STATE OF CALIFORNIA		PUBLIC UTILITIES COMMISSION San Francisco
M e m o r a n d u m
Date:	APRIL 15, 2005
To:	The Commission (Meeting of April 21, 2005)
From:	Delaney Hunter, Director Office of Governmental Affairs (OGA) - Sacramento
Subject:	AB 453 (Benoit) Grade separation projects As amended March 29, 2005

Legislative Subcommittee Recommendation: Support

Summary: This bill would amend Sections 2456 and 2458 of the California Streets and Highways (S&H) Code, relating to the grade separation program. This bill would require that local agencies furnish evidence satisfactory to Caltrans that all matters prerequisite to the award of a construction contract can be accomplished within two years after an allocation, instead of the current one-year time period.


Digest: Existing law requires the California Transportation Commission to make allocations for grade separation projects, as defined. Existing law requires, in order for an allocation for construction costs, or for preconstruction costs if not already allocated, to be made, that a local agency furnish certain evidence satisfactory to the Department of

Transportation, including that all matters prerequisite to the award of the construction contract can be accomplished within one year after the allocation.

This bill would require, in order for an allocation for construction costs, or for preconstruction costs if not already allocated, to be made, that a local agency furnish evidence satisfactory to the department that all matters prerequisite to the award of a construction contract can be accomplished within two years after the allocation.

Division Analysis (CPSD):

The bill would provide an additional year in which local agencies could complete the requirements of the allocation including securing an agreement with the affected railroad(s), receive authorization to construct the project from the California Public Utilities Commission (CPUC), complete all the required environmental impact reports for both CEQA and NEPA and secure the remainder of the necessary funding for the proposed grade separation project.

· The Section 190 Grade Separation Program is executed under S&H Codes Sections 190-192 and 2450-2461.

· S&H Code Section 2452 requires the CPUC to establish the priority list for grade separation projects and furnish it to the California Transportation Commission (CTC) by July 1 of each year for use in the fiscal year beginning on that date. S&H Code Section 2452 also makes the CPUC responsible for establishing the criteria to be used in determining the priority of projects nominated for separation or alteration.

· S&H Code Section 2453 gives the CTC responsibility for allocating (distributing) the funds to qualified projects.

· This bill would provide an additional year (2 years total) to local agencies to complete the necessary steps to receive a full allocation.

· Currently, S&H Code Section 2456 requires that a local agency furnish certain evidence satisfactory to the Department of Transportation (Caltrans), including that all matters prerequisite to the award of the construction contract can be accomplished within one year after the allocation in order for an allocation for construction costs, or for preconstruction costs if not already allocated, to be made.

· The bill would address the problem of local agencies needing extra time to complete the allocation requirements. Most recently, two local agencies lost their allocations when they could not satisfy the requirements for an allocation. The City of Ontario and the City of Riverside lost their allocations when they were unable to complete their environmental review documents within the existing one-year time period.


· The additional time would not change the responsibilities of the CPUC nor alter the program fiscally.

Program Background

· S&H Code Section 190 requires the State's annual budget to include $15 million for funding these projects. S&H Code Section 2450 et seq. sets out the procedure for administering these funds, and Section 2453 gives the CTC responsibility for allocating (distributing) the funds to qualified projects.

· S&H Code Section 2452 requires the CPUC to establish the priority list for projects and furnish it to the CTC by July 1 of each year for use in the fiscal year beginning on that date. CPUC procedure is to promulgate the list for the first fiscal year by issuing an interim decision, and then to revise the list for the second year by deleting projects for which funds were actually allocated in the first. CPUC adopts the revised list by final decision in the second year of the proceeding, and begins the funding cycle again the following year by instituting a new proceeding.

FISCAL IMPACT: No fiscal impact to the CPUC.

LEGISLATIVE HISTORY

In December 1998, the CPUC acted formally to sponsor legislation (AB 357- Calderon) that would increase the annual appropriation for grade separation projects from $15 million to $60 million. The legislation was amended following legislative debates to remove the funding level provisions and insert language requiring the CPUC to submit a report to the Legislature on the sufficiency of the $15 million fund. The CPUC, in taking a sponsorship position on what ultimately became AB 357, had internally reviewed the sufficiency of the $15 million appropriation and determined that for safety reasons, an increase in the funding level was necessary. The $15 million allocation for safety prioritized projects mandated by S&H Code Section 190 was set in 1974 and is woefully inadequate today. CPUC staff suggested a $60 million funding level in order to provide the same purchasing power in the following fiscal years as was provided in 1974 after they analyzed the increased construction and land acquisition costs.

STATUS

This bill was passed by the Assembly Transportation Committee (policy committee) on April 11, 2005 (vote 9-0) to the Assembly Committee on Appropriations (fiscal committee), and has not received a hearing date.

SUPPORT/OPPOSITION

Support: City of Riverside, Greater Riverside Chamber of Commerce

Opposition: None on file.

STAFF CONTACT

Delaney Hunter dlh@cpuc.ca.gov

OGA (916) 327-7788

Date: April 15, 2005

BILL LANGUAGE

BILL NUMBER: AB 453 AMENDED

BILL TEXT

AMENDED IN ASSEMBLY MARCH 29, 2005

INTRODUCED BY Assembly Member Benoit

FEBRUARY 15, 2005

An act to amend Sections 2454, 2456, 2456

and 2458 of the Streets and Highways Code, relating to

transportation.

LEGISLATIVE COUNSEL'S DIGEST

AB 453, as amended, Benoit. Grade separation projects.

Existing law requires the California Transportation Commission to

make allocations for grade separation projects, as defined.

