Amended in Assembly August 18, 2016

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 BillNo. 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

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 delete

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

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

P2    1

SECTION 1.  

Section 75230 of the Public Resources Code is
2amended to read:

3

75230.  

(a) The Low Carbon Transit Operations Program is
4hereby created to provide operating and capital assistance for transit
5agencies to reduce greenhouse gas emissions and improve mobility,
6with a priority on serving disadvantaged communities.

7(b) Funding for the program is continuously appropriated
8pursuant to Section 39719 of the Health and Safety Code from the
P3    1Greenhouse Gas Reduction Fund established pursuant to Section
216428.8 of the Government Code.

3(c) Funding shall be allocated by the Controller on a formula
4basis consistent with the requirements of this part and with Section
539719 of the Health and Safety Code, upon a determination by the
6Department of Transportation that the expenditures proposed by
7a recipient transit agency meet the requirements of this part and
8guidelines developed pursuant to this section, and that the amount
9of funding requested is currently available.

10(d) A recipient transit agency shall demonstrate that each
11expenditure of program moneys allocated to the agency reduces
12greenhouse gas emissions.

13(e) A recipient transit agency shall demonstrate that each
14expenditure of program moneys does not supplant another source
15of funds.

16(f) Moneys for the program shall be expended to provide transit
17operating or capital assistance that meets any of the following:

18(1) Expenditures that directly enhance or expand transit service
19by supporting new or expanded bus or rail services, new or
20expanded water-borne transit, or expanded intermodal transit
21facilities, and may include equipment acquisition, fueling, and
22maintenance, and other costs to operate those services or facilities.

23(2) Operational expenditures that increase transit mode share.

24(3) Expenditures related to the purchase of zero-emission buses,
25including electric buses,begin delete orend deletebegin insert andend insert the installation of the necessary
26equipment and infrastructure to operate and supportbegin insert theseend insert
27 zero-emission buses.

28 (g) For recipient transit agencies whose service areas include
29disadvantaged communities, as identified pursuant to Section
3039711 of the Health and Safety Code, at least 50 percent of the
31total moneys received pursuant to this chapter shall be expended
32on projects or services that meet the requirements of subdivisions
33(d), (e), and (f) and benefit the disadvantaged communities, as
34identified consistent with the guidance developed by the State Air
35Resources Board pursuant to Section 39715.

36(h) The Department of Transportation, in coordination with the
37State Air Resources Board, shall develop guidelines that describe
38the methodologies that recipient transit agencies shall use to
39demonstrate that proposed expenditures will meet the criteria in
40subdivisions (d), (e), (f), and (g) and establish the reporting
P4    1requirements for documenting ongoing compliance with those
2criteria.

3(i) Chapter 3.5 (commencing with Section 11340) of Part 1 of
4Division 3 of Title 2 of the Government Code does not apply to
5the development of guidelines for the program pursuant to this
6section.

7(j) A recipient transit agency shall submit the following
8information to the Department of Transportation before seeking a
9disbursement of funds pursuant to this part:

10(1) A list of proposed expense types for anticipated funding
11levels.

12(2) The documentation required by the guidelines developed
13pursuant to this section to demonstrate compliance with
14subdivisions (d), (e), (f), and (g).

15(k) For capital projects, the recipient transit agency shall also
16do all of the following:

17(1) Specify the phases of work for which the agency is seeking
18an allocation of moneys from the program.

19(2) Identify the sources and timing of all moneys required to
20undertake and complete any phase of a project for which the
21recipient agency is seeking an allocation of moneys from the
22program.

23(3) Describe intended sources and timing of funding to complete
24any subsequent phases of the project, through construction or
25procurement.

26(l) A recipient transit agency that has used program moneys for
27any type of operational assistance allowed by subdivision (f) in a
28previous fiscal year may use program moneys to continue the same
29service or program in any subsequent fiscal year if the agency can
30demonstrate that reductions in greenhouse gas emissions can be
31realized.

32(m) Before authorizing the disbursement of funds, the
33Department of Transportation, in coordination with the State Air
34Resources Board, shall determine the eligibility, in whole or in
35part, of the proposed list of expense types, based on the
36documentation provided by the recipient transit agency to ensure
37ongoing compliance with the guidelines developed pursuant to
38this section.

39(n) The Department of Transportation shall notify the Controller
40of approved expenditures for each recipient transit agency, and
P5    1the amount of the allocation for each agency determined to be
2available at that time of approval.

3(o) A recipient transit agency that does not submit an
4 expenditure for funding in a particular fiscal year may retain its
5funding share, and may accumulate and utilize that funding share
6in a subsequent fiscal year for a larger expenditure, including
7operating assistance. The recipient transit agency must first specify
8the number of fiscal years that it intends to retain its funding share
9and the expenditure for which the agency intends to use these
10moneys. A recipient transit agency may only retain its funding
11share for a maximum of four years.

12(p) A recipient transit agency may, in any particular fiscal year,
13loan or transfer its funding share to another recipient transit agency
14within the same region for any identified eligible expenditure under
15the program, including operating assistance, in accordance with
16procedures incorporated by the Department of Transportation in
17the guidelines developed pursuant to this section, which procedures
18shall be consistent with the requirement in subdivision (g).

19(q) A recipient transit agency may apply to the Department of
20Transportation to reassign any savings of surplus moneys allocated
21under this section to the agency for an expenditure that has been
22completed to another eligible expenditure under the program,
23including operating assistance. A recipient transit agency may also
24apply to the Department of Transportation to reassign to another
25eligible expenditure any moneys from the program previously
26allocated to the agency for an expenditure that the agency has
27determined is no longer a priority for the use of those moneys.

28(r) The recipient transit agency shall provide annual reports to
29the Department of Transportation, in the format and manner
30prescribed by the department, consistent with the internal
31administrative procedures for the use of the fund proceeds
32developed by the State Air Resources Board.

33(s) The Department of Transportation and recipient transit
34agencies shall comply with the guidelines developed by the State
35Air Resources Board pursuant to Section 39715 of the Health and
36Safety Code to ensure that the requirements of Section 39713 of
37the Health and Safety Code are met to maximize the benefits to
38disadvantaged communities as described in Section 39711 of the
39Health and Safety Code.

P6    1(t) A recipient transit agency shall comply with all applicable
2legal requirements, including the requirements of the California
3Environmental Quality Act (Division 13 (commencing with Section
421000)), and civil rights and environmental justice obligations
5under state and federal law. Nothing in this section shall be
6construed to expand or extend the applicability of those laws to
7recipient transit agencies.

8(u) The audit of public transportation operator finances already
9required under the Transportation Development Act pursuant to
10Section 99245 of the Public Utilities Code shall be expanded to
11include verification of receipt and appropriate expenditure of
12moneys from the program. Each recipient transit agency receiving
13moneys from the program in a fiscal year for which an audit is
14conducted shall transmit a copy of the audit to the Department of
15Transportation, and the department shall make the audits available
16to the Legislature and the Controller for review on request.

begin delete
17

SEC. 1.5.  

Section 75230 of the Public Resources Code is
18amended to read:

19

75230.  

(a) The Low Carbon Transit Operations Program is
20hereby created to provide operating and capital assistance for transit
21agencies to reduce greenhouse gas emissions and improve mobility,
22with a priority on serving disadvantaged communities.

23(b) Funding for the program is continuously appropriated
24pursuant to Section 39719 of the Health and Safety Code from the
25Greenhouse Gas Reduction Fund, established pursuant to Section
2616428.8 of the Government Code.

27(c) Funding shall be allocated by the Controller on a formula
28basis consistent with the requirements of this part and with Section
2939719 of the Health and Safety Code, upon a determination by the
30Department of Transportation that the expenditures proposed by
31a recipient transit agency meet the requirements of this part and
32guidelines developed pursuant to this section, and that the amount
33of funding requested is currently available.

34(d) A recipient transit agency shall demonstrate that each
35expenditure of program moneys allocated to the agency reduces
36greenhouse gas emissions.

37(e) A recipient transit agency shall demonstrate that each
38expenditure of program moneys does not supplant another source
39of funds.

P7    1(f) (1) Moneys for the program shall be expended to provide
2transit operating or capital assistance that meets any of the
3following:

4(A) Expenditures that directly enhance or expand transit service
5by supporting new or expanded bus or rail services, new or
6expanded water-borne transit, or expanded intermodal transit
7facilities, and may include equipment acquisition, fueling, and
8maintenance, and other costs to operate those services or facilities.

9(B) Operational expenditures that increase transit mode share.

10(C) Expenditures related to the purchase of zero-emission buses,
11including electric buses, or the installation of the necessary
12equipment and infrastructure to operate and support zero-emission
13buses.

14(2) (A) Moneys for the program may additionally be expended
15to support the operation of existing bus or rail service if all of the
16following occur:

17(i) The governing board of the transit agency declares a fiscal
18emergency, as defined in paragraph (2) of subdivision (d) of
19Section 21080.32, within 90 days prior to the agency requesting
20the funds.

21(ii) The expenditure of the requested funds is necessary to
22sustain the transit agency’s transit service in the fiscal year in
23which the requested funds are to be expended.

24(iii) The governing board of the transit agency would be required
25to reduce or eliminate transit service if the requested funds are not
26received.

27(iv) The governing board makes a finding that a reduction in,
28or elimination of, transit service would increase greenhouse gas
29emissions because transit customers would choose other
30less-efficient modes of transportation.

31(v) The transit agency does not request funds over consecutive
32funding years unless the transit agency has declared a fiscal
33emergency in each year consistent with clause (i).

34(vi) The transit agency does not request funds for more than
35three consecutive funding years.

36(B) Moneys allocated for the purpose of this paragraph shall be
37 expended to provide transit operating assistance that meets both
38of the following criteria:

P8    1(i) The expenditures support current bus- or rail-service
2operating costs and may include labor, fueling, maintenance, and
3other costs to operate and maintain those services.

4(ii) The recipient transit agency demonstrates that each
5expenditure directly sustains transit service that would otherwise
6be reduced or eliminated in the upcoming year if those funds were
7not received.

8(g) For recipient transit agencies whose service areas include
9disadvantaged communities, as identified pursuant to Section
1039711 of the Health and Safety Code, at least 50 percent of the
11total moneys received pursuant to this chapter shall be expended
12on projects or services that meet requirements of subdivisions (d),
13(e), and (f) and benefit the disadvantaged communities, as
14identified consistent with the guidance developed by the State Air
15Resources Board pursuant to Section 39715 of the Health and
16Safety Code.

17(h) The Department of Transportation, in coordination with the
18State Air Resources Board, shall develop guidelines that describe
19the methodologies that recipient transit agencies shall use to
20demonstrate that proposed expenditures will meet the criteria in
21subdivisions (d), (e), (f), and (g) and establish the reporting
22requirements for documenting ongoing compliance with those
23criteria.

24(i) The Administrative Procedure Act (Chapter 3.5 (commencing
25with Section 11340) of Part 1 of Division 3 of Title 2 of the
26Government Code) does not apply to the development of guidelines
27for the program pursuant to this section.

28(j) A recipient transit agency shall submit the following
29information to the Department of Transportation before seeking a
30disbursement of funds pursuant to this part:

31(1) A list of proposed expense types for anticipated funding
32levels.

33(2) The documentation required by the guidelines developed
34pursuant to this section to demonstrate compliance with
35subdivisions (d), (e), (f), and (g).

36(k) For capital projects, the recipient transit agency shall also
37do all of the following:

38(1) Specify the phases of work for which the agency is seeking
39an allocation of moneys from the program.

P9    1(2) Identify the sources and timing of all moneys required to
2undertake and complete any phase of a project for which the
3recipient agency is seeking an allocation of moneys from the
4program.

5(3) Describe intended sources and timing of funding to complete
6any subsequent phases of the project, through construction or
7procurement.

8(l) A recipient transit agency that has used program moneys for
9any type of operational assistance allowed in subdivision (f) in a
10previous fiscal year may use program moneys to continue the same
11service or program in any subsequent fiscal year if the agency can
12demonstrate that reductions in greenhouse gas emissions can be
13realized.

14(m) Before authorizing the disbursement of funds, the
15Department of Transportation, in coordination with the State Air
16Resources Board, shall determine the eligibility, in whole or in
17part, of the proposed list of expense types based on the
18documentation provided by the recipient transit agency to ensure
19ongoing compliance with the guidelines developed pursuant to
20 this section.

21(n) The Department of Transportation shall notify the Controller
22of approved expenditures for each recipient transit agency, and
23the amount of the allocation for each agency determined to be
24available at that time of approval.

25(o) A recipient transit agency that does not submit an
26expenditure for funding in a particular fiscal year may retain its
27funding share, and may accumulate and utilize that funding share
28in a subsequent fiscal year for a larger expenditure, including
29operating assistance. The recipient transit agency must first specify
30the number of fiscal years that it intends to retain its funding share
31and the expenditure for which the agency intends to use these
32moneys. A recipient transit agency may only retain its funding
33share for a maximum of four years.

34(p) A recipient transit agency may, in any particular fiscal year,
35loan or transfer its funding share to another recipient transit agency
36within the same region for any identified eligible expenditure under
37the program, including operating assistance, in accordance with
38procedures incorporated by the Department of Transportation in
39the guidelines developed pursuant to this section, which procedures
40shall be consistent with the requirement in subdivision (g).

