BILL ANALYSIS Ó
AB 2090
Page 1
Date of Hearing: April 11, 2016
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
AB 2090
(Alejo) - As Amended April 7, 2016
SUBJECT: Low Carbon Transit Operations Program
SUMMARY: Allows funding from the Low Carbon Transit Operations
Program (LCTOP) to be expended to support the operation of
existing transit service if the agency declares a fiscal
emergency under the California Environmental Quality Act (CEQA).
Specifically, this bill:
1)Allows funds from the LCTOP be expended to support the
operation of existing bus or rail service if the following
criteria are met:
a) The governing board of the transit agency declares a
fiscal emergency, as defined by CEQA, within 90 days of the
agency requesting LCTOP funds;
b) The expenditure of the LCTOP funds is necessary to
sustain the transit agency's transit service in the year in
which the funds would be expended;
c) The governing board of the transit agency would be
AB 2090
Page 2
forced to reduce or eliminate transit service if the
requested LCTOP funds are not received; and,
d) The governing board of the transit agency makes a
finding that a reduction in or elimination of existing
transit service would increase greenhouse gas (GHG)
emissions because customers would choose other
less-efficient modes of transportation.
2)Defines the criteria for which funds from LCTOP can be
expended by the transit agency after they declare a fiscal
emergency under CEQA, including:
a) The expenditures support current bus or rail service
operating costs, including labor, fueling, maintenance, and
other costs to operate;
b) The transit agency demonstrates that each expenditure
directly sustains transit service that would otherwise be
reduced or eliminate in the upcoming year without the LCTOP
funds; and,
c) Transit agencies may not request LCTOP to support
existing transit service unless the agency declares a
fiscal emergency in each year under CEQA and for not more
than three consecutive years.
EXISTING LAW:
1)Requires the California Air Resources Board (ARB), pursuant to
AB 32 (Núñez),
Chapter 488, Statutes of 2006, to develop a plan of how to
AB 2090
Page 3
reduce statewide GHG emissions to 1990 levels by 2020. Under
AB 32, ARB is authorized to include the use of market-based
mechanisms to comply with these regulations (cap and trade).
2)Requires, pursuant to the SB 375 (Steinberg), Chapter 728,
Statutes of 2008, regions must prepare a regional
transportation plan that includes a sustainable communities
strategy (SCS) designed to achieve the regional targets for
GHG emission reduction.
3)Establishes the Greenhouse Gas Reduction Fund (GGRF) in the
State Treasury and requires all money collected pursuant to
cap and trade, with limited exceptions, be deposited into the
fund and makes the GGRF funds available for appropriation by
the Legislature.
4)Establishes the LCTOP, administered by the California
Department of Transportation (Caltrans), and continuously
appropriates 5% of GGRF fund proceeds for transit operations
to expand service, with a priority on serving disadvantaged
communities.
5)Requires, pursuant to SB 535 (de León), Chapter 830, Statutes
of 2012, that a minimum of 25% of the moneys available in GGRF
be used to benefits disadvantaged communities.
6)Provides funding for public transportation through the
Transportation Development Act (TDA), including State Transit
Assistance (STA) which is derived from the statewide sales tax
on diesel fuel. STA funds are appropriated by the Legislature
and are allocated by a formula with 50% being allocated
according to population and 50% being allocated according to
transit operator revenues from the prior fiscal year.
AB 2090
Page 4
7)Requires transit operators to maintain a specified ratio of
fare revenues to operating costs in order to be eligible to
receive TDA funds.
FISCAL EFFECT: Unknown
COMMENTS: LCTOP was created by SB 862 (Committee on Budget and
Fiscal Review), Chapter 862, Statutes of 2014, as part of a
comprehensive package of programs to target GHG reductions in
California using funds generated by the state's cap and trade
program. These programs include affordable housing and
sustainable communities, transit and intercity rail capital
projects, and high-speed rail. LCTOP is administered by
Caltrans and is continuously appropriated 5% of GGRF of funds.
In 2014-15, LCTOP received $25 million, and in 2015-16 it was
funded at $100 million. The Governor's January 2016-17 Budget
proposes $100 million for the program.
Specifically, LCTOP was created to provide operating and capital
assistance for transit agencies to reduce GHG emission and
improve mobility, with a priority on serving disadvantaged
communities. Approved projects in LCTOP support new or expanded
bus or rail services and expand intermodal transit facilities
and may include equipment acquisition, fueling, maintenance, and
other costs to operate those services or facilities, with each
project reducing GHG emissions. For transit agencies whose
service area includes disadvantaged communities, at least 50% of
the total moneys received shall be expended on projects that
will benefit disadvantaged communities.
