BILL ANALYSIS AB 1203 Page 1 Date of Hearing: April 30, 2009 ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION Curren D. Price, Chairman AB 1203 (Ma) - As Introduced: February 27, 2009 SUBJECT : Transportation bond funds: transit system safety SUMMARY : This bill would require the California Emergency Management Agency (Cal EMA), by February 1 of each fiscal year, to select eligible applicants for transit system safety projects from the Transit System Safety, Security, and Disaster Response Account (Account) pursuant to the Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006 (Proposition 1B) and provide the Controller with a list of the projects and sponsoring agencies eligible to receive an allocation. Specifically, this bill : 1) Requires, no later than February 1 of each fiscal year, Cal EMA to select eligible projects to receive grants under the Account and shall provide the Controller with a list of the projects and the sponsoring agencies eligible to receive funding from the account. Upon receipt of this information, the Controller's office shall commence any necessary actions to allocate funds to those agencies, including, but, not limited to, seeking the issuance of bonds for that purpose [Government Code Section 8879.59 (f)]. 2) Makes technical conforming changes to state law. EXISTING LAW 1) Establishes the Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006 (Proposition 1B) and authorizes the issuance of $19.925 billion of general obligation bond funds for the mobility, safety, and air quality improvements, as specified. 2) Requires the deposit of $1 billion of the bond proceeds in the Account to be used, upon appropriation, for capital projects that provide increased protection against a security and safety threat, and for capital expenditures to increase the capacity of transit operators to develop disaster response transportation systems that can move AB 1203 Page 2 people, goods, and emergency personnel and equipment in the aftermath of a disaster. 3) Requires the allocation of 25 percent of these funds for capital expenditures to regional public waterborne transit agencies authorized to operate a regional water transit system and requires the Cal EMA to administer a grant application and award program for transit agencies eligible to receive funding. 4) Requires the Cal EMA to select eligible projects to receive those grants by February 1 of each fiscal year in which funds are used for this purpose. FISCAL EFFECT : Unknown COMMENTS : The Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006, approved by the voters as Proposition 1B at the November 7, 2006, general election, authorized the issuance of general obligation bonds for specified purposes, including, but not limited to transit security projects. According to the author, this bill provides clarifying language to allow the 25 percent waterborne element of the Transit System Safety, Security and Disaster Response program to be administered by way of an up-front grant allocation program, instead of a reimbursable grant program. Chapter 12.491, Article 6 of Division 1 of Title 2 of the Government Code, titled: Implementation of the Highway Safety, Traffic Reduction, Air Quality, and Bond Act of 2006, provides a description of the eligibility criteria and program management requirements for the Account funds. Based on Article 6 requirements, 25 percent of available funds are to be allocated to regional public waterborne transit agencies for eligible capital expenditures that enhance the capacity of regional public waterborne transit agencies to provide disaster response transportation systems that can move people, goods, and emergency personnel and equipment in the aftermath of a disaster or emergency. These funds are awarded to transit agencies through a reimbursable grant program, as opposed to an up-front allocation of funds as is the procedure with the majority of funds provided under this Article. AB 1203 Page 3 State reimbursement processes are such that grant program reimbursements for the 25 percent waterborne element have taken several months to process, requiring the project sponsor to cash flow the cumulative program costs over several months at a time. This has required the project sponsor to tie up significant amounts of cash to carry expenses while waiting for reimbursement. Once project activity ramps up, it will be impossible for the sponsor to carry the cost of project expenses over multiple months due to limited cash on hand. This bill provides clarifying language that directs the administration of the 25 percent waterborne component of the Account funds to be administered by way of an up-front "allocation" of funds as opposed to on a reimbursement basis. According to the author, this provides consistency with the way in which 60 percent of the program funds are administered across the state, and addresses recipient issues with long-lead times in receiving state reimbursements. REGISTERED SUPPORT / OPPOSITION : Support San Francisco Bay Area Water Transit Authority (WETA) (Sponsor) California Conference Board of the Amalgamated Transit Union California Conference of Machinists International Longshore and Warehouse Union California Labor Federation California Teamsters Public Affairs Council San Francisco Chamber of Commerce Opposition None on file Analysis Prepared by : Rod Brewer / G. O. / (916) 319-2531