BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 231 (Gaines) - Transportation programs ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: April 20, 2015 |Policy Vote: T. & H. 11 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: May 18, 2015 |Consultant: Mark McKenzie | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 231 would explicitly make water-borne transit programs and projects eligible for funding under two specified cap-and-trade programs, and would revise the State Transit Assistance formulas to increase funding allocations to the Tahoe Regional Planning Agency (TRPA) at the expense of the state share of funds. Fiscal Impact: Additional allocation of approximately $233,000 in Public Transportation Account (PTA) funds to TRPA, representing a redirection of diesel fuel tax revenues from the state share of PTA funds to TRPA. SB 231 (Gaines) Page 1 of ? No direct state costs, potential cost pressures to the extent that cap-and-trade funds are used for water-borne transit, rather than other eligible transit projects. (Greenhouse Gas Reduction Fund) Background: Existing law establishes the Affordable Housing and Sustainable Communities Program (AHSC) under the Strategic Growth Council. This program provides competitive grants to local agencies for projects to reduce greenhouse gas emissions through land use, housing, transportation, and agricultural land preservation. Eligible projects include infill housing development, transit projects to support ridership (including transit and transit stations), and active transportation projects. Qualifying transit includes various forms of rail service, bus service, and "flexible transit" (vanpools and shuttle bus feeder systems). Existing law continuously appropriates 20% of cap-and-trade funds to AHSC beginning in 2015-16. Existing law also establishes the Low Carbon Transit Operations Program (LCTOP) under the California State Transportation Agency. This program is administered by the Department of Transportation (Caltrans) and provides operating and capital assistance to transit agencies to reduce greenhouse gas emissions and improve mobility, with a priority on serving disadvantaged communities. Funds are distributed on a formulaic basis to local agencies, rather than a competitive basis. Eligible projects include expanded, new, or enhanced transit services; conversion or retrofit of transit vehicles and equipment to zero-emission; expanded intermodal transit facilities; and infrastructure to support zero-emission or plug-in hybrid vehicles. Existing law continuously appropriates 5% of cap-and-trade funds to LCTOP beginning in 2015-16. The State Transit Assistance program (STA) provides funding for local transit operations and capital improvements, and state entities for transportation planning, mass transportation, intercity rail programs, and transit improvement projects. This program is funded by diesel sales tax revenues, which are deposited into the Public Transportation Account, with a portion of the funds allocated to local recipients (primarily transit operators) through a statutory formula based on population and SB 231 (Gaines) Page 2 of ? operating revenues. Proposed Law: SB 231 would specify that water-borne transit capital projects and programs are eligible for AHSC funding, and authorize transit operating or capital assistance expenditures for new or expanded water-borne transit are eligible for LCTOP funding. In addition, the bill deems the population of the area under TRPAs jurisdiction to be 145,000 for purposes of STA funding formulas, and specifies that the additional allocations to TRPA would be from the state portion of Public Transportation Account revenues. Staff Comments: The Tahoe Basin has a resident population of approximately 55,000, but the area's transportation system must accommodate up to 350,000 visitors on a "peak" day due to its popularity as a recreation destination and its proximity to major urban areas. This bill establishes a TRPA population of 145,000, which the Tahoe Transportation District (within TRPA) determined based on annualized visitor travel to the region. The higher population level specified in SB 231 is intended to provide additional transit funding for TRPA, considering the annualized visitor travel. This bill also makes water-borne transit systems explicitly eligible for AHSC competitive grants and expenditures of LCTOP funds by local transit entities, which is intended to provide a funding option for the Tahoe Transportation District's north-south ferry project. While the resident population of TRPA is about 55,000, the methodology that the State Controller uses to calculate statutorily-created transportation planning entity shares of STA funds established TRPA's population at 98,733 in 2014-15. The Controller's 2015-16 STA Allocation Estimate indicates that TRPA is expected to receive an allocation of $499,327 in the coming year. Under SB 231, TRPA's allocation will increase by approximately $233,100 to $732,431. The bill requires the additional allocation to come from the state share of STA revenues which would otherwise be used to fund state transportation planning, mass transportation, intercity rail programs, and transit improvement projects. The fiscal impact SB 231 (Gaines) Page 3 of ? of the bill is technically a shift of the state share of revenues to the TRPA, which leaves the potential for additional expenditures of State Highway Account revenues to make up for the lost PTA funds on the state side of STA allocations. Staff notes that making water-borne transit projects and programs explicitly eligible for AHSC and LCTOP funding would not result in additional expenditures, but could create cost pressures to the extent those programs and projects would not have otherwise received an allocation absent the bill. Even if using these funds for water transit projects is not explicitly authorized under the letter of the law, it could be argued that these expenditures follow the spirit of the law in that they would meet the objectives of reducing air pollution, improving connectivity, and increasing transit ridership. In addition, water-borne transit projects would also need to meet all other requirements of the respective programs to be eligible for funding. For the AHSC, water transit projects would also have to compete for funding with other transit projects. For the LCTOP, water transit projects could be funded from the amount allocated by formula to the local entity, but it would have to compete with other local priorities. Staff notes that the guidelines for the LCTOP currently authorize the expenditure of funds by eligible recipients who operate ferry services for support of new or expanded ferry services, but the AHSC guidelines do not reference ferries or water transit. -- END --