AB 2090
Page 5
LCTOP's purpose is to support new and expanded transit service
that increase mode share - shift new riders out of their cars -
to reduce GHG emissions. Prior to receiving an allocation,
which is distributed by the State Controller following the STA
formula, eligible transit agencies must submit a description of
their proposed expenditures and demonstrate how each expenditure
will reduce GHG emissions.
As noted by the author, some transit agencies in the state are
facing fiscal challenges that prevent them from putting more new
bus or rail service out on the street, and they are currently
prohibited from using these vital state funds to supplement
their transit service. He adds that not only are these agencies
unable to provide new transit services, they are struggling to
maintain the level of service out on the street today. And
without sources of revenue, transit agencies may have to cut
back service, thus forcing some transit riders onto less
efficient, dirtier modes of transportation, which could in turn
actually increase GHG emissions.
This bill is sponsored by Santa Cruz Metropolitan Transit
District (METRO). The district asserts it is experiencing a
significant and growing structural deficit caused by rising
operations costs and flat ridership amidst diminishing local,
state, and federal support. It further contends that the
flexibility provided by this bill will allow it to avoid making
a counterproductive 25% reduction in service that would impact
46% of their core ridership.
Under this bill, to be able to use LCTOP funds to support
existing service, a transit agency would have to declare a
fiscal emergency under CEQA. Current law allows transit
agencies to be exempted from CEQA review of the reduction or
elimination of transit services and increases to fares, fees,
fines, rates and charges that support transit service when such
actions are undertaken as a result of a declared fiscal
AB 2090
Page 6
emergency caused by the failure of revenues to adequately
fund agency programs, facilities, and operations. Under CEQA,
a "fiscal emergency" means that the agency is projected to have
negative funding within one year from the date of declaration.
The transit agency must conduct a public hearing to consider the
action prior to declaring the fiscal emergency.
In writing support of this bill, the California Transit
Association states that it supports AB 2090 because it would
provide a recipient transit agency with a targeted new tool for
maintaining current transit service levels in a fiscal
emergency. At the same time, the stringent requirements ensure
that the core function of LCTOP remains i.e., advancing transit
services and initiatives that reduce GHG emissions.
As the state and regions continue to work toward the goal
reducing GHG emissions, as well as cutting other forms of air
pollution, as set forth in AB 32 and SB 375, increasing the mode
shift from single occupant car trips to public transportation is
critical for success in reaching this goal. LCTOP is an
important funding source to support new and expanding transit
services throughout the state. However, if a transit agency is
forced to increase fares and reduce or eliminate services due to
budget problems, not allowing the agency to access and utilize
this funding source seems counterproductive. Eliminating
service will eliminate transportation options for the affected
communities and will likely shift people back to their cars for
commuting and other uses, which will serve to increase GHG
emissions. If a transit agency declares a fiscal emergency, the
use of LCTOP funds may not fully offset all of the reductions or
changes needed to regain balance, but will help mitigate the
AB 2090
Page 7
situation. This bill also includes a three-year limit on the
time one agency can use LCTOP for this purpose, which will help
ensure the funds serve only as temporary assistance.
Related legislation: SB 824 (Beall), would authorize a transit
agency that does not submit a project for funding under LCTOP in
a particular fiscal year to retain its funding share for
expenditure in a subsequent fiscal year or loan or transfer it
to another eligible agency in the same region. SB 824 is
scheduled to be heard by the Senate Transportation and Housing
Committee on April 19, 2016.
Previous legislation: SB 862 (Committee on Budget and Fiscal
Review), Chapter 36, Statues of 2014, created and funded the
Affordable Housing and Sustainable Communities, the Low Carbon
Transportation, and the Low Carbon Transit Operations programs.
SB 535 (de León), Chapter 830, Statutes of 2012, required, among
other things, that a minimum of 25% of the moneys available in
GGRF be used to benefits disadvantaged communities.
AB 32 (Núñez), Chapter 488, Statutes of 2006, created the
California Global Warming Solutions Act of 2006 and required ARB
AB 2090
Page 8
to adopt GHG reduction measures to ensure that statewide
emissions are reduced to 1990 levels by 2020.
REGISTERED SUPPORT / OPPOSITION:
Support
Santa Cruz Metropolitan Transit District (Sponsor)
Association of Monterey Bay Area Governments
California Transit Association
Honorable Cynthia Mathews, Mayor, city of Santa Cruz
Monterey-Salinas Transit
Orange County Transportation Authority
Riverside Transit Agency
Opposition
AB 2090
Page 9
None on file
Analysis Prepared by:Melissa White / TRANS. / (916) 319-2093