Date The Honorable Ben Hueso Room 5144 State Capitol Sacramento, CA 95814 Subject: Strong Opposition: AB 2485

(Hueso), Commercialization of State Highway Rest Stops.

Dear Assemblymember Hueso: The California Independent Oil Marketers Association (CIOMA), NATSO and the Partnership to Save Highway Communities respectfully submit our strong opposition to your measure AB 2485. This measure would allow Caltrans to seek federal waivers for commercial development at state rest stops. A long-standing federal law, USC 23 Section 111, prohibits commercial services at interstate rest areas. There are NO waiver provisions. CALTRANS can only proceed with commercial rest areas if the federal law were changed by Congress. It is very important to note that the U.S. Senate very recently, and overwhelmingly, defeated an attempt to rescind the ban on commercialization of interstate rest stops - the measure was defeated 12 ayes 86 nays; both California Senators voted against the amendment. This long-standing ban was implemented to encourage commercial development at the exits along interstates, and has been a resounding success. Some mistake rest area commercialization as a privatization initiative, but the fact is that Congress long ago privatized highway services. In 1960, Congress prohibited states from offering commercial services at rest areas along the Interstate Highway System specifically so that private sector businesses would grow and provide the services needed by travelers. That decision was a resounding success, resulting in the development of 97,000 businesses employing 2.2 million Americans offering food, fuel and convenience items at interstate exits across the country, and benefiting towns, counties and communities up and down the interstates. In California there are 1,378 gas stations, 8,231 highway-oriented food service locations, - 90 truck service sites, 260 fuel stops and 61 truck stops which comprise a disperse and

convenience-oriented network of privately developed locations. These businesses employ an estimated 188,363 people. Allowing rest area commercialization will siphon away a huge portion of the sales of these exit-related businesses. Rest areas, being located directly on the interstate right-of-way, have a major advantage of location that the exit businesses dont have. The rest areas, on the shoulder of the road or the median (as opposed to the exit), would capture between 35 and 45 percent of the sales to highway travelers according to a recent study by the Virginia Tech Transportation Institute. Rest area commercialization will not create new demand for hamburgers or gasoline. It will simply transfer a huge portion of those sales from the exit businesses to the commercial rest area. Any measure that allows new commercial development at interstate rest areas will create unfair and uncompetitive advantaged location for a single concessions contractor that obtains those development rights. It will destroy small business owners who have diligently invested in and operated their enterprises to meet the needs of the traveling public. From the perspective of small-business retailers, who have paid top dollar for real estate based on proximity to the interstate and who support their local communities through taxes, commercialization of rest areas is viewed as a government take-over of highway services, an intrusion of the worst kind. As such AB 2485 will be a job- and business-killer in a time that every opportunity needs to be provided towards increasing jobs and stimulating small business development. On behalf of hundreds of thousands small businesses we ask the Assembly Transportation Committee to vote NO on this untimely measure. Sincerely, Jay McKeeman, Vice President of Government Relations & Communications

California Independent Oil Marketers Association Petroleum Marketers Association of America (PMAA) National Restaurant Association National Association of Convenience Stores (NACS) National Council of Chain Restaurants NATSO, Representing America's Travel Plazas and Truckstops Society of Independent Gasoline Marketers of America (SIGMA) National Council of State Agencies for the Blind (NCSAB) Association of Kentucky Fried Chicken Franchisees Brinker International Burger King Corporation Coalition of Franchisee Associations Franchise Management Advisory Council

International Pizza Hut Franchise Holders Association International Sign Association (ISA) Interstate Dairy Queen Corporation McDonalds Corporation National Association of Shell Marketers National Franchise Association (Burger King franchisees) OSI Restaurant Partners (Outback Steakhouse and other brands) Taco Bell Franchise Management Advisory Council Yum! Brands cc: Assemblymember Marty Block Assemblymember Brian Jones Senator Joel Anderson Senator Juan Vargas Members of the Assembly Transportation Committee