California Legislature—2015–16 Regular Session

Assembly BillNo. 2411


Introduced by Assembly Member Frazier

February 19, 2016


An act to amend Section 16965 of the Government Code, and to amend Section 183.1 of the Streets and Highways Code, relating to transportation.

LEGISLATIVE COUNSEL’S DIGEST

AB 2411, as introduced, Frazier. Transportation revenues.

Article XIX of the California Constitution restricts the expenditure of revenues from taxes imposed by the state on fuels used in motor vehicles upon public streets and highways to street and highway and certain mass transit purposes. Existing law requires certain miscellaneous revenues deposited in the State Highway Account that are not restricted as to expenditure by Article XIX of the California Constitution to be transferred to the Transportation Debt Service Fund in the State Transportation Fund, as specified, and requires the Controller to transfer from the fund to the General Fund an amount of those revenues necessary to offset the current year debt service made from the General Fund on general obligation transportation bonds issued pursuant to Proposition 116 of 1990.

This bill would delete the transfer of these miscellaneous revenues to the Transportation Debt Service Fund, thereby eliminating the offsetting transfer to the General Fund for debt service on general obligation transportation bonds issued pursuant to Proposition 116 of 1990. The bill, subject to a specified exception, would instead require the miscellaneous revenues to be retained in the State Highway Account and to be used solely for transportation expenditures consistent with the restrictions for expenditure of fuel tax revenues in Article XIX of the California Constitution.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 16965 of the Government Code is
2amended to read:

3

16965.  

(a) (1) The Transportation Debt Service Fund is hereby
4created in the State Treasury. Moneys in the fund shall be dedicated
5to all of the following purposes:

6(A) Payment of debt service with respect to designated bonds,
7as defined in subdivision (c) of Section 16773, and as further
8provided in paragraph (3) and subdivision (b).

9(B) To reimburse the General Fund for debt service with respect
10to bonds.

11(C) To redeem or retire bonds, pursuant to Section 16774,
12maturing in a subsequent fiscal year.

13(2) The bonds eligible under subparagraph (B) or (C) of
14 paragraph (1) include bonds issued pursuant tobegin delete the Clean Air and
15Transportation Improvement Act of 1990 (Part 11.5 (commencing
16with Section 99600) of Division 10 of the Public Utilities Code),end delete

17 the Passenger Rail and Clean Air Bond Act of 1990 (Chapter 17
18(commencing with Section 2701) of Division 3 of the Streets and
19Highways Code), the Seismic Retrofit Bond Act of 1996 (Chapter
2012.48 (commencing with Section 8879) of Division 1 of Title 2),
21and the Safe, Reliable High-Speed Passenger Train Bond Act for
22the 21st Century (Chapter 20 (commencing with Section 2704) of
23Division 3 of the Streets and Highways Code), and nondesignated
24bonds under Proposition 1B, as defined in subdivision (c) of
25Section 16773.

26(3) (A) The Transportation Bond Direct Payment Account is
27hereby created in the State Treasury, as a subaccount within the
28Transportation Debt Service Fund, for the purpose of directly
29paying the debt service, as defined in paragraph (4), of designated
30bonds of Proposition 1B, as defined in subdivision (c) of Section
3116773. Notwithstanding Section 13340, moneys in the
32Transportation Bond Direct Payment Account are continuously
33appropriated for payment of debt service with respect to designated
P3    1bonds as provided in subdivision (c) of Section 16773. So long as
2any designated bonds remain outstanding, the moneys in the
3Transportation Bond Direct Payment Account may not be used
4for any other purpose, and may not be borrowed by or available
5for transfer to the General Fund pursuant to Section 16310 or any
6similar law, or to the General Cash Revolving Fund pursuant to
7Section 16381 or any similar law.

8(B) Once the Treasurer makes a certification that payment of
9debt service with respect to all designated bonds has been paid or
10provided for, any remaining moneys in the Transportation Bond
11Direct Payment Account shall be transferred back to the
12Transportation Debt Service Fund.

