Amended in Senate April 27, 2015

Senate Bill No. 508

Introduced by Senator Beall

February 26, 2015

An act to amend Sections begin insert 99233.3, 99234, end insert 99247, 99268.2, 99268.3, 99268.4, 99268.17, begin insert 99268.19, end insert and 99314.6 of the Public Utilities Code, relating to begin delete transit. end delete begin insert transportation. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 508, as amended, Beall. begin delete Transit operations: financial requirements. end delete begin insert Transportation funds: transit operators: pedestrian safety. end insert

(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% begin insert end insert 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. begin insert Existing law authorizes an operator to satisfy the applicable ratio of fare revenues to operating costs by supplementing its fare revenues with local funds, as defined. end insert 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 begin delete health coverage, pension, end delete fuel, insurance, and claims settlement costs. The bill would also exempt startup costs for new transit services for up to 2 years. begin insert The bill would revise the definition of local funds. end insert 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 begin delete participation or other lease financing mechanisms. end delete begin insert participation. end insert

begin insert

(2) The Mills-Alquist-Deddeh Act, also known as the Transportation Development Act, also generally requires the allocation of 2% of available funds to cities and counties for facilities for bicycles and pedestrians. Existing law provides that a city or county may expend up to 5% of its bicycle and pedestrian allocation to supplement moneys from other sources to fund bicycle safety education programs, as long as this amount is not used to fully fund the salary of any one person.

end insert begin insert

This bill would also authorize the funding of pedestrian safety education programs from the 5% amount.

end insert begin delete

(2)

end delete

begin insert (3) end insert  Existing law begin delete also end delete 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. begin delete The bill would exclude certain health coverage and pension costs from the definition of operating costs used to calculate compliance with the efficiency standards. end delete 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:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 99233.3 of the end insert begin insert Public Utilities Code end insert begin insert is
amended to read: end insert

99233.3.  

Two percent of the remaining money in the fund shall
be made available to counties and cities for facilities provided for
the exclusive use of pedestrians and bicycles unless the
transportation planning agency finds that the money could be used
to better advantage for the purposes stated in Article 4
(commencing with Section 99260) and Article 4.5 (commencing
with Section 99275), or for local street and road purposes in those
areas where the money may be expended for begin delete such end delete begin insert those end insert purposes,
in the development of a balanced transportation system. Of the
amount made available to a city or county pursuant to this section,
5 percent thereof may be expended to supplement moneys from
other sources to fund bicycle begin insert and pedestrian end insert safety education
programs, but shall not be used to fully fund the salary of any one
person.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 99234 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

99234.  

(a) Claims for facilities provided for the exclusive use
of pedestrians and bicycles or for bicycle begin insert and pedestrian end insert safety
education programs shall be filed according to the rules and
regulations adopted by the transportation planning agency.

(b) The money shall be allocated for the construction, including
related engineering expenses, of those facilities pursuant to
procedures or criteria established by the transportation planning
agency for the area within its jurisdiction, or for bicycle begin insert and
pedestrian end insert safety education programs.

(c) The money may be allocated for the maintenance of bicycling
trails that are closed to motorized traffic pursuant to procedures
or criteria established by the transportation planning agency for
the area within its jurisdiction.

(d) The money may be allocated without respect to Section
99231 and shall not be included in determining the apportionments
to a city or county for purposes of Sections 99233.7 to 99233.9,
inclusive.

(e) Facilities provided for the use of bicycles may include
projects that serve the needs of commuting bicyclists, including,
but not limited to, new trails serving major transportation corridors,
secure bicycle parking at employment centers, park and ride lots,
and transit terminals where other funds are unavailable.

(f) Notwithstanding any other provision of this section, a
planning agency established in Title 7.1 (commencing with Section
66500) of the Government Code may allocate the money to the
Association of Bay Area Governments for activities required by
Chapter 11 (commencing with Section 5850) of Division 5 of the
Public Resources Code.

(g) Notwithstanding any other provision of this section, the
transportation planning agencies that allocate funds, pursuant to
this section, to the cities and counties with jurisdiction or a sphere
of influence within the delta, as defined in Section 5852 of the
Public Resources Code, may allocate the money to the Delta
Protection Commission for activities required by Chapter 12
(commencing with Section 5852) of Division 5 of the Public
Resources Code.