P10   1(q) A recipient transit agency may apply to the Department of
2Transportation to reassign any savings of surplus moneys allocated
3under this section to the agency for an expenditure that has been
4completed to another eligible expenditure under the program,
5including operating assistance. A recipient transit agency may also
6apply to the Department of Transportation to reassign to another
7eligible expenditure any moneys from the program previously
8allocated to the agency for an expenditure that the agency has
9determined is no longer a priority for the use of those moneys.

10(r) The recipient transit agency shall provide annual reports to
11the Department of Transportation, in the format and manner
12prescribed by the department, consistent with the internal
13administrative procedures for the use of the fund proceeds
14developed by the State Air Resources Board.

15(s) The Department of Transportation and recipient transit
16agencies shall comply with the guidelines developed by the State
17Air Resources Board pursuant to Section 39715 of the Health and
18Safety Code to ensure that the requirements of Section 39713 of
19the Health and Safety Code are met to maximize the benefits to
20disadvantaged communities, as identified pursuant to Section
2139711 of the Health and Safety Code.

22(t) A recipient transit agency shall comply with all applicable
23legal requirements, including the requirements of the California
24Environmental Quality Act (Division 13 (commencing with Section
2521000)), and civil rights and environmental justice obligations
26under state and federal law. Nothing in this section shall be
27construed to expand or extend the applicability of those laws to
28recipient transit agencies.

29(u) The audit of public transportation operator finances already
30required under the Transportation Development Act pursuant to
31Section 99245 of the Public Utilities Code shall be expanded to
32include verification of receipt and appropriate expenditure of
33moneys from the program. Each recipient transit agency receiving
34moneys from the program in a fiscal year for which an audit is
35conducted shall transmit a copy of the audit to the Department of
36Transportation, and the department shall make the audits available
37to the Legislature and the Controller for review on request.

end delete
38

SEC. 2.  

Section 75231 is added to the Public Resources Code,
39to read:

P11   1

75231.  

(a) A recipient transit agency under the program created
2pursuant to Section 75230 may apply to the Department of
3Transportation for a letter of no prejudice for any eligible
4expenditures under the program, including operating assistance,
5for which the department has authorized a disbursement of funds.
6If approved by the department, the letter of no prejudice shall allow
7the recipient transit agency to expend its own moneys for the
8expenditures and to be eligible for future reimbursement from
9moneys available for the program.

10(b) The amount expended under subdivision (a) shall be
11reimbursed by the state from moneys available for the program if
12all of the following conditions are met:

13(1) The expenditures for which the letter of no prejudice was
14requested have commenced, and any regional or local expenditures,
15if applicable, have been incurred.

16(2) The expenditures made by the recipient transit agency are
17eligible under the program. If expenditures made by the recipient
18transit agency are determined to be ineligible, the state has no
19obligation to reimburse those expenditures.

20(3) The recipient transit agency complies with all applicable
21legal requirements for the expenditures, including the requirements
22of the California Environmental Quality Act (Division 13
23(commencing with Section 21000)), and civil rights and
24environmental justice obligations under state and federal law.
25Nothing in this section shall be construed to expand or extend the
26applicability of those laws to recipient transit agencies.

27(4) There are moneys in the Greenhouse Gas Reduction Fund
28designated for the program and from the recipient transit agency’s
29formula allocation share as determined pursuant to subparagraph
30(B) of paragraph (1) of subdivision (b) of Section 39719 of the
31Health and Safety Code that are sufficient to make the
32reimbursement payment.

33(c) The recipient transit agency and the Department of
34Transportation shall enter into an agreement governing
35 reimbursement as described in this section. The timing and final
36amount of reimbursement shall be dependent on the terms of the
37agreement and the availability of moneys in the Greenhouse Gas
38Reduction Fund for the program.

P12   1(d) The Department of Transportation, in consultation with
2recipient public transit agencies, may develop guidelines to
3implement this section.

begin delete
4

SEC. 3.  

Section 1.5 of this bill incorporates amendments to
5Section 75230 of the Public Resources Code proposed by both this
6bill and Assembly Bill 2090. It shall only become operative if (1)
7both bills are enacted and become effective on or before January
81, 2017, (2) each bill amends Section 75230 of the Public
9Resources Code, and (3) this bill is enacted after Assembly Bill
102090, in which case Section 1 of this bill shall not become
11operative.

end delete


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