BILL ANALYSIS Ó AB 2620 Page 1 (Without Reference to File) CONCURRENCE IN SENATE AMENDMENTS AB 2620 (Dababneh) As Amended August 29, 2016 2/3 vote -------------------------------------------------------------------- |ASSEMBLY: |78-0 |(May 12, 2016) |SENATE: | 39-0 |(August 31, | | | | | | |2016) | | | | | | | | | | | | | | | -------------------------------------------------------------------- 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 service. 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. AB 2620 Page 2 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 projects. 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. AB 2620 Page 3 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 AB 2620 Page 4 of transportation, utilizing existing, unused Proposition 116 revenues for other rail projects seems appropriate. Analysis Prepared by: Melissa White / TRANS. / (916) 319-2093 FN: 0005017