BILL ANALYSIS Ó
AB 1143
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Date of Hearing: August 31, 2011
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
AB 1143 (Dickinson) - As Amended: July 12, 2011
SUBJECT : Sacramento Regional Transit District: bonds.
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
(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.
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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. First, it
authorizes RT to issue revenue bonds with a two-thirds vote of
their governing board, thereby, foregoing the need to have a
AB 1143
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vote of the electorate, as is currently required. Second, 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 tax. Third, 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.
REGISTERED SUPPORT / OPPOSITION :
Support
AB 1143
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Sacramento Regional Transit District ÝSPONSOR]
Opposition
None on file
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958