BILL ANALYSIS Ó
SB 824
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Date of Hearing: June 27, 2016
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
SB
824 (Beall) - As Amended June 21, 2016
SENATE VOTE: 26-11
SUBJECT: Low Carbon Transit Operations Program
SUMMARY: Makes various program changes to the Low Carbon
Transit Operations Program (LCTOP). Specifically, this bill:
1)Recasts and streamlines the requirements for eligible uses of
funding for LCTOP to provide operating or capital assistance
projects by requiring transit agencies to meet any, instead of
all, of the following expanded criteria:
a) Directly enhance or expand transit service by supporting
new or expanded bus or rail services or water-borne
transit; and expanded intermodal transit facilities,
including equipment acquisition, fueling, maintenance, and
other costs of operating the facility;
b) Increase mode share; or,
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c) 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.
1)Allows a transit agency to use LCTOP funds for continued
operations of new or expanded transit services previously
funded from the program if the agency can demonstrate
continued reductions in greenhouse gas emissions (GHG).
2)Requires a transit agency proposing to use LCTOP expenditures
on capital projects to submit information to the California
Department of Transportation (Caltrans), specifying the phases
of work for which the agency is seeking an allocation,
identifying the sources and timing of all moneys required for
the project, and describing the intended sources of funding
and timing to complete any subsequent phase.
3)Allows a transit agency to retain their funding share, for no
more than four years, to accumulate and utilize funding in a
subsequent year for a larger expenditure. Requires the agency
to specify the number of years it intends to retain its share
and on what the agency intends to spend the funds.
4)Allows a transit agency to loan or transfer its funding share,
in a fiscal year, to another eligible transit agency within
the same region.
5)Allows a transit agency to apply to Caltrans to reassign any
project savings to another eligible expenditure or reassign
funds from a previously approved project to another eligible
expenditure.
6)Allows a transit agency to apply to Caltrans for a letter of
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no prejudice (LONP) for eligible expenditures under the
program to allow the agency to expend its own resources and be
eligible for reimbursement from its future funding share.
7)Requires the state to reimburse the transit agency for the
LONP if all of the following are met:
a) The expenditures have commenced and regional or local
expenditures have been incurred;
b) The expenditures made by the transit agency are eligible
for the program;
c) The recipient transit agency has complied with all
applicable legal requirements, including the California
Environmental Quality Act (CEQA), and federal and state
civil rights and environmental justice laws; and,
d) There are funds available from the Greenhouse Gas
Reduction Fund (GGRF) designated for the program and from
the transit agency's formula allocation.
1)Requires Caltrans and the transit agency to enter into an
agreement governing the LONP reimbursement.
2)Allows Caltrans to develop guidelines for the use of the LONP.
3)Requires transit agencies receiving LCTOP funding to
demonstrate that the expenditures do not supplant another
source of funds.
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4) Changes the requirements for disadvantaged communities to
require at least 50% of the total program moneys for LCTOP,
versus 50% of each transit agency allocation, be spent on
projects or services that benefit disadvantaged communities,
as defined by CalEnviroScreen, and that those investments are
made within the jurisdiction of each regional transportation
agency.
5)Requires Caltrans to submit a report to the Legislature every
three years, starting on
July 1, 2019, on the LCTOP expenditures benefiting disadvantaged
communities.
6)Expands the contents of the existing audit of transit agencies
required under the Transportation Development Act to include
verification and receipt of funds from LCTOP and requires a
copy of the audit be sent to Caltrans to be available to the
Legislature or the Controller for review.
7)Requires that transit agencies comply with all applicable
legal requirements, including the CEQA, and federal and state
civil rights and environmental justice laws and clarifies that
the section does not expand any of those laws to the agencies.
EXISTING LAW:
1)Requires the California Air Resources Board (ARB), pursuant to
AB 32 (Núñez),
Chapter 488, Statutes of 2006, to develop a plan of how to
reduce statewide GHG emissions to 1990 levels by 2020. Under
AB 32, ARB is authorized to include the use of market-based
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mechanisms to comply with these regulations (cap and trade).
2)Requires, pursuant to the SB 375 (Steinberg), Chapter 728,
Statutes of 2008, regions to prepare a regional transportation
plan that includes a sustainable communities strategy
designed to achieve the regional targets for GHG emission
reduction.
