BILL ANALYSIS SB 1371 Page 1 SENATE THIRD READING SB 1371 (Correa) As Amended August 16, 2010 2/3 vote. Urgency SENATE VOTE :Vote not relevant TRANSPORTATION 13-0 ----------------------------------------------------------------- |Ayes:|Bonnie Lowenthal, | | | | |Jeffries, | | | | |Bill Berryhill, | | | | |Blumenfield, Buchanan, | | | | |Eng, Torlakson, Hayashi, | | | | |Miller, Niello, Norby, | | | | |Portantino, Solorio | | | |-----+--------------------------+-----+--------------------------| | | | | | ----------------------------------------------------------------- SUMMARY : Authorizes letters of no prejudice (LONP) for the $950 million in high-speed passenger train bond funds intended for capital improvements to intercity and commuter rail lines and urban rail systems. Specifically, this bill : 1)Authorizes eligible recipients of these bond dollars to seek LONPs, as defined, from the California Transportation Commission (CTC). 2)Authorizes the CTC to approve LONPs for projects that it has programmed or otherwise approved, regardless of whether bond funding has been previously appropriated for the project. 3)Provides that expenditures for projects with approved LONPs may be reimbursed with bond dollars if all of the following apply: a) The project has commenced and expenditures have been incurred by the eligible recipient; b) The expenses are eligible for reimbursement according to state and federal laws and procedures; c) The eligible recipient complies with all legal SB 1371 Page 2 requirements of the project, including compliance with the California Environmental Quality Act; d) The expenditures were incurred after the project was programmed or otherwise approved by the CTC; and, e) Sufficient bond dollars are available. 4)Authorizes the CTC to develop guidelines to implement LONPs for the $950 million in high-speed passenger train bond funds intended for intercity and commuter rail, using guidelines already developed for similar bond programs to the extent possible. 5) Is an urgency measure allowing this bill to become effective upon enactment. EXISTING LAW: 1)Makes available, in part, under the Safe, Reliable High-Speed Passenger Train Bond Act (Bond Act) for the 21st Century, $950 million for capital improvements to intercity and commuter rail lines and urban rail systems that provide direct connectivity to the high-speed passenger train system. Of the $950 million, $190 million is allocated to The Department of Transportation for state-supported intercity rail lines that provide regularly scheduled service and that use public funds for operation and maintenance. (A minimum of $47.5 million must be allocated to each of the state's three intercity rail corridors.) The remaining funds, $760 million, are allocated by the CTC to eligible recipients by formula related to a recipient's proportional share of the statewide number of track miles, annual vehicle miles, and annual passenger trips. 2)Provides that allocations from this money may be used for capital improvements that provide direct connectivity to the high-speed passenger train system, are part of the construction of the system, or that provide capacity enhancements, modernization, rehabilitation, or safety improvements. 3)Makes public agencies and joint powers authorities that operate regularly scheduled passenger rail service in the SB 1371 Page 3 following categories eligible recipients of the bond dollars: a) Commuter rail; b) Light rail; c) Heavy rail; and, d) Cable car. 4)Authorizes LONPs for projects to be funded under the Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006 that provided $20 billion in funds for transportation capital improvements. FISCAL EFFECT : Unknown; however, according to the Assembly Appropriations Committee analysis of last year's AB 672 (Bass), Chapter 462, Statutes of 2009, that similarly authorized LONPs: 1)Minor additional costs to the CTC to approve and issue LONPs and to track compliance with bond act requirements for projects receiving LONPs. 2)Potential significant savings in aggregate state and local transportation funds to the extent the issuance of LONPs allows projects to remain on schedule and thus reduces total project costs. COMMENTS : Under current law, CTC and other administering agencies have established LONP programs for various funding categories under Proposition 1B, the Highway Safety, Traffic Reduction, Air Quality, and Port Security Act of 2006. LONPs are essentially agreements between a local or regional transportation agency and the agency responsible for administering a specific category of state bond funds. LONP agreements allow a local or regional agency that wants to expend their own local funds to begin or continue a project and then be reimbursed later from state bond funds, when the bond funds become available. The timing and amount of reimbursement form state bond funds is not guaranteed so local agencies, not the state, assume the risk of choosing to use the LONP process to advance funding for a project. SB 1371 Page 4 The Los Angeles County Metropolitan Transportation Authority supports SB 1371 because it will allow the Southern California Regional Rail Authority (SCRRA) to move forward with a $200 million rail safety program to implement positive train control throughout the Metrolink system. SCRRA intends to implement positive train control by 2012. Other projects will also be eligible for LONPs under this bill. Related legislation: AB 2703 (John A. Perez) is similar to this bill and is currently pending in Senate Rules Committee. Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093 FN: 0006717