BILL ANALYSIS Ó
AB 1164
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CONCURRENCE IN SENATE AMENDMENTS
AB 1164 (Gordon)
As Amended September 1, 2011
Majority vote
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|ASSEMBLY: | |(June 2, 2011) |SENATE: |35-0 |(September 7, |
| | | | | |2011) |
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(vote not relevant)
Original Committee Reference: TRANS.
SUMMARY : Authorizes the California Department of Transportation
(Caltrans) to loan federal funds to accelerate Proposition 1B
projects, under certain conditions and for a limited time.
The Senate amendments entirely replace previous provisions of this
bill and instead:
1)Authorize Caltrans, under certain conditions, to loan federal
funds in the State Highway Account (SHA) to accelerate Proposition
1B projects, until September 30, 2015.
2)Provide that loans of federal funds may be made only upon approval
of the Director of Finance and the California Transportation
Commission and only if doing so will not impact Caltrans' ability
to fund programmed projects.
3)Limit the aggregate amount of the loans that may be made to no
more than the amount of unsold Proposition 1B bonds and requires
the loans to be repaid to the SHA within three years.
4)Provide that loans may be made only under circumstances where
federal funds might otherwise be lost to the state and prohibits
Caltrans from making a loan of local subvention funds except at
the request of a specific regional transportation planning agency
to which the funds had been allocated previously.
5)Appropriate repaid funds 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 Operations and Protection Program.
6)Require Caltrans to report to the Joint Legislative Budget
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Committee within 45 days after the end of each fiscal year in
which the loan authority has been used.
7)Provide that these provisions will become inoperative when all
loans are repaid and repeals these provisions on January 1, 2019.
8)Make technical, conforming changes to related provisions of law.
EXISTING LAW :
1)Authorizes, pursuant to the Highway Safety, Traffic Reduction, Air
Quality, and Port Security Bond Act of 2006, (approved by the
voters as Proposition 1B), $19.925 billion in transportation
infrastructure bonds in over a dozen individual programs.
2)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.
AS PASSED BY THE ASSEMBLY , this bill required Senate confirmation of
the five members of the High-Speed Rail Authority (Authority) who
are appointed by the Governor.
FISCAL EFFECT : According to the Senate Appropriations Committee,
minor administrative costs to Caltrans, the Department of Finance,
and the California Transportation Commission. The bill could
prevent the loss of federal funds.
COMMENTS : According to Caltrans, in the midst of a severe economic
downturn in early 2009, Congress enacted ARRA to, among other
things, provide states with a substantial infusion of federal
funding for transportation projects. ARRA required that these funds
be used on projects that could break ground immediately (in most
cases within 120 days). Caltrans and local and regional agencies
were successful in utilizing all of the federal funds awarded to
California and, in the process, were able to accelerate construction
of many projects. The side effect, however, was that this major
short-term infusion of funding cleared out most of the projects that
Caltrans (and many agencies) had ready to go to construction upon
funding becoming available (often known as "shelf" projects).
Consequently, the current list of shelf projects is relatively
short.
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This shortage of shelf projects could pose a significant challenge
to Caltrans in utilizing all of the regular (non-ARRA) federal
funding that California receives. Under federal law, all funds
received in a federal fiscal year (FFY) have to be obligated to
projects prior to the end of the FFY. Any funds not assigned to
projects within that time frame are forfeited and can be claimed by
other states. However, funds cannot be obligated for construction
until the project is ready for bid. Caltrans is working to
accelerate delivery of projects to ensure that it can use all
available funding. However, if any major projects scheduled for
delivery in the near future fail to meet their targets, there is a
significant risk that the department may fall short of being able to
use all available federal funds in FFY 2011 or FFY 2012. In that
case, the state would forfeit these funds to other states.
At the same time that Caltrans is facing challenges in obligating
all of its federal funds, the state is having difficulty in moving
forward with Proposition 1B projects. By December of 2011, the
state is expected to have at least $1.3 billion in Proposition 1B
projects ready to go to construction. However, due to economic
conditions and the state's fiscal situation, California may be
unable to generate adequate bond funding to fully fund these
projects and allow them to proceed.
This bill would enable a significant number of these projects to
proceed with loans of federal dollars authorized by this bill.
The provisions of this bill have not been heard in the Assembly.
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093
FN: 0002691