BILL NUMBER: SB 1371 AMENDED
AMENDED IN ASSEMBLY AUGUST 9, 2010
AMENDED IN ASSEMBLY JUNE 16, 2010
FEBRUARY 19, 2010
An act to add Chapter 9.6 (commencing with Section 2425)
to An act to add Chapter 20.1 (commencing with Section
2704.30) to Division 3 of the Streets and Highways Code,
relating to transportation, and declaring the urgency thereof, to
take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 1371, as amended, Lowenthal Correa.
Federal transportation economic stimulus funds: 2nd round.
Transportation: bond funded projects: letter of no prejudice
Existing law, the Safe, Reliable High-Speed Passenger Train Bond
Act for the 21st Century, provides for the issuance of $9.95 billion
in general obligation bonds for high-speed rail and related purposes,
including $950 million to be allocated by the California
Transportation Commission to eligible recipients for capital
improvements to intercity and commuter rail lines and urban rail
transit systems in connection with or otherwise related to the
high-speed train system.
Existing law, with respect to the Highway Safety, Traffic
Reduction, Air Quality, and Port Security Bond Act of 2006, a $19.925
billion general obligation bond act for transportation and related
purposes, authorizes a regional or local agency to apply for a letter
of no prejudice that makes that agency eligible to expend funds
under its control for a project or project component that has been
designated to receive bond funding and to be subsequently reimbursed
from bond funds for that expenditure when bond funds become
This bill would allow an eligible recipient for funding for
capital improvements to intercity and commuter rail lines and urban
rail transit systems in connection with or otherwise related to the
high-speed train system under the Safe, Reliable High-Speed Passenger
Train Bond Act for the 21st Century to apply to the California
Transportation Commission and the Department of Transportation for a
letter of no prejudice relating to those projects. The bill would
authorize the commission and the department to develop guidelines to
implement these provisions.
This bill would declare that it is to take effect immediately as
an urgency statute.
Existing law generally provides for programming and allocation of
state and federal transportation capital improvement program funds
pursuant to the state transportation improvement program process
administered by the California Transportation Commission. Under these
provisions, 25% of available funds are available for interregional
improvement projects nominated by the Department of Transportation,
subject to a requirement that 60% of these funds be available for
projects in nonurbanized areas on the interregional road system and
for intercity rail projects. The remaining 75% of available funds are
available for regional improvement projects nominated by regional
agencies. All funds programmed through the state transportation
improvement program process are subject to the north-south split, and
the regional improvement funds are further subject to the county
Existing law establishes special procedures and formulas for
allocation and expenditure of federal transportation economic
stimulus funds received by the state in 2009.
This bill would require the Department of Transportation to work
with local transportation agencies to develop a list of potential
projects that may be awarded within a 90-day period of the award to
the state of 2nd round federal transportation economic stimulus
funds. The bill would require the department to submit to the
Legislative Analyst's Office and specified committees, or to post on
its Internet Web site, a monthly status report with respect to
expenditure of these funds. The bill would make related legislative
findings and declarations.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Chapter 20.1 (commencing with Section
2704.30) is added to Division 3 of the Streets and
Highways Code , to read:
CHAPTER 20.1. IMPLEMENTATION OF THE SAFE, RELIABLE HIGH-SPEED
PASSENGER TRAIN BOND ACT FOR THE 21ST CENTURY
2704.30. (a) An eligible recipient for funds pursuant to Section
2704.095 may apply to the California Transportation Commission and
the Department of Transportation for a letter of no prejudice for a
project or a component of a project to be undertaken with those
funds. The commission may approve the letter of no prejudice for one
or more projects or project components that the commission has
programmed or otherwise approved for funding. The letter of no
prejudice shall reference the project or component thereof and the
amount of bond funding that is programmed or otherwise approved for
that project or project component. The commission may approve a
letter of no prejudice regardless of whether bond funding has been
previously appropriated for purposes of the project or project
(b) Expenditures for the costs, up to the amount set forth in the
letter of no prejudice, of a project or project component for which a
letter of no prejudice has been issued shall be eligible for
reimbursement from the High-Speed Passenger Train Bond Fund if all of
the following apply:
(1) The project or project component for which the letter of no
prejudice was requested has commenced and expenditures have been
incurred by the eligible recipient.
(2) The expenditures made by the eligible recipient are eligible
for reimbursement in accordance with state and federal laws and
procedures, and are permitted expenditures under Section 2704.095. If
expenditures made are determined to be ineligible, then the state
has no obligation to reimburse for those expenditures.
