BILL NUMBER: SB 508 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Beall
FEBRUARY 26, 2015
An act to amend Sections 99247, 99268.2, 99268.3, 99268.4,
99268.17, and 99314.6 of the Public Utilities Code, relating to
transit.
LEGISLATIVE COUNSEL'S DIGEST
SB 508, as introduced, Beall. Transit operations: financial
requirements.
(1) Existing law provides various sources of funding to public
transit operators. Under the Mills-Alquist-Deddeh Act, also known as
the Transportation Development Act, revenues from a 1/4% sales tax in
each county are available, among other things, for allocation by the
transportation planning agency to transit operators, subject to
certain financial requirements for an operator to meet in order to be
eligible to receive funds. Existing law sets forth alternative ways
an operator may qualify for funding, including a standard under which
the allocated funds do not exceed 50%of the operator's total
operating costs, as specified, or the maintenance by the operator of
a specified farebox ratio of fare revenues to operating costs.
Existing law generally establishes the required farebox ratio as 20%
in urbanized areas and 10% in nonurbanized areas, except that an
operator that exceeded those percentages in the 1978-79 fiscal year
is required to maintain the higher farebox ratios in order to remain
eligible for funding. Existing law provides various exceptions to the
definition of "operating cost" for these purposes.
This bill would delete the requirement for transit operators to
maintain higher farebox requirements based on the 1978-79 fiscal
year. The bill would exempt additional categories of expenditures
from the definition of "operating cost" used to determine compliance
with required farebox ratios, including, among others, certain health
coverage, pension, fuel, insurance, and claims settlement costs. The
bill would also exempt startup costs for new transit services for up
to 2 years. The bill would revise the definition of "operating cost"
for performance audit and certain other purposes to exclude
principal and interest payments on capital projects funded with
certificates of participation or other lease financing mechanisms.
(2) Existing law also creates the State Transit Assistance
program, under which certain revenues in the Public Transportation
Account are allocated by formula for public transportation purposes.
Under that program, funds may not be allocated to a transit operator
for operating purposes unless the operator meets certain efficiency
standards. Compliance with the efficiency standards is based on
whether the operator's total operating cost per revenue vehicle hour
is increasing by no more than the Consumer Price Index, as specified.
Existing law imposes no restrictions on allocations of funds for
capital purposes. Existing law provides for funds withheld from an
operator to be retained by the allocating transportation planning
agency for allocation in a later year if the operator can
subsequently meet the efficiency standards, and in certain cases,
provides for the funds to be reallocated to other transit purposes,
or to revert to the Controller.
This bill, rather than making an operator ineligible to receive
State Transit Assistance program funds for operating purposes for an
entire year for failing to meet the efficiency standards, would
instead reduce the operator's operating allocation by a specified
percentage, based on the percentage amount that the operator failed
to meet the efficiency standards, as specified. The bill would
exclude certain health coverage and pension costs from the definition
of operating costs used to calculate compliance with the efficiency
standards. The bill would delete provisions related to funds
withheld, reallocated, or reverted by the transportation planning
agency.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 99247 of the Public Utilities Code is amended
to read:
99247. For purposes of Section 99246, and as used elsewhere in
this article:
(a) "Operating cost" means all costs in the operating expense
object classes exclusive of the costs in the depreciation and
amortization expense object class of the uniform system of accounts
and records adopted by the Controller pursuant to Section
99243, and exclusive of all. 99243. "Operating cost"
excludes all subsidies for commuter rail services operated
on railroad lines under the jurisdiction of the
Interstate Commerce Commission and of Federal Railroad
Administration, all direct costs for providing charter
services, and exclusive of all vehicle lease costs
, and principal and interest payments on capital projects
funded with certificates of participation or other lease financing
mechanisms .
(b) "Operating cost per passenger" means the operating cost
divided by the total passengers.
(c) "Operating cost per vehicle service hour" means the operating
cost divided by the vehicle service hours.
(d) "Passengers per vehicle service hour" means the total
passengers divided by the vehicle service hours.
(e) "Passengers per vehicle service mile" means the total
passengers divided by the vehicle service miles.
(f) "Total passengers" means the number of boarding passengers,
whether revenue producing or not, carried by the public
transportation system.
(g) "Transit vehicle" means a vehicle, including, but not limited
to, one operated on rails or tracks, which is used for public
transportation services funded, in whole or in part, under this
chapter.
(h) "Vehicle service hours" means the total number of hours that
each transit vehicle is in revenue service, including layover time.
(i) "Vehicle service miles" means the total number of miles that
each transit vehicle is in revenue service.
(j) "Vehicle service hours per employee" means the vehicle service
hours divided by the number of employees employed in connection with
the public transportation system, based on the assumption that 2,000
person-hours of work in one year constitute one employee. The count
of employees shall also include those individuals employed by the
operator which provide services to the agency of the operator
responsible for the operation of the public transportation system
even though not employed in that agency.
