BILL ANALYSIS
SB 1371
Page 1
SENATE THIRD READING
SB 1371 (Lowenthal and Correa)
As Amended June 16, 2010
2/3 vote. Urgency
SENATE VOTE :30-0
TRANSPORTATION 12-0 APPROPRIATIONS 17-0
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|Ayes:|Bonnie Lowenthal, |Ayes:|Fuentes, Conway, |
| |Jeffries, | |Bradford, |
| |Bill Berryhill, | |Charles Calderon, Coto, |
| |Blumenfield, Buchanan, | |Davis, |
| |Eng, Furutani, Galgiani, | |De Leon, Gatto, Hall, |
| |Hayashi, Miller, Niello, | |Harkey, Miller, Nielsen, |
| |Portantino | |Norby, Skinner, Solorio, |
| | | |Torlakson, Torrico |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Directs the California Department of Transportation
(Caltrans) to develop a list of projects that may be awarded
within a short timeframe upon the release of a second round of
federal transportation economic stimulus funds; includes urgency
provisions. Specifically, this bill :
1)Requires Caltrans to work with local transportation agencies
to develop a list of projects that meet certain criteria and
that may be available to award within 90 days after the award
of a second round of federal economic stimulus dollars for
transportation (a.k.a. STIM 2).
2)Requires Caltrans to submit monthly status reports to the
Legislative Analyst's Office on the implementation STIM 2 or
to post the information on the information on the internet.
3)Includes urgency provisions.
EXISTING LAW:
4)Provides 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
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government to stimulate the nation's economy.
5)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
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.
6)Provides authority for Caltrans to loan ARRA funds to
transportation projects programmed for funding from
Proposition 1B infrastructure bonds, within specific
parameters.
7)Directs loan repayments to be made to the State Highway
Account for projects in the State Highway Operation &
Protection Program.
8)Provides 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 is to be made by existing
formulae, generally based on population.
9)Provides legislative intent that at least 40% of the funds
apportioned to regional and local transportation agencies be
sub-allocated to cities and counties.
10)Requires 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 : According to the Assembly Appropriations
Committee, Caltrans is already required by federal law to
prepare the information that this bill requires to be reported
to the Legislative Analyst's Office. Consequently, costs to
implement this bill, should a second round of stimulus dollars
become available, will be minor and absorbable.
COMMENTS : In February 2009, President Obama signed ARRA, a $787
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billion economic stimulus package developed with the goals of
creating new jobs, 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 received $2.57 billion for
highways and $1.1 billion for transit.
In response, 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 also included provisions
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.
Earlier this year, Congress considered STIM 2, a second round of
economic stimulus funding for states. As proposed in the most
recent version of STIM 2, states will 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.
The federal legislation has since stalled and it is unlikely
that it will move any further through Congress. However, in the
event that it does move, and given the short timeframes proposed
in STIM 2, this bill is intended to make 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. If STIM 2 does not move
through Congress by the end of California's legislative session,
it is the author's intent to hold SB 1371 on the Assembly
inactive file.
Related legislation: AB 2703 (John A. Perez) authorizes loans
of a second round of federal economic stimulus funds to advance
projects scheduled to be funded from Proposition 1B
infrastructure bonds. AB 2703 is currently pending in the
Senate.
SB 1371
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Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093
FN: 0005415