BILL ANALYSIS Ó
AB 1143
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1143 (Dickinson)
As Amended July 12, 2011
Majority vote
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|ASSEMBLY: | |(June 2, 2011) |SENATE: |25-10|(August 18, |
| | | | | |2011) |
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(vote not relevant)
Original Committee Reference: B.,P. & C.P.
SUMMARY : Expands the Sacramento Regional Transit District's (RT)
authority to issue revenue bonds.
The Senate amendments delete the Assembly version of this bill, and
instead:
1)Authorize RT to issue revenue bonds by a two-thirds vote of the
governing board, thereby, deleting the provisions in statute that
require a vote of the electorate.
2)Deem as revenue, for purposes of the Revenue Bond Law of 1941, any
revenues or other income, receipts, or amounts made available to
RT, including, but not limited to, the proceeds of a transactions
and use tax imposed under specified provisions of existing law.
3)Allow RT to borrow money in accordance with provisions related to
securitized limited obligation notes, short term loans, and grant
anticipation notes.
4)Make other technical and clarifying changes.
EXISTING LAW :
1)Establishes the "Sacramento Regional Transit District Act" which
governs the powers and functions of RT, establishes RT's
territory, board of directors, and planning duties, and authorizes
RT to issue general obligation bonds and revenue bonds as
specified.
2)Allows RT to issue revenue bonds, payable from revenue of any
facility or enterprise to be acquired or constructed by RT, in the
manner provided by the Revenue Bond Law of 1941, Chapter 6
AB 1143
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(commencing with Section 54300), Part 1, Division 2, Title 5 of
the Government Code, all of the provisions of which are applicable
to the district.
3)Authorizes the district to temporarily borrow money in accordance
with various provisions of the Government Code applicable to local
agencies.
AS PASSED BY THE ASSEMBLY , this bill authorized the Department of
General Services, with the consent of the Board of Equalization
(BOE), to enter into a lease to consolidate the BOE headquarters.
FISCAL EFFECT : None
COMMENTS : The Legislature authorized the creation of the Sacramento
Regional Transit District in 1971 to operate a comprehensive public
transportation system for the Sacramento region. Since then, the
Legislature has made additional funding tools available to public
transportation agencies, as well as providing greater flexibility in
the use of their existing authorities. This bill seeks to update
RT's enabling act to reflect the changes and full range of funding
tools now available to public agencies.
Currently, 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 Cosumnes River
College, which RT estimates will cost $270 million. RT is also
planning a light rail extension to the Sacramento International
Airport, estimated to cost $856 million. RT wants to use revenue
bonds for part of the funding for both projects.
Existing law authorizes RT to issue revenue bonds under the Revenue
Bond Law of 1941, which establishes uniform procedures for public
agencies in California to use when issuing revenue bonds, including
the requirement for a two-thirds vote of the electorate within the
district's area of jurisdiction to issue bonds.
This bill makes three changes to RT's enabling Act: 1) It
authorizes RT to issue revenue bonds with a two-thirds vote of their
governing board, thereby, foregoing the need to have a vote of the
electorate, as is currently required; 2) The bill expands what can
be deemed as "revenue" for purposes of the Revenue Bond Law of 1941,
in order to include other revenues for income, receipts, or amounts
made available to RT, including proceeds from a transactions and use
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tax; and, 3) The bill allows RT more flexibility in borrowing funds,
including the use of securitized limited obligation notes, short
term loans, and grant anticipation notes - additional funding tools
that were added to statute after RT's creation.
According to the sponsor, the Sacramento Regional Transit District,
this bill will allow RT to save on both financing costs and
much-needed time with the ability to directly issue revenue bonds
for their upcoming expansions. The author notes that financing must
be completed before construction contracts can be awarded and the
success of the projects will depend on RT's ability to execute
financing in order to meet the 2013 construction season.
Additionally, the author believes that providing RT with useful
alternative procedures for temporary borrowing will help RT
withstand both federal and state grant fund timing, which will
provide a substantial portion of RT's capital and operating cash.
Support arguments: According to the sponsor, the additional
flexibility for RT in this bill is consistent with the authority of
several other transit districts in California. Supporters argue
that the bill will help RT to arrange local financing to complement
federal funding in order to meet construction deadlines
Opposition arguments: While this bill gives additional flexibility
to RT and RT's ability to issue revenue bonds, it does, however,
remove the current requirement for the electorate, by a two-thirds
vote, to approve the issuance of those bonds.
The subject matter of this bill has not been heard in an Assembly
policy committee this legislative session.
Analysis Prepared by : Debbie Michel / L. GOV. / (916) 319-3958
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