3)Establishes the GGRF in the State Treasury and requires all
money collected pursuant to cap and trade, with limited
exceptions, be deposited into the fund and makes the GGRF
funds available for appropriation by the Legislature.
4)Requires, pursuant to SB 535 (de León), Chapter 830, Statutes
of 2012, that a minimum of 25% of the moneys available in GGRF
be used to benefits disadvantaged communities.
5)Establishes the Transit Intercity Rail Capital Program
(TIRCP), administered by the California State Transportation
Agency, and continuously appropriates 10% of GGRF fund
proceeds to the program for transformative transit capital
projects.
6)Establishes LCTOP, administered by Caltrans, and continuously
appropriates 5% of GGRF fund proceeds to the program for
transit operating and capital assistance to expand service,
with a priority on serving disadvantaged communities.
7)Requires LCTOP funding for transit operations and capital
assistance meet all of the following requirements:
a) Support new or expanded bus or rail services or
water-borne transit; and expanded intermodal transit
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facilities, including equipment acquisition, fueling,
maintenance, and other costs of operating the facility;
b) Each expenditure must directly enhance or expand transit
service to increase mode share; and,
c) Each expenditure must reduce GHGs.
8)Requires each eligible transit agency, prior to receiving
funding from LCTOP, to submit to Caltrans a list of proposed
expenditures and any documentation required by guidelines.
9)Requires Caltrans, in consultation with ARB, to determine if
the proposed list of expenditures submitted by transit
agencies meets the program guidelines.
10)Requires that after Caltrans determines the expenditures
proposed by the transit agency will meet the requirements of
the program, funding for LCTOP is allocated by the Controller
through the State Transit Assistance (STA) formula with 50%
being allocated according to population and 50% being
allocated according to transit operator revenues from the
prior fiscal year.
11)Requires each transit agency receiving funding from LCTOP
whose service area includes disadvantaged communities, as
defined by CalEnviroScreen, must expend at least 50% of the
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funds on projects or services that benefit those communities.
12)Requires Caltrans, in consultation with ARB, to develop
guidelines, methodologies, and reporting requirements for the
program.
13)Requires transit agencies to provide annual reports to
Caltrans on use of the funds from the program.
FISCAL EFFECT: Unknown
COMMENTS: LCTOP was created by SB 862 (Committee on Budget and
Fiscal Review), Chapter 862, Statutes of 2014, as part of a
comprehensive package of programs to target GHG reductions in
California using funds generated by the state's cap and trade
program. These programs include affordable housing and
sustainable communities, transit and intercity rail capital and
operating projects, and high-speed rail. LCTOP is administered
by Caltrans and is continuously appropriated 5% of GGRF funds.
In 2014-15, LCTOP received $25 million, and in 2015-16 it was
funded at $100 million. Although, the Governor's January
2016-17 Budget proposed $100 million for the program, it is
unclear what the funding level will be for this year.
Specifically, LCTOP was created to provide operating and capital
assistance for transit agencies to reduce GHG emission and
improve mobility, with a priority on serving disadvantaged
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communities. Currently, approved projects in LCTOP support new
or expanded bus or rail services and expand intermodal transit
facilities and may include equipment acquisition, fueling,
maintenance, and other costs to operate those services or
facilities, with each project reducing GHG emissions. For
transit agencies whose service area includes disadvantaged
communities, at least 50% of the total moneys received shall be
expended on projects that will benefit disadvantaged
communities.
Currently, for operations, LCTOP supports only new and expanded
transit service that increase mode share - shift new riders out
of their cars - to reduce GHG emissions. Prior to receiving an
allocation, which is distributed by the State Controller
following the STA formula, eligible transit agencies must submit
a description of their proposed expenditures and demonstrate how
each expenditure will reduce GHG emissions.
According to the author, SB 824 makes a few modest adjustments
to the existing LCTOP that will give transit agencies more
flexibility in how they spent the funds they receive from the
program. He further notes that, the total amounts agencies
receive each year are very small, often in absolute terms and in
all cases small relative to the need, so reducing barriers to
using these funds is necessary to ensure that all transit
agencies actually spend their shares to reduce GHGs.
