BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 2222 (Holden) - Transit Pass Program: free or reduced-fare
transit passes
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|Version: August 2, 2016 |Policy Vote: T. & H. 7 - 0, |
| | E.Q. 6 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 8, 2016 |Consultant: Mark McKenzie |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 2222 would establish the Transit Pass Program,
which would be administered by the Department of Transportation
(Caltrans), upon appropriation of funding by the Legislature, to
provide transit agencies with funding to support transit pass
programs that provide free or reduced-fare transit passes to
low-income middle school, high school, and college students, as
specified.
Fiscal
Impact:
Approximately $5 million in cost pressures to fund the program
at the minimum level of $20,000 per eligible transit agency.
Absent a specified funding source, these costs represent a
General Fund cost pressure. To the extent existing transit
special funds are used to fund the program, there would be a
AB 2222 (Holden) Page 1 of
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commensurate decrease in funding available for other transit
priorities.
Estimated Caltrans administrative costs of approximately
$200,000 for two years, and $100,000 ongoing. Initial costs
would be incurred to develop and adopt guidelines, performance
measures, and reporting requirements related to establishing
the program, and ongoing costs would be related to
administering the program. (State Highway Account)
Potential California Air Resources Board (CARB) costs in the
low hundreds of thousands annually, to the extent it is
determined that the Transit Pass Program, by virtue of its
placement in the Public Resources Code, would require CARB to
provide guidance on how to report and quantify greenhouse gas
(GHG) emission reductions and maximizing benefits to
disadvantaged communities. (see recommended amendments below)
Background: Existing law, as enacted by SB 862 (Committee on Budget and
Fiscal Review), Chap. 36/2014, establishes a long-term plan for
the expenditure of revenues generated through CARB's
cap-and-trade auctions. Specifically, existing law requires
that cap-and-trade funds deposited into the Greenhouse Gas
Reduction Fund (GGRF) are continuously appropriated as follows:
25% for the high-speed rail project; 20% for affordable housing
and sustainable communities grants; 10% for the Transit and
Intercity Rail Capital Program (TIRCP); and 5% for the
Low-Carbon Transit Operations Program (LCTOP). The remaining
40% is available for annual appropriation by the Legislature.
TIRCP is a competitive grant program that funds capital
improvements to reduce GHG emissions and modernize California's
intercity, commuter, and urban rail and bus systems to achieve
specific policy objectives, with a goal of providing at least
25% of available funding to projects that provide a direct
benefit to disadvantaged communities. LCTOP provides operating
and capital assistance for transit agencies to reduce GHG
emissions and improve mobility, with a priority on serving
disadvantaged communities. For agencies whose service area
includes disadvantaged communities, at least 50% of the total
monies received must be spent on projects that will benefit
those areas. LCTOP funds are allocated to transit agencies
pursuant to the State Transit Assistance statutory formula.
Free or reduced-fare transit programs are an eligible
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expenditure under the LCTOP.
Proposed Law:
AB 2222 would establish the Transit Pass Program to provide
low-income students with free or reduced-fare transit passes.
Specifically, this bill would:
Require Caltrans to administer the program, upon appropriation
of funds by the Legislature for the program.
Require the funds to be allocated by the State Controller to
support new or existing transit pass programs that provide
free or reduced-fare transit passes to any of the following:
o Students attending public middle or high schools
that are eligible for funding under the federal No Child
Left Behind Act.
o Students attending a community college who qualify
for a student fee waiver.
o Students attending a California State University
(CSU) or University of California (UC) who are Cal Grant
or federal Pell Grant recipients.
Authorize eligible transit providers that would be
distributing funds to consider prioritizing applications by
specified entities with existing, successful transit pass
programs, to the extent the entity demonstrates that
additional funding will further reduce the cost of the transit
pass or expand program eligibility.
Require Caltrans to develop program guidelines that would
ensure funds are used to expand eligibility or further reduce
the cost of a transit pass, and to develop performance
measures and reporting requirements to evaluate whether the
program is increasing transit ridership among students. The
guidelines would be exempt from the Administrative Procedure
Act requirements.
Require transit providers and participants to enter into
agreements to ensure that free or reduced-fare transit passes
are distributed to students.
Require $20,000 to be provided to each transit provider, and
specify that any additional available funds would be
allocated to transit agencies pursuant to existing State
Transit Assistance distribution formulas, as specified. Any
funds allocated, but not distributed, during a fiscal year
shall be distributed the following fiscal year.
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Staff
Comments: Currently, many transit agencies in California use
existing transit funding to provide free or reduced fare transit
passes to students for use on their systems. For example, the
San Francisco Muni offers the "Free Muni for Youth" program that
gives free access to Muni to low and moderate income youth, from
five to 18 years old. Sacramento Regional Transit also offers
students from age five to 18 a 50% discounted fare for monthly
passes. The Los Angeles County Metropolitan Transportation
Authority (Metro) has been offering reduced fares for both K-12
and college students since the early 1990s, with programs that
provide a 54% discount on monthly passes both college students,
and a 76% discount for the K-12 program. Most of the programs
require proof of the students being registered in school, but
the SF Muni program is based upon family income level.
Additionally, some transit agencies have developed agreements
directly with schools in their jurisdictions to partner and
provide free or reduced passes to all students. For example,
The University of California Los Angeles (UCLA) and the
University of Southern California (USC) provide free passes for
their students in partnership with Metro. In the Sacramento
area, the University of California at Davis offers a variety of
travel options at reduced rates for students and faculty. While
the funding provided by this bill could be used to enhance
existing programs, it may also be used to supplant resources
provided under current transit pass programs, and act as an
indirect subsidy for other transit operations.
Recommended
Amendments: While the bill was recently amended to remove GGRF
as a specified source of funding for the Transit Pass Program,
the proposed statutes for the program would remain in Division
44 of the Public Resources Code, which includes specified
programs for the expenditure of GGRF monies. CARB indicates
this could imply that they would be required to perform
oversight functions that are required for the other GGRF
programs in Division 44, which would trigger additional costs.
To avoid this ambiguity and the potential costs, staff
recommends an amendment to move the provisions of the bill to
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Division 10 of the Public Utilities Code, which contains laws
specific to transit districts.
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