BILL ANALYSIS Ó
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: AB 427
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: PÉrez
VERSION: 3/29/11
Analysis by: Art Bauer FISCAL: yes
Hearing date: June 21, 2011
SUBJECT:
Transportation bond funds: transit system safety
DESCRIPTION:
This bill authorizes agencies that received funds from the
intercity rail and the commuter rail programs funded through
Proposition 1B, the Highway Safety, Traffic Reduction, Air
Quality, and Port Security Bond Act of 2006, also to receive
funds under certain conditions from the bond act's Mass Transit
Program.
ANALYSIS:
Proposition 1B authorized the issuance of $19.925 billion in
general obligation bonds to invest in high-priority improvements
to the state's surface transportation system and to finance
strategies to improve air quality. Among the 14 programs
contained in Proposition 1B is the Transit System Safety,
Security and Disaster Response Account (Account), which provides
$1 billion of bond proceeds for capital projects that increase
protection against security and safety threats to the state's
public transit systems.
SB 88 (Committee on Budget and Fiscal Review), Chapter 18,
Statutes of 2007, provides that funds in the Account are
distributed as follows: 60 percent to the mass transit program,
25 percent to the Regional Public Water Transit Agency in the
Bay Area, and 15 percent to the intercity rail program.
Existing law distributes these funds to individual rail and
transit programs by formula.
Existing law precludes operators of intercity passenger rail
service and commuter rail service from receiving funds from the
Account's mass transit program.
This bill :
AB 427 (PÉREZ) Page 2
1. Removes the prohibition for operators who receive funds
designated for intercity and commuter rail program or
capital expenditures from also receiving funds from the
Account's mass transit program.
2. Requires an agency notified of its eligibility to
receive funds from the Account's mass transit program or
funds for intercity passenger rail and commuter rail must,
within 45 days of notification, provide the California
Emergency Management Agency (CEMA) a letter of intent to
use the funds.
3. Requires CEMA to notify a regional transportation
planning agency (RTPA) if funds allocated to an eligible
agency within an RTPA's jurisdiction are being reallocated
from the recipient to the RTPA.
4. Requires an RTPA, within 30 days of receiving CEMA's
notification, to notify CEMA of its intent to distribute
the funds to other eligible transit operators or rail
operators.
5. Requires CEMA, if an RTPA fails to notify CEMA of its
intent, to reallocate the funds on a competitive basis to
an eligible entity in a different region of the state.
6. Requires CEMA, by May 1 of each year, to report to the
Senate Transportation and Housing Committee, the Senate
Budget and Fiscal Review Committee, the Assembly
Transportation Committee, and the Assembly Budget
Committee. A summary of projects selected for funding
during the fiscal year, the status of projects selected for
funding in prior fiscal years, and a list of all transit
agencies that have not used funds allocated to them.
COMMENTS:
Purpose . According to the author this bill allows bond funds to
be "re-directed to shovel ready projects" in cases where an
agency indicates it does not intend to expend the funds.
According to CEMA there are agencies that have been unable to
spend transit funds that been allocated to them. The Department
of Finance's Office of State Audits audited the Account and
found that funds are allocated to agencies that do not have an
immediate need for the funds. This occurred because the funds
AB 427 (PÉREZ) Page 3
are allocated by formula. The auditors estimate that the amount
of funds being unused would have earned the state $8.5 million
in interest. This bill creates a process to transfer unexpended
funds to agencies that would benefit from them in a timely
fashion.
Assembly Votes:
Floor: 72-0
Appr: 12-0
Trans: 12-0
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
June 15, 2011)
SUPPORT: None received.
OPPOSED: None received.