Amended in Senate March 24, 2015

Senate Bill No. 9

Introduced by Senator Beall

December 1, 2014

An act to amend Sections 75220, 75221, and 75222 of, and to add Sections 75223, 75224, and 75225 to, the Public Resources Code, relating to transportation.

LEGISLATIVE COUNSEL’S DIGEST

SB 9, as amended, Beall. Greenhouse Gas Reduction Fund: Transit and Intercity Rail Capital Program.

Existing law requires all moneys, except for fines and penalties, collected by the State Air Resources Board from the auction or sale of allowances as part of a market-based compliance mechanism relative to reduction of greenhouse gas emissions begin delete , end delete to be deposited in the Greenhouse Gas Reduction Fund.

Existing law provides various sources of funding for transportation programs, including capital and operating funds for rail services, including intercity, commuter, and urban rail systems, including the Transit and Intercity Rail Capital Program which receives 10% of the annual proceeds of the Greenhouse Gas Reduction Fund as a continuous appropriation. Existing law provides that the purpose of the program is to fund capital improvements and operational investments to modernize California’s rail systems to achieve certain policy objectives, including the reduction of greenhouse gas emissions and the expansion and integration of rail services. Existing law requires the Transportation Agency to administer the program, with grants to be awarded by the California Transportation Commission.

This bill would modify the purpose of the program to delete references to operational investments and instead provide for the funding of large, transformative capital improvements with a total cost exceeding $100,000,000. The bill would require the Transportation Agency, in prioritizing and selecting projects for funding, to consider the extent to which a project reduces greenhouse gas emissions, and would add additional factors to be considered in evaluating applications for funding. The bill would require the Transportation Agency to develop, by July 1, 2016, an initial 5-year estimate of revenues reasonably expected to be available for the program, with subsequent estimates to be made every other year for additional 5-year periods, and would require the agency to adopt 5-year programs of projects consistent with those estimates. The bill would begin delete require end delete begin insert authorize end insert the agency to make a multiyear funding commitment for a project proposed to be funded over more than one fiscal year, and would authorize the California Transportation Commission to approve a letter of no prejudice that begin insert would end insert allow an applicant to expend its own funds on a project in the adopted program of projects, subject to future reimbursement from program funds for eligible expenditures.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 75220 of the Public Resources Code is
amended to read:

75220.  

(a) The Transit and Intercity Rail Capital Program is
hereby created to fund large, transformative capital improvements
with a total cost exceeding one hundred million dollars
begin delete ($1,000,000) end delete begin insert ($100,000,000) end insert that will reduce greenhouse gas
emissions and modernize California’s intercity, commuter, and
urban rail systems to achieve all of the following policy objectives:

(1) Reduce greenhouse gas emissions.

(2) Expand and improve rail service to increase ridership.

(3) Integrate the rail service of the state’s various rail operators,
including integration with the high-speed rail system.

(4) Improve rail safety.

(b) The Transportation Agency shall evaluate applications for
funding under the program consistent with the criteria set forth in
this chapter and prepare a list of projects recommended for funding.
The list may be revised at any time.

(c) The California Transportation Commission shall award
grants to applicants pursuant to the list prepared by the
Transportation Agency.

SEC. 2.  

Section 75221 of the Public Resources Code is
amended to read:

75221.  

(a) Projects eligible for funding under the program
include, but are not limited to, all of the following:

(1) Rail capital projects, including acquisition of rail cars and
locomotives, that expand, enhance, and improve existing rail
systems and connectivity to existing and future rail systems,
including the high-speed rail system.

(2) Intercity and commuter rail projects that increase service
levels, improve reliability, and decrease travel times.

(3) Rail integration implementation, including integrated
ticketing and scheduling systems, shared-use corridors, related
planning efforts, and other service integration initiatives.

(4) Bus rapid transit and other bus transit investments to increase
ridership and reduce greenhouse gas emissions.

(b) In order to be eligible for funding under the program, a
project shall demonstrate that it will achieve a reduction in
greenhouse gas emissions. In prioritizing and recommending
projects for funding, the Transportation Agency shall consider the
extent to which a project reduces greenhouse gas emissions.

(c) The program shall have a programmatic goal of providing
at least 25 percent of available funding to projects benefiting
disadvantaged communities, consistent with the objectives of
Chapter 830 of the Statutes of 2012.

(d) In evaluating grant applications for funding, the
Transportation Agency shall consider all of the following:

(1) The cobenefits of projects that support implementation of
sustainable communities strategies through one or more of the
following:

(A) Reducing auto vehicles miles traveled and the number of
auto trips through growth in rail ridership.

(B) Promoting housing development in the vicinity of rail
stations.

(C) Expanding existing rail and public transit systems.

(D) Enhancing the connectivity, integration, and coordination
of the state’s various regional and local transit systems.

(E) Providing a direct connection to the high-speed rail system.

(F) Implementing clean vehicle technology.

(G) Promoting active transportation.

(H) Improving public health.

(2) The project priorities developed through the collaboration
of two or more rail operators and any memoranda of understanding
between state agencies and local or regional rail operators.

(3) Geographic equity.

