Bill Summary for Bill Number SB15-272

Date: 04/23/2015

Final
BILL SUMMARY for SB15-272

SENATE COMMITTEE ON TRANSPORTATION

Votes: View-->	Action Taken:
Refer Senate Bill 15-272 to the Committee of the W	PASS

11:19 AM -- SB 15-272

Senator Baumgardner, prime sponsor, presented Senate Bill 15-272. This bill allows the state to borrow money for specific transportation projects by issuing Transportation Revenue Anticipation Notes (TRANs). In addition, the bill modifies the block of statutory transfers from the General Fund to the Highway Users Tax Fund (HUTF) and the Capital Construction Fund (CCF) pursuant to Senate Bill 09-228. The bill is referred to voters at the November 3, 2015, election. It requires the approval of a majority of voters to become law. Finally, the bill makes two changes to statute governing transportation contracts.

First, the bill allows the Colorado Department of Transportation (CDOT) to issue TRANs worth up to $3.5 billion and carrying a maximum repayment cost of $5.5 billion in principal and interest. The bill specifies a list of transportation projects that may receive TRANs proceeds; until these projects are fully funded, no other project may receive funding from this source. Issuance of new TRANs may begin upon the completion of repayment of previous TRANs authorized in 1999, which is expected to occur in FY 2016-17. The TRANs authorized in the bill carry a maximum repayment term of 20 years. TRANs proceeds would be exempt from restrictions on multi-year debt and state spending in TABOR.

Second, the bill lengthens the five-year block of statutory transfers from the General Fund to the HUTF and the CCF, in the event that one or more year(s) of transfers are reduced or not made because of revenue collected in excess of the TABOR limit. For each year in which transfers are reduced or not made, an additional year of transfers is required, in which 2 percent of General Fund revenue must be transferred to the HUTF and 1 percent of General Fund revenue must be transferred to the CCF. As in current law, transfers created in the bill may be reduced or not made because of the size of the TABOR surplus. The schedule of transfers is extended until five years of full transfers have taken place. The bill also broadens the permitted uses of SB 09-228 transfers to the HUTF, allowing transferred funds to be used for general highway operations and maintenance in addition to projects in the Strategic Transportation Project Investment Program. The bill requires that, for design-build contracts with an estimated completed cost of less than $75 million, the CDOT not penalize a bidding contractor for inexperience in design-build contracts. The CDOT must publish a copy of a chosen contractor's final winning proposal on its website, and must redact financial and proprietary information from the copy. The CDOT must communicate to a bidding contractor that the winning proposal will be made public.

Senator Baumgardner said that the bill creates a plan to finance and accelerate $3.5 billion of critical transportation projects, and clarified that it would not raise taxes. He discussed how the 60 projects specified in the bill would be throughout the state. He provided a brief history of these types of bonds in Colorado.

11:25 AM -- David May, representing the I-25 North Business Alliance and Ft. Collins Chamber of Commerce, testified in support of the bill. A handout was distributed (Attachment A). He discussed the challenges related to Interstate 25 (I-25) and additional problems created by delaying construction if these bonds were not approved. Senator Todd asked for additional information on the statewide poll.

150423 AttachA.pdf

11:31 AM -- Sandra Solin, representing the Northern Colorado Legislative Alliance, testified in support of the bill. She discussed how the project list provided in the bill was developed. She gave a brief history of how CDOT has identified its priority projects and distributed a handout detailing the project list (Attachment B).

150423 AttachB.pdf

11:44 AM -- David Flaherty, representing Magellan Strategies, testified in support of the bill. He discussed his role in polling people on their willingness to support transportation projects. He discussed the results of the poll. He responded to questions from the committee regarding how the poll was conducted. Committee discussion ensued.

12:02 PM -- Andy Karsian, representing CDOT, testified in opposition to the bill. He discussed the TRANs bonds that were issued by the state in 1999 and compared that legislation to SB 15-272. He discussed the decreasing purchasing power of the federal gas tax, the project list set by the Transportation Commission, and the need for maintenance and surface treatments on existing roads. He responded to questions from the committee regarding the Responsible Acceleration of Maintenance and Partnerships program and CDOT's plan for funding projects if the bill does not pass.

