BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 427 (J.Perez)
Hearing Date: 08/15/2011 Amended: 08/15/2011
Consultant: Mark McKenzie Policy Vote: T&H 7-0
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BILL SUMMARY: AB 427 would revise the procedures for allocating
transportation general obligation bond funds for transit system
safety, security, and disaster response that are administered by
the California Emergency Management Agency (CalEMA).
Specifically, this bill would:
Allow operators that receive an allocation of funds designated
for intercity and commuter rail systems to also receive an
allocation of funds designated for mass transit operators.
Require funds allocated for use on the regional commuter rail
system that serves a five county region in southern California
(Metrolink) to be allocated to each of the county
transportation commissions served by Metrolink.
Explicitly authorize safety-related projects approved by
CalEMA to be an eligible capital expenditure of funds
designated for mass transit.
Require an entity notified of its eligibility to receive an
allocation of mass transit or intercity/commuter rail bond
funds to notify CalEMA within 45 days of its intent to use the
funds, as specified. Funds would be reallocated if the entity
fails to respond.
Require CalEMA to notify the relevant transportation planning
agency (RTPA) if funds allocated to an entity within the RTPA
are subject to reallocation, and authorize the RTPA to notify
CalEMA within 30 days of its intent to distribute those funds
to other eligible transit or rail operators in the region.
Authorize CalEMA to reallocate those funds on a competitive
basis to an eligible entity in a different region of the
state, if the RTPA fails to respond.
Require CalEMA to submit an annual report to the Legislature
and Legislative Analyst's Office (LAO) on its activities,
including projects selected for funding, the status of those
projects, and a listing of entities that have not used
allocated funds.
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Fiscal Impact (in thousands)
AB 427 (J.Perez)
Page 1
Major Provisions 2011-12 2012-13 2013-14 Fund
CalEMA administration minor one-time costs, likely less than
Bond*
$50 to update guidelines for
reallocations
Bond fund reallocation Redirection of $1,000 to $2,000
annuallyBond*
among eligible entities
Deletion of fund prohibition Increased expenditure
flexibility Bond*
for agencies eligible for both programs
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* Transit System Safety, Security, and Disaster Response Account
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STAFF COMMENTS:
The Highway Safety, Traffic Reduction, Air Quality, and Port
Security Bond Act of 2006 (Proposition 1B) authorized $19.925
billion in general obligation bonds for various
transportation-related purposes, including $1 billion for
capital improvements related to transit system safety, security,
and disaster response. Pursuant to SB 88 (Senate Committee on
Budget and Fiscal Review), Chapter 181 of 2007, the program is
divided into three subprograms administered by CalEMA: 60% of
the funds are designated for mass transit, 25% are designated
for regional public waterborne transit agencies, and 15% for
intercity passenger rail and commuter rail systems. The 60%
mass transit program is governed by the State Transit Assistance
(STA) formula. Current law prohibits an entity that receives an
allocation of funds designated for the intercity and commuter
rail program from receiving funds under the mass transit
program.
AB 427 would allow agencies that receive funds from the 60% mass
transit program to use those funds, at their discretion, on
eligible projects that receive funds from the 15%
intercity/commuter rail program. This provision addresses an
inconsistency in the administration of the mass transit program
with respect to eligible agencies that are also member agencies
of a regional commuter rail system. Since the Metrolink system
has received allocations of funds designated for the
AB 427 (J.Perez)
Page 2
intercity/commuter rail program, current law prohibits funds
designated for the mass transit program to be spent on commuter
rail projects. However, some Metrolink member agencies that
have received mass transit funds were authorized by CalEMA to
spend them on the Metrolink system within its jurisdiction,
while others were prohibited from doing so, which hindered the
expeditious expenditure of funds allocated to those agencies.
This bill would provide flexibility to agencies that operate
both mass transit and commuter rail systems by allowing them the
discretion to spend allocations of mass transit funds on the
commuter rail system, if those projects have a higher priority.
Since the mass transit funds are allocated based on statutory
formulas for the State Transit Assistance Program, some entities
that receive an allocation may not have an identified need or
eligible projects on which to expend the funds. AB 427 would
establish a process for redirecting those unused funds to other
eligible entities. The bill would give first priority to
projects within the same region as the entity that received an
initial allocation, and any remaining funds would be reallocated
to other eligible entities in a different region on a
competitive basis.
CalEMA indicates that out of each annual $100 million
appropriation provided for the mass transit program,
approximately $1-$2 million goes unused. This bill would result
in a redirection of those funds for expenditure by other
eligible entities on shovel-ready transit projects.
Approximately $360 million of the original $600 million
authorized by Proposition 1B have yet to be allocated. Staff
estimates that administrative costs to CalEMA for updating
program guidelines and establishing procedures for reallocating
funds would be minor, likely less than $50,000. CalEMA would
also be required to annually report to the Legislature and LAO
on program activities. Costs would be minor because CalEMA
already provides project-level reports as part of general
requirements related to bond fund expenditures; the report in
this bill would be an update of that annual report.