BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 824 (Beall) - Low Carbon Transit Operations Program
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|Version: April 11, 2016 |Policy Vote: T. & H. 10 - 1 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 9, 2016 |Consultant: Mark McKenzie |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 824 would revise the Low Carbon Transit Operations
Program (LCTOP) to provide enhanced flexibility to recipient
transit agencies for program expenditures, as specified.
Fiscal
Impact:
Unknown significant cost pressures, to the extent the bill
expands eligible projects to include any transit agency
expenditure with demonstrated GHG emission reductions.
(Greenhouse Gas Reduction Fund - GGRF) -----See staff
comments-----
Department of Transportation (Caltrans) administrative costs
in the range of $100,000 to $200,000 to adopt revised program
guidelines, administer the LNOP process, and manage workload
related to expanded audit procedures. (State Highway Account)
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California Air Resources Board (ARB) costs of approximately
$315,000 annually for two positions to coordinate with
Caltrans on the adoption of program guidelines, provide
guidance on tracking and reporting GHG reductions and
disadvantaged communities benefits, and quantify GHG
reductions for proposed project expenditures. (GGRF)
Background: Existing law establishes the LCTOP to provide operating and
capital assistance for transit agencies to reduce greenhouse gas
(GHG) emissions and improve mobility, with a priority on serving
disadvantaged communities. Funds provided for the program must
be expended to provide transit operating or capital assistance
that meets all of the following criteria: (1) new or expanded
bus, rail, or water transit services, or expanded intermodal
facilities, and any other costs to operate those services or
facilities, and may include equipment acquisition, fueling, and
maintenance; (2) the recipient demonstrates that expenditures
directly enhance or expand transit service to increase mode
share; and (3) the recipient agency demonstrates that each
expenditure reduces GHG emissions. At least 50 percent of the
money allocated to transit agencies whose service area includes
disadvantaged communities must be spent on projects or services
that meet the above requirements and benefit those communities.
Caltrans is required to coordinate with ARB to develop
guidelines that recipient agencies must use to demonstrate that
expenditures meet program criteria. Before authorizing
disbursement of funds, Caltrans and ARB coordinate to determine
eligibility of recipient agencies' proposed expense types.
Existing law continuously appropriates five percent of annual
GGRF proceeds to LCTOP, and funding is allocated to transit
agencies pursuant to existing State Transit Assistance formulas.
LCTOP received $25 million in 2014-15 and $100 million in
2015-16. The Governor's 2016-17 Budget proposes $100 million
for the program.
Proposed Law:
SB 824 would revise the LCTOP to provide enhanced flexibility
to recipient transit agencies for program expenditures.
Specifically, this bill would authorize transit agencies to:
Use funds for the costs to operate new or expanded service in
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the fiscal year in which the service is first implemented, and
in any subsequent year if the agency demonstrates additional
GHG emission reductions.
Use funds for any expenditure with demonstrated GHG emission
reductions.
Retain funding allocations in a given year for an unlimited
number of fiscal years and use accumulated funds in a future
year for a larger expenditure.
Loan or transfer funding shares to another recipient transit
agency in the same region for any identified eligible
expenditure.
Enter into an agreement with other transit agencies to pool
respective funding shares of each member for any identified
eligible program expenditure.
Apply to Caltrans to reassign any savings or surplus amounts
allocated for an expenditure that has been completed to
another eligible expenditure.
Apply to Caltrans for a "letter of no prejudice" (LNOP) that
allows the agency to expend its own funds for authorized
expenditures and be eligible for reimbursement from future
allocations, under specified conditions. Caltrans may develop
guidelines to implement an LNOP program.
The bill also requires recipient agencies to do all of the
following for capital projects: (1) specify the phases of work
for which the agency is seeking an allocation; (2) identify the
sources and timing of all moneys required to undertake and
complete any phase of the project; and (3) describe intended
sources and timing of funding to complete any subsequent phases
of the project, through construction or procurement.
SB 824 would also expand existing public transportation operator
audits to include verification of receipt and appropriate
expenditure of LCTOP funds, and require agencies receiving LCTOP
funds to transmit a copy of the audit to Caltrans.
Related
Legislation: AB 2090 (Alejo), which has been referred to the
Assembly Appropriations Committee's Suspense File, would
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authorize LCTOP funds to be used to support operation of an
existing bus or rail service if the transit agency declares a
fiscal emergency and other criteria are met.
Staff
Comments: Under the existing LCTOP eligibility criteria,
transit agencies must prove that a proposed expenditure will
expand specified services or facilities, directly enhance or
expand service to increase mode share, and reduce GHG emissions.
SB 824 would amend those eligibility criteria to authorize
expenditures that would meet any one of those specified
criteria, which essentially broadens eligibility to any
expenditure that reduces GHG emissions, rather than ensuring
funds are used for expanded services and facilities and expanded
mode share. In addition, provisions that allow an agency to
retain funds for future expenditures, loan funds to other
agencies, and pool resources with other agencies will likely
facilitate expenditures for more expensive projects, which may
result in more funds being used for capital improvements rather
than operating expenses. Expanding the allowable uses and
potentially changing the mix of funds used for different types
of expenses creates significant cost pressures on LCTOP funds.
The bill would also impose new administrative duties on both
Caltrans and ARB to coordinate on developing and adopting
guidelines, and determining eligibility of proposed transit
agency expenses. Caltrans would also be required to develop and
administer a program that provides for LNOPs, and would have
some additional administrative duties pertaining to the enhanced
audit requirements. ARB indicates that analyzing and tracking
GHG reductions, co-benefits, and disadvantaged community
benefits are complicated by the ability to transfer funding
among recipients and fiscal years. In addition, allowing funds
to be used for any project that reduces GHG emissions will
likely require the development of additional GHG quantification
methods for proposed projects. Caltrans costs for 1-2 new
positions for additional administrative duties would be in the
range of $100,000 to $200,000 annually, while ARB indicates it
would need two new positions at a cost of approximately $315,000
annually.
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