SEC. 2. Section 99268.2 of the Public Utilities Code is amended to
read:
99268.2. (a) In the case of
an operator required to be in compliance with Section 99268 under
Section 99268.1, the operator may be allocated additional funds that
could not be allocated to it because of such
those requirements, if it maintains, for the fiscal year, a
ratio of fare revenues to operating cost, as defined by subdivision
(a) of Section 99247, at least equal (1)
to one-fifth if serving an urbanized area or to one-tenth
if serving a nonurbanized area or (2)
to the ratio it had during the 1978-79 fiscal
year, whichever is greater. area.
(b) In addition, such an operator having a ratio of the sum of
fare revenues and local support to operating cost greater than
one-fifth if serving an urbanized area, or one-tenth if serving a
nonurbanized area, during the 1978-79 fiscal year shall, at least,
maintain that ratio in order to be eligible for additional funds
pursuant to this section.
SEC. 3. Section 99268.3 of the Public Utilities Code is amended to
read:
99268.3. (a) In the case of an operator which
that is serving an urbanized area, and which
that was eligible for funds under this article
during the 1978-79 fiscal year even though not required to be in
compliance with Section 99268 or which that
commenced operation after that fiscal year, the operator shall
be eligible for such those funds in any
fiscal year, commencing with claims for the 1980-81 fiscal year, if
it maintains, for the fiscal year, a ratio of fare revenues to
operating cost, as defined by subdivision (a) of Section 99247, at
least equal to one-fifth or to the ratio it had during the
1978-79 fiscal year, whichever is greater. one-fifth.
(b) In addition, such an operator having a ratio of the sum of
fare revenues and local support to operating cost greater than
one-fifth during the 1978-79 fiscal year shall, at least, maintain
that ratio in order to be eligible for funds under this article.
(c)
(b) In the case of an operator that is
serving an urbanized area, and which that
was in operation during the 1978-79 fiscal year even though not
then eligible for funds under this article, but which
that has since become eligible for such
those funds, the operator shall be eligible for
such the funds in any fiscal year,
commencing with the 1980-81 fiscal year, if it complies with either
of the following:
(1) The requirements of Section 99268.
(2) The requirements of subdivisions
subdivision (a) and (b) .
SEC. 4. Section 99268.4 of the Public Utilities Code is amended to
read:
99268.4. (a) In the case of
an operator which that is serving a
nonurbanized area, and which that was
eligible for funds under this article during the 1978-79 fiscal year
even though not required to be in compliance with Section 99268 or
which that commenced operation after
that fiscal year, the operator shall be eligible for such
those funds in any fiscal year, commencing with
claims for the 1980-81 fiscal year, if it maintains, for the fiscal
year, a ratio of fare revenues to operating cost, as defined by
subdivision (a) of Section 99247, at least equal to
one-tenth or to the ratio it had during the 1978-79 fiscal year,
whichever is greater. one-tenth.
(b) In addition, such an operator having a ratio of the sum of
fare revenues and local support to operating cost greater than
one-tenth during the 1978-79 fiscal year shall, at least, maintain
that ratio in order to be eligible for funds under this article.
SEC. 5. Section 99268.17 of the Public Utilities Code is amended
to read:
99268.17. (a) Notwithstanding subdivision (a) of Section 99247,
the following costs shall be excluded from the definition of
"operating cost " for the purposes of
calculating any required ratios of fare revenues to operating cost
specified in this article:
(1) The additional operating
costs required to provide comparable complementary paratransit
service as required by Section 37.121 of Title 49 of the Code of
Federal Regulations, pursuant to the Americans with Disabilities Act
of 1990 (42 U.S.C. Sec. 12101 et seq.), as identified in the operator'
s paratransit plan pursuant to Section 37.139 of Title 49 of the Code
of Federal Regulations that exceed the operator's costs required to
provide comparable complementary paratransit service in the prior
year as adjusted by the Consumer Price Index, shall be
excluded from the definition of operating cost for the purposes of
calculating any required ratios of fare revenues to operating cost
specified in this article. Index.
(2) The additional costs of health insurance premiums, or
contributions to self-insurance programs, that exceed the operator's
cost of health insurance premiums or self-insurance contributions in
the prior year as adjusted by the Consumer Price Index.
(3) The additional costs of pension contributions, or related
defined benefit programs, that exceed the operator's cost of pension
contributions or defined benefit programs in the prior year as
adjusted by the Consumer Price Index.
(4) Fuel.
(5) Alternative fuel programs.
(6) Power, including electricity.
(7) Insurance premiums and payments in settlement of claims
arising out of the operator's liability.
(8) State or federal mandates.
(9) Startup costs for new services for a period of not more than
two years.
(b) The exclusion of costs from the definition of operating costs
in subdivision (a) applies solely for the purpose of this
section article and does not authorize an
operator to report an operating cost other than as defined in
subdivision (a) of Section 99247 or a ratio of fare revenue to
operating cost other than as that ratio is described elsewhere in
this article, to any of the following entities:
(1) The Controller pursuant to Section 99243.
(2) The entity conducting the fiscal audit pursuant to Section
99245.
(3) The entity conducting the performance audit pursuant to
Section 99246.
(c) This section shall become operative on January 1, 2007.
SEC. 6. Section 99314.6 of the Public Utilities Code is amended to
read:
99314.6. (a) Except as provided in Section 99314.7, the following
eligibility standards apply:
(1) Except as provided in paragraph (2)
(3) , funds shall not be allocated for
operating or capital purposes pursuant to Sections 99313
and 99314 to an operator unless if the
operator meets either of the following efficiency standards:
(A) The operator shall receive its entire allocation, and any
or all of this allocation may be used for operating purposes, if the
operator's total operating cost per revenue vehicle hour in
the latest year for which audited data are available does not exceed
the sum of the preceding year's total operating cost per revenue
vehicle hour and an amount equal to the product of the percentage
change in the Consumer Price Index for the same period multiplied by
the preceding year's total operating cost per revenue vehicle hour.
(B) The operator shall receive its entire allocation, and any
or all of this allocation may be used for
operating purposes, if the operator's average total operating
cost per revenue vehicle hour in the latest three years for which
audited data are available does not exceed the sum of the average of
the total operating cost per revenue vehicle hour in the three years
preceding the latest year for which audited data are available and an
amount equal to the product of the average percentage change in the
Consumer Price Index for the same period multiplied by the average
total operating cost per revenue vehicle hour in the same three
years.
(2) If an operator does not meet either efficiency standard under
paragraph (1), the operator shall receive its entire allocation and
the funds shall be allocated pursuant to this paragraph. The portion
of the allocation that the operator may use for operations shall be
the total allocation to the operator reduced by the lowest percentage
by which the operator's total operating cost per revenue vehicle
hour for the applicable year or three-year period calculated pursuant
to subparagraph (A) or (B) of paragraph (1) exceeded the target
amount necessary to meet the applicable efficiency standard. The
remaining portion of the operator's allocation may be used only for
capital purposes.
(2)
(3) The transportation planning agency, county
transportation commission, or the San Diego Metropolitan Transit
Development Board, as the case may be, shall adjust the calculation
of operating costs and revenue vehicle hours pursuant to paragraph
(1) to account for either or both of the following factors:
(A) Exclusion of costs cost
increases beyond the change in the Consumer Price Index for fuel;
alternative fuel programs; power, including electricity; insurance
premiums and payments in settlement of claims arising out of the
operator's liability; health insurance premiums or contributions
to self-insurance programs; pension contributions or related defined
benefit programs; or state or federal mandates, including the
additional operating costs required to provide comparable
complementary paratransit service as required by Section 37.121 of
Title 49 of the Code of Federal Regulations, pursuant to the
Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12101 et
seq.), as identified in the operator's paratransit plan pursuant to
Section 37.139 of Title 49 of the Code of Federal Regulations.
(B) Exclusion of startup costs for new services for a period of
not more than two years.
(3) Funds withheld from allocation to an operator pursuant to
paragraph (1) shall be retained by the transportation planning
agency, county transportation commission, or the San Diego
Metropolitan Transit Development Board, as the case may be, for
reallocation to that operator for two years following the year of
ineligibility. In a year in which an operator's funds are allocated
pursuant to paragraph (1), funds withheld from allocation during a
preceding year shall also be allocated. Funds not allocated before
the commencement of the third year following the year of
ineligibility shall be reallocated to cost effective high priority
regional transit activities, as determined by the transportation
planning agency, county transportation commission, or the San Diego
Metropolitan Transit Development Board, as the case may be. If that
agency or commission, or the board, determines that no cost effective
high priority regional transit activity exists, the unallocated
funds shall revert to the Controller for reallocation.
(b) As used in this section, the following terms have the
following meanings:
(1) "Operating cost" means the total operating cost as reported by
the operator under the Uniform System of Accounts and Records,
pursuant to Section 99243 and subdivision (a) of Section 99247.
(2) "Revenue vehicle hours" has the same meaning as "vehicle
service hours," as defined in subdivision (h) of Section 99247.
(3) "Consumer Price Index," as applied to an operator, is the
regional Consumer Price Index for that operator's region, as
published by the United States Bureau of Labor Statistics. If a
regional index is not published, the index for the State of
California applies.
(4) "New service" has the same meaning as "extension of public
transportation services" as defined in Section 99268.8.
(c) The restrictions in this section do not apply to allocations
made for capital purposes.
(d) The exclusion of costs cost
increases described in paragraph (2) (3)
of subdivision (a) applies solely for the purpose of
calculating an operator's eligibility to claim funds pursuant to this
section and does not authorize an operator to report an operating
cost per revenue vehicle hour other than as described in this section
and in Section 99247, to any of the following entities:
(1) The Controller pursuant to Section 99243.
(2) The entity conducting the fiscal audit pursuant to Section
99245.
(3) The entity conducting the performance audit pursuant to
Section 99246.
(e) The restrictions in this section shall not apply to the
allocation of funds made pursuant to Sections 99313 and 99314 after
January 1, 2010, and through the 2014-15 fiscal year.