BILL ANALYSIS �
SB 151
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Date of Hearing: June 23, 2014
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
SB 151 (DeSaulnier) - As Amended: June 9, 2014
SENATE VOTE : Not relevant
SUBJECT : California Transportation Commission: State Highway
Operation and Protection Program allocations.
SUMMARY : Requires the California Transportation Commission
(CTC) to allocate funds for capital outlay and capital outlay
support (COS) costs for projects in the State Highway Operation
and Protection Program (SHOPP) and requires supplemental
allocations for projects that exceed approved allocations.
EXISTING LAW :
1)Directs the California Department of Transportation (Caltrans)
to develop the SHOPP, a program of major capital projects
necessary to preserve and protect the state highway system.
Projects in the SHOPP are limited to those that do not add new
capacity to the system.
2)Authorizes CTC to review the SHOPP relative to its overall
adequacy, level of funding needed to implement the program,
and the impact of those expenditures on the state
transportation improvement program.
3)Requires CTC to approve the SHOPP and to allocate funds for
capital outlay costs of SHOPP projects but not for COS costs.
FISCAL EFFECT : Unknown
COMMENTS : The author introduced SB 151 in response to a recent
Legislative Analyst's Office (LAO) report that reviewed
Caltrans' COS program relative to the 2014-15 budget. In its
report, LAO recommended that the Legislature require CTC to
allocate funds for each phase of a SHOPP project, including COS
resources.
COS refers to the staff support necessary to deliver a project
(such as project design and management) while capital outlay
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costs are incurred by construction contractors for materials and
labor to construct a project. The SHOPP, the state's program
for repairing and reconstructing the highway system, is the
largest ongoing state transportation program. Typical SHOPP
projects include pavement and bridge rehabilitation, major
reconstruction, and safety improvements. Currently, Caltrans
spends about $2.3 billion annually from state fuel excise taxes
and federal funds for the SHOPP. Under existing law related to
the SHOPP, CTC allocates funds for capital outlay costs but not
COS costs.
LAO and Caltrans have worked for a number of years to resolve
perceived deficiencies in the department's COS program,
including the lack of appropriate controls for COS resources.
As part of last year's budget package, the Legislature adopted
supplemental report language directing LAO to work with the
Administration to review Caltrans' COS program to increase the
accountability and efficiency of the program. LAO's report on
this year's COS budget request is as a result of this review.
LAO's recommendation that the Legislature should require CTC to
allocate funds for each phase of a SHOPP project, including COS,
is based on what the LAO perceives is a lack of adequate
oversight and control in Caltrans' current COS program.
According to LAO:
1)The Legislature, which is responsible for appropriating COS
funds on a program-wide basis, has limited opportunity to
review COS budget requests. These requests are typically
submitted to the Legislature as a part of the Governor's May
Revise, just a few weeks before the final budget is due.
2)CTC allocates funds for capital outlay costs of individual
SHOPP projects and in the process is able to provide some
oversight regarding capital expenditures on projects during
construction. However, CTC does not allocate funding to
Caltrans for COS costs on SHOPP projects and is therefore
unable to monitor and control allowable COS spending.
3)Caltrans relies primarily on its own staff to perform most COS
work on SHOPP projects and the COS program lacks checks and
balances to ensure projects are brought in on time and under
budget.
This bill would require CTC to allocate COS costs for SHOPP
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projects, in addition to capital outlay costs for which it
already allocates funds. It would also require CTC to vote on
supplemental allocations any time a project exceeds its capital
or support allocations.
Suggested amendments : The requirement that all SHOPP overruns
have to be taken back to CTC for supplemental allocations will
bog down CTC's allocation process unnecessarily and cause
delays. Furthermore, the rigid requirement to have every SHOPP
project voted on could dangerously delay emergency projects.
The bill should be amended to grant CTC authority to establish
exceptions to the allocation requirements so as not to unduly
delay projects.
With these amendments, the bill should be able to be implemented
without imposing a significant additional administrative burden
on Caltrans. Also, CTC oversight will help provide checks and
balances in Caltrans' use of COS and hopefully begin to resolve
concerns related to how Caltrans builds its COS budget requests
and allocates COS resources.
Related legislation : SB 486 (DeSaulnier) modifies processes for
developing and adopting Caltrans' long-range planning and
programming documents. SB 486 is scheduled to be heard in this
committee on June 23, 2014.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093