California Department of Transportation
 

State Highway Account (SHA) Loan Program Highlights

Purpose:

Assembly Bill (AB) 1012, (Torlakson) Chapter 783, Statutes of 1999 authorized the use of unallocated funds in the State Highway Account (SHA) for the purpose of making short-term loans to advance the capital improvement phase of State Transportation Improvement Program (STIP) eligible projects that are included within an adopted Regional Transportation Plan (RTP).

Eligibility:

Transportation Planning Agencies, County Transportation Commissions, Transit Districts, City and County Governments, and Local Transportation Authorities are eligible to apply for a loan under this program. Loans are subject to the provisions of Article XIX of the California Constitution.

Funding:

By January 15 and July 15 of each year, the California Transportation Commission (CTC) must adopt projections regarding the availability of funds to be loaned and the period of time during which funds will be available.

With the exception of those requests which would exceed program capacity, loans will be considered for approval on a first-come, first-served basis whenever the State Highway Account cash balance is greater than $400 million.

The maximum amount of funds that may be loaned for one or more projects to any single county in any single loan must be not more than 50 percent of the most recent regional-choice funding allocation, in an amount not to exceed $100 million.

Requirements:

An agency applying for a loan must be the approving authority for the county's submission to the STIP, unless the agency applies jointly with the approving authority.

Projects must be STIP-eligible and included in an adopted RTP, and must comply with California Environmental Quality Act (CEQA) requirements.

Total project costs must be greater than $10 million. In counties with populations under 500,000, the CTC may waive this requirement if 50 percent of the county's share for the current county share period is equal to, or greater than, the amount to be loaned.

A fiscal assessment of the applicant's ability to repay a loan must be made by an independent fiscal consultant, selected by the applicant from a pre-qualified list approved jointly by Caltrans and the CTC. The applicant must incur the cost of this assessment.

Applicants must certify that other resources are not available to fund the project and that the applicant does not intend to create an indirect arbitrage situation. An indirect arbitrage situation would be created by banking or investing the loaned funds at a higher yield than the State of California's Pooled Money Investment Account (PMIA) Earnings Yield Rate in effect while the monies are borrowed.

Interest rates on loans will be set at the rate paid on money in the PMIA during the period of time that the money is loaned. A history of the PMIA Earnings Yield Rates can be found at the California State Controller's Office website at: www.sco.ca.gov

Projects must be under construction no later than six months after the date the loan funds are transmitted.

Loans must be repaid within four years from non-state sources.

For additional information, please contact the Office of Innovative Finance.