BILL NUMBER: AB 1229 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 11, 2011
INTRODUCED BY Assembly Member Feuer
FEBRUARY 18, 2011
An act to amend Sections 64111 and 64132
Section 14553.4 of the Government Code, relating to
transportation financing, and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 1229, as amended, Feuer. California Transportation
Financing Authority Fund: subsidies: local agency revenue bonds.
Transportation: financing: federal highway grant
anticipation notes.
Existing law continuously appropriates the amounts specified in
the annual Budget Act as having been deposited in the State Highway
Account from federal transportation funds, and pledged by the
California Transportation Commission, to the Treasurer for the
purposes of issuing federal highway grant anticipation notes,
commonly known as GARVEE bonds, to fund transportation projects
selected by the commission. Existing law prohibits the Treasurer from
authorizing the issuance of the notes if the annual repayment
obligations of all outstanding notes in any fiscal year would exceed
15% of the total amount of federal transportation funds deposited in
the account for any consecutive 12-month period within the preceding
24 months.
This bill would increase the 15% limitation to 25%, thereby making
an appropriation. This bill, with respect to the amount represented
by the 25% limitation, would reserve 40% of that amount to fund
projects proposed by transportation planning agencies. The notes for
those projects would be secured by all federal transportation funds
deposited in the State Highway Account, but would be repaid from
specified federal funds designated for allocation to and expenditure
by the transportation planning agencies. The bill would provide that
a transportation planning agency may not commit more than 50% of its
share of apportionments of the designated federal funds to annual
debt service on the notes, as specified. The bill would require the
commission to approve these project proposals upon receiving a
communication from the Director of Transportation that the associated
debt service for the transportation planning agency's region will
not exceed the 50% limitation and a communication from the Treasurer
that the total debt service on federal grant anticipation notes
authorized will not exceed the overall 25% limitation.
The California Transportation Financing Authority Act sets forth
the duties of the California Transportation Financing Authority in
issuing certain transportation financing instruments, or approving
their issuance by various local or regional agencies. The authority
is authorized to expend moneys in the continuously appropriated
California Transportation Financing Authority Fund to secure the
issuance of bonds issued by the authority and cover various related
costs, among other things.
This bill would authorize the authority to direct the Treasurer to
utilize unrestricted moneys in the fund to subsidize the payment of
interest by those local or regional agencies on revenue bonds issued
by those agencies pursuant to these provisions.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 14553.4 of the
Government Code is amended to read:
14553.4. (a) The Treasurer may not
authorize the issuance of notes if the annual repayment obligations
of all outstanding notes in any fiscal year would exceed 15
25 percent of the total amount of federal
transportation funds deposited in the State Highway Account in the
State Transportation Fund for any consecutive 12-month period within
the preceding 24 months.
(b) Of the amount represented by the 25-percent limitation in
subdivision (a), 40 percent shall be reserved for projects proposed
by transportation planning agencies for funding from notes secured by
all federal transportation funds deposited in the State Highway
Account, but to be repaid by federal regional surface transportation
program funds and federal congestion mitigation and air quality funds
that flow through the State Highway Account for use by
transportation planning agencies pursuant to Sections 182.6 and 182.7
of the Streets and Highways Code. A transportation planning agency
may not commit more than 50 percent of its share of apportionments of
Section 182.6 and 182.7 funds for any consecutive 12-month period
within the preceding 24 months to annual debt service on the notes.
The commission shall approve regionally funded project proposals
pursuant to this subdivision upon receiving a communication from the
Director of Transportation that the associated debt service for the
transportation planning agency's region will not exceed 50 percent of
its share of Section 182.6 and 182.7 funds and a communication from
the Treasurer that the total debt service on notes authorized
pursuant to this article will not exceed the 25-percent limitation
under subdivision (a). Approval by the commission constitutes a
pledge of federal funds pursuant to subdivision (a) of Section
14554.8.
SECTION 1. Section 64111 of the Government Code
is amended to read:
64111. (a) Prior to issuing or approving the issuance of bonds
for a project, the authority shall determine that the revenues and
other moneys available for a project will be sufficient to pay debt
service on the bonds and to operate and maintain the project over the
life of the bonds consistent with the objective set forth in Section
64105. The authority may hire outside consultants to assist in
making these determinations.
