BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 824|
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THIRD READING
Bill No: SB 824
Author: Beall (D)
Amended: 5/31/16
Vote: 21
SENATE TRANS. & HOUSING COMMITTEE: 10-1, 4/19/16
AYES: Beall, Cannella, Allen, Bates, Galgiani, Leyva, McGuire,
Mendoza, Roth, Wieckowski
NOES: Gaines
SENATE APPROPRIATIONS COMMITTEE: 6-1, 5/27/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza
NOES: Nielsen
SUBJECT: Low Carbon Transit Operations Program
SOURCE: Santa Clara Valley Transportation Authority
DIGEST: This bill modifies the Low Carbon Transit Operations
Program (LCTOP).
ANALYSIS:
Existing law:
1) Establishes the Transit and Intercity Rail Capital Program
(TIRCP) (SB 862, Committee on Budget, Chapter 36, Statutes
of 2014), a competitive grant program to fund capital
improvements and operational investments that reduce
greenhouse gas (GHG) emissions and modernize California's
intercity, commuter, and urban rail and bus systems to
achieve specific policy objectives. Program goals include
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providing at least 25% of available funding to projects that
provide a direct benefit to disadvantaged communities
(DACs). Existing law continuously appropriates 10% of
annual greenhouse gas reduction funds (GGRF) to TIRCP
beginning in 2015-16.
2) Establishes the LCTOP (SB 862), 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.
3) Makes a number of modifications to the TIRCP (SB 9, Beall,
Chapter 710, Statutes of 2015), including:
a) 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.
b) Eliminating operations funding as an eligible use of
TIRCP funds.
c) Authorizing the California State Transportation
Agency (CalSTA) to make multiyear funding commitments.
d) Requiring CalSTA to maximize the total amount of GHG
emission reductions achieved under the program.
e) 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
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advance its own fund and be eligible for future
reimbursement from the program.
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 to
purchase zero-emission buses, including electric buses, or
to install necessary equipment and infrastructure related to
such buses.
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
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transit agency in the same region for any identified
eligible expenditure under LCTOP.
7) 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.
8) 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.
9) 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.
10) Requires the recipient transit agency and Caltrans to
enter into an agreement governing LONP reimbursement.
11) Authorizes Caltrans to develop guidelines to implement the
LONP provisions of this bill.
Comments
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1)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.
2)Moving funds around. This bill provides flexibility for
recipient transit agencies to loan or transfer 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 transfer it to
another agency within the same region.
3)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
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.
4)Funding operating costs beyond the first year. This bill
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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.
5)Audit streamlining. Existing law, the Transportation
Development Act (TDA), requires all public transit agencies to
undergo a financial audit each year. This bill includes LCTOP
in that audit, rather than subjecting agencies to a separate
audit just for LCTOP.
6)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.
7)Recent amendments. To help address opposition concerns, the
author amended this bill in the Senate Appropriations
Committee to remove the authorization for a recipient transit
agency to use LCTOP monies for any expenditure for which it
can demonstrate GHG emissions reductions. Instead, this bill
now allows expenditures to purchase zero-emission buses or
install related equipment and infrastructure. In addition,
the author amended this bill to delete a provision allowing
recipient transit agencies to pool funds among themselves.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
1)Unknown cost pressures, to the extent the bill expands
eligible projects to include expenditures for the purchase of
zero-emission buses and necessary equipment and infrastructure
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to operate and support those buses. (Greenhouse Gas Reduction
Fund - GGRF)
2)Caltrans administrative costs in the range of $100,000 to
$200,000 to adopt revised program guidelines, administer the
LONP process, and manage workload related to expanded audit
procedures. (State Highway Account)
3)Estimated California Air Resources Board (ARB) costs of
approximately $154,000 annually for one position to coordinate
with Caltrans on the adoption of program guidelines, and
provide guidance on tracking and reporting GHG reductions and
disadvantaged communities' benefits. (GGRF)
SUPPORT: (Verified5/27/16)
Santa Clara Valley Transportation Authority (source)
Alameda-Contra Costa Transit District
Associated General Contractors
Bay Area Rapid Transit District
California Transit Association
Central Contra Costa Transit Authority
Foothill Transit
Los Angeles County Metropolitan Transportation Authority
Metropolitan Transportation Commission
Monterey-Salinas Transit
Napa Valley Transportation Authority
Peninsula Corridor Joint Powers Board (Caltrain)
San Bernardino Associated Governments
San Mateo County Transit District
San Mateo County Transportation Authority
Ventura County Transportation Commission
OPPOSITION: (Verified5/27/16)
Asian Pacific Environmental Network
California Bicycle Coalition
California Housing Partnership Corporation
California ReLeaf
Housing California
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Move L.A.
Public Advocates
Safe Routes to School National Partnership
TransForm
Trust for Public Land
ARGUMENTS IN SUPPORT: The author states that existing law and
program guidelines place unnecessary limits on how LCTOP shares
are 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.
ARGUMENTS IN OPPOSITION: 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 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.
SB 824
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Prepared by:Erin Riches / T. & H. / (916) 651-4121
5/31/16 20:45:38
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