BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 518 (Lowenthal) Hearing Date: 05/28/2009 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 specified. 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 costsGeneral ----------see staff comments---------- ARB monitoring $85 $85 Special* State funding prohibition Unknown cost savings General/ ____________ Special * Air Pollution Control Fund _________________________________________________________________ ____ STAFF COMMENTS: 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.