BILL ANALYSIS                                                                                                                                                                                                    Ó

                              Senator Jim Beall, Chair
                                2015 - 2016  Regular 

          Bill No:          AB 2090           Hearing Date:    6/21/2016
          |Author:   |Alejo                                                 |
          |Version:  |5/27/2016                                             |
          |Urgency:  |No                     |Fiscal:      |Yes             |
          |Consultant|Manny Leon                                            |
          |:         |                                                      |

          SUBJECT:  Low Carbon Transit Operations Program

           DIGEST:  This bill allows funding from the Low Carbon Transit  
          Operations Program (LCTOP) be expended to support the operation  
          of existing bus or rail service if the specified criteria is  

          Existing law:
          1)Requires the California Air Resources Board (CARB), pursuant  
            to AB 32 (Núñez, Chapter 488, Statutes of 2006) to develop a  
            plan of how to reduce statewide greenhouse gas (GHG) emissions  
            to 1990 levels by 2020.  Under AB 32, CARB is authorized to  
            include the use of market-based mechanisms to comply with  
            these regulations (i.e., cap and trade).

          2)Requires regions, pursuant to t SB 375 (Steinberg, Chapter  
            728, Statutes of 2008) to prepare a regional transportation  
            plan that includes a sustainable communities strategy (SCS)  
            designed to achieve the regional targets for GHG emission  

          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.


          AB 2090 (Alejo)                                    Page 2 of ?

          4)Establishes 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 that a minimum of 25% of the moneys available in GGRF  
            be used to benefit 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.  

          7)Requires transit operators to maintain a specified ratio of  
            fare revenues to operating costs in order to be eligible to  
            receive TDA funds.  

          This bill:

          1)Allows funds from LCTOP  to 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 the California  
               Environmental Quality Act (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


          AB 2090 (Alejo)                                    Page 3 of ?
             d)   The governing board of the transit agency makes a  
               finding that a reduction in or elimination of existing  
               transit service would increase GHG emissions because  
               customers would choose other less-efficient modes of  

          2)Defines the criteria for which funds from LCTOP can be  
            expended by the transit agency after it declares a fiscal  
            emergency under CEQA, as specified


          1)Purpose. The author asserts, "AB 2090 will provide transit  
            agencies with an additional tool for maintaining current  
            transit service levels during fiscal emergencies, with the  
            acknowledgement that severe funding challenges hurt transit  
            ridership and jeopardize the state's long-term greenhouse gas  
            (GHG) emission reduction goals.  An important part of meeting  
            the state's GHG emission reduction goals is not only to expand  
            existing transit services, but also to maintain existing  
            services to prevent people from having to take to the road in  
            their own vehicles."

          2)LCTOP.  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.  

            Specifically, LCTOP was created to provide operating and  
            capital assistance for transit agencies to reduce GHG  
            emissions and improve mobility, with a priority on serving  
            disadvantaged communities.  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.  

            Prior to receiving an allocation, which is distributed by the  
            State Controller through the STA formula, eligible transit  
            agencies must submit a description of their proposed  


          AB 2090 (Alejo)                                    Page 4 of ?
            expenditures and demonstrate how each expenditure will reduce  
            GHG emissions.  Approved projects in LCTOP may include  
            equipment acquisition, fueling, maintenance, and other costs  
            to operate new or expanded services and/or facilities.  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  

          3)Greater flexibility. AB 2090 will allow transit agencies to  
            use LCTOP funds to support existing service if a transit  
            agency declares a fiscal emergency under CEQA.  This increased  
            flexibility will allow transit agencies struggling to maintain  
            services with a vital funding option.  For example, writing in  
            support of the bill, the Santa Cruz Metropolitan Transit  
            District notes, "the Santa Cruz Metropolitan Transit District  
            is experiencing a significant and growing structural deficit  
            caused by rising operations costs and flat ridership amidst  
            diminishing local, state, and federal support.  The  
            flexibility provided by AB 2090 will allow the agency to avoid  
            making a counterproductive 25% reduction in service that would  
            impact 46% of the agency's core ridership."   

          4)Double-referral. This bill is also referred to the Senate  
            Committee on Environmental Quality.

          Related 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  
          to adopt GHG reduction measures to ensure that statewide  
          emissions are reduced to 1990 levels by 2020.  

          FISCAL EFFECT:  Appropriation:  Yes    Fiscal Com.:  Yes     


          AB 2090 (Alejo)                                    Page 5 of ?
          Local:  No

          Assembly Votes:

            Floor:         77-1
            Approps:  20-0
            Trans:         16-0
          POSITIONS:  (Communicated to the committee before noon on  
                          June 15, 2016.)

          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
          San Francisco Bay Area Transit District 
          Santa Cruz County Regional Transportation Commission 
          Transportation Agency for Monterey County 
          Ventura County Transportation Commission


          None received 

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