BILL ANALYSIS Ó
SB 9
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Date of Hearing: June 29, 2015
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
SB
9 (Beall) - As Amended July 2, 2015
SENATE VOTE: 37-1
SUBJECT: Greenhouse Gas Reduction Fund: Transit and Intercity
Rail Capital Program.
SUMMARY: Modifies the Transit and Intercity Rail Capital
Program (TIRCP) to focus on capital rail and transit system
improvements that will be transformative. Specifically, this
bill:
1)Clarifies that the TIRCP should emphasize transit capital
improvements that will be "transformative."
2)Eliminates operations funding as an eligible use of TIRCP
funds.
3)Clarifies that bus system improvements are eligible for TIRCP
funding, and specifically provides that ferry system
improvements are also eligible.
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4)Directs the California State Transportation Agency (CalSTA) to
evaluate project applications consistent with revised criteria
as set forth in the bill.
5)Adds the following to the list of co-benefits CalSTA must
consider in evaluating project applications:
a) Reduction in auto trips through growth in transit
ridership;
b) Enhanced connectivity, integration, and coordination
with regional and local transit systems; and
c) Direct connections to the high-speed rail system.
6)Adds other project evaluation criteria (in addition to the
expanded list of co-benefits) to include the extent to which
the project provides the following:
a) Reduced greenhouse gas (GHG) emissions;
b) Supplemental, non-state funding; and
c) Increased transit ridership.
7)Authorizes CalSTA to make multi-year funding commitments and
requires project applications to identify the source and
timing of all funds needed to complete the project and fund
ongoing operating and maintenance costs.
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8)Directs CalSTA to approve a five-year program of projects
according to prescribed procedures.
9)Establishes a process whereby an agency that is applying for
funds for a multi-year project can obtain a letter of no
prejudice from CalSTA to allow the agency to advance its own
funds and be eligible for future reimbursement from the
program.
10)Make other, technical modifications to the TIRCP
EXISTING LAW:
1) Under the California Global Warming Solutions Act of 2006,
directs the Air Resources Board (ARB) to adopt GHG emissions
reduction measures, including market-based mechanisms (e.g.,
the cap-and-trade program), to reduce GHG emissions to 1990
levels by 2020.
2) Establishes the Greenhouse Gas Reduction Fund (GGRF) and
directs auction revenue from the cap-and-trade program to be
deposited into the fund and expended according to a
three-year investment plan developed by the Department of
Finance.
3)Establishes the TIRCP to fund capital improvements and
operational investments that reduce GHG emissions and
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modernize California's intercity, commuter, and urban rail
systems and bus systems to achieve specific policy objectives.
4)Continuously appropriates, beginning in 2015-16, 10% of annual
cap-and-trade auction revenues for the TIRCP.
5)Directs project applicants for TIRCP grants to submit grant
applications to CalSTA for evaluation in accordance with
procedures and program guidelines adopted by the agency, and
requires CalSTA to submit a list of projects to the California
Transportation Commission (CTC) for funding.
FISCAL EFFECT: Unknown
COMMENTS: According to the author, SB 9 seeks to ensure that
cap-and-trade funding is invested responsibly in projects that
maximize reductions in GHG emissions by focusing the program on
large, transformative projects. The author believes that
large-scale transit expansion projects will result in the
"biggest bang for the buck" when it comes to reducing GHG
emissions and he believes the multi-year program provided for in
SB 9 will facilitate these projects.
The TIRCP was created via legislation enacted last year, [SB 862
(Committee on Budget and Fiscal Review), Chapter 36, Statues of
2014]. SB 862, a budget trailer bill, continuously appropriated
portions of the cap-and-trade auction revenue proceeds for
designated programs or purposes, including 10% for the TIRCP.
The TIRCP is intended to achieve the following specific policy
objectives:
1)Reduced greenhouse gas emissions;
2)Expanded and improved rail service to increase ridership;
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3)Integrated rail service of the state's various rail operators,
including integration with the high-speed rail system; and
4)Improved rail safety.
Specific projects that are eligible for funding in the TIRCP
include:
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; and,
4)Bus rapid transit and other bus transit investments to
increase ridership and reduce greenhouse gas emissions.
SB 862 required CalSTA to develop guidelines for the TIRCP
before soliciting applications for funding, and these guidelines
were published in February of this year. SB 862 directed CalSTA
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to evaluate project applications for funding from the TIRCP
based on the following factors:
1)Co-benefits that support implementation of sustainable
communities strategies, such as:
a) Reducing auto vehicle miles traveled;
b) Promoting housing development near rails stations;
c) Expanding existing rail and public transit stations;
d) Implementing clean vehicle technology;
e) Promoting active transportation; and,
f) Improving public health.
2)Collaboration between rail operators and state and local
agencies.
3)Geographic equity.
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4)Consistency with adopted sustainable communities strategies.
CalSTA is expected to release the first year's program of
projects within the next couple of weeks.
