BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 824|
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UNFINISHED BUSINESS
Bill No: SB 824
Author: Beall (D)
Amended: 8/18/16
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
SENATE FLOOR: 26-11, 6/1/16
AYES: Allen, Beall, Block, De León, Galgiani, Glazer, Hall,
Hancock, Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara,
Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Pan,
Pavley, Roth, Wieckowski, Wolk
NOES: Anderson, Bates, Berryhill, Fuller, Gaines, Moorlach,
Morrell, Nguyen, Nielsen, Stone, Vidak
NO VOTE RECORDED: Cannella, Huff, Runner
ASSEMBLY FLOOR: 60-11, 8/23/16 - See last page for vote
SUBJECT: Low Carbon Transit Operations Program
SOURCE: Santa Clara Valley Transportation Authority
DIGEST: This bill modifies the Low Carbon Transit Operations
Program (LCTOP).
Assembly Amendments require a recipient agency to demonstrate
that LCTOP funds do not supplant other funding sources; allow
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recipient agencies to spend LCTOP funds on operational
expenditures that increase transit mode share; limits the period
a recipient agency may carry over LCTOP funds for a maximum of
four years; requires a recipient agency to comply with
applicable legal requirements, including the California
Environmental Quality Act (CEQA) and state and federal civil
rights and environmental justice laws; and adds, as a condition
for state reimbursement under a letter of no prejudice (LONP),
that sufficient funds are available from both the Greenhouse Gas
Reduction Fund (GGRF) and the agency's formula allocation share
under 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
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 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.
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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
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) Requires a recipient transit agency to demonstrate that
expenditures of LCTOP monies do not supplant another funding
source.
3) Allows a recipient transit agency to spend LCTOP monies on
operational expenditures that increase transit mode share.
4) Allows a recipient transit agency to use LCTOP monies to
purchase zero-emission buses, including electric buses, and
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to install necessary equipment and infrastructure to operate
and support such buses.
5) 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
c) Describe intended sources and timing of funding to
complete any subsequent phases of the project, through
construction or procurement
6) Allows a recipient transit agency that has used LCTOP monies
for any type of eligible operational assistance in a previous
fiscal year to use LCTOP monies to continue the same service
or program in a subsequent fiscal year if it can demonstrate
that additional GHG emissions reductions can be realized.
7) Allows a recipient transit agency that does not submit a
project for funding in a particular fiscal year to retain its
funding share 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. Limits fund retention to a maximum of four years.
8) 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.
9) 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.
10)Requires a recipient transit agency to comply with all
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applicable legal requirements, including the California
Environmental Quality Act (CEQA) and state and federal civil
rights and environmental justice laws.
11)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.
12)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 CEQA and state and
federal civil rights and environmental justice
obligations, if applicable
d) Sufficient monies are available from the GGRF and from
the recipient transit agency's formula allocation share
13)Requires the recipient transit agency and Caltrans to enter
into an agreement governing LONP reimbursement.
14)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.
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4)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.
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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Assembly Appropriations Committee:
1)Ongoing special fund costs to Caltrans, which administers the
LCTOP, of $200,000 to $300,000 for two or three positions to
revise program guidelines, establish systems for tracking the
LONP process, monitor transit agencies' accounting for and use
of funds, as modified by the bill, prepare the Legislature
report, and for workload associated with the expanded audit
requirements. [Greenhouse Gas Reduction Fund - GGRF]
2)Ongoing special fund cost to the Air Resources Board of
$160,000 for one position to coordinate with Caltrans on the
adoption of program guidelines, and provide guidance on
tracking and reporting GHG reductions and disadvantaged
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communities' benefits.
3)Potentially significant cost pressures, from expanding
eligible use of LCTOP funds to include expenditures for the
purchase of zero-emission buses and equipment and
infrastructure to operate and support those buses.
SUPPORT: (Verified8/22/16)
Santa Clara Valley Transportation Authority (source)
Alameda-Contra Costa Transit District
Asian Pacific Environmental Network
Associated General Contractors
Bay Area Rapid Transit District
California Bicycle Coalition
California ReLeaf
California Transit Association
California Walks
Central Contra Costa Transit Authority
Coalition for Clean Air
Foothill Transit
Gamaliel of California
Housing California
Investing in Place
Long Beach Transit
Los Angeles County Metropolitan Transportation Authority
Metropolitan Transportation Commission
Monterey-Salinas Transit
Move L.A.
Napa Valley Transportation Authority
North Bay Organizing Project
Orange County Transportation Authority
Peninsula Corridor Joint Powers Board (Caltrain)
Public Advocates
Safe Routes to School National Partnership
San Bernardino Associated Governments
Santa Cruz Metropolitan Transit District
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San Mateo County Transit District
San Mateo County Transportation Authority
Santa Monica Big Blue Bus
Solano County Transit
TransForm
Transportation Authority of Marin
Trust for Public Land
Ventura County Transportation Commission
OPPOSITION: (Verified8/22/16)
None received
ASSEMBLY FLOOR: 60-11, 8/23/16
AYES: Achadjian, Alejo, Arambula, Atkins, Baker, Bloom,
Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chávez,
Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman,
Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gordon, Hadley, Roger Hernández, Holden,
Irwin, Jones-Sawyer, Lackey, Levine, Lopez, Low, Maienschein,
McCarty, Medina, Mullin, Nazarian, O'Donnell, Quirk,
Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone,
Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood,
Rendon
NOES: Travis Allen, Bigelow, Brough, Dahle, Beth Gaines,
Gallagher, Grove, Harper, Jones, Melendez, Patterson
NO VOTE RECORDED: Chang, Gray, Kim, Linder, Mathis, Mayes,
Obernolte, Olsen, Steinorth
Prepared by: Erin Riches / T. & H. / (916) 651-4121
8/23/16 19:54:33
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