13(C) The moneys in the Transportation Bond Direct Payment
14Account shall be invested in the Surplus Money Investment Fund,
15and all investment earnings shall accrue to the account.

16(D) The Controller may establish subaccounts within the
17Transportation Bond Direct Payment Account as may be required
18by the resolution, indenture, or other documents governing any
19designated bonds.

20(4) For purposes of this subdivision and subdivision (b), and
21subdivision (c) of Section 16773, “debt service” means payment
22of all of the following costs and expenses with respect to any
23designated bond:

24(A) The principal of and interest on the bonds.

25(B) Amounts payable as the result of tender on any bonds, as
26described in clause (iv) of subparagraph (B) of paragraph (1) of
27subdivision (d) of Section 16731.

28(C) Amounts payable under any contractual obligation of the
29state to repay advances and pay interest thereon under a credit
30enhancement or liquidity agreement as described in clause (iv) of
31subparagraph (B) of paragraph (1) of subdivision (d) of Section
3216731.

33(D) Any amount owed by the state to a counterparty after any
34offset for payments owed to the state on any hedging contract as
35described in subparagraph (A) of paragraph (2) of subdivision (d)
36of Section 16731.

37(b) From the moneys transferred to the fund pursuant to
38paragraph (2) or (3) of subdivision (c) of Section 9400.4 of the
39Vehicle Code, there shall first be deposited into the Transportation
40Bond Direct Payment Account in each month sufficient funds to
P4    1equal the amount designated in a certificate submitted by the
2Treasurer to the Controller and the Director of Finance at the start
3of each fiscal year, and as may be modified by the Treasurer
4thereafter upon issuance of any new issue of designated bonds or
5upon change in circumstances that requires such a modification.
6This certificate shall be calculated by the Treasurer to identify, for
7each month, the amount necessary to fund all of the debt service
8with respect to all designated bonds. This calculation shall be done
9in a manner provided in the resolution, indenture, or other
10documents governing the designated bonds. In the event that
11transfers to the Transportation Bond Direct Payment Account in
12any month are less than the amounts required in the Treasurer’s
13certificate, the shortfall shall carry over to be part of the required
14payment in the succeeding month or months.

15(c) The state hereby covenants with the holders from time to
16time of any designated bonds that it will not alter, amend, or restrict
17the provisions of subdivision (c) of Section 16773 of the
18Government Code, or Sections 9400, 9400.1, 9400.4, and 42205
19of the Vehicle Code, which provide directly or indirectly for the
20transfer of weight fees to the Transportation Debt Service Fund
21or the Transportation Bond Direct Payment Account, or
22subdivisions (a) and (b) of this section, or reduce the rate of
23imposition of vehicle weight fees under Sections 9400 and 9400.1
24of the Vehicle Code as they existed on the date of the first issuance
25of any designated bonds, if that alteration, amendment, restriction,
26or reduction would result in projected weight fees for the next
27fiscal year determined by the Director of Finance being less than
28two times the maximum annual debt service with respect to all
29outstanding designated bonds, as such calculation is determined
30pursuant to the resolution, indenture, or other documents governing
31the designated bonds. The state may include this covenant in the
32resolution, indenture, or other documents governing the designated
33bonds.

34(d) Once the required monthly deposit, including makeup of
35any shortfalls from any prior month, has been made pursuant to
36subdivision (b), from moneys transferred to the fund pursuant to
37paragraph (2) or (3) of subdivision (c) of Section 9400.4 of the
38Vehicle Code, or pursuant to Section 16965.1 or 63048.67, the
39Controller shall transfer as an expenditure reduction to the General
40Fund any amount necessary to offset the cost of current year debt
P5    1service payments made from the General Fund with respect to any
2bonds issued pursuant to Proposition 192 (1996) and three-quarters
3of the amount of current year debt service payments made from
4the General Fund with respect to any nondesignated bonds, as
5defined in subdivision (c) of Section 16773, issued pursuant to
6Proposition 1B (2006). In the alternative, these funds may also be
7used to redeem or retire the applicable bonds, pursuant to Section
816774, maturing in a subsequent fiscal year as directed by the
9Director of Finance.

