BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 1164 (Gordon)
Hearing Date: 08/15/2011 Amended: 08/15/2011
Consultant: Mark McKenzie Policy Vote: T&H 9-0
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BILL SUMMARY: AB 1164 would authorize the Department of
Transportation (Caltrans) make a loan from federal
transportation funds for purposes of advancing a project that is
programmed to receive an allocation of Proposition 1B general
obligation bond funds, under specified conditions. The loan
would be repaid without interest from the proceeds of bonds sold
pursuant to Proposition 1B within three years. The bill would
appropriate funds received as repayment to Caltrans for use in
the local assistance program, in a manner in which the federal
funds would have otherwise been used, or for use on projects in
the State Highway Operation and Protection Program (SHOPP).
Caltrans would report to the Legislature on the loans made and
methodology for selecting projects within 45 days of the end of
the fiscal year. This loan authority would only be available
until September 30, 2015.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Maximize use of federal funds no new costs, potential
savings by Federal*
preventing a loss of federal funds
Caltrans/DOF/CTC minor administrative costs
Special**
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* Federal funds on deposit in the State Highway Account
** State Highway Account
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STAFF COMMENTS:
Existing law, enacted by ABx3 20 (Bass), Chapter 21 of 2009-10
Third Extraordinary Session, authorizes Caltrans, with approval
from the Department of Finance (DOF), to make loans of up to
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$310 million in federal American Recovery and Reinvestment Act
(ARRA) funds for the purpose of advancing projects funded, in
whole or in part, with Proposition 1B funds. Loans are to be
repaid, without interest, to the State Highway Account and are
appropriated to Caltrans for maintenance and rehabilitation
projects in the SHOPP. ARRA required 50 percent of the funds to
be obligated within 120 days, and the remaining funds must be
obligated within one year. Any ARRA funds not obligated within
these timeframes would be made available to other states. The
loan authority provided by ABx3 20 allowed Caltrans to maximize
the use of federal ARRA funds and advance Proposition 1B
projects that were halted or delayed due to the state's
inability to issue general obligation bonds.
AB 1164 would authorize Caltrans, until September 30, 2015, to
make a loan from federal transportation funds held in the State
Highway Account, upon approval of DOF and the California
Transportation Commission (CTC), to fund projects that have been
programmed to receive an allocation of bond funds authorized by
Proposition 1B. Caltrans may only make such a loan under the
following conditions: (1) if the loan is approved by DOF and
the California Transportation Commission (CTC); (2) if the loan
will not impact the ability to fund other specified projects;
and (3) if those federal funds might otherwise be lost to the
state. Loans would be repaid, without interest, to the State
Highway Account from proceeds of Proposition 1B bonds within
three years. Repaid funds would be appropriated to Caltrans for
use in the local assistance program, in a manner in which the
federal funds would have otherwise been used, or for use on
projects in the SHOPP.
This bill would provide Caltrans with general authority to use
this loan mechanism for federal transportation funds received
prior to September 30, 2015, providing the dual benefit of
advancing Proposition 1B projects and preventing the loss of any
unobligated federal funds at the end of the federal fiscal year.
In addition, California would be in a position to claim any
federal funds the may have been forfeited by other states, under
provisions of federal law. The bill may result in avoidance of
any project cost escalation caused by delays, and would allow
Caltrans to take advantage of the current market of favorable
contracting prices.
DOF and CTC would incur minor costs to review and approve loans
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of federal funds. Caltrans would be required to track
outstanding loans and provide annual reports to the Joint
Legislative Budget Committee on the loans made and the
methodology used to select projects. These duties could be
added to existing responsibilities to track and report on
projects funded by Proposition 1B at a minor cost to the
department, likely less than $50,000 annually.