BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1164| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1164 Author: Gordon (D) Amended: 8/15/11 in Senate Vote: 21 SENATE TRANSPORTATION & HOUSING COMMITTEE : 9-0, 7/5/11 AYES: DeSaulnier, Gaines, Harman, Huff, Kehoe, Lowenthal, Pavley, Rubio, Simitian SENATE APPROPRIATIONS COMMITTEE : 7-0, 8/15/11 AYES: Kehoe, Walters, Alquist, Emmerson, Lieu, Pavley, Steinberg NO VOTE RECORDED: Price, Runner ASSEMBLY FLOOR : 76-1, 6/2/11 - See last page for vote SUBJECT : Federal transportation funds SOURCE : Department of Transportation DIGEST : This bill authorizes, until September 30, 2015, the Department of Transportation to make loans of federal funds deposited in the State Highway Account 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 CONTINUED AB 1164 Page 2 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 the Department of Transportation (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 to fund Proposition 1B bond projects that are ready for construction, but for which bond funds are unavailable. This bill: 1. Authorizes 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. 2. Requires the loan be repaid without interest from the proceeds of bonds sold pursuant to Proposition 1B within three years. 3. Appropriates 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 SHOPP. 4. Requires Caltrans to report to the Legislature on the loans made and methodology for selecting projects within 45 days of the end of the fiscal year. 5. Sunsets this loan authority on September 30, 2015. Comments This bill ensures that there is a steady stream of transportation projects going to construction even when AB 1164 Page 3 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 enables 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 will be in a position to claim them, under the provisions of federal law. FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee: Fiscal Impact (in thousands) Major Provisions 2011-12 2012-13 2013-14 Fund Maximize use of no new costs, potential savings by Federal* federal funds preventing a loss of federal funds Caltrans/DOF/CTC minor administrative costs Special** *Federal funds on deposit in the State Highway Account **State Highway Account SUPPORT : (Verified 8/16/11) Department of Transportation (source) ASSEMBLY FLOOR : AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Campos, Carter, Cedillo, Chesbro, Cook, Davis, Dickinson, AB 1164 Page 4 Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani, Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Grove, Hagman, Halderman, Harkey, Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell, Nestande, Nielsen, Olsen, Pan, Perea, V. Manuel Pérez, Portantino, Silva, Skinner, Smyth, Solorio, Swanson, Torres, Valadao, Wagner, Wieckowski, Williams, Yamada, John A. Pérez NOES: Norby NO VOTE RECORDED: Conway, Gorell, Hall JJA:do 8/17/11 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****