BILL ANALYSIS
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CONSENT
Bill No: SB 1371
Author: Lowenthal (D)
Amended: As introduced
Vote: 27 - Urgency
SENATE TRANSPORTATION & HOUSING COMMITTEE : 8-0, 4/20/10
AYES: Lowenthal, Huff, Ashburn, DeSaulnier, Kehoe,
Oropeza, Pavley, Simitian
NO VOTE RECORDED: Harman
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Federal stimulus funding for transportation
SOURCE : Author
DIGEST : This bill prepares California to implement a
second federal economic stimulus bill, should one be passed
by the United States Congress and signed by the President.
ANALYSIS : On February 17, 2009, President Obama signed
the American Recovery and Reinvestment Act (ARRA), a $787
billion economic stimulus package developed with the goals
of creating new and saving existing jobs and investing in
long-term economic growth. The federal government made
available $48 billion nationally for a variety of
discretionary grant and formula-based transportation
programs. Of the formula-based funds, California is
expected to receive $2.57 billion for highways and $1.1
billion for transit.
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On March 27, 2009, the Legislature passed and the Governor
signed AB 20xxx (Bass), Chapter 21, to govern the
distribution of ARRA's formula-based highway funds. That
bill provided that all projects using ARRA funds must meet
the deadlines and requirements established by ARRA, but it
changed how highway infrastructure funds are distributed to
the California Department of Transportation (Caltrans) and
to regional transportation agencies. It also provided
additional guidance on the use of Caltrans' portion of ARRA
funds. The intent of AB 20xxx was to facilitate the
implementation of federal stimulus funds under the
timelines provided by the Act and to achieve a number of
policy objectives, including addressing a growing backlog
of maintenance and rehabilitation needs, supporting
Proposition 1B projects that may be delayed due to the
state's fiscal crisis, and creating employment
opportunities for young adults.
In December 2009, the United States House of
Representatives passed H.R. 2847, known as the "Jobs for
Main Street Act," to provide additional stimulus funding
for transportation. The Jobs for Main Street Act contains
formula-based programs that are similar to those that were
in ARRA, but it establishes a much shorter timeline for
spending its funds. Under the Jobs for Main Street Act,
transportation agencies must award contracts within 90 days
of the state receiving funds.
This bill establishes state law governing the
implementation of a second federal economic stimulus bill,
should one be passed by the United States Congress and
signed by the President. In its current form, the bill:
1. Makes findings and declarations regarding the importance
of funding for transportation to stimulate job creation
and economic development and the necessity of swift
action by the Legislature to develop and transportation
agencies to implement legislation that enables agencies
to meet the strict deadlines expected to be contained in
a second stimulus bill.
2. Requires Caltrans to work with local transportation
agencies to develop a list of projects that have the
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potential to be awarded within the 90-day period
established by the Jobs for Main Street Act.
3. Requires Caltrans to submit monthly reports to the
Legislature regarding the status of implementing the
stimulus bill, should one be passed by Congress and
signed by the President.
Comments
Congress is considering authorizing a second round of
federal economic stimulus funding that has the potential to
bring $3.7 billion to California for investment in
transportation infrastructure. A stimulus bill, however,
is expected to contain very short timelines for awarding
contracts on projects funded by it.
The statewide unemployment rate remains above 12 percent,
with some counties experiencing a jobless rate above 20
percent. The author's office asserts that the state must
stand ready to use all stimulus funds available to it
within the timelines provided by the federal act.
Legislation developed to implement a stimulus bill should
do the following:
1. Expedite the process by which state and local
transportation agencies obligate and award federal
funds, easing regulatory and statutory hurdles where
appropriate and in a manner consistent with the mobility
and environmental goals of the state.
2. Establish an allocation formula that provides
flexibility in the use of funds and ensures geographic
equity such that all areas of the state benefit from the
federal stimulus act.
While the likelihood of receiving a second round of
stimulus funding for transportation is uncertain at this
time, the author believes it is important to prepare for a
second round given the short time lines expected for using
the funds and the critical need this state faces for
creating jobs. Moving this bill helps to being that
preparation.
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Status of federal stimulus . It is unclear at this time
whether Congress will enact a second stimulus bill. After
the House of Representatives passed the Jobs for Main
Street Act in December, the U.S. Senate amended the bill to
remove the provisions related to stimulus, renamed the bill
the "Hiring Incentives to Restore Employment (HIRE) Act,"
and limited the bill to extending the federal
transportation bill, known as the Safe, Accountable,
Flexible, Transportation Equity Act - A Legacy for Users
(SAFETEA-LU). The HIRE Act was signed by the President on
March 12, 2010. The Senate had proposed to deal with a
second stimulus with a smaller amount of funding, but has
yet to do so.
In response to the Jobs for Main Street Act, Caltrans
worked with the regional transportation agencies and the
Federal Highway Administration (FHWA) in January and
February to identify projects that could meet the short
deadlines proposed by the original Jobs for Main Street Act
and to ensure that projects that could meet those timelines
were included in the Federal Statewide Transportation
Improvement Program (FSTIP). (Projects must be included in
the FSTIP to be eligible for federal funding.) Given the
uncertain fate of federal stimulus at this time, much of
the early activity by transportation agencies at every
level of government has slowed.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
JJA:do 5/4/10 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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