(4) Consistency with adopted sustainable communities strategies.

(5) The extent to which a project has supplemental funding
committed to it from other nonstate sources.

(6) The extent to which the project will increase ridership.

(e) Eligible applicants under the program shall be public
agencies, including joint powers agencies, that operate existing or
planned regularly scheduled intercity or commuter passenger rail
service or urban rail transit service. An eligible applicant may
partner with transit operators that do not operate rail service on
projects to integrate ticketing and scheduling with bus or ferry
service.

(f) A recipient of funds under the program may combine funding
from the program with other funding, including, but not limited
to, the State Transportation Improvement Program, the Low Carbon
Transit Operations Program, the State Air Resources Board clean
vehicle program, and state transportation bond funds.

SEC. 3.  

Section 75222 of the Public Resources Code is
amended to read:

75222.  

(a) Applications for grants under the program shall be
submitted to the Transportation Agency for evaluation in
accordance with procedures and program guidelines adopted by
the agency. An eligible applicant may submit an application to the
agency to fund a project over multiple fiscal years. The agency
may make multiyear funding commitments for projects that are
proposed to be funded from the program over a period of more
than one fiscal year.

(b) The application shall define the project purpose, intended
scope, proposed cost, intended funding sources, and schedule for
project completion.

(c) The application shall specify the phases of work for which
an eligible applicant is seeking an allocation of funds from the
program, as appropriate:

(1) Studies, environmental review, and permits.

(2) Preparation of project plans and specifications.

(3) Right-of-way acquisition.

(4) Construction or procurement.

(d) The application shall identify the sources and timing of all
funds required to undertake and complete any phase of a project
for which an eligible applicant is seeking an allocation of funds
from the program. The application shall also describe intended
sources and timing of funds to complete any subsequent phases
of the project, through construction or procurement.

SEC. 4.  

Section 75223 is added to the Public Resources Code,
to read:

75223.  

(a) The Transportation Agency shall conduct at least
two public workshops on draft program guidelines containing
selection criteria prior to adoption and shall post the draft
guidelines on the agency’s Internet Web site at least 30 days prior
to the first public workshop. Concurrent with the posting, the
agency shall transmit the draft guidelines to the fiscal committees
and the appropriate policy committees of the Legislature.

(b) Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code does not apply to
the development and adoption of procedures and program
guidelines for the program pursuant to this section.

SEC. 5.  

Section 75224 is added to the Public Resources Code,
to read:

75224.  

(a) No later than July 1, 2016, the Transportation
Agency shall develop an initial five-year estimate of revenues, in
annual increments, reasonably expected to be available to the
program from the Greenhouse Gas Reduction Fund, and adopt an
initial program of projects, which shall cover a period of five fiscal
years.

(b) The Transportation Agency shall adopt each subsequent
program of projects not later than April 1 of each even-numbered
year based on a five-year estimate of revenues, in annual
increments. Each subsequent program shall cover a period of five
fiscal years, beginning July 1 of the year of adoption, and shall be
a statement of intent by the Transportation Agency for the
allocation and expenditure of funds during those five fiscal years.

(c) The Transportation Agency begin delete shall end delete begin insert may end insert enter into and execute
a multiyear funding agreement with an eligible applicant for a
project that is proposed to be funded from the program over a
period of more than one fiscal year. The agreement shall include
a proposed schedule of the amount of funds expected to be
provided based on the year funds are anticipated to be available,
and may be for a period that extends beyond the five fiscal years
covered by the program of projects.

SEC. 6.  

Section 75225 is added to the Public Resources Code,
to read:

75225.  

(a) A lead applicant agency may apply to the
commission for a letter of no prejudice for a project or for any
component of a project included in the five-year program of
projects adopted by the Transportation Agency. If approved by
the commission, the letter of no prejudice shall allow the lead
applicant agency to expend its own funds for the project or any
component of the project and to be eligible for future
reimbursement from funds available for the program from the
Greenhouse Gas Reduction Fund.

(b) The amount expended under subdivision (a) shall be
reimbursed by the state from funds available for the program from
the Greenhouse Gas Reduction Fund if all of the following
conditions are met:

(1) The project or project component for which the letter of no
prejudice was requested has commenced, and the regional or local
expenditures have been incurred.

(2) The expenditures made by the lead applicant agency are
eligible for reimbursement in accordance with applicable laws and
procedures. In the event expenditures made by the lead applicant
agency are determined to be ineligible, the state has no obligation
to reimburse those expenditures.

(3) The lead applicant agency complies with all legal
requirements for the project, including the requirements of the
California Environmental Quality Act (Division 13 (commencing
with Section 21000)).

(4) There are funds in the Greenhouse Gas Reduction Fund
designated for the program that are sufficient to make the
reimbursement payment.

(c) The lead applicant agency and the commission shall enter
into an agreement governing reimbursement as described in this
section. The timing and final amount of reimbursement is
dependent on the terms of the agreement and the availability of
funds in the Greenhouse Gas Reduction Fund for the program.

(d) The commission, in consultation with intercity, commuter,
urban rail, and other public transit entities, may develop guidelines
to implement this section.