BILL ANALYSIS                                                                                                                                                                                                    

                                                                    AB 2620

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          (Without Reference to File)


          2620 (Dababneh)

          As Amended  August 29, 2016

          2/3 vote

          |ASSEMBLY:  |78-0  |(May 12, 2016) |SENATE: | 39-0 |(August 31,      |
          |           |      |               |        |      |2016)            |
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          |           |      |               |        |      |                 |

          Original Committee Reference:  TRANS.

          SUMMARY:  Authorizes the California Transportation Commission  
          (CTC) to reallocate funds from the Proposition 116 (1990)  
          program, if they are not encumbered or expended by 2020, for  
          other existing passenger rail projects with existing rail  

          The Senate amendment clarify that the high-speed rail project is  
          not eligible to receive reallocated funds since it does not  
          provide existing rail service.   


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          EXISTING LAW:  

          1)Enacts Proposition 116, the Clean Air and Transportation  
            Improvement Act (CATIA), which authorized $1.99 billion in  
            general obligation bonds for specific projects, purposes, and  
            geographic jurisdictions, primarily for passenger rail capital  

          2)Allows the Legislature to reallocate funds not expended or  
            encumbered by July 1, 2010, to any passenger rail project in  
            the state by a two-thirds vote in each house. 

          3)Creates the CTC with specified powers and duties relative to  
            the programming of transportation capital improvement projects  
            and the allocations of transportation revenues. 

          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee, reallocation of up to $12.8 million in general  
          obligation bond funds, potentially resulting in additional  
          General Fund costs for debt service payments in the mid hundreds  
          of thousands annually for 30 years, to the extent these bonds  
          remain unsold absent the bill.  See staff comments below.

          COMMENTS:  Proposition 116, which was approved by voters in  
          1990, authorized $1.99 billion in general obligation bonds for a  
          variety of intercity passenger rail, commuter rail, transit and  
          other projects.  Specifically, $1.852 billion was authorized for  
          the preservation, acquisition, construction, or improvement of  
          rail rights-of-way, rail terminals and stations, rolling stock  
          acquisition, grade separations, rail maintenance facilities, and  
          other capital expenditures for rail purposes.  Additionally, $73  
          million was authorized for 28 non-urban counties for various  
          rail projects, the purchase of paratransit vehicles, and other  
          capital facilities for public transportation.  Finally, for  
          non-rail projects, $20 million was available for a competitive  
          bicycle program for capital outlay for bicycle improvement  
          projects and $30 million for a water-borne ferry program.   


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          Proposition 116 is administered by the California Department of  
          Transportation (Caltrans) and the CTC and is programmed and  
          allocated in two-step process similar to the process used for  
          the State Transportation Improvement Program (STIP).  First, the  
          CTC programs the funds for projects eligible under the original  
          authorization, which it does by approving project applications  
          that define a project's scope, schedule, and funding.  Then the  
          CTC allocates the funds when the project is ready for funding.

          As part of its 2015 Annual Report to the California Legislature,  
          the CTC urged the Legislature to enact legislation to sunset the  
          Proposition 116 program and reallocate any funds remaining at  
          that time to other passenger rail projects.  The CTC reports the  
          most recent action for allocating funds from the program  
          occurred in 2014-15, and as of June 30, 2015, of the amounts  
          programmed only $12.7 million remains unallocated.   

          According to the author, during a time when many are looking for  
          a funding source and solution to maintain and repair  
          California's transportation infrastructure, California should  
          better utilize existing funding sources.  Further he states  
          that, in the case of Proposition 116, money has been allocated,  
          yet some of these funds have not been utilized and if they  
          remain unused for an extended period of time, the state should  
          reallocate the funds to projects which will move forward.  The  
          author continues that, while there has been little activity  
          related to these funds, the additional administrative cost to  
          the state can be avoided if the program sunset and the funds  
          were redirected to existing projects.

          The CTC has recommended the Proposition 116 program be sunsetted  
          and the funds be reallocated for many years now.  The CTC is  
          working with the remaining local agencies on their programmed  
          projects to try to finalize any allocations.  This bill would  
          allow the CTC to continue this process until 2020 before any  
          reallocation would occur.  The CTC would then be able to  
          reallocate any unallocated funds to other passenger rail  
          projects in the state as outlined in the proposition.  As the  
          state continues to grapple with funding shortfalls in all modes  


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          of transportation, utilizing existing, unused Proposition 116  
          revenues for other rail projects seems appropriate.   

          Analysis Prepared by:                                             
                          Melissa White / TRANS. / (916) 319-2093  FN: