BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 231 (Gaines) - Transportation programs
          
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          |Version: April 20, 2015         |Policy Vote: T. & H. 11 - 0     |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: May 18, 2015      |Consultant: Mark McKenzie       |
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          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.







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           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  








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          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  








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          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.




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