BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                  AB 1143|
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                                 THIRD READING


          Bill No:  AB 1143
          Author:   Dickinson (D)
          Amended:  7/12/11 in Senate
          Vote:     21

           
           SENATE TRANSPORTATION & HOUSING COMMITTEE  :  7-2, 7/5/11
          AYES:  DeSaulnier, Gaines, Kehoe, Lowenthal, Pavley, Rubio, 
            Simitian
          NOES:  Harman, Huff
           
          ASSEMBLY FLOOR  :  Not relevant


           SUBJECT  :    Sacramento Regional Transit District:  bonds

           SOURCE  :     Author


           DIGEST  :    This bill authorizes the Sacramento Regional 
          Transit District to issue revenue bonds.

           ANALYSIS  :    Sacramento Regional Transit District (RT) is 
          embarking on an extensive program to expand its light rail 
          system.  The first project in this expansion will be a 
          4.3-mile extension of the Blue Line in the State Route 99 
          corridor from its current terminus at Meadowview Road to 
          Consumnes River College, which RT estimates will cost $270 
          million.  RT will learn in 2012 whether the Federal Transit 
          Administration will fund 50 percent of this cost.  RT is 
          contemplating the use of revenue bonds to raise part of the 
          funds that will make up the remaining 50 percent.  RT is 
          also planning a light rail extension to Sacramento 
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          International Airport, which RT estimates will cost $856 
          million.  RT anticipates revenue bonds being part of the 
          funding package for this extension too.

          Existing law authorizes RT to issue revenue bonds under the 
          provisions of the Revenue Bond Law of 1941, which 
          establishes uniform procedures for public agencies in 
          California to use when issuing revenue bonds.  It defines 
          the terms of the covenants, defines the various agencies 
          that may issue revenue bonds, establishes procedure for 
          imposing revenues, and enumerates a variety of other 
          conditions necessary to issue bonds, including requiring a 
          majority vote of the governing board to place a measure on 
          the ballot and a two-thirds vote of the electorate within a 
          special district's area of jurisdiction to issue the bonds. 
           Bonds issued by local agencies, including RT, have a 12 
          percent cap on the interest rate. 

          RT, according to specified statutory procedures, may issue 
          short-term notes, grant anticipation notes, and otherwise 
          temporarily borrow funds.

          This bill:

          1. Authorizes RT to issue revenue bonds by a two-thirds 
             vote of the governing board but does not require a vote 
             of the electorate.

          2. Deems as revenue for purposes of the Revenue Bond Law of 
             1941farebox revenue, sales tax revenue, or other 
             revenues that may be available to RT.

          3. Requires RT to follow various procedures stipulated in 
             existing law for issuing bonds.

           Comments
           
           Change in state transportation financing environment  .  When 
          RT originally conceived its light rail expansion projects, 
          it based a substantial portion of the local match on prior 
          state funding commitments from the Transportation 
          Congestion Relief Program, Proposition 1B, and the State 
          Local Partnership Program.  Due to the lack of funding 
          availability in these transportation infrastructure 







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          programs, RT must now raise a significant portion of local 
          funding by financing 50 percent of the project's cost on 
          its own.  This bill establishes a framework for RT to 
          leverage local revenues to match the federal funds and 
          provides RT with the tools to maximize local funds. 
               
           Other transit agencies have similar provisions  .  This bill 
          is not establishing new precedent.  Several other transit 
          districts have similar provisions, including BART, San 
          Diego County Regional Transportation Commission, San Mateo 
          County Transit District, and the Santa Clara Valley 
          Transportation Authority among others.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No   
          Local:  No

           SUPPORT  :   (Verified  7/12/11)

          Sacramento Regional Transit District

           ARGUMENTS IN SUPPORT  :    According to the author's office, 
          the ability to issue revenue bonds directly for up- coming 
          light rail projects will save time and be more efficient.  
          Because of the Federal Transit Administration requirements 
          for grant approval, RT needs to have its local share of the 
          construction financing for its light rail expansion in 
          place before May 2012.  By arranging the local financing to 
          complement the federal financing decision timeline, this 
          bill will enable RT to meet its earliest possible date to 
          commence construction, which would be 2013.



          JJA:kc  7/12/11   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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