Amended in Assembly August 15, 2016

Amended in Assembly June 21, 2016

Amended in Senate May 31, 2016

Amended in Senate April 11, 2016

Amended in Senate March 15, 2016

Senate Bill No. 824

Introduced by Senator Beall

January 7, 2016

An act to amend Section 75230 of, and to add Section 75231 to, the Public Resources Code, relating to transportation.

LEGISLATIVE COUNSEL’S DIGEST

SB 824, as amended, Beall. Low Carbon Transit Operations Program.

Existing law requires all moneys, except for fines and penalties, collected by the State Air Resources Board from the auction or sale of allowances as part of a market-based compliance mechanism relative to reduction of greenhouse gas emissions to be deposited in the Greenhouse Gas Reduction Fund.

Existing law continuously appropriates specified portions of the annual proceeds in the Greenhouse Gas Reduction Fund to various programs, including 5% for the Low Carbon Transit Operations Program, for expenditures to provide transit operating or capital assistance consistent with specified criteria. Existing law provides for distribution of available funds under the program by a specified formula to recipient transit agencies by the Controller, upon approval of the recipient transit agency’s proposed expenditures by the Department of Transportation.

This bill would require a recipient transit agency to demonstrate that each expenditure of program moneys allocated to the agency does not supplant another source of funds. The bill would authorize a recipient transit agency that does not submit an expenditure for funding under the program in a particular fiscal year to retain its funding share for expenditure in a subsequent fiscal year for a maximum of 4 years. The bill would allow a recipient transit agency to loan or transfer its funding share in any particular fiscal year to another recipient transit agency within the same region, or to apply to the department to reassign, to other eligible expenditures under the program, any savings of surplus moneys from an approved and completed expenditure under the program or from an approved expenditure that is no longer a priority, as specified. The bill would also allow a recipient transit agency to apply to the department for a letter of no prejudice for any eligible expenditures under the program for which the department has authorized a disbursement of funds, and, if granted, would allow the recipient transit agency to expend its own moneys and to be eligible for future reimbursement from the program, under specified conditions. The bill would also require a recipient transit agency to provide additional information to the department to the extent funding is sought for capital projects.

begin delete

Existing law requires recipient transit agencies whose service areas include disadvantaged communities, as defined, to expend at least 50% of the funding received from the program on projects and services that benefit disadvantaged communities.

end delete begin delete

This bill would instead provide for the Department of Transportation to require at least 50% of the total moneys available for the program to be expended on projects and services that benefit disadvantaged communities. The bill would require the department to ensure that investments benefiting disadvantaged communities are made within the jurisdiction of each regional transportation planning agency, and to report to the Legislature on the investments made in that regard by July 1, 2019, and at least every 3 years thereafter.

end delete begin insert

This bill would incorporate changes to Section 75230 of the Public Resources Code proposed by both this bill and AB 2090, which would become operative only if both bills are enacted and become effective on or before January 1, 2017, and this bill is chaptered last.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 75230 of the Public Resources Code is
amended to read:

75230.  

(a) The Low Carbon Transit Operations Program is
hereby created to provide operating and capital assistance for transit
agencies to reduce greenhouse gas emissions and improve mobility,
with a priority on serving disadvantaged communities.

(b) Funding for the program is continuously appropriated
pursuant to Section 39719 of the Health and Safety Code from the
Greenhouse Gas Reduction Fund established pursuant to Section
16428.8 of the Government Code.

(c) Funding shall be allocated by the Controller on a formula
basis consistent with the requirements of this part and with Section
39719 of the Health and Safety Code, upon a determination by the
Department of Transportation that the expenditures proposed by
a recipient transit agency meet the requirements of this part and
guidelines developed pursuant to this section, and that the amount
of funding requested is currently available.

(d) A recipient transit agency shall demonstrate that each
expenditure of program moneys allocated to the agency reduces
greenhouse gas emissions.

(e) A recipient transit agency shall demonstrate that each
expenditure of program moneys does not supplant another source
of funds.

(f) Moneys for the program shall be expended to provide transit
operating or capital assistance that meets any of the following:

(1) Expenditures that directly enhance or expand transit service
by supporting new or expanded bus or rail services, new or
expanded water-borne transit, or expanded intermodal transit
facilities, and may include equipment acquisition, fueling, and
maintenance, and other costs to operate those services or facilities.

(2)  begin delete Expenditures end delete begin insert Operational expenditures end insert that increase begin insert transit end insert
mode share.

(3) Expenditures related to the purchase of zero-emission buses,
including electric buses, or the installation of the necessary
equipment and infrastructure to operate and support zero-emission
buses.

