BILL ANALYSIS
AB 2703
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Date of Hearing: April 19, 2010
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
AB 2703 (John A. P?rez) - As Amended: April 8, 2010
SUBJECT : Federal economic stimulus funds: transportation
SUMMARY : Authorizes loans of federal economic stimulus funds to
advance projects scheduled to be funded from Proposition 1B
infrastructure bonds. Specifically, this bill:
1)Authorizes the California Department of Transportation
(Caltrans), with approval from the Department of Finance
(DOF), to make loans of federal funds from a second round of
federal transportation economic stimulus funds awarded to
California in 2010.
2)Authorizes loans for purposes of advancing a project or a
portion of a project that has been programmed by an
unspecified date and is to be funded by Proposition 1B
infrastructure bonds; limits loans only to those projects that
are ready to be awarded within 90 days of federal
apportionment.
3)Sets forth procedures to be followed to request loans.
4)Requires loans to be repaid to the State Highway Account
(SHA), without interest, from the proceeds of bonds when they
are sold.
5)Directs loan repayments to be made available for appropriation
by the Legislature for the State Highway Operation and
Protection Program (SHOPP).
EXISTING LAW:
6)Provided for the distribution of nearly $2.6 billion in
federal American Recovery and Reinvestment Act (ARRA) funds
received last year for highways and roads from the federal
government to stimulate the nation's economy.
7)Makes legislative findings and declarations that it is in the
state's interest to ensure federal highway infrastructure
funds are fully obligated and used expeditiously, consistent
AB 2703
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with the ARRA; states further legislative intent that priority
be given to the use of ARRA funds for repair and
rehabilitation of the existing highway system and to advance
Proposition 1B bond funded-projects that have been delayed or
are in jeopardy of being delayed because of the state's
inability to issue general obligation bonds.
8)Provided authority for Caltrans to loan ARRA funds to
transportation projects programmed for funding from
Proposition 1B infrastructure bonds, within specific
parameters.
9)Directed loan repayments to be made to the SHA for projects in
the SHOPP.
10)Provided that the $2.6 billion in ARRA funds were to be
considered part of the federal Surface Transportation Program
(STP) and apportioned 37.5% (about $1 billion) to the state
and 62.5% (about $1.6 billion) to regional agencies.
Distribution to regional agencies was to be made by existing
formulae, generally based on population.
11)Provided legislative intent that at least 40% of the funds
apportioned to regional and local transportation agencies be
sub-allocated to cities and counties.
12)Required strict reporting on the timely use of ARRA funds
and, if need be, redistribution of any ARRA funds in jeopardy
of not being used.
FISCAL EFFECT : Unknown
COMMENTS : Congress is currently considering a second round of
economic stimulus funding for states. In the most recent
version of the legislation, states would have extremely short
timeframes within which to award contracts to be funded with
these federal dollars. States that fail to use the funds within
the timeframes prescribed will forfeit their share of the
federal economic stimulus dollars and those funds will be
redistributed to other states.
This bill makes it easier for transportation agencies and
Caltrans to use federal economic stimulus funds on ready-to-go
projects and to ensure no federal funds are forfeited for lack
of use.
AB 2703
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Last year, the Legislature passed ABX3 20 (Bass), Chapter 21,
Statutes of 2009, that provided for the distribution of ARRA
funds for highways and roads. ABX3 20 included provisions,
similar to AB 2703, authorizing loans to bond-funded projects
that had been stalled due to the state's inability to sell
bonds. Consequently, California was successful in obligating
100% of the ARRA funds made available and delivered previously
stalled transportation projects.
Urgency: The author intends to take amendments in committee to
make AB 2703 an urgency measure.
Related legislation: SB 1371 (Lowenthal) of 2010, an urgency
measure, requires Caltrans to work with local transportation
agencies to develop a list of potential projects that may be
awarded within a 90-day period of the award to the state of
second round federal transportation economic stimulus funds.
That bill is currently pending in Senate Transportation and
Housing Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
State Building and Construction Trades Council
Opposition
None on file
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093