BILL ANALYSIS Ó
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Wieckowski, Chair
2015 - 2016 Regular
Bill No: SB 951
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|Author: |McGuire |
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|Version: |3/17/2016 |Hearing |4/20/2016 |
| | |Date: | |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Rebecca Newhouse |
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SUBJECT: Transportation: Golden State Patriot Passes Program
ANALYSIS:
Existing law:
1) Under the California Global Warming