12:20 PM

Committee discussion ensued regarding the costs and benefits of bonding now versus the possibility of bonding in the future.

12:30 PM -- Barbara Kirkmeyer, Weld County Commissioner, representing Weld County and North Front Range Metropolitan Planning Organization (NFRMPO), testified in support of the bill. She said that she chairs the North I-25 Coalition and the Highway 85 Coalition. She said that about 10 percent of the projects listed in the bill are in Weld County, and discussed the need for I-25 to be expanded.

12:37 PM -- Sean Conway, Weld County Commissioner, representing Weld County and NFRMPO, testified in support of the bill. He said that the bill lets the voters decide if they want to bond the money.

12:40 PM -- Tony Milo, representing the Colorado Contractors Association (CCA), testified against the bill. He said that although contractors would benefit from the work if the bill passed, CCA is very concerned about the debt that would be incurred. He discussed CDOT's current plans for the construction and maintenance program and the need for fiscal responsibility. He responded to questions from the committee regarding bond repayment and the Transportation Expansion Project in Denver.

12:49 PM -- Kelly Sloan and Pete Baier, representing Mesa County, came to the table in support of the bill. Mr. Sloan said that the project list reflects needs in the entire state and that the two projects for the Grand Valley are very important to Mesa County. Mr. Baier discussed transportation planning priorities in Grand County and said that Mesa County believes that the timing for renewing the bonds is ideal. Mr. Sloan and Mr. Baier responded to questions from the committee regarding whether the voters in Grand County would be willing to increase taxes to pay for transportation projects in the long term.

12:55 PM -- Grier Bailey, representing the Colorado Wyoming Petroleum Marketers Association (CWPMA), testified in support of the bill. He discussed the benefits of addressing a large number of high-value projects at the same time rather than spreading out the projects over fifty years. He discussed CWPMA's concerns that the projects could become toll roads in the future.

01:01 PM -- Tony Lombard, representing Colorado Counties Incorporated (CCI) testified in support of the bill. He said that CCI has been aware of Impact 64's discussions. He discussed the lack of public support for other funding alternatives and said that CCI is not endorsing a specific list of transportation projects.

01:03 PM -- Will Toor, representing the Southwest Energy Efficiency Project (SWEEP), testified in opposition to the bill. He said that the proposal would cut funding for maintenance and distributed a handout (Attachment C). He discussed federal funding requirements, the importance of state transportation plans, and SWEEP's support for multi-modal transportation infrastructure.

150423 AttachC.pdf

01:10 PM -- Rachel Richards, representing Pitkin County, testified in opposition to the bill. She said that the local officials are desperate to have these transportation projects proceed but said that HB 15-272 is not solving the shortfall of transportation funding for the long term. She discussed whether the public would support increasing the state gasoline tax if the measure was tied to these projects and suggested amending the bill to add transportation revenue.

01:17 PM -- Jody Randall, representing American Civil Constructors (ACC), testified in support of the bill. She said that ACC is worried about the projections for future traffic congestion in Colorado, and discussed issues associated with public-private partnerships (P3). She responded to questions from the committee regarding how long TRANs would be a solution to transportation issues in the state. Committee discussion ensued regarding the will of the voters.

01:26 PM -- Steve Tool, representing himself, came to the table for questions. He said that he is chair of the Colorado Legislative Alliance and was the chair of the Joint Budget Committee when the previous bonds were issued. He discussed CDOT's budget, including general fund transfers provided by Senate Bill 09-228 and the Federal Highway Trust Fund.

01:30 PM

Senator Baumgardner gave closing comments on the bill.


BILL:	SB15-272
TIME:	01:31:08 PM
MOVED:	Baumgardner
MOTION:	Refer Senate Bill 15-272 to the Committee of the Whole. The motion passed on a vote of 3-2.
SECONDED:
		VOTE
	Cooke	Yes
	Garcia	No
	Todd	No
	Scott	Yes
	Baumgardner	Yes


Final YES: 3 NO: 2 EXC: 0 ABS: 0 FINAL ACTION: PASS

01:33 PM

The committee adjourned.