(h) Within 30 days after receiving a request for a review from
any city or county, the transportation planning agency shall review
its allocations made pursuant to Section 99233.3.

(i) In addition to the purposes authorized in this section, a
portion of the amount available to a city or county pursuant to
Section 99233.3 may be allocated to develop a comprehensive
bicycle and pedestrian facilities plan, with an emphasis on bicycle
projects intended to accommodate bicycle commuters rather than
recreational bicycle users. An allocation under this subdivision
may not be made more than once every five years.

(j) Up to 20 percent of the amount available each year to a city
or county pursuant to Section 99233.3 may be allocated to restripe
class II bicycle lanes.

begin delete SECTION 1. end delete
begin insert SEC. 3. end insert   

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. “Operating cost” excludes all subsidies for commuter rail
services operated on railroad lines under the jurisdiction of the
Federal Railroad Administration, all direct costs for providing
charter services, all vehicle lease costs, and principal and interest
payments on capital projects funded with certificates of
begin delete participation or other lease financing mechanisms. end delete begin insert participation. end insert

(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.

begin delete SEC. 2. end delete
begin insert SEC. 4. end insert   

Section 99268.2 of the Public Utilities Code is amended
to read:

99268.2.  

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 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 to one-fifth if serving an urbanized
area or begin delete to end delete one-tenth if serving a nonurbanized area.

begin delete SEC. 3. end delete
begin insert SEC. 5. end insert   

Section 99268.3 of the Public Utilities Code is amended
to read:

99268.3.  

(a) In the case of an operator that is serving an
urbanized area, and 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 that commenced operation after
that fiscal year, the operator shall be eligible for 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.

(b) In the case of an operator that is serving an urbanized area,
and that was in operation during the 1978-79 fiscal year even
though not then eligible for funds under this article, but that has
since become eligible for those funds, the operator shall be eligible
for 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 subdivision (a).

begin delete SEC. 4. end delete
begin insert SEC. 6. end insert   

Section 99268.4 of the Public Utilities Code is amended
to read:

99268.4.  

In the case of an operator that is serving a
nonurbanized area, and 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 that commenced operation after
that fiscal year, the operator shall be eligible for 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.

begin delete SEC. 5. end delete
begin insert SEC. 7. end insert   

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 begin insert federal end insert 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.

begin delete

(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.

end delete begin delete

(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.

end delete begin delete

(4) 

end delete

begin insert (2) end insert begin insert   end insert Fuel.

begin delete

(5)

end delete

begin insert (3) end insert  Alternative fuel programs.

begin delete

(6)

end delete

begin insert (4) end insert  Power, including electricity.

begin delete

(7)

end delete

begin insert (5) end insert  Insurance premiums and payments in settlement of claims
arising out of the operator’s liability.

begin delete

(8)

end delete

begin insert (6) end insert  State or federal mandates.

begin delete

(9)

end delete

begin insert (7) end insert  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 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.

begin insert

begin insert SEC. 8. end insert   

end insert

begin insert Section 99268.19 of the end insert begin insert Public Utilities Code end insert begin insert is
amended to read: end insert

99268.19.  

If fare revenues are insufficient to meet the
applicable ratio of fare revenues to operating cost required by this
article, an operator may satisfy that requirement by supplementing
its fare revenues with local funds. begin delete “Local end delete begin insert As used in this section,
“local end insert funds” means begin delete revenues derived from taxes imposed by the
operator or by a county transportation commission created pursuant
to Division 12 (commencing with Section 130000) of the Public
Utilities Code. end delete begin insert any nonfederal or nonstate grant funds or other
revenues generated by, earned by, or distributed to an operator. end insert

begin delete SEC. 6. end delete
begin insert SEC. 9. end insert   

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 (3), funds shall be allocated
for operating or capital purposes pursuant to Sections 99313 and
99314 to an operator 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 begin delete may end delete begin insert shall end insert be used
only for capital purposes.

(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 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; begin delete health
insurance premiums or contributions to self-insurance programs;
pension contributions or related defined benefit programs; end delete 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 begin insert federal end insert 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.

(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 cost increases described in paragraph (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.