BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
                              Senator Jim Beall, Chair
                                2015 - 2016  Regular 

          Bill No:          AB 738            Hearing Date:     7/14/2015
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          |Author:   |Beth Gaines                                           |
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          |Version:  |5/11/2015                                             |
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          |Urgency:  |No                     |Fiscal:      |No              |
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          |Consultant|Eric Thronson                                         |
          |:         |                                                      |
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          SUBJECT:  Sacramento Regional Transit District


           DIGEST:  This bill recasts membership in the Sacramento Regional  
          Transit District and redefines the boundaries of the District.

          ANALYSIS:
          
          Existing law:
          
            1)  Establishes the Sacramento Regional Transit (Sacramento  
              RT) District to operate a single unified public  
              transportation system in the Sacramento region in order to  
              meet the present and future public transportation, and mass  
              and rapid transit, needs of the region.

            2)  Defines member entities of the Sacramento RT District as  
              cities or counties that are annexed to the district.

            3)  Enables any city or county to annex and become part of the  
              Sacramento RT District following a written request by that  
              city or county and upon approval by the Sacramento Area  
              Council of Governments.

            4)  Defines the boundaries of the Sacramento RT District as: 

              a)    All of the areas of any eligible cities in which a  
                city council has declared the need for the district to  
                operate; and
              b)    Any of the area of a county described in statute  







          AB 738 (Beth Gaines)                               Page 2 of ?
          
          
                within which a board of supervisors has declared the need  
                for the district to operate.

            1)  Enables Sacramento RT to operate and exercise its powers  
              within any city or county.

            2)  Restricts Sacramento RT from levying an ad valorem  
              property tax within the boundaries of any city or county  
              unless that city council or county board of supervisors  
              declares that there is a need for Sacramento RT to levy a  
              tax within its boundaries.

          This bill:

            1)  Defines member entities of Sacramento RT as any city or  
              county within the district boundaries.

            2)  Determines the boundaries of Sacramento RT to include:

              a)    The cities of Sacramento and Rancho Cordova
              b)    The unincorporated territory of Sacramento County  
                within the urban service area, as determined by the Board  
                of Supervisors
              c)    An eligible city or county that has annexed to the  
                district

            1)  Requires that any territory annexed into a city currently  
              included in Sacramento RT also be included in the district.

            2)  Requires any new city incorporated on or after January 1,  
              2016, which has any territory within Sacramento RT  
              boundaries, to be annexed wholly into the district.

            3)  Declares that any territory included within the district  
              boundaries of Sacramento RT is subject to taxation in  
              accordance with the assessable valuation of the property and  
              that revenue can be used for general purposes and for  
              payment of any district indebtedness.

            4)  Restricts Sacramento RT from levying an ad valorem  
              property tax on any territory that is not within the  
              district boundaries.

            5)  Requires the legislative body of any city or county that  
              wishes to be annexed into Sacramento RT to agree in writing  








          AB 738 (Beth Gaines)                               Page 3 of ?
          
          
              upon terms and conditions of annexation with the district's  
              board of directors.

            6)  Eliminates the Sacramento Area Council of Governments'  
              approval of annexation of any new territory to the district.

            7)  Requires any territory wishing to detach from the district  
              to obtain a supermajority vote of 80%of the district's board  
              of directors, and a majority of its governing body, in order  
              to no longer be part of the district.
            8)  Holds any territory that detaches from the district  
              responsible for taxation for the payment of any bonded  
              indebtedness existing at the time of detachment.

