BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: sb 1371
SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: lowenthal
VERSION: 2/19/10
Analysis by: Jennifer Gress FISCAL: yes
Hearing date: April 20, 2010 URGENCY: YES
SUBJECT:
Federal stimulus funding for transportation
DESCRIPTION:
This bill prepares California to implement a second federal
economic stimulus bill, should one be passed by the United
States Congress and signed by the President.
ANALYSIS AND BACKGROUND:
On February 17, 2009, President Obama signed the American
Recovery and Reinvestment Act (ARRA), a $787 billion economic
stimulus package developed with the goals of creating new and
saving existing jobs and investing in long-term economic growth.
The federal government made available $48 billion nationally
for a variety of discretionary grant and formula-based
transportation programs. Of the formula-based funds, California
is expected to receive $2.57 billion for highways and $1.1
billion for transit.
On March 27, 2009, the Legislature passed and the Governor
signed AB 20xxx (Bass), Chapter 21, to govern the distribution
of ARRA's formula-based highway funds. That bill provided that
all projects using ARRA funds must meet the deadlines and
requirements established by ARRA, but it changed how highway
infrastructure funds are distributed to the California
Department of Transportation (Caltrans) and to regional
transportation agencies. It also provided additional guidance
on the use of Caltrans' portion of ARRA funds. The intent of AB
20xxx was to facilitate the implementation of federal stimulus
funds under the timelines provided by the Act and to achieve a
number of policy objectives, including addressing a growing
backlog of maintenance and rehabilitation needs, supporting
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Proposition 1B projects that may be delayed due to the state's
fiscal crisis, and creating employment opportunities for young
adults.
In December 2009, the United States House of Representatives
passed H.R. 2847, known as the "Jobs for Main Street Act," to
provide additional stimulus funding for transportation. The
Jobs for Main Street Act contains formula-based programs that
are similar to those that were in ARRA, but it establishes a
much shorter timeline for spending its funds. Under the Jobs
for Main Street Act, transportation agencies must award
contracts within 90 days of the state receiving funds.
This bill would establish state law governing the implementation
of a second federal economic stimulus bill, should one be passed
by the United States Congress and signed by the President. In
its current form, the bill:
Makes findings and declarations regarding the importance of
funding for transportation to stimulate job creation and
economic development and the necessity of swift action by the
Legislature to develop and transportation agencies to
implement legislation that enables agencies to meet the strict
deadlines expected to be contained in a second stimulus bill.
Requires Caltrans to work with local transportation agencies
to develop a list of projects that have the potential to be
awarded within the 90-day period established by the Jobs for
Main Street Act.
Requires Caltrans to submit monthly reports to the Legislature
regarding the status of implementing the stimulus bill, should
one be passed by Congress and signed by the President.
COMMENTS:
1.Purpose . 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 infrastructure. A stimulus bill, however, is
expected to contain very short timelines for awarding
contracts on projects funded by it.
The statewide unemployment rate remains above 12 percent, with
some counties experiencing a jobless rate above 20 percent.
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The author asserts that the state must stand ready to use all
stimulus funds available to it within the timelines provided
by the federal act. Legislation developed to implement a
stimulus bill should do the following:
Expedite 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 consistent with the mobility and
environmental goals of the state.
Establish 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
federal stimulus act.
While the likelihood of receiving a second round of stimulus
funding for transportation is uncertain at this time, the
author believes it is important to prepare for a second round
given the short time lines expected for using the funds and
the critical need this state faces for creating jobs. Moving
this bill helps to being that preparation.
1.Status of federal stimulus . It is unclear at this time
whether Congress will enact a second stimulus bill. After the
House of Representatives passed the Jobs for Main Street Act
in December, the U.S. Senate amended the bill to remove the
provisions related to stimulus, renamed the bill the "Hiring
Incentives to Restore Employment (HIRE) Act," and limited the
bill to extending the federal transportation bill, known as
the Safe, Accountable, Flexible, Transportation Equity Act - A
Legacy for Users (SAFETEA-LU). The HIRE Act was signed by the
President on March 12, 2010. The Senate had proposed to deal
with a second stimulus with a smaller amount of funding, but
has yet to do so.
In response to the Jobs for Main Street Act, Caltrans worked
with the regional transportation agencies and the Federal
Highway Administration (FHWA) in January and February to
identify projects that could meet the short deadlines proposed
by the original Jobs for Main Street Act and to ensure that
projects that could meet those timelines were included in the
Federal Statewide Transportation Improvement Program (FSTIP).
(Projects must be included in the FSTIP to be eligible for
federal funding.) Given the uncertain fate of federal
stimulus at this time, much of the early activity by
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transportation agencies at every level of government has
slowed.
2.Urgency clause . This bill contains an urgency clause.
Therefore, if this bill is passed by the Legislature and
signed by the Governor, it will go into effect immediately.
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
April 14, 2010)
SUPPORT: None received.
OPPOSED: None received.