begin delete

10(e) From moneys transferred to the fund pursuant to Section
11183.1 of the Streets and Highways Code, the Controller shall
12transfer as an expenditure reduction to the General Fund any
13amount necessary to offset the cost of current year debt service
14payments made from the General Fund with respect to any bonds
15issued pursuant to Proposition 116 (1990). In the alternative, these
16funds may also be used to redeem or retire the applicable bonds,
17pursuant to Section 16774, maturing in a subsequent fiscal year
18as directed by the Director of Finance.

end delete
begin delete

19(f)

end delete

20begin insert(e)end insert Once the required monthly deposit, including makeup of
21any shortfalls from any prior month, has been made pursuant to
22subdivision (b), from moneys transferred to the fund pursuant to
23paragraph (2) or (3) of subdivision (c) of Section 9400.4 of the
24Vehicle Code, or pursuant to Section 16965.1 or 63048.67, the
25Controller shall transfer as an expenditure reduction to the General
26Fund any amount necessary to offset the eligible cost of current
27year debt service payments made from the General Fund with
28respect to any bonds issued pursuant to Proposition 108 (1990)
29and Proposition 1A (2008), and one-quarter of the amount of
30current year debt service payments made from the General Fund
31with respect to any nondesignated bonds, as defined in subdivision
32(c) of Section 16773, issued pursuant to Proposition 1B (2006).
33The Department of Finance shall notify the Controller by July 30
34of every year of the percentage of debt service that is expected to
35be paid in that fiscal year with respect to bond-funded projects that
36qualify as eligible guideway projects consistent with the
37requirements applicable to the expenditure of revenues under
38Article XIX of the California Constitution, and the Controller shall
39make payments only for those eligible projects. In the alternative,
40these funds may also be used to redeem or retire the applicable
P6    1bonds, pursuant to Section 16774, maturing in a subsequent fiscal
2year as directed by the Director of Finance.

begin delete

3(g)

end delete

4begin insert(f)end insert On or before the second business day following the date on
5which transfers are made to the Transportation Debt Service Fund,
6and after the required monthly deposits for that month, including
7makeup of any shortfalls from any prior month, have been made
8to the Transportation Bond Direct Payment Account, the Controller
9shall transfer the funds designated for reimbursement of bond debt
10service with respect to nondesignated bonds, as defined in
11subdivision (c) of Section 16773, and other bonds identified in
12subdivisionsbegin delete (d), (e), and (f)end deletebegin insert (d) and (e)end insert in that month from the
13fund to the General Fund pursuant to this section.

14

SEC. 2.  

Section 183.1 of the Streets and Highways Code is
15amended to read:

16

183.1.  

begin delete(a)end deletebegin deleteend deletebegin deleteNotwithstanding subdivision (a) of Section 182 or
17any other provision of law, money end delete
begin insertExcept as otherwise provided
18in Section 54237.7 of the Government Code, money end insert
deposited into
19the account that is not subject to Article XIX of the California
20Constitution, including, but not limited to, money that is derived
21from the sale of documents, charges for miscellaneous services to
22the public, condemnation deposits fund investments, rental of state
23property, or any other miscellaneous uses of property or money,
24begin delete may be used for any transportation purpose authorized by statute,
25upon appropriation by the Legislature or, after transfer to another
26fund, upon appropriation by the Legislature from that fund.end delete
begin insert shall
27be used solely for transportation expenditures consistent with
28Section 2 of Article XIX of the California Constitution.end insert

begin delete

29(b) Commencing with the 2013-14 fiscal year, and not later
30than November 1 of each fiscal year thereafter, based on prior year
31financial statements, the Controller shall transfer the funds
32identified in subdivision (a) for the prior fiscal year from the State
33Highway Account to the Transportation Debt Service Fund in the
34State Transportation Fund, and those funds are continuously
35appropriated for the purposes specified for the Transportation Debt
36Service Fund.

end delete


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