(3) The eligible recipient complies with all legal requirements
for the project, including the requirements of the California
Environmental Quality Act (Division 13 (commencing with Section
21000) of the Public Resources Code).
(4) The expenditures were incurred after the project or project
component was programmed or otherwise approved for funding by the
(5) There is in the High-Speed Passenger Train Bond Fund an
appropriated amount sufficient to make the reimbursement payment.
Nothing in this section requires the fund to be funded at any
particular time or in any particular amount.
(c) The commission, department, and eligible recipients may enter
into an agreement or agreements governing reimbursement as described
in this section.
(d) Both the commission and the department, in consultation with
eligible recipients, may develop guidelines to implement this
section. If the commission or the department develop guidelines, they
shall, to the extent practicable, use the guidelines developed for
letters of no prejudice under Section 8879.501 of the Government
(e) Nothing in this section modifies any requirement under Chapter
20 (commencing with Section 2704).
(f) For the purposes of this section, "letter of no prejudice"
means an agreement between an eligible recipient and the commission
or the department that makes eligible for future reimbursement from
bond proceeds the expenditure of funds under the control of the
eligible recipient, subject to the availability of bond funds, as
provided in this section. The timing and final amount of
reimbursement are dependent on the terms of the agreement and the
availability of bond funds. The final amount of reimbursement may be
less than the amount stated in the letter of no prejudice.
SEC. 2. This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
In order to allow bond-funded transportation projects to proceed
as expeditiously as possible, and to benefit job retention in
California, it is necessary that this act take effect immediately.
SECTION 1. The Legislature finds and declares
all of the following:
(a) Congress is considering authorizing a second round of federal
economic stimulus funding that has the potential to bring $3.7
billion to California for investment in transportation
(b) To ensure that this stimulus package provides immediate
economic relief by creating or saving jobs in the short term, the
federal legislation is expected to include extremely short timelines
for project delivery that will pose significant challenges to state
and local agencies.
(c) Despite a modest economic recovery, the statewide unemployment
rate remains above 12 percent, with some counties experiencing a
jobless rate above 20 percent.
(d) The state must stand ready to use all stimulus funds
available to it within the timelines provided by the second federal
economic stimulus act.
(e) To this end, it is the intent of the Legislature to enact
legislation that does all of the following:
(1) Expedites the process by which state and local transportation
agencies obligate and award federal funds, easing regulatory and
statutory hurdles where appropriate and in a manner that is
consistent with the mobility and environmental goals of the state.
(2) Establishes an allocation formula that provides flexibility in
the use of funds and ensures geographic equity such that all areas
of the state benefit from the second federal economic stimulus act.
(3) Articulates priorities for project selection that will assist
state and local agencies in reducing their backlogs of maintenance
and rehabilitation projects and enable Proposition 1B (2006)
projects, that may otherwise be delayed due to the fiscal environment
of the state, to move forward.
SEC. 2. Chapter 9.6 (commencing with Section
2425) is added to Division 3 of the Streets and Highways Code, to
CHAPTER 9.6. SECOND ROUND FEDERAL TRANSPORTATION ECONOMIC
2425. This chapter shall be known and may be cited as the
Transportation Economic Stimulus Act of 2010.
2426. (a) The department shall work with local transportation
agencies to develop a list of potential projects that may be awarded
within a 90-day period after the award of the second round of federal
transportation economic stimulus funds to the state. In doing so,
the department shall assess whether the project is included in the
federal transportation improvement program, has completed applicable
state and federal environmental review processes, and would have
sufficient funding from other sources to complete the project if
stimulus funds were provided.
(b) The department shall submit, on a monthly basis, a status
report on the implementation of the federal stimulus act to the
Legislative Analyst's Office and the appropriate policy and fiscal
committees of the Legislature. This report shall identify each
project funded by the federal stimulus act and indicate whether a
project has been certified, obligated, and awarded, and has had funds
disbursed for it. The report shall also indicate the percentage of
funds provided to state and local agencies in accordance with the
allocation formula established by this chapter that has met each of
these milestones. In lieu of submitting the monthly report to the
Legislative Analyst's Office and the committees, the department may
elect to post the information, or a link to the information, on its
Internet Web site on a monthly basis.
SEC. 3. This act is an urgency statute
necessary for the immediate preservation of the public peace, health,
or safety within the meaning of Article IV of the Constitution and
shall go into immediate effect. The facts constituting the necessity
In order to maximize the opportunity for California to receive and
expend federal transportation economic stimulus funds, it is
necessary for this act to take effect immediately.