BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                          SB 9|
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                                UNFINISHED BUSINESS 


          Bill No:  SB 9
          Author:   Beall (D), et al.
          Amended:  9/1/15  
          Vote:     21  

           SENATE ENVIRONMENTAL QUALITY COMMITTEE:  7-0, 3/18/15
           AYES:  Wieckowski, Gaines, Bates, Hill, Jackson, Leno, Pavley

           SENATE TRANS. & HOUSING COMMITTEE:  10-0, 4/28/15
           AYES:  Beall, Cannella, Bates, Gaines, Galgiani, Leyva,  
            McGuire, Mendoza, Roth, Wieckowski
           NO VOTE RECORDED:  Allen

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 5/28/15
           AYES:  Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen

           SENATE FLOOR:  37-1, 6/3/15
           AYES:  Allen, Anderson, Bates, Beall, Berryhill, Block,  
            Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,  
            Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Leno,  
            Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Moorlach,  
            Morrell, Nguyen, Pavley, Roth, Runner, Stone, Vidak,  
            Wieckowski, Wolk
           NOES:  Nielsen
           NO VOTE RECORDED:  Hancock, Pan

           ASSEMBLY FLOOR:  74-1, 9/3/15 - See last page for vote

           SUBJECT:   Greenhouse Gas Reduction Fund: Transit and Intercity  
                     Rail Capital Program


          SOURCE:    Author

          DIGEST:   This bill modifies the Transit and Intercity Rail  








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          Capital Program (TIRCP) to focus on transformative capital rail  
          and transit system improvements.

          Assembly Amendments remove the requirement for 70% of the funds  
          to be allocated to projects with a total cost of $100 million or  
          more, and 30% to projects costing less than $100 million, define  
          "transformative capital improvement" and modify eligibility,  
          application, and project programming requirements.
          
          ANALYSIS:           
          
          Existing law:       

           1) Requires, under the California Global Warming Solutions Act  
             of 2006 (also known as AB 32), the California Air Resources  
             Board (ARB) to determine the 1990 statewide greenhouse gas  
             (GHG) emissions level and approve a statewide GHG emissions  
             limit that is equivalent to that level, to be achieved by  
             2020.  AB 32 authorizes ARB to adopt a regulation that  
             establishes a market-based mechanism with declining annual  
             aggregate emission limits for sources that emit GHGs. (Health  
             and Safety Code (HSC) §38500 et seq.)


           2) Establishes the Greenhouse Gas Reduction Fund (GGRF) and  
             directs auction revenue collected pursuant to a market-based  
             mechanism 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  
             modernize California's intercity, commuter, and urban rail  
             systems and bus systems to achieve specific policy  
             objectives.


           4) Appropriates, continuously, beginning in 2015-16, 10% of  
             annual cap-and-trade auction revenues for the TIRCP.










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           5) Directs project applicants for TIRCP grants to submit grant  
             applications to the California State Transportation Agency  
             (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.


          This bill: 

           1) Provides that the TIRCP must fund capital improvements that  
             are "transformative", defined as a rail, bus, or ferry  
             transit project that will significantly reduce vehicle miles  
             traveled, congestion, and GHG emissions by creating a new  
             transit system, increasing the capacity of an existing  
             transit system, or otherwise significantly increasing the  
             ridership of a transit system.


           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.  


           4) Directs CalSTA to evaluate project applications consistent  
             with revised criteria as set forth in this bill.


           5) Requires CalSTA to additionally consider the following when  
             evaluating grant applications:


           6) The extent to which a project reduces GHG emissions.


           7) The extent to which a project has supplemental funding from  
             non-state sources.









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           8) The extent to which a project will increase ridership. 


           9) Additional cobenefits including enhanced connectivity,  
             integration, and coordination with various transit systems,  
             and reduction in auto trips through growth in transit  
             ridership.


           10)Authorizes CalSTA to make multi-year funding commitments and  
             requires project applications to identify, among other  
             things, including project scope, purpose, phases of work, the  
             source and timing of all funds needed to complete the project  
             and fund ongoing operating and maintenance costs.


           11)Directs CalSTA to approve a multi-year program of projects  
             according to prescribed procedures and requires CalSTA to  
             maximize the total amount of GHG emissions reductions  
             achieved under the program.


           12)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.


           13)Makes other technical modifications to the TIRCP.


          Background

          The Transit and Intercity Rail Capital Program. SB 862 (Budget  
          and Fiscal Review Committee, Chapter 36, Statutes of 2014)  
          created the TIRCP. The TIRCP funds capital improvements for GHG  
          emission reductions that expand and improve rail service, and  
          integrate state and local rail and other transit systems,  
          including the high-speed rail system.  