(g)  begin delete (1) end delete begin delete   end delete begin delete The department shall require end delete begin insert For recipient transit
agencies whose service areas include disadvantaged communities,
as identified pursuant to Section 39711 of the Health and Safety
Code, end insert at least 50 percent of the total moneys received pursuant to
this chapter begin delete to end delete begin insert shall end insert be expended on projects or services that meet
the requirements of subdivisions (d), (e), and (f) and benefit the
disadvantaged begin delete communities, as identified pursuant to Section
39711 of the Health and Safety Code. end delete begin insert communities, as identified
consistent with the guidance developed by the State Air Resources
Board pursuant to Section 39715. end insert

begin delete

(2) The department shall ensure that investments benefiting
disadvantaged communities as identified pursuant to Section 39711
of the Health and Safety Code are made within the jurisdiction of
each regional transportation planning agency, as defined in Section
99214 of the Public Utilities Code. The department,
notwithstanding Section 10231.5 of the Government Code, shall
report to the Legislature on or before July 1, 2019, and at least
every three years thereafter, on the investments made that benefit
disadvantaged communities and on the investments made that
benefit other communities. The report shall be submitted pursuant
to Section 9795 of the Government Code.

end delete

(h) The Department of Transportation, in coordination with the
State Air Resources Board, shall develop guidelines that describe
the methodologies that recipient transit agencies shall use to
demonstrate that proposed expenditures will meet the criteria in
subdivisions (d), (e), (f), and (g) and establish the reporting
requirements for documenting ongoing compliance with those
criteria.

(i) Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code does not apply to
the development of guidelines for the program pursuant to this
section.

(j) A recipient transit agency shall submit the following
information to the Department of Transportation before seeking a
disbursement of funds pursuant to this part:

(1) A list of proposed expense types for anticipated funding
levels.

(2) The documentation required by the guidelines developed
pursuant to this section to demonstrate compliance with
subdivisions (d), begin delete (e),(f), end delete begin insert (e), (f), end insert and (g).

(k) For capital projects, the recipient transit agency shall also
do all of the following:

(1) Specify the phases of work for which the agency is seeking
an allocation of moneys from the program.

(2) Identify the sources and timing of all moneys required to
undertake and complete any phase of a project for which the
recipient agency is seeking an allocation of moneys from the
program.

(3) Describe intended sources and timing of funding to complete
any subsequent phases of the project, through construction or
procurement.

(l) A recipient transit agency that has used program moneys for
begin delete operating assistance to implement new or expanded transit service end delete
begin insert any type of operational assistance allowed by subdivision (f) end insert in a
previous fiscal year may use program moneys to continue begin delete to
operate end delete the same service begin insert or program end insert in any subsequent fiscal year
if the agency can demonstrate that reductions in greenhouse gas
emissions can be realized.

(m) Before authorizing the disbursement of funds, the
Department of Transportation, in coordination with the State Air
Resources Board, shall determine the eligibility, in whole or in
part, of the proposed list of expense types, based on the
documentation provided by the recipient transit agency to ensure
ongoing compliance with the guidelines developed pursuant to
this section.

(n) The Department of Transportation shall notify the Controller
of approved expenditures for each recipient transit agency, and
the amount of the allocation for each agency determined to be
available at that time of approval.

(o) A recipient transit agency that does not submit an
expenditure for funding in a particular fiscal year may retain its
funding share, and may accumulate and utilize that funding share
in a subsequent fiscal year for a larger expenditure, including
operating assistance. The recipient transit agency must first specify
the number of fiscal years that it intends to retain its funding share
and the expenditure for which the agency intends to use these
moneys. A recipient transit agency may only retain its funding
share for a maximum of four years.

(p) A recipient transit agency may, in any particular fiscal year,
loan or transfer its funding share to another recipient transit agency
within the same region for any identified eligible expenditure under
the program, including operating assistance, in accordance with
procedures incorporated by the Department of Transportation in
the guidelines developed pursuant to this section, which procedures
shall be consistent with the requirement in subdivision (g).

(q) A recipient transit agency may apply to the Department of
Transportation to reassign any savings of surplus moneys allocated
under this section to the agency for an expenditure that has been
completed to another eligible expenditure under the program,
including operating assistance. A recipient transit agency may also
apply to the Department of Transportation to reassign to another
eligible expenditure any moneys from the program previously
allocated to the agency for an expenditure that the agency has
determined is no longer a priority for the use of those moneys.

(r) The recipient transit agency shall provide annual reports to
the Department of Transportation, in the format and manner
prescribed by the department, consistent with the internal
administrative procedures for begin insert the end insert use of begin insert the end insert fund proceeds
developed by the State Air Resources Board.

(s) The Department of Transportation and recipient transit
agencies shall comply with the guidelines developed by the State
Air Resources Board pursuant to Section 39715 of the Health and
Safety Code to ensure that the requirements of Section 39713 of
the Health and Safety Code are met to maximize the benefits to
disadvantaged communities as described in Section 39711 of the
Health and Safety Code.

(t) A recipient transit agency shall comply with all applicable
legal requirements, including the requirements of the California
Environmental Quality Act (Division 13 (commencing with Section
21000)), and civil rights and environmental justice obligations
under state and federal law. Nothing in this section shall be
construed to expand or extend the applicability of those laws to
recipient transit agencies.

(u) The audit of public transportation operator finances already
required under the Transportation Development Act pursuant to
Section 99245 of the Public Utilities Code shall be expanded to
include verification of receipt and appropriate expenditure of
moneys from the program. Each recipient transit agency receiving
moneys from the program in a fiscal year for which an audit is
conducted shall transmit a copy of the audit to the Department of
Transportation, and the department shall make the audits available
to the Legislature and the Controller for review on request.

begin insert

begin insert SEC. 1.5. end insert   

end insert

begin insert Section 75230 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

75230.  

(a) The Low Carbon Transit Operations Program is
hereby created to provide operating and capital assistance for transit
agencies to reduce greenhouse gas emissions and improve mobility,
with a priority on serving disadvantaged communities.

(b) Funding for the program is continuously appropriated
pursuant to Section 39719 of the Health and Safety Code from the
Greenhouse Gas Reduction begin delete Fund end delete begin insert Fund, end insert established pursuant to
Section 16428.8 of the Government Code.

(c) Funding shall be allocated by the Controller begin insert on a formula
basis end insert consistent with the requirements of this part and with Section
39719 of the Health and Safety Code, upon a determination by the
Department of Transportation that the expenditures proposed by
a begin insert recipient end insert transit agency meet the requirements of this part and
guidelines developed pursuant to begin delete subdivision (f), and end delete begin insert this section,
and that end insert the amount of funding requested begin delete that end delete is currently available.

begin insert

(d) A recipient transit agency shall demonstrate that each
expenditure of program moneys allocated to the agency reduces
greenhouse gas emissions.

end insert begin insert

(e) A recipient transit agency shall demonstrate that each
expenditure of program moneys does not supplant another source
of funds.

end insert begin delete

(d) Moneys

end delete

begin insert (f) end insert begin insert   end insert begin insert (1) end insert begin insert   end insert begin insert Moneys end insert for the program shall be expended to provide
transit operating or capital assistance that meets begin delete all end delete begin insert any end insert of the

begin delete following criteria: end delete begin insert following: end insert

begin delete

(1)

end delete

begin insert (A) end insert  Expenditures begin insert that directly enhance or expand transit service
by end insert supporting new or expanded bus or rail services, new or
expanded water-borne transit, or expanded intermodal transit
facilities, and may include equipment acquisition, fueling, and
maintenance, and other costs to operate those services or facilities.

begin delete

(2) The recipient transit agency demonstrates that each
expenditure directly enhances or expands transit service to

end delete

begin insert (B) end insert begin insert   end insert begin insert Operational expenditures that end insert increase begin insert transit end insert mode share.

begin delete

(3) The recipient transit agency demonstrates that each
expenditure reduces greenhouse gas emissions.

end delete begin insert

(C) Expenditures related to the purchase of zero-emission buses,
including electric buses, or the installation of the necessary
equipment and infrastructure to operate and support zero-emission
buses.

end insert begin insert

(2) (A) Moneys for the program may additionally be expended
to support the operation of existing bus or rail service if all of the
following occur:

end insert begin insert

(i) The governing board of the transit agency declares a fiscal
emergency, as defined in paragraph (2) of subdivision (d) of
Section 21080.32, within 90 days prior to the agency requesting
the funds.

end insert begin insert

(ii) The expenditure of the requested funds is necessary to
sustain the transit agency’s transit service in the fiscal year in
which the requested funds are to be expended.

end insert begin insert

(iii) The governing board of the transit agency would be
required to reduce or eliminate transit service if the requested
funds are not received.

end insert begin insert

(iv) The governing board makes a finding that a reduction in,
or elimination of, transit service would increase greenhouse gas
emissions because transit customers would choose other
less-efficient modes of transportation.

end insert begin insert

(v) The transit agency does not request funds over consecutive
funding years unless the transit agency has declared a fiscal
emergency in each year consistent with clause (i).

end insert begin insert

(vi) The transit agency does not request funds for more than
three consecutive funding years.

end insert begin insert

(B) Moneys allocated for the purpose of this paragraph shall
be expended to provide transit operating assistance that meets
both of the following criteria:

end insert begin insert

(i) The expenditures support current bus- or rail-service
operating costs and may include labor, fueling, maintenance, and
other costs to operate and maintain those services.

end insert begin insert

(ii) The recipient transit agency demonstrates that each
expenditure directly sustains transit service that would otherwise
be reduced or eliminated in the upcoming year if those funds were
not received.

end insert begin delete

(e)

end delete

begin insert (g) end insert  For begin insert recipient end insert transit agencies whose service areas include
disadvantaged begin delete communities end delete begin insert communities, end insert as identified pursuant
to Section 39711 of the Health and Safety Code, at least 50 percent
of the total moneys received pursuant to this chapter shall be
expended on projects or services that meet requirements of
begin delete subdivision (d) end delete begin insert subdivisions (d), (e), and (f) end insert and benefit the
disadvantaged communities, begin insert as identified end insert consistent with the
guidance developed by the State Air Resources Board pursuant to
Section 39715 of the Health and Safety Code.

begin delete

(f)

end delete

begin insert (h) end insert  The Department of Transportation, in coordination with the
State Air Resources Board, shall develop guidelines that describe
the methodologies that recipient transit agencies shall use to
demonstrate that proposed expenditures will meet the criteria in
subdivisions begin delete (d) and (e) end delete begin insert (d), (e), (f), and (g) end insert and establish the
reporting requirements for documenting ongoing compliance with
those criteria.

begin delete

(g) Chapter

end delete

begin insert (i) end insert begin insert   end insert begin insert The Administrative Procedure Act (Chapter end insert 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government begin delete Code end delete begin insert Code) end insert does not apply to the development of
guidelines for the program pursuant to this section.

begin delete

(h)

end delete

begin insert (j) end insert  A begin insert recipient end insert transit agency shall submit the following
information to the Department of Transportation before seeking a
disbursement of funds pursuant to this part:

(1) A list of proposed expense types for anticipated funding
levels.

(2) The documentation required by the guidelines developed
pursuant to begin delete subdivision (f) end delete begin insert this section end insert to demonstrate compliance
with subdivisions begin delete (d) and (e). end delete begin insert (d), (e), (f), and (g). end insert

begin insert

(k) For capital projects, the recipient transit agency shall also
do all of the following:

end insert begin insert

(1) Specify the phases of work for which the agency is seeking
an allocation of moneys from the program.

end insert begin insert

(2) Identify the sources and timing of all moneys required to
undertake and complete any phase of a project for which the
recipient agency is seeking an allocation of moneys from the
program.

end insert begin insert

(3) Describe intended sources and timing of funding to complete
any subsequent phases of the project, through construction or
procurement.

end insert begin insert

(l) A recipient transit agency that has used program moneys for
any type of operational assistance allowed in subdivision (f) in a
previous fiscal year may use program moneys to continue the same
service or program in any subsequent fiscal year if the agency can
demonstrate that reductions in greenhouse gas emissions can be
realized.

end insert begin delete

(i)

end delete

begin insert (m) end insert  Before authorizing the disbursement of funds, the
begin delete department, end delete begin insert Department of Transportation, end insert in coordination with
the State Air Resources Board, shall determine the eligibility, in
whole or in part, of the proposed list of expense begin delete types, end delete begin insert types end insert based
on the documentation provided by the recipient transit agency to
ensure ongoing compliance with the guidelines developed pursuant
to begin delete subdivision (f). end delete begin insert this section. end insert

begin delete

(j)

end delete

begin insert (n) end insert  The begin delete department end delete begin insert Department of Transportation end insert shall notify
the Controller of approved expenditures for each begin insert recipient end insert transit
agency, and the amount of the allocation for each begin delete transit end delete agency
determined to be available at that time of approval.

begin insert

(o) A recipient transit agency that does not submit an
expenditure for funding in a particular fiscal year may retain its
funding share, and may accumulate and utilize that funding share
in a subsequent fiscal year for a larger expenditure, including
operating assistance. The recipient transit agency must first specify
the number of fiscal years that it intends to retain its funding share
and the expenditure for which the agency intends to use these
moneys. A recipient transit agency may only retain its funding
share for a maximum of four years.

end insert begin insert

(p) A recipient transit agency may, in any particular fiscal year,
loan or transfer its funding share to another recipient transit
agency within the same region for any identified eligible
expenditure under the program, including operating assistance,
in accordance with procedures incorporated by the Department
of Transportation in the guidelines developed pursuant to this
section, which procedures shall be consistent with the requirement
in subdivision (g).

end insert begin insert

(q) A recipient transit agency may apply to the Department of
Transportation to reassign any savings of surplus moneys allocated
under this section to the agency for an expenditure that has been
completed to another eligible expenditure under the program,
including operating assistance. A recipient transit agency may
also apply to the Department of Transportation to reassign to
another eligible expenditure any moneys from the program
previously allocated to the agency for an expenditure that the
agency has determined is no longer a priority for the use of those
moneys.

end insert begin delete

(k)

end delete

begin insert (r) end insert  The recipient transit agency shall provide annual reports to
the Department of Transportation, in the format and manner
prescribed by the department, consistent with the internal
administrative procedures for begin insert the end insert use of begin insert the end insert fund proceeds
developed by the State Air Resources Board.

begin delete

(l)

end delete

begin insert (s) end insert  The Department of Transportation and recipient transit
agencies shall comply with the guidelines developed by the State
Air Resources Board pursuant to Section 39715 of the Health and
Safety Code to ensure that the requirements of Section 39713 of
the Health and Safety Code are met to maximize the benefits to
disadvantaged begin delete communities as described in end delete begin insert communities, as
identified pursuant to end insert Section 39711 of the Health and Safety
Code.

begin insert

(t) A recipient transit agency shall comply with all applicable
legal requirements, including the requirements of the California
Environmental Quality Act (Division 13 (commencing with Section
21000)), and civil rights and environmental justice obligations
under state and federal law. Nothing in this section shall be
construed to expand or extend the applicability of those laws to
recipient transit agencies.

end insert begin insert

(u) The audit of public transportation operator finances already
required under the Transportation Development Act pursuant to
Section 99245 of the Public Utilities Code shall be expanded to
include verification of receipt and appropriate expenditure of
moneys from the program. Each recipient transit agency receiving
moneys from the program in a fiscal year for which an audit is
conducted shall transmit a copy of the audit to the Department of
Transportation, and the department shall make the audits available
to the Legislature and the Controller for review on request.

end insert

SEC. 2.  

Section 75231 is added to the Public Resources Code,
to read:

75231.  

(a) A recipient transit agency under the program created
pursuant to Section 75230 may apply to the Department of
Transportation for a letter of no prejudice for any eligible
expenditures under the program, including operating assistance,
for which the department has authorized a disbursement of funds.
If approved by the department, the letter of no prejudice shall allow
the recipient transit agency to expend its own moneys for the
expenditures and to be eligible for future reimbursement from
moneys available for the program.

(b) The amount expended under subdivision (a) shall be
reimbursed by the state from moneys available for the program if
all of the following conditions are met:

(1) The expenditures for which the letter of no prejudice was
requested have commenced, and any regional or local expenditures,
if applicable, have been incurred.

(2) The expenditures made by the recipient transit agency are
eligible under the program. If expenditures made by the recipient
transit agency are determined to be ineligible, the state has no
obligation to reimburse those expenditures.

(3) The recipient transit agency complies with all applicable
legal requirements for the expenditures, including the requirements
of the California Environmental Quality Act (Division 13
(commencing with Section 21000)), and civil rights and
environmental justice obligations under state and federal law.
Nothing in this section shall be construed to expand or extend the
applicability of those laws to recipient transit agencies.

(4) There are moneys in the Greenhouse Gas Reduction Fund
designated for the program and from the recipient transit agency’s
formula allocation share as determined pursuant to subparagraph
(B) of paragraph (1) of subdivision (b) of Section 39719 of the
Health and Safety Code that are sufficient to make the
reimbursement payment.

(c) The recipient transit agency and the Department of
Transportation shall enter into an agreement governing
reimbursement as described in this section. The timing and final
amount of reimbursement shall be dependent on the terms of the
agreement and the availability of moneys in the Greenhouse Gas
Reduction Fund for the program.

(d) The Department of Transportation, in consultation with
recipient public transit agencies, may develop guidelines to
implement this section.

begin insert

begin insert SEC. 3. end insert   

end insert begin insert

Section 1.5 of this bill incorporates amendments to
Section 75230 of the Public Resources Code proposed by both this
bill and Assembly Bill 2090. It shall only become operative if (1)
both bills are enacted and become effective on or before January
1, 2017, (2) each bill amends Section 75230 of the Public
Resources Code, and (3) this bill is enacted after Assembly Bill
2090, in which case Section 1 of this bill shall not become
operative.

end insert