BILL ANALYSIS                                                                                                                                                                                                    Ó






           SENATE TRANSPORTATION & HOUSING COMMITTEE       BILL NO: AB 730
          SENATOR MARK DESAULNIER, CHAIRMAN              AUTHOR:  alejo
                                                         VERSION: 4/1/13
          Analysis by:  Eric Thronson                    FISCAL:  no
          Hearing date:  June 18, 2013



          SUBJECT:

          Monterey-Salinas Transit District revenue bonds

          DESCRIPTION:

          This bill authorizes the Monterey-Salinas Transit District to  
          approve with a two-thirds vote of its governing board the  
          issuance of up to $50 million in revenue bonds.

          ANALYSIS:

          The Revenue Bond Law of 1941 (RBL) establishes uniform  
          procedures for public agencies in California to use when issuing  
          revenue bonds.  The RBL specifies the various agencies that may  
          issue revenue bonds, defines the terms of revenue bond  
          covenants, and enumerates a variety of other conditions related  
          to revenue bond issuance.  In addition, the RBL establishes  
          procedures for approving the issuance of revenue bonds,  
          including requiring a majority vote of the governing board to  
          place a measure on the ballot and a two-thirds vote of the  
          electorate within a special district's area of jurisdiction.  

          In 2009, AB 644 (Caballero), Chapter 460, dissolved the  
          Monterey-Salinas Transit Agency and created the Monterey-Salinas  
          Transit District (MST).  Among the powers AB 644 granted to MST  
          was the authority to issue revenue bonds under the RBL.

          In 2011, AB 1143 (Dickinson), Chapter 537, authorized Sacramento  
          Regional Transit (RT) to issue revenue bonds without a  
          two-thirds vote of the electorate and instead to issue revenue  
          bonds with only a two-thirds vote of its governing board.

           This bill  authorizes MST to approve with a two-thirds vote of  
          its governing board the issuance of up to $50 million in revenue  
          bonds, exempting MST from the RBL requirement of placing a bond  
          measure on the ballot and garnering a two-thirds vote of the  
          electorate.  In addition, this bill restricts MST from using  




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          these bond funds on any projects in the former Fort Ord area  
          except for projects wholly within the State Highway 1  
          right-of-way or on the Monterey branch rail line.  Finally, this  
          bill includes the purchase of vehicles in the list of projects  
          eligible for revenue bond funding.
          
          COMMENTS:

           1.Purpose  .  According to the author, this bill allows MST to  
            more easily and less expensively issue revenue bonds to fund  
            improvements to its vehicles, equipment, and facilities.  The  
            author contends that MST has real capital needs, as one-third  
            of MST's full-sized bus fleet is beyond its useful life, and  
            MST's maintenance facilities are 35 years old and operating  
            well beyond their original design capacities.  Unlike other  
            counties in the state, Monterey County does not have a local  
            sales tax dedicated to transportation and therefore is more  
            dependent upon state and federal revenue sources for support.   
            The author believes this bill enables MST to issue bonds to  
            meet their funding needs for safe and efficient operations and  
            to provide service to their 4.5 million urban customers as  
            well as regional connections between communities.

           2.Other transit agencies have similar provisions  .  This bill is  
            not establishing new precedent by allowing MST to issue  
            revenue bonds with only a governing board vote instead of a  
            vote of the people.  Besides Sacramento's RT, 20 other transit  
            districts in California have similar provisions, including the  
            Bay Area Rapid Transit (BART), Orange County Transportation  
            Authority (OCTA), and the Santa Clara Valley Transportation  
            Authority (VTA). 

           3.Transit needs access to resources  .  The Legislature has  
            clearly prioritized policies that reduce greenhouse gas  
            emissions and improve air quality through the passage of bills  
            like AB 32 (Nunez Pavley), Chapter 488, Statutes of 2006, and  
            SB 375 (Steinberg), Chapter 728, Statutes of 2008.  Many argue  
            that public transit is a necessary and vital part of the  
            state's efforts to reduce emissions.  But while it works  
            toward emission reductions, some suggest the Legislature is  
            failing to provide the resources necessary to accomplish the  
            desired air quality benefits.  This bill gives a local transit  
            district another tool to use to accomplish its public  
            transportation aims by enabling it to more efficiently  
            consider one of many funding mechanisms available to other  
            districts.  At some point the committee may wish to consider  




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            granting this tool and others to transit districts statewide  
            in order to help facilitate the Legislature's goals of cleaner  
            air and more effective public transit.

           4.Double-referral  .  The Rules Committee has referred this bill  
            to both this committee and the Governance and Finance  
            Committee.  Therefore, if this bill passes this committee, it  
            will be referred to the Committee on Governance and Finance.
          
          Assembly Votes:
               Floor:    49-23
               LG:     6-2
               Trans:    10-6

          POSITIONS:  (Communicated to the committee before noon on  
          Wednesday,                                             June 12,  
          2013.)

               SUPPORT:  Monterey-Salinas Transit (sponsor)
                         City of Salinas
                         Fort Ord Reuse Authority
                         Monterey County Board of Supervisors
                         Transportation Agency for Monterey County

               OPPOSED:  None received.