Existing law requires a railroad to agree to contribute 10% of the

cost of a project in order for an allocation to be made for projects

that eliminate an existing crossing, or alter or reconstruct an

existing grade separation. Existing law requires, in order

for an allocation for construction costs, or for preconstruction

costs if not already allocated, to be made, that a local agency

furnish certain evidence satisfactory to the Department of

Transportation, including that all matters prerequisite to the award

of the construction contract can be accomplished within one year

after the allocation.

This bill would instead require a railroad to agree to

contribute 5% of the cost of a project in order for those allocations

to be made. The bill would require, in order for an

allocation for construction costs, or for preconstruction costs if

not already allocated, to be made, that a local agency furnish

evidence satisfactory to the department that all matters prerequisite

to the award of a construction contract can be accomplished within

two years after the allocation.

Vote: majority. Appropriation: no. Fiscal committee: yes.

State-mandated local program: no.

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Section 2454 of the Streets and Highways Code is

amended to read:

2454. Allocations made pursuant to Section 2453 shall be made on

the basis of the following:

(a) An allocation of 80 percent of the estimated cost of the

project shall be made; except that whenever contributions from other

sources exceed 20 percent of the estimated cost, the allocation shall

be reduced by the amount in excess of 20 percent of the estimated

cost.

(b) An allocation of 50 percent of the estimated cost of the

project shall be made for a proposed crossing.

(c) No allocation shall be made in excess of 50 percent of the

estimated cost of the project unless the grade crossing to be

eliminated has been in existence for at least 10 years prior to the

date of allocation.

(d) On projects which eliminate an existing crossing, or alter or

reconstruct an existing grade separation, no allocation shall be made

unless the railroad agrees to contribute 5 percent of the cost of

the project.

(e) Where a project does not include a grade separation, but

eliminates existing grade crossing or crossings, the allocation shall

not exceed the estimated allocation that would have been made for

the grade separation which is no longer needed because of the

elimination of the grade crossing by the project and which is

indicated on the priority list to be urgently in need of grade

separation.

(f) Where the project includes the separation of a highway and a

railroad passenger service operated by a city or county, the

operating agency shall contribute 20 percent of the cost of the

project. The priority listing for such projects shall be in

accordance with criteria established for such railroad passenger

service by the Public Utilities Commission.

(g) Notwithstanding subdivisions (a) to (f), inclusive, the total

of such allocations for a single project shall not exceed five

million dollars ($5,000,000) without specific legislative

authorization, except that the amount for a single project may be

increased to either (1) an amount that includes the federal

construction cost index increase each year since 1976, or (2) an

amount which does not exceed one-third of the total funds

appropriated for grade separation projects for the year of

allocation, whichever amount is less, as determined each year by the

Public Utilities Commission.

(h) Notwithstanding subdivisions (a) to (g), inclusive, a single

project in excess of five million dollars ($5,000,000), but not

exceeding twenty million dollars ($20,000,000), shall be considered

without specific legislative authority, if the project (1) is

included in the Public Utilities Commission's priority list of

projects scheduled to be funded, (2) eliminates the need for future

related grade separation projects, (3) provides projected cost

savings of at least 50 percent to the state or local jurisdiction, or

both of them, by eliminating the need for future projects, and (4)

alleviates traffic and safety problems or provides improved rail

service not otherwise possible. Projects approved pursuant to this

subdivision shall be funded over a multiyear period, not to exceed

five years, and the allocation for any one of those years shall not

exceed the amount prescribed by subdivision (g) for a single project.

An agency which has received an allocation for a project approved

pursuant to this subdivision shall not be eligible for an allocation

for another project under this subdivision for a period of 10 years

from the date of approval of that project. Not more than one-half of

the total allocation available in any one fiscal year for grade

separation projects may be used for the purposes of this subdivision.

(i) Notwithstanding any of the above provisions of this section or

any other provision of law, when the state or local agency uses

funds derived from federal sources in financing its share of project

costs, the railroad contribution, where required by federal law or

regulation, shall be computed pursuant to federal law. However, the

allocation made pursuant to this chapter shall be computed as though

such matching contribution was derived from nonfederal sources and

shall be computed as though the railroad had made its contribution

pursuant to state law rather than pursuant to federal law. Where the

contribution of the railroad is computed according to federal law or

regulation because of the use of federal funds in the allocation for

a project, the allocation shall be increased by the amount the share

of the railroad is reduced below 5 percent of the estimated cost of

the project.

SEC. 2.

SECTION 1. Section 2456 of the Streets and Highways

Code is amended to read:

2456. An allocation for construction costs, including

preconstruction costs if not already allocated, shall be made to a

local agency only if it furnishes evidence satisfactory to the

department that all necessary orders of the Public Utilities

Commission have been executed, that sufficient local funds will be

made available as the work of the project progresses, that all

necessary agreements with affected railroad or railroads have been

executed that, if required, all environmental impact reports have

been prepared and approvals obtained, and that all other matters

prerequisite to the award of the construction contract can be

accomplished within two years after the allocation. Local funds shall

be deemed available to the amount of any general obligation bonds

authorized but unsold if it is determined that such bonds may be

issued and sold by the local agency at any time.

SEC. 3.

SEC. 2. Section 2458 of the Streets and Highways Code

is amended to read:

2458. Except as provided in this section, allocations shall

remain available until expended. If a construction contract has not

been awarded within two years after an allocation for construction

costs, the commission may order the allocation canceled and such

funds shall revert to the fund set aside for purposes of this

chapter. All or any part of an allocation for preconstruction costs

may be canceled and such funds shall revert to the fund set aside for

purposes of this chapter upon a finding that insufficient progress

is being made to complete the project. Where an allocation is

canceled pursuant to this section, the local agency shall reimburse

the fund set aside for purposes of this chapter the portion of the

allocation which is not reverted as set forth in this section. The

department shall determine, with the local agency, as to the time of

repayment.