BILL ANALYSIS Ó
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UNFINISHED BUSINESS
Bill No: SB 85
Author: Senate Budget and Fiscal Review Committee
Amended: 6/12/13
Vote: 21
PRIOR SENATE VOTES NOT RELEVANT
ASSEMBLY FLOOR : Not available
SUBJECT : Transportation Budget Trailer Bill of 2013-14
SOURCE : Author
DIGEST : This is the Transportation Budget Trailer Bill for
2013-14. It contains necessary changes to enact modifications
in the Budget Bill for 2013-14. This bill includes changes
regarding the accounting treatment of various
transportation-related accounts, provides a mechanism for
increased security for certain transportation bonds, extends the
use of miscellaneous revenue for the payment of debt service of
transportation bonds, and provides a process for the relocation
of utilities pursuant to the constructions of the high-speed
rail project.
Assembly Amendments delete the Senate version of the bill, which
expressed legislative intent to enact statutory changes related
to the Budget Act of 2013, and instead add the current language.
ANALYSIS :
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Existing law:
1. Provides that the Department of Transportation (Caltrans) may
adjust the budgeting, accounting and reporting systems for
various transportation funds, comprising the Public
Transportation Account, the State Highway Account, the
Traffic Congestion Relief Fund, the Transportation Investment
Fund and the Transportation Deferred Investment Fund, such
that unliquidated encumbrances are not reflected in the fund
balance and financial statements.
2. Allows for the fiscal years 2010-11, 2011-12 and 2012-13 the
transfer of miscellaneous revenue (including money derived
from the sale of documents, charges for various services,
condemnation deposits, rental of property, and other uses of
money and property) to the Transportation Debt Service Fund
in the State Transportation Fund, to be used for payment of
current year debt service on certain mass transportation
bonds. Existing law requires that these revenues be retained
in the State Highway Account, commencing in 2013-14, subject
to appropriation by the Legislature.
3. Provides for the issuance of general obligation bonds to be
sold for various transportation projects, with debt service
generally payable from the General Fund. Weight fees are
imposed on certain commercial vehicles with the revenues
generated by these fees available for expenditure from the
State Highway Account, to be used for certain transportation
purposes. Weight fee revenues deposited in the State Highway
Account are transferred to the Transportation Debt Service
Fund to be used for debt service on certain transportation
bonds. These funds can also be used for advanced funding of
future debt service requirements.
4. Authorizes the High-Speed Rail Authority (HSRA) to enter into
contracts, including for the purposes of establishing and
maintaining a right-of-way for high-speed rail segments.
HSRA has the statutory authority to relocate utilities in
order to create a right-of-way and conduct construction on
the high-speed rail project, but no statutory framework
exists for this process. Such a frame work for utility
relocation by Caltrans is in statute.
This bill:
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1. Clarifies that existing law allows for the use of a cash
accounting method in reporting fund balances for certain
specified funds. Specifically, this bill allows for the
Department of Finance to direct agencies that collect revenue
for, or spending from, the Public Transportation Account, the
State Highway Account, the Traffic Congestion Relief Fund,
the Transportation Investment Fund and the Transportation
Deferred Investment Fund, to adjust budgeting accounting, and
reporting systems and documents so that unliquidated
encumbrances, payables, and other accruals are not reflected
in the fund balance in the Governor's Budget fund condition
or the fund balance in the financial statements submitted to
the State Controller for purposes of the annual report.
These funds are managed to maintain cash for immediate need,
rather than accumulating large cash balances that must equal
total commitments. The treatment of these funds reflects the
multi-year use of cash to deliver transportation projects as
efficiently as possible.
2. Removes the requirement that miscellaneous revenues be
retained in the State Highway Account beginning in 2013-14,
and instead requires that these revenues be transferred to
the Transportation Debt Service Fund in the State
Transportation Fund for payment of current year debt service
on certain mass transportation bonds. Under this bill, the
revenue would be continuously appropriated for this purpose.
This bill allows for the miscellaneous transportation
revenues to offset debt serve costs to the General Fund on an
ongoing basis.
3. Creates a class of transportation general obligation bonds
known as designated bonds, which are secured by a transfer of
weight fee revenue to the Transportation Debt Service Fund
for the purpose of directly paying the debt service on the
designated bonds, rather than paying debt service indirectly
through reimbursement to the General Fund. The funds are
continuously appropriated. To the extent the transferred
weight fees are insufficient to meet the debt service
requirement, the General Fund would make up the shortfall.
4. Provides a statutory framework to HSRA for the relocation of
utilities in the right-of-way of the high-speed rail project,
based on the framework already in place for Caltrans. This
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bill establishes procedures for reimbursement or payment of
utility relocation costs, clarifying the HSRA's utility
relocation process on land acquired for the high-speed rail
project. The proposed statutory change provides that HSRA
will pay for the reasonable and necessary costs of removal
and relocation of the utilities that are within the
right-of-way. Costs of certain relocations with the
right-of-way will also be covered by the HSRA. A credit will
be made to the HSRA for improvements to the utility, salvage
value of materials, and changes in the useful life of any
replacement property.
Comments
This bill enacts a variety of changes to transportation
activities in the state. The cash accounting for certain
transportation funds clarifies existing law and would result in
no changes to current practices. This bill related to utility
relocation for HSRA merely institutes a statutory framework for
an authority that already exists. The transfer of miscellaneous
revenue to the General Fund provides a form of General Fund
relief, in that it relieves the General Fund of debt service
costs. The transfer and pledge of weight fees for certain bonds
would result in so-called "double-barreled" bonds and generate
potential reductions in the interest rate on such bonds and
reduced debt service costs.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
According to the Senate Budget and Fiscal Review Committee,
General Fund savings of $67 million in the budget year, and $60
million on-going, as a result of the transfer of miscellaneous
revenues from the State Highway Account. Potential General Fund
savings due to a reduction in interest costs on debt stemming
from a more efficient bond structure. This bill contains an
appropriation and has been identified as related to the budget
in the Budget Bill.
JA:k 6/13/13 Senate Floor Analyses
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SUPPORT/OPPOSITION: NONE RECEIVED
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