreements to be submitted to the Legislature for approval, which will be given by the enactment of a statute. It also requires a responsible agency to have at least one public hearing at a location at or near the proposed facility and receive public comments on the proposed lease agreement. A lease agreement for the legislature's review should be submitted with public comments from public hearings.
4. Assembly Bill (AB) 680 (Baker) Chapter 107, Statutes of 1989
This assembly bill was approved by Governor Wilson on July 10, 1989. This legislation authorized the Department of Transportation (Caltrans) to have four transportation demonstration projects, including at least one in northern California and one in southern California, involving agreements with private entities for the construction and lease of transportation infrastructure for up to 35 years. This bill authorized the agreements to allow the private entity to charge tolls for the use of the privately constructed facilities.
This legislation sought the following through approved public private partnership projects:
1) private sector efficiencies in designing and building transportation projects,
2) identification of capital funds needed for transportation projects in the state,
3) reduction in the level of congestion in existing transportation corridors,
4) continued compliance with environmental requirements and state and federal laws applicable to all publicly financed projects, and
5) provision of alternative traveling routes to the public.
1) Table A-I-1: Current CA Legislative PPP Guidelines Summary
| Code | Provisions | CA | Note |
| 1-a | Allows for Unsolicited Proposals | Y | |
| 1-b | Limits Number of Projects | N | |
| 1-c | Restricts Geographic Location | Y | |
| 1-d | Restricts Mode of Transportation | N | |
| 1-e | Allows for Conversions of Existing Roads | Y | |
| 1-f | Prior Legislative Approval Required | Y | |
| 1-g | Allows for Local Veto | N | |
| 1-h | Restricts PPP Authority to State Agencies | N | |
| 1-i | Design-Build Readily Allowed? | Y | |
| 1-j | HOT Lane Projects? | Y | |
| 1-k | Number of Major PPP Highway Projects Since 1991 | 7 | |
| 2-a | Allows Public Agency to Hire Own Consultants | Unspecified | |
| 2-b | Allows Payments to Unsuccessful Bidders | Unspecified | |
| 2-c | Requires Application Fees | Unspecified | |
| 2-d | Requires Time for Public Review | Y | |
| 2-e | Specifies Evaluation Criteria | N | |
| 2-f | Structures Proposal Review Process | Y | |
| 2-g | Protects Confidentiality of Proposals | N |
Table A-I-1: Current CA Legislative PPP Guidelines Summary and Recommendations (Continued)
| Code | Provisions | CA | Note |
| 1-a | Allows for Unsolicited Proposals | Y | |
| 1-b | Limits Number of Projects | N | |
| 1-c | Restricts Geographic Location | Y | |
| 1-d | Restricts Mode of Transportation | N | |
| 1-e | Allows for Conversions of Existing Roads | Y | |
| 1-f | Prior Legislative Approval Required | Y | |
| 1-g | Allows for Local Veto | N | |
| 1-h | Restricts PPP Authority to State Agencies | N | |
| 1-i | Design-Build Readily Allowed? | Y | |
| 1-j | HOT Lane Projects? | Y | |
| 1-k | Number of Major PPP Highway Projects Since 1991 | 7 | |
| 2-a | Allows Public Agency to Hire Own Consultants | Unspecified | |
| 2-b | Allows Payments to Unsuccessful Bidders | Unspecified | |
| 2-c | Requires Application Fees | Unspecified | |
| 2-d | Requires Time for Public Review | Y | |
| 2-e | Specifies Evaluation Criteria | N | |
| 2-f | Structures Proposal Review Process | Y | |
| 2-g | Protects Confidentiality of Proposals | N | |
| 3-a | Allows State and Federal Funds | Unspecified | |
| 3-b | Allows TIFIA Funds | Unspecified | |
| 3-c | Restricts Toll Revenues from General Fund | Y | |
| 3-d | Allows Public Sector to Issue Revenue Bonds | Unspecified | |
| 3-e | Allows Public Sector to Form Nonprofits and Issue Debt | Unspecified | Allowing states to form non-profits and issue tax-exempt bonds is one method to skirt traditional public financing. |
| 4-a | Allows for Multiple Types of Project Delivery | Y | |
| 4-b | Exempts PPP Projects from State Procurement Laws | N | |
| 4-c | Allows for Outsourcing of Operations and Management | Y | |
| 4-d | Requires Public to Maintain Comparable Non-Toll Routes | N | |
| 4-e | Requires Non-Compete Clauses | Y | |
| 4-f | Allows for Long-Term Leases to Private Sector | Y | Extremely long-term leases limit the ability of future public officials to negotiate with private firms over the operation of a critical piece of transportation infrastructure. |
| 5-a | Rate-Setting Control Set in Agreement | Y | |
| 5-b | Requires Removal of Tolls After Payment of Debt | N |
_____________________________________________________________________________________________________
10 Source: http://www.dot.ca.gov/hq/innovfinance/Public-Private%20Partnerships/PPP_main.html. (last accessed on June 19, 2009.) There are more proposals for PPP legislation or other innovative finance legislation. However, because of various reasons, such as premature proposals, political opposition, and funding issues, such proposals do not make it through the passage, or even do not reach a discussion and voting in the state congress.