BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: SB 824 Hearing Date: 4/19/2016
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|Author: |Beall |
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|Version: |4/11/2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Manny Leon |
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SUBJECT: Low Carbon Transit Operations Program
DIGEST: This bill modifies the Low Carbon Transit Operations
Program (LCTOP).
ANALYSIS:
AB 32 (Núñez and Pavley, Chapter 488, Statutes of 2006) requires
the state Air Resources Board (ARB) to develop a plan to reduce
emissions to 1990 levels by 2020. It also requires ARB to
ensure programs that reduce greenhouse gas (GHG) emissions are
targeted, to the extent feasible, to the most disadvantaged
communities (DACs) in the state. AB 32 authorizes ARB to
deposit any fees paid by GHG emission sources into the
Greenhouse Gas Reduction Fund (GGRF).
SB 535 (De León, Chapter 830, Statutes of 2012) requires 25% of
GGRF funds to be allocated to projects that provide benefits to
DACs, and at least 10% to projects located within DACs. DACs
have been identified by the California Environmental Protection
Agency using census tract data based on geographic,
socioeconomic, public health, and environmental hazard criteria.
SB 862 (Committee on Budget, Chapter 36, Statutes of 2014)
established the Transit and Intercity Rail Capital Program
(TIRCP), a competitive grant program to fund capital
improvements and operational investments that reduce GHG
emissions and modernize California's intercity, commuter, and
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urban rail and bus systems to achieve specific policy
objectives. Program goals include providing at least 25% of
available funding to projects that provide a direct benefit to
DACs. Existing law continuously appropriates 10% of annual GGRF
funds to TIRCP beginning in 2015-16.
SB 862 additionally established the LCTOP, which provides
operating and capital assistance for transit agencies to reduce
GHG emissions and improve mobility, with a priority on serving
DACs. Eligible projects include new or expanded bus or rail
services and expanded intermodal transit facilities, and may
include equipment acquisition, fueling, maintenance, and other
costs to operate those services or facilities. All projects
must reduce GHG emissions. Funds are allocated to transit
agencies pursuant to the State Transit Assistance statutory
formula. For agencies whose service area includes DACs, at
least 50% of the total monies received must be spent on projects
that will benefit DACs. Existing law continuously appropriates
5% of annual GGRF funds to LCTOP beginning in 2015-16.
SB 9 (Beall, Chapter 710, Statutes of 2015) made a number of
modifications to the TIRCP, including:
1)Requiring funding of capital improvements that are
"transformative," defined as a rail, bus, or ferry transit
project that will significantly reduce vehicle miles traveled,
congestion, and GHG emissions by creating a new transit
system, increasing the capacity of an existing transit system,
or otherwise significantly increasing the ridership of a
transit system.
2)Eliminating operations funding as an eligible use of TIRCP
funds.
3)Authorizing the California State Transportation Agency
(CalSTA) to make multiyear funding commitments.
4)Requiring CalSTA to maximize the total amount of GHG emission
reductions achieved under the program.
5)Establishing a process whereby an agency applying for funds
for a multiyear project can obtain a letter of no prejudice
(LONP) from CalSTA to allow the agency to advance its own fund
and be eligible for future reimbursement from the program.
SB 824 (Beall) Page 3 of ?
This bill:
1) Provides that a recipient transit agency must demonstrate
that a project reduces GHG emissions in order to receive
LCTOP funds.
2) Allows a recipient transit agency to use LCTOP monies for
the costs to operate new or expanded service in the fiscal
year in which the service is first implemented, and in any
subsequent fiscal year if the agency can demonstrate that
additional GHG emissions reductions can be realized.
3) Allows a recipient transit agency to use LCTOP monies for
any other expenditure for which it can demonstrate GHG
emissions reductions.
4) Requires a recipient transit agency for capital projects,
to:
a) Specify the phases of work for which it is seeking an
LCTOP allocation;
b) Identify the sources and timing of all monies required
to undertake and complete any phase of a project for which
it is seeking an LCTOP allocation; and
c) Describe intended sources and timing of funding to
complete any subsequent phases of the project, through
construction or procurement.
5) Allows a recipient transit agency that does not submit a
project for funding in a particular fiscal year to retain
its funding share for an unlimited number of fiscal years
and to utilize the accumulated funding share in a subsequent
fiscal year. Requires the recipient transit agency to
specify the number of fiscal years it intends to retain its
share and the expenditure for which it is intended.
6) Allows a recipient transit agency, in any fiscal year, to
loan or transfer its funding share to another recipient
transit agency in the same region for any identified
eligible expenditure under LCTOP.
7) Allows a group of recipient transit agencies, in any
fiscal year, to enter into an agreement to pool their
funding shares for any identified eligible expenditure under
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LCTOP.
8) Allows a recipient transit agency to apply to Caltrans to
reassign to another eligible expenditure under LCTOP, any
savings or surplus monies allocated from LCTOP, or any
previously allocated LCTOP monies for an expenditure that
the agency has determined is no longer a priority.
9) Expands the audit of public transit operator finances
required by existing law to include verification of receipt
and appropriate expenditure of LCTOP monies. Requires each
recipient transit agency receiving LCTOP monies in a fiscal
year for which an audit is conducted to transmit a copy of
the audit to Caltrans, and requires Caltrans to make these
audits available to the Legislature and Controller upon
request.
10) Allows a recipient transit agency to apply to Caltrans for
an LONP for program expenditures authorized by Caltrans.
Allows the recipient transit agency, if the request is
approved, to spend its own monies and to be eligible for
future reimbursement from LCTOP. Provides that
reimbursement shall be made if:
a) The authorized expenditures have commenced and any
regional or local expenditures, if applicable, have been
incurred;
b) The expenditures are eligible under LCTOP;
c) The recipient transit agency complies with all legal
requirements for the project, including the California
Environmental Quality Act, if applicable; and
d) Sufficient GGRF monies are available.