          COMMENTS:

            1)  Purpose.  According to the author, this bill is attempting  
              to resolve a few problems created by existing law.  First,  
              some jurisdictions in Sacramento County, specifically the  
              cities of Folsom, Citrus Heights, and Elk Grove, contract  
              for service with Sacramento RT but are reluctant to annex  
              into the district for fear of losing some existing degree of  
              control over the operations of service within their  
              boundaries.  This bill allows entities to negotiate their  
              relationships to Sacramento RT before annexing into the  
              district and therefore allay some concerns.  Second,  
              Sacramento RT has invested in some currently unincorporated  
              areas of Sacramento County, and to protect those investments  
              this bill specifies that those areas remain part of the  
              district notwithstanding any new city incorporations in the  
              future.  Finally, this bill creates a mechanism for a member  
              city to leave the district if it wishes, which is currently  
              not possible under existing law.

            2)  Sacramento RT Background.  The Legislature authorized the  
              creation of the Sacramento RT District in 1971 to operate a  
              comprehensive public transportation system for the  
              Sacramento region.  

              Sacramento RT serves an area encompassing 418 square miles  
              and 1.4 million people; it operates 67 bus routes and 38.6  
              miles of light rail service.  Sacramento RT is governed by  
              an 11-member board of directors comprised of eight directors  
              that are appointed by the member entities, including  
              Sacramento County and the cities of Sacramento and Rancho  








          AB 738 (Beth Gaines)                               Page 4 of ?
          
          
              Cordova.  Additionally, three directors are appointed by  
              non-annexed jurisdictions, which are "participating  
              entities," including the cities of Citrus Heights, Elk  
              Grove, and Folsom.  Board members vote based on a weighted  
              vote system established by AB 2137 (Niello, Chapter 227,  
              Statutes of 2008), which is based upon the type of  
              membership and the financial contribution made by each  
              entity to the district.

            3)  Concerns.  The City of Elk Grove has an "oppose unless  
              amended" position on this bill, and raises several areas of  
              concern.  First, it believes this bill creates challenges  
              for the city's planned future annexations and the service  
              area for Elk Grove's own transit service.  Second, Elk Grove  
              strongly objects to this bill granting Sacramento RT the  
              ability to levy and keep an ad valorem property tax in the  
              unincorporated area of Sacramento County.  If Elk Grove ever  
              annexes more land that had an ad valorem property tax  
              associated with it, the City expects to take over that  
              property tax.  

              Elk Grove states that it has no intention of annexing into  
              Sacramento RT.  Any future land Elk Grove annexes will  
              become part of the city's own transit service.  Elk Grove's  
              oppose letter suggests that this bill threatens Elk Grove's  
              ability to grow, and at the same time, expand its own  
              transit service.  For example, this bill will include in  
              Sacramento RT's boundary a portion of Sacramento County  
              south of Elk Grove that is entirely disconnected from the  
              rest of Sacramento RT by the City of Elk Grove's boundary.   
              It seems reasonable for Elk Grove to want this portion of  
              Sacramento County to be excluded from Sacramento RT's  
              district, given that Sacramento RT does not provide service  
              to this area and would have to travel through Elk Grove to  
              do so.  Further, it doesn't appear that Sacramento RT  
              intends to limit Elk Grove's ability to grow and provide its  
              own service.  In light of this, the committee and author may  
              wish to amend the bill to resolve Elk Grove's growth issues  
              as well as exclude the detached portion of Sacramento County  
              from Sacramento RT's district boundary.
            
          Related Legislation:
          
          AB 906 (Cooper) - specifies that the City of Elk Grove's  
          obligation to pay its proportionate share for transit service  








          AB 738 (Beth Gaines)                               Page 5 of ?
          
          
          provided by Sacramento RT is fully satisfied by the district's  
          receipt of revenues from a countywide sales tax measure  
          dedicated to transit service.  This bill is also being heard in  
          this committee today.

          Assembly Votes:
              Floor:    75-0
              LGov:       9-0
          
          FISCAL EFFECT:  Appropriation:  No    Fiscal Com.:  No    Local:  
           No
            
          POSITIONS:  (Communicated to the committee before noon on  
          Wednesday,
                          July 8, 2015.)
          
            SUPPORT:  

          Sacramento Regional Transit District

          OPPOSITION:

          City of Elk Grove                                 -- END --