More Flexibility: SB 824 contains numerous changes to the LCTOP
program, which give more flexibility to transit agencies to
utilize the funds. Specifically, this bill allows transit
agencies to use LCTOP funding to support new or expanded transit
service and continue funding the operation of that service in
subsequent years as long as the service is helping to reduce
GHGs. Additionally, this bill authorizes the use of a LONP so
that transit agencies can utilize their own resources to
initiate new or expanded service or commence a capital project
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or expenditure and be reimbursed from their future formula share
of the program. LONP is utilized in many other infrastructure
programs including those funded by Proposition 1B and the
current TIRCP.
In writing in support of SB 824, the California Transit
Association (CTA) states that this bill would modify LCTOP,
based on feedback from transit agencies across the state, to
provide recipient transit agencies with the tools necessary for
utilizing their funding shares more strategically and with
maximum benefit. They further stare that CTA supports the
changes in LCTOP proposed by this bill because they would allow
recipient transit agencies to more easily and efficiently pursue
investments in projects that maximize GHG reductions and
co-benefits, and which are more responsive to changing
priorities within their service areas or regions.
Existing Practices: SB 824 also codifies numerous existing
practices in LCTOP. Specifically, SB 824 allows a transit
agency to "bank" their formula fund share, for no more than 4
years, to save up sufficient funds to use for a larger
expenditure. Additionally, agencies that are not ready to move
forward can loan or transfer their LCTOP formula share to
another eligible agency in the region. This bill also allows
transit agencies to reassign their funds to another eligible
project and retain any savings from a project for future
eligible uses. Finally, the bill expands current transit agency
audit requirements to include LCTOP funding to streamline
reporting.
Transit agencies have utilized LCTOP for a wide variety of
projects and services including reduced transit fare passes.
For example, in writing in support of SB 824, the Orange County
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Transportation Authority notes that they have utilized their
LCTOP share to subsidize a Summer Youth Pass providing
subsidized bus fares to Orange County youth; and as a result of
this investment, youth ridership increased 3.5%. They further
contend that this bill will help agencies build on these
successes by providing the ability to invest in long-term,
multi-year projects to increase ridership and reduce emissions.
Disadvantaged Communities: In addition to changes to the LCTOP
funding provisions, SB 824 would change the requirement for
funding for disadvantaged communities. Currently, each transit
agency that has communities identified under CalEnvorScreen,
must spend 50% of their respective formula share on projects or
services that benefit those disadvantaged communities. SB 824
would shift the requirement to the programmatic, state-wide
level, but retain geographic diversity by requiring investments
benefitting disadvantaged communities within the jurisdiction of
each regional transportation planning agency. This statewide
approach is consistent with other GGRF programs such as the
TIRCP and the Affordable Housing Sustainable Communities
programs.
In writing support of this bill, the Central Contra Costa
Transit Authority highlighted a priority project to help serve
communities of concern in their area by increasing bus service
in the Monument Corridor in Concord. They state they while the
corridor is heavily concentrated with low income and minority
populations, it does not meet the current state definition of
disadvantaged community. The agency would like to increase
service in this corridor using LCTOP funds, and therefore
support a statewide disadvantaged communities' requirement over
the current transit operator boundary basis.
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Related legislation: AB 2090 (Alejo) authorizes transit agencies
to utilize LCTOP funding to support existing transit operations
if the governing board of the transit agency declares a fiscal
emergency under CEQA. AB 2090 passed the Senate Transportation
and Housing Committee and is scheduled to be heard by the Senate
Environmental Quality Committee on June 29, 2016.
Previous legislation: SB 862 (Committee on Budget and Fiscal
Review), Chapter 36, Statues of 2014, created and funded the
Affordable Housing and Sustainable Communities, the Low Carbon
Transportation, TIRCP, and LCTOP programs.
REGISTERED SUPPORT / OPPOSITION:
Support
California Transit Association (Sponsor)
Santa Clara Valley Transportation Authority (Sponsor)
Associated General Contractors
Alameda-Contra Costa Transit District
Central Contra Costa Transit Authority
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Foothill Transit
Los Angeles County Metropolitan Transportation Authority
Metropolitan Transportation Commission
Monterey-Salinas Transit
Napa Valley Transportation Authority
Orange County Transportation Authority
Peninsula Corridor Joint Powers Board
San Bernardino Associated Governments
San Francisco Bay Area Rapid Transit District
San Mateo County Transit District
San Mateo County Transportation Authority
Santa Cruz Metropolitan Transit District
Santa Monica's Big Blue Bus
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Opposition
None on file
Analysis Prepared by:Melissa White / TRANS. / (916)
319-2093