BILL ANALYSIS                                                                                                                                                                                                    

                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           518 (Lowenthal)
          Hearing Date:  05/26/2009           Amended: 05/06/2009
          Consultant: Mark McKenzie       Policy Vote: T&H 6-4, ED 5-3
          BILL SUMMARY:   SB 518 would limit funding for subsidized  
          parking and provide incentives for adopting certain measures  
          that account for the full cost of parking.  Specifically, this  
          bill would:
           Require cities and counties located within a metropolitan  
            planning organization (MPO) to adopt and implement 20 points  
            worth of parking measures from a points-based menu of  
            alternatives by January 1, 2012.
           Authorize community college districts to charge a specified  
            fee on students and staff for recovering transportation costs  
            or costs related to subsidized transit passes.
           Authorize cities and counties to use gas tax revenues  
            allocated from the Highway Users Tax Account (HUTA) for the  
            adoption or implementation of transportation demand measures,  
            including those identified in the points-based menu.
           Require a local authority to either fix parking meter rates by  
            ordinance or specify targets in an ordinance and allow the  
            fees to be adjusted administratively.
           Authorize fees from parking meter zones to be used for parking  
            benefit districts or programs that reduce parking demand, as  
           Defines the "full cost of parking" as the sum of the  
            annualized land cost, the annualized construction cost, and  
            the annualized operations and maintenance cost.
           Prohibit the use of state funds to directly or indirectly  
            subsidize the construction or operations of parking on or  
            after January 1, 2011, with specified exceptions.
           Authorize the Air Resources Board (ARB) to approve and award  
            points, in addition to those items on the menu, for other  
            measures that reduce or eliminate subsidies that fail to  
            charge users for the full cost of parking, as specified.
           Require ARB to consider eligibility for carbon reduction  
            credits through a cap-and-trade program for cities or counties  
            that implement parking measures that exceed 20 points.
           Require cities and counties that implement measures that  
            achieve at least 50 points to receive 5% bonus points when  
            their applications are considered for allocations of state  


            loan and grant program funds.
                            Fiscal Impact (in thousands)

           Major Provisions         2009-10      2010-11       2011-12     Fund
           Local mandate          Unknown, potentially significant  
                                   ----------see staff comments----------
          ARB monitoring                    $85         $85       Special*
          State funding prohibition         Unknown cost savings  General/
          * Air Pollution Control Fund                            

          STAFF COMMENTS: This bill meets the criteria for referral to the  
          Suspense File.
          Page 2
          SB 518 (Lowenthal)

          This bill would impose a state-mandated local program by  
          requiring cities and counties within an MPO to adopt and  
          implement parking measures from the point-based menu.  Local  
          agencies have the authority to charge fees to cover costs for  
          preparation and revision of land use plans and policies, and  
          some of the items from the points-based menu have fee authority  
          attached to them.  There have been occasions, however, when the  
          Commission on State Mandates (COSM) has determined that some  
          specific duties related to local planning are reimbursable.  One  
          example of this is the Airport Land Use Commission (ALUC)  
          Mandate.  Even though an ALUC has the authority to charge fees  
          related to planning activities around airports, the COSM  
          determined that this fee authority does not disclaim state  
          responsibility to reimburse local entities for certain costs  
          related to the establishment or re-establishment of an ALUC.   
          While this mandate has been suspended in each Budget Act from  
          2005-06 to 2008-09, costs incurred in fiscal years 1997-98  
          through 2004-05 were $10,825,000.

          There are approximately 400 cities and counties located within  
          the jurisdiction of an MPO.  Potentially reimbursable costs  
          related to SB 518 are unknown, but if each eligible local entity  
          successfully filed a claim with the COSM for $10,000 each, this  
          bill would have a General Fund impact of $4 million.  These  


          costs could be lower to the extent that the COSM restricted  
          reimbursement to certain administrative costs related to the  
          process of selecting and implementing these parking policies.   
          If the COSM decided that broader activities would be eligible  
          for reimbursement, such as those related to the environmental  
          review process, these costs could be significantly higher. 

          SB 518 would authorize ARB to award points for other measures  
          that reduce or eliminate parking subsidies, if points are  
          assigned in proportion to the estimated impact on vehicle miles  
          traveled.  The bill also requires ARB to consider making a local  
          entity that adopts over 20 points worth of parking measures  
          eligible for carbon reduction credits as part of any  
          cap-and-trade program that is implemented.  ARB indicates that  
          it would require about  PY of staff time to monitor local  
          agencies actions with respect to these parking measures and  
          track the potential reduction in VMT on a region by region basis  
          to account for any greenhouse gas emission reductions.  Costs  
          associated with these new and ongoing duties would be in the  
          range of $85,000 annually.

          SB 518 would also prohibit the use of state funds to directly or  
          indirectly subsidize the construction or operation of parking on  
          and after January 1, 2011, as specified.  Under current law,  
          state funds may be used for these purposes.  The volume of state  
          funds used to subsidize parking is unknown, but this provision  
          would result in some unquantifiable savings to the state,  
          probably from the General Fund and special funds. 

          It is unclear whether a single agency or each applicable agency  
          would be required to monitor the point system to comply with the  
          provisions that allow local agencies that adopt 50 points from  
          the menu to be awarded bonus funds when applying for various  
          state grant and loan programs.  Lastly, this bill would  
          authorize HUTA funds to be used for transportation demand  
          measures, including those identified in the points-based menu.   
          To the extent that this creates a new use for gas tax revenues  
          that is not currently authorized, this bill would create special  
          fund cost pressures.