BILL ANALYSIS Ó
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: AB 1164
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: gordon
VERSION: 6/28/11
Analysis by: Art Bauer FISCAL: yes
Hearing date: July 5, 2011
SUBJECT:
Federal transportation funds
DESCRIPTION:
This bill authorizes the Department of Transportation (Caltrans)
to make loans of federal funds deposited in the State Highway
Account (SHA) to advance projects funded by Proposition 1B.
ANALYSIS:
California has two major capital outlay programs for
transportation investments: The State Transportation
Improvement Program (STIP) and the State Highway Operations and
Protection Program (SHOPP). The STIP is the states' five-year
transportation capital outlay program, which is updated and
adopted by the California Transportation Commissioner (CTC)
every two years. Regional agencies program 75 percent of the
STIP revenue and Caltrans programs 25 percent. The projects in
the STIP are typically capacity increasing projects. The SHOPP
is the state's ten-year highway rehabilitation program, which
the CTC adopts every two years. Some Proposition 1B, the 2006
$19.925 billion state transportation bond, included programs
that are within the STIP.
Existing law authorizes Caltrans, with the approval of the
Director of Finance, to loan funds from the American Recovery
and Reinvestment Act of 2009 (ARRA) to fund Proposition 1B bond
projects that are ready for construction, but for which bond
funds are unavailable.
This bill authorizes Caltrans, with the approval of the Director
of Finance, to loan federal funds in the State Highway Account
(SHA) to accelerate Proposition 1B projects. Caltrans would
repay the loans when Proposition 1B bonds are sold.
AB 1164 (GORDON) Page 2
COMMENTS:
1.Purpose . The purpose of this bill is to ensure that there is
a steady stream of transportation projects going to
construction even when bond funds are unavailable. This bill
achieves this in two ways. First, because of the difficulty
the state is having in selling bonds, the stream of
Proposition 1B bond revenue is unpredictable. Nevertheless,
there are projects sitting on the shelf ready to go to
construction. This bill addresses this issue by allowing
Caltrans to borrow federal funds to commence the projects. A
second reason put forward by the bill's sponsor, Caltrans, is
that this bill would enable the state, at the end of the
federal fiscal year, to commit any unobligated federal funds
that the state would be at risk of losing to unfunded, but
read-to-go, bond projects. In addition, if other states
forfeit federal funds, California would be in a position to
claim them, under the provisions of federal law.
2.Proposed amendments . There are two shortcomings with the
bill. The first is that the CTC does not approve the loans.
This makes it difficult to coordinate the timing of the
expenditure of loan funds with STIP expenditures, as CTC is
responsible for STIP expenditures. Second, there is no stated
period of time for the repayment of the loans, nor for the
authority to borrow federal funds. In addition, Caltrans is
proposing an amendment that ensures the loans will not impact
the SHOPP and STIP projects already funded. The following
amendments address these issues:
a. On page 2, line 8, after Director of Finance add "and
the California Transportation Commission." The amendment
requires CTC approval of any loan.
b. On page 3, line 3 after the period add " The Department
may make a loan of federal funds under this section only
if it has determined that the loan of such funds will not
impact its ability to fund programmed projects delivered
under the State Highway Operations and Protection Program
or the State Transportation Improvement Program." This
amendment ensures that SHOPP and STIP projects are not put
at risk by the loan program.
AB 1164 (GORDON) Page 3
c. On page 3, line 16, add after the parenthesis "within
three years of the date of the original loan." This
amendment limits the length of the loan.
d. Between lines 36 and 37 add the following, "The loan
authority provided by this section shall be available only
until September 30, 2015. This section shall become
inoperative when all loans are repaid pursuant to
subdivision(a)." This is the sunset amendment.
3. Double-referral . The Rules Committee referred this bill to
both the Transporation and Housing Committee and to the Rules
Committee. Therefore, if this bill passes this committee, it
will be referred to the Committee on Rules.
Assembly Votes are not relevant.
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
June 29, 2011)
SUPPORT: Department of Transportation (sponsor)
OPPOSED: None received.