The sponsor of SB 9, the Santa Clara Valley Transportation
Authority (VTA), fears that the existing TIRCP is currently not
structured, either statutorily or in the guidelines recently
issued by CalSTA, in a way that would allow the program to
accommodate large transit expansion projects. Consequently, VTA
and others support SB 9 because it makes several changes to this
new program by:
1)Focusing the program on transformative capital improvements;
2)Eliminating funding for operational investments;
3)Expanding the program to include ferry systems and clarifying
that bus systems are included as well;
4)Modifying project evaluation criteria to emphasize projects
that reduce GHG emissions, connect to the high-speed rail
system, and have supplemental funding from non-state sources;
and,
5)Providing for a five-year programming horizon and allowing for
multi-year project allocations.
By enabling CalSTA to program funding over multiple fiscal
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years, SB 9 allows the TIRCP to accommodate large transit
expansion projects that could receive a more substantive amount
of cap-and-trade auction revenues over a period of time rather
than all at once. Longer funding commitments will allow public
agencies to use TIRCP dollars to leverage federal funding and to
secure financing, both of which are typically done for large
transit expansion projects.
Opponents of the measure primarily objected to earlier
provisions of SB 9 that would have set aside the majority of
TIRCP funds for projects costing over $100 million. With recent
amendments, it is anticipated that many of the opponents will
withdraw their opposition and may even support SB 9. However, a
number of organizations remain opposed to provisions of SB 9
that give priority consideration for funding to projects that
receive significant non-state funding. These organizations
believe this evaluation criterion will dramatically curb the
ability for many communities, particularly disadvantaged and
other low-income communities to compete for TIRCP funds.
Committee comments: SB 9 establishes a five-year programming
process similar to the process used by the CTC to create and
adopt the State Transportation Improvement Program (STIP).
Similar to the STIP process, SB 9 directs CalSTA develop an
estimate of the funds reasonably expected to be available to the
program and to approve a program of projects accordingly.
Creating a five-year program for TIRCP projects will facilitate
development of larger projects, which can take years to design
and construct. Having a long-range funding commitment provides
a measure of predictability for the project sponsor and makes it
easier and cheaper to obtain project financing and to fully fund
a project.
There are some down sides to this approach, however; for
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instance:
1)The Administration traditionally has been loath to provide any
cap-and-trade auction estimates so as not to inappropriately
affect the market. SB 9 would require such an estimate,
however. Without an estimate, programming out-year project
commitments may be futile.
2)A focus on larger projects inherently means fewer dollars
would be available for smaller projects that could benefit a
greater number of transit operators.
3)The existing cap-and-trade program, which funds the TIRCP,
extends only to 2020. Unless pending legislation such as SB
32 (Pavley) is enacted to prolong the program, there will only
be funding for the first four years of a five-year program.
All things considered, however, SB 9 strikes a solid middle
ground. It facilitates larger projects than the current program
encourages and yet it does not preclude smaller projects.
Double referral: This bill will be referred to the Assembly
Natural Resources Committee should it pass out of this
committee.
Related legislation: SB 32 (Pavley), would ensure that the
policy tools currently being utilized to achieve the existing
2020 GHG target remain available for the achievement of targets
beyond 2020 - including, but not limited to, energy efficiency
requirements for buildings and appliances, tailpipe emissions
standards for mobile sources, power sector renewable portfolio
and emissions performance standards, sustainable land use
policies, fuel-related emissions standards, and market based
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mechanisms - to maximize the effectiveness of our climate
policies overall.
SB 32 is currently in the Assembly Natural Resources Committee.
Previous legislation: SB 862 (Committee on Budget and Fiscal
Review), Chapter 36, Statutes of 2014, implemented, as part of
the 2014-15 budget, the cap-and-trade expenditure plan and
created specific state programs such as the Transit and
Intercity Rail Capital Program.
REGISTERED SUPPORT / OPPOSITION:
Support
Alameda-Contra Costa Transit District
California Transit Association
International Longshore & Warehouse Union
Northern California Carpenters Regional Council
San Francisco Bay Area Water Emergency Transportation Authority
Santa Clara County Board of Supervisors
Santa Clara Valley Transportation Authority
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Silicon Valley Leadership Group
Opposition (many of these opponents are likely to withdraw their
opposition now that the bill no longer includes provisions that
would have set aside the majority of TIRCP fund for projects
costing over $100 million.)
Antelope Valley Transit Authority
Asian Pacific Environmental Network
California Bicycle Coalition
California Walks
Catholic Charities Diocese of Stockton
Coalition for Clean Air
Coalition for Sustainable Transportation
Leadership Counsel for Justice and Accountability
Los Angeles County Bicycle Coalition
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Napa County Transportation Planning Agency
NRDC
Policy Link
Public Advocates
Sacramento Housing Alliance
Safe Routes to School National Partnership
San Diego Metropolitan Transit System
TransForm
Analysis Prepared by:Janet Dawson / TRANS. / (916)
319-2093