BILL ANALYSIS                                                                                                                                                                                                    ”

                                                                    AB 2090

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          2090 (Alejo)

          As Amended  May 27, 2016

          Majority vote

          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |Transportation  |16-0 |Frazier, Linder,      |                    |
          |                |     |Baker, Bloom, Brown,  |                    |
          |                |     |Chu, Daly, Dodd,      |                    |
          |                |     |Eduardo Garcia,       |                    |
          |                |     |Gomez, Kim, Mathis,   |                    |
          |                |     |Medina, Melendez,     |                    |
          |                |     |Nazarian, O'Donnell   |                    |
          |                |     |                      |                    |
          |Appropriations  |20-0 |Gonzalez, Bigelow,    |                    |
          |                |     |Bloom, Bonilla,       |                    |
          |                |     |Bonta, Calderon,      |                    |
          |                |     |Chang, Daly, Eggman,  |                    |
          |                |     |Gallagher, Eduardo    |                    |
          |                |     |Garcia, Roger         |                    |
          |                |     |HernŠndez, Holden,    |                    |
          |                |     |Jones, Obernolte,     |                    |
          |                |     |Quirk, Santiago,      |                    |
          |                |     |Wagner, Weber, Wood   |                    |
          |                |     |                      |                    |


                                                                    AB 2090

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          |                |     |                      |                    |

          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  
               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  


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            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.

          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, potential significant cost pressure on the LCTOP by  
          expanding criteria for use of funds set aside for this program  
          and thus likely increasing the number of transit agencies that  
          would be eligible to apply for funding.  Caltrans may incur  
          additional administrative costs to revise program guidelines and  
          to review additional funding applications, but these costs  
          should be absorbable.

          COMMENTS:  LCTOP was created by SB 862 (Budget and Fiscal Review  
          Committee), 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.  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.  


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          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.  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.  

          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  
          emergency caused by the failure  of  revenues  to adequately  


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          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.   

          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  
          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.  

          Please see the policy committee analysis for full discussion of  
          this bill.

          Analysis Prepared by:                                             
                          Melissa White / TRANS. / (916) 319-2093  FN: