BILL ANALYSIS Ó SENATE COMMITTEE ON TRANSPORTATION AND HOUSING 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 met. ANALYSIS: 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 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. 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 transportation 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 COMMENTS: 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 communities. 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 Wednesday, June 15, 2016.) 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 San Francisco Bay Area Transit District Santa Cruz County Regional Transportation Commission Transportation Agency for Monterey County Ventura County Transportation Commission OPPOSITION: None received -- END --