11) Requires the recipient transit agency and Caltrans to
enter into an agreement governing LONP reimbursement.
12) Authorizes Caltrans to develop guidelines to implement the
LONP provisions of this bill.
COMMENTS:
1)Purpose. The author states that existing law and program
guidelines place unnecessary limits on how LCTOP shares are
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spent. These limits undermine recipient agencies' ability to
use the funds in ways that could maximize GHG reductions.
This bill gives public transit agencies additional tools and
greater flexibility for utilizing LCTOP formula shares, as
well as including several administrative streamlining
provisions. This bill will help recipient agencies manage
program funds more efficiently and effectively, similar to
changes made to TIRCP by the author's 2015 legislation.
2)TIRCP v. LCTOP. SB 9 of last year eliminated operations as an
eligible expenditure under TIRCP. This resulted in TIRCP
exclusively funding transit capital projects. On the other
hand, while LCTOP was created to provide both operating and
capital assistance, LCTOP currently requires a recipient
agency to, among other things, demonstrate that the funds will
"directly enhance or expand transit service to increase mode
share," which is primarily an operating expense. Both
programs were created under SB 862, and both are funded with
GGRF monies, but they also differ in that LCTOP funds are
allocated to transit agencies on a formula basis, while TIRCP
is a competitive grant program.
3)Moving funds around. This bill provides flexibility for
recipient transit agencies to loan, transfer, or pool funds
among themselves. The Santa Clara Valley Transportation
Authority (VTA), sponsor of this bill, states that this
flexibility will help ensure that an agency that is not ready
to move forward with a project in a particular year can loan
its share to another agency which has insufficient funds to
advance an eligible project. (Currently, LCTOP program
guidelines allow transfers but require the agency to
demonstrate "mutual benefit.") It will also help ensure that
if an agency has a share so small that it is outweighed by the
costs (in staff time) of preparing the application, or an
agency does not currently have an eligible use for its share,
or did not spend its entire share due to project savings, it
can either pool its share with others or transfer it to
another agency. In all cases, shares could only be
transferred to another agency within the same region.
4)Streamlining project eligibility. Existing law requires a
recipient transit agency to demonstrate that a project
receiving LCTOP funds increases mode share, expands service,
benefits DACs, and reduces GHG emissions. However, this bill
intends to establish greater flexibility relative to how LCTOP
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funds can be used for the above-mentioned eligible projects
that aim to reduce GHG emissions. VTA, sponsor of this bill,
states that by maximizing flexibility for eligible project
expenditures, this bill ensures that agencies will be able to
use their formula shares for the broadest array of projects
and services to reduce GHG emissions, including the purchase
of zero-emission electric buses to replace diesel buses.
5)Funding operating costs beyond the first year. This bill
allows an agency to continue to use its LCTOP share to support
new or expanded service beyond the first year in which the
service is implemented, provided it can demonstrate that
additional GHG reductions will be achieved beyond the first
year. The author states that this provision addresses the
fact that it often takes more than one year for new service to
"ramp up" to projected ridership - and, by extension, for
projected mode share and GHG reductions to be realized.
6)Audit streamlining. Existing law, the Transportation
Development Act (TDA), requires all public transit agencies to
undergo a financial audit each year. This bill would include
LCTOP in that audit, rather than subjecting agencies to a
separate audit just for LCTOP.
7)LONPs. Last year's SB 9 authorized TIRCP grant recipients to
receive an LONP from CalSTA, which enables the recipient to
spend alternative funds on a project and later be reimbursed
from TIRCP. This bill includes similar LONP provisions for
LCTOP, enabling an agency to advance its project using local
dollars with the promise of later LCTOP reimbursement, rather
than having to wait for the LCTOP allocation. This bill was
amended on April 11 to ensure that the LONP provisions apply
to both capital and operating expenditures.
8)Opposition concerns. Opponents state that by eliminating the
mode share and service requirements, this bill undermines the
basic goals of the program. The opponents assert, "Many
federal and state funding programs already support capital
expansion of transit," including TIRCP. Specifically,
TransForm writes:
TransForm understands the need to address certain issues
with LCTOP, including the amounts of money to smaller,
largely rural agencies, and the potential "yo-yo" funding to
service to meet the target of ridership increases and new
service year over year. However, SB 824 doesn't address
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these issues in ways that meet the needs of disadvantaged
communities or low-income households, who rely
overwhelmingly on bus transit when it's reliable and within
reach.
While opponents have expressed a desire to retain the existing
eligibility criteria for LCTOP projects, the author and
proponents assert that the intent of this bill is to provide
local transit agencies with the flexibility to ultimately
achieve reductions in GHG emissions based on their regional
needs.
Related Legislation:
AB 2090 (Alejo) - authorizes monies appropriated to the LCTOP to
support operation of an existing bus or rail service if the
governing board of the requesting transit agency declares a
fiscal emergency and other criteria are met. This bill passed
the Assembly Transportation Committee 16-0 and was referred to
the Assembly Appropriations Committee.
SB 9 (Beall, Chapter 710, Statutes of 2015) - modifies the TIRCP
to focus on transformative rail and transit system improvements.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: No
POSITIONS: (Communicated to the committee before noon on
Wednesday,
April 13, 2016.)
SUPPORT:
Santa Clara Valley Transportation Authority (sponsor)
Associated General Contractors
California Transit Association
Central Contra Costa Transit Authority
Foothill Transit
Monterey-Salinas Transit
San Bernardino Associated Governments
Ventura County Transportation Commission
OPPOSITION:
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Asian Pacific Environmental Network
California Bicycle Coalition
Public Advocates
TransForm
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