BILL ANALYSIS
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UNFINISHED BUSINESS
Bill No: SB 1371
Author: Correa (D)
Amended: 8/16/10
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
ASSEMBLY FLOOR : Not available
SUBJECT : Transportation: bond funded projects: letter
of no prejudice
SOURCE : Author
DIGEST : This bill authorizes letters of no prejudice for
the $950 million in high-speed passenger train bond funds
intended for capital improvements to intercity and commuter
rail lines and urban rail systems.
Assembly Amendments delete the Senate version of the bill,
which dealt with Federal Stimulus Funding for
transportation, and instead add the current language.
ANALYSIS :
Existing law
1. Makes available, in part, under the Safe, Reliable
High-Speed Passenger Train Bond Act (Bond Act) for the
21st Century, $950 million for capital improvements to
CONTINUED
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intercity and commuter rail lines and urban rail systems
that provide direct connectivity to the high-speed
passenger train system. Of the $950 million, $190
million is allocated to The Department of Transportation
for state-supported intercity rail lines that provide
regularly scheduled service and that use public funds
for operation and maintenance. (A minimum of $47.5
million must be allocated to each of the state's three
intercity rail corridors.) The remaining funds, $760
million, are allocated by the California Transportation
Commission (CTC) to eligible recipients by formula
related to a recipient's proportional share of the
statewide number of track miles, annual vehicle miles,
and annual passenger trips.
2. Provides that allocations from this money may be used
for capital improvements that provide direct
connectivity to the high-speed passenger train system,
are part of the construction of the system, or that
provide capacity enhancements, modernization,
rehabilitation, or safety improvements.
3. Makes public agencies and joint powers authorities that
operate regularly scheduled passenger rail service in
the following categories eligible recipients of the bond
dollars:
Commuter rail
Light rail
Heavy rail
Cable car
4. Authorizes letters of no prejudice (LONPs) for projects
to be funded under the Highway Safety, Traffic
Reduction, Air Quality, and Port Security Bond Act of
2006 that provided $20 billion in funds for
transportation capital improvements.
This bill:
1. Authorizes eligible recipients of these bond dollars to
seek letters of LONPs, as defined, from the CTC.
2. Authorizes the CTC to approve LONPs for projects that it
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has programmed or otherwise approved, regardless of
whether bond funding has been previously appropriated
for the project.
3. Provides that expenditures for projects with approved
LONPs may be reimbursed with bond dollars if all of the
following apply:
A. The project has commenced and expenditures have
been incurred by the eligible recipient.
B. The expenses are eligible for reimbursement
according to state and federal laws and procedures.
C. The eligible recipient complies with all legal
requirements of the project, including compliance
with the California Environmental Quality Act.
D. The expenditures were incurred after the project
was programmed or otherwise approved by the CTC.
E. Sufficient bond dollars are available.
4. Authorizes the CTC to develop guidelines to implement
LONPs for the $950 million in high-speed passenger train
bond funds intended for intercity and commuter rail,
using guidelines already developed for similar bond
programs to the extent possible.
5. Is an urgency bill allowing this bill to become
effective upon enactment.
Comments
Under current law, CTC and other administering agencies
have established LONP programs for various funding
categories under Proposition 1B, the Highway Safety,
Traffic Reduction, Air Quality, and Port Security Act of
2006. LONPs are essentially agreements between a local or
regional transportation agency and the agency responsible
for administering a specific category of state bond funds.
LONP agreements allow a local or regional agency that wants
to expend their own local funds to begin or continue a
project and then be reimbursed later from state bond funds,
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when the bond funds become available. The timing and
amount of reimbursement form state bond funds is not
guaranteed so local agencies, not the state, assume the
risk of choosing to use the LONP process to advance funding
for a project.
The Los Angeles County Metropolitan Transportation
Authority supports this bill because it will allow the
Southern California Regional Rail Authority (SCRRA) to move
forward with a $200 million rail safety program to
implement positive train control throughout the Metrolink
system. SCRRA intends to implement positive train control
by 2012.
Other projects will also be eligible for LONPs under this
bill.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
Unknown; however, according to the Assembly Appropriations
Committee analysis of last year's AB 672 (Bass), Chapter
462, Statutes of 2009, that similarly authorized LONPs (1)
minor additional costs to the CTC to approve and issue
LONPs and to track compliance with bond act requirements
for projects receiving LONPs, (2) potential significant
savings in aggregate state and local transportation funds
to the extent the issuance of LONPs allows projects to
remain on schedule and thus reduces total project costs.
SUPPORT : (Verified 8/26/10)
Altamont Commuter Express/ San Joaquin Regional Rail
Commission
California Transit Association
Los Angeles County Metropolitan Transportation Authority
Orange County Business Council
Southern California Regional Rail Authority
Ventura County Transportation Commission
JJA:do 8/27/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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