BILL ANALYSIS
AB 2703
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Date of Hearing: May 12, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2703 (John A. Perez) - As Amended: April 27, 2010
Policy Committee:
TransportationVote:13-0
Urgency: Yes State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill, as proposed to be amended , authorizes loans of
federal economic stimulus funds to advance projects scheduled
to be funded from state general obligation (Proposition 1B)
bonds. Specifically, this bill:
1)Authorizes 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 May 1, 2010
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)Requires loans to be repaid to the State Highway Account
(SHA), without interest, from the proceeds of bonds when they
are sold.
4)Directs loan repayments to be made available for appropriation
by the Legislature for the State Highway Operation and
Protection Program (SHOPP).
FISCAL EFFECT
Increased likelihood that federal stimulus funds, if made
available, will be spent expeditiously and not forfeited for
lack of timely encumbrance.
AB 2703
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Short-term loans to help expedite bond-funded projects would be
repaid in full with bond proceeds.
COMMENTS
1)Background . ABX3 20 (Bass)/Chapter 21 of 2009, provided for
the distribution of $2.6 billion in federal American Recovery
and Reinvestment Act (ARRA) funds received for highways and
roads. That legislation 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.
2)Purpose . Congress is currently considering a second round of
economic stimulus funding for the states. The most recent
version of this legislation provides extremely short
timeframes within which to award contracts using the federal
dollars. States that fail to use the funds within the
required timeframes would forfeit their share of stimulus
dollars and those funds would be redistributed to other
states. AB 2703 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.
3)Amendment . The amendment simply replaces a blank space in the
bill with a specific date prior to which a project must have
been programmed in order to be eligible for loans of federal
stimulus funds.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081