BILL ANALYSIS
AB 798
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Date of Hearing: April 29, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 798 (Nava) - As Amended: February 26, 2009
Policy Committee:
TransportationVote:11-3
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill creates the seven-member California Transportation
Financing Authority (CTFA), chaired by the State Treasurer, to
provide new capacity or improvements for transportation systems
via conduit financing through the issuance of revenue bonds.
Specifically, this bill:
1)States that the objective of CTFA is to increase the
construction for the state transportation system-in a manner
consistent with the state's greenhouse gas reduction goals,
air quality improvement goals, and natural resources
conservation goals-through the issuance of revenue bonds.
2)Grants CTFA broad authority to secure project financing and
provides that all CFTA expenses will be payable solely from
projects funded by the authority, except that loans may be
obtained from other sources for start-up costs and must be
repaid with interest.
3)Provides that project sponsors-Caltrans, regional
transportation planning agencies, and other local and regional
transportation entities-may pledge the following revenue
sources as security for revenue bonds issued by CTFA: local
transportation funds, fuel taxes, Article XIX B fuel sales
taxes, local transportation sales taxes, developer fees,
tolls, and other state revenues approved for these purposes by
the Legislature or by initiative.
4)Explicitly provides that CTFA will not have the power to plan
or approve projects, other than project financing, as provided
for in this bill.
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5)Grants CTFA authority to authorize a project sponsor to
collect tolls if a project meets the specified criteria.
6)Creates the California Transportation Financing Authority Fund
(Fund) and directs all moneys in the Fund to be continuously
appropriated.
FISCAL EFFECT
1)Though the CTFA's administrative costs would be charged to
participating project sponsors, it is not known how much
demand there will be for the financing tools offered by CTFA
and when sufficient revenues would be realized to fully cover
the administrative costs. Initial costs are to be borrowed
from available resources within the State Treasurer's Office
and paid back with interest once there is sufficient demand
for CTFA financing.
2)Initial workload is dependent upon demand, but the bill
requires the chair of the Authority to appoint an executive
director and authorizes employment of bond counsel and other
consultants, as necessary. Based on the cost of other
financing authorities under the treasurer's purview, annual
costs for the authority would likely be in the range of
$200,000 to $300,000.
3)Potentially significant increase in the volume of revenue
bonds, secured by transportation revenue sources, if CTFA is
effective in accelerating transportation project financing and
construction by enhancing the use of revenue-secured
indebtedness.
4)Potentially significant toll revenue resulting if CTFA
authorizes transportation project sponsors or Caltrans to
impose and collect tolls as a source of bond repayment and to
implement congestion management mechanisms.
COMMENTS
Purpose . This bill, sponsored by the State Treasurer,
establishes an additional financing mechanism that
transportation project sponsors can use to access beneficial
rates and obtain financing with fewer requirements. Allowing
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project sponsors to access the municipal bond market reduces the
need to seek initial financing from other, potentially more
restrictive sources, especially for toll projects that often
require a local agency to agree to non-compete clauses and
exorbitant franchise terms to obtain private financing.
Prior Legislation . This bill is identical to AB 3021 (Nava) of
last year, which was summarily vetoed by the governor without a
stated reason. AB 3021 passed the Assembly floor 49-29.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081