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
CONTINUED
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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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