(b) The authority may issue or approve the issuance of bonds to
achieve any of its purposes under this division and bonds may be
issued without investment grade ratings, as long as the bonds are
sold only to qualified institutional buyers or accredited investors
who attest upon purchase that they understand the nature of the risks
of their investment. The bonds may be taxable or tax exempt and may
be sold at public or private negotiated sale. The Treasurer shall
serve as the agent for sale for all authority bond issues, and shall
be reimbursed from bond proceeds to cover the Treasurer's costs
related to the issuance of these bonds. As used in this subdivision,
"accredited investor" shall have the meaning as defined in
subdivision (a) of Section 5950, and "qualified institutional buyer"
shall have the meaning as defined in subdivision (h) of Section 5950.
(c) The project sponsor may request that it be the issuer of the
bonds. The authority may grant the request if it determines that the
revenues and other moneys available for the project will be
sufficient to pay debt service on the bonds and to operate and
maintain the project over the life of the bonds. A project sponsor
for which the authority has granted a request that the project
sponsor issue the bonds, in addition to any other powers it may have
under any other law, shall have all of the powers of the authority
under this division necessary or convenient for the purpose of
issuing, securing, and repaying the bonds and financing or
refinancing the project. This provision is a complete, additional,
and alternative method of accomplishing the matters authorized, and
the project sponsor need not comply with any other law relating to
the issuance of bonds, financing of projects and, if applicable, the
imposition and collection of tolls.
(d) The authority may arrange additional credit support for the
bond issues, including, but not limited to, interest subsidies
provided pursuant to subdivision (e) of Section 64132. However, the
authority may not compel project sponsors to make use of that credit
enhancement, nor compel them to contribute to it by becoming part of
a common credit or by providing funding for a common reserve or other
enhancement mechanism.
SEC. 2. Section 64132 of the Government Code is
amended to read:
64132. (a) The California Transportation Financing Authority Fund
is hereby created and continued in existence in the State Treasury,
to be administered by the authority. Notwithstanding Section 13340 of
the Government Code, all moneys in the funds shall be continuously
appropriated without regard to fiscal year for the purposes of this
division. The authority may pledge any or all of the moneys in the
fund as security for payment of the principal of, and interest on,
any particular issuance by the authority of bonds issued pursuant to
this division, or any particular secured or unsecured loan made
pursuant to subdivision (g) or (h) of Section 64107, and, for that
purpose or as necessary or convenient to the accomplishment of any
other purpose of the authority, may divide the fund into separate
accounts. All moneys accruing to the authority pursuant to this part
from whatever source shall be deposited in the fund.
(b) Subject to the priorities that may be created by the pledge of
particular moneys in the fund to secure any issuance of bonds of the
authority, and subject further to the costs of loans provided by the
authority pursuant to subdivisions (g) and (h) of Section 64107, and
subject further to any reasonable costs that may be incurred by the
authority in administering the program authorized by this division,
all moneys in the fund derived from any source shall be held in trust
for the security and payment of bonds of the authority and shall not
be used or pledged for any other purpose so long as the bonds are
outstanding and unpaid. However, nothing in this section shall limit
the power of the authority to make loans with the proceeds of bonds
in accordance with the terms of the resolution authorizing the same.
(c) Pursuant to any agreements with the holders of particular
bonds pledging any particular assets, revenues, or moneys, the
authority may create separate accounts in the fund to manage assets,
revenues, or moneys in the manner set forth in the agreements.
(d) The authority may, from time to time, direct the Treasurer to
invest moneys in the fund that are not required for its current
needs, including proceeds from the sale of any bonds, in the eligible
securities specified in Section 16430 as the agency shall designate.
The authority may direct the Treasurer to deposit moneys in
interest-bearing accounts in state or national banks or other
financial institutions having principal offices in this state. The
authority may alternatively require the transfer of moneys in the
fund to the Surplus Money Investment Fund for investment pursuant to
Article 4 (commencing with Section 16470) of Chapter 3 of Part 2 of
Division 4 of Title 2. All interest or other increment resulting from
an investment or deposit shall be deposited in the fund,
notwithstanding Section 16305.7. Moneys in the fund shall not be
subject to transfer to any other fund pursuant to any provision of
Part 2 (commencing with Section 16300) of Division 4 of Title 2,
excepting the Surplus Money Investment Fund.
(e) The authority may direct the Treasurer to utilize unrestricted
moneys in the fund, including interest or other increment resulting
from an investment or deposit of unrestricted moneys, to subsidize
the payment of interest by project sponsors on revenue bonds issued
by those project sponsors pursuant to this division.