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          The 2014-15 Budget provided for a continuous appropriation of  
          10%, or $25 million, of cap-and-trade funds to this program  
          beginning in 2015-16. CalSTA is required to evaluate  
          applications, and then prepare a list of projects recommended  
          for funding to be used by CTC in awarding grant monies. 

          CalSTA released draft guidelines for the program in December  
          2014, and finalized them on February 6th. The guidelines  
          describe the policy, standards, criteria, and procedures for the  
          development, adoption and management of the TIRCP. 

          The guidelines state that it is CalSTA's intent to adopt an  
          initial multiyear program of projects covering a minimum of two  
          years of estimated funding.

          The guidelines also note that "CalSTA will also make some  
          funding available for demonstration projects that are smaller  
          scale efforts with great potential to be expanded. These may  
          include projects such as a novel approach to attracting new  
          riders or a test of a concept related to integrated ticketing,  
          as well as intercity rail or transit effectiveness or  
          operational studies that are expected to have elements that can  
          be implemented with little or no capital investment (such  
          studies must result in a reduction in net greenhouse gas  
          emission)." 

          SB 862 establishes a goal for the TIRCP of providing at least  
          25% of available funding to projects that provide a direct,  
          meaningful, and assured benefit to disadvantaged communities. SB  
          862 also requires the ARB, in consultation with the California  
          Environmental Protection Agency, to develop funding guidelines  
          for all agencies that are appropriated monies from the GGRF.   
          These guidelines must include a component for how administering  
          agencies should maximize benefits for disadvantaged communities.  


          At the end of June 2015, CalSTA completed the first round of the  
          program, awarding $224 million to 14 projects throughout  
          California.

          Comments









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          1)Purpose of Bill.  According to the author, "Transportation  
            funding available under the Transit and Intercity Rail Capital  
            Program should be invested in projects that maximize  
            reductions in greenhouse gas emissions to ensure California  
            meets its climate goals set forth by AB 32. These types of  
            projects are a multi-year effort and requires a level of  
            financial certainty for the operators to plan.  SB 9 provides  
            for a multi-year planning and allocation process under the  
            Transit and Intercity Rail Capital Program administered by the  
            California Transportation Agency.  This process is utilized by  
            the federal government and common for a variety of other  
            transportation programs."

          Related/Prior Legislation
          
          SB 862 (Committee on Budget, Chapter 36, Statutes of 2014)  
          established requirements for ARB to develop guidelines for  
          agencies administering GGRF funds. 

          FISCAL EFFECT:   Appropriation:    Yes         Fiscal  
          Com.:YesLocal:   No

          According to the Assembly Appropriations Committee, any  
          additional administrative costs to CalSTA will be absorbable.  
          Under current law, the TIRCP is funded by a continuous  
          appropriation of 10% of annual cap-and-trade revenues beginning  
          in 2015-16. Based on current estimates of cap-and-trade  
          revenues, about $200 million will be available to the TIRCP this  
          fiscal year. Given this significant funding level and the  
          numerous other demands for cap-and-trade funds, the modest  
          program expansion in this bill would likely not create any  
          significant cost pressure on the program.


          SUPPORT:   (Verified9/3/15)


          Alameda-Contra Costa Transit District 
          Antelope Valley Transit District 
          California Transit Association
          City of San Jose
          International Longshore & Warehouse Union








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          Los Angeles-San Diego-San Louis Obispo Rail Corridor Agency
          Napa County Transportation Planning Agency
          Northern California Carpenters Regional Council
          Orange County Transportation Authority
          San Diego Association of Governments
          San Diego Metropolitan Transit System
          San Francisco Bay Area Rapid Transit District
          San Francisco Bay Area Water Emergency Transportation Authority
          Santa Clara County Board of Supervisors
          Santa Clara Valley Transportation Authority
          Silicon Valley Leadership Group
          Transportation Agency for Monterey County


          OPPOSITION:   (Verified9/3/15)


          None received

           ASSEMBLY FLOOR:  74-1, 9/3/15
           AYES:  Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,  
            Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau,  
            Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly,  
            Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto,  
            Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Roger  
            Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey,  
            Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes,  
            McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,  
            O'Donnell, Olsen, Perea, Quirk, Rendon, Ridley-Thomas,  
            Rodriguez, Santiago, Steinorth, Mark Stone, Thurmond, Ting,  
            Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
           NOES:  Gallagher
           NO VOTE RECORDED:  Brough, Beth Gaines, Harper, Patterson,  
            Salas



          Prepared by:Rebecca Newhouse / E.Q. / (916) 651-4108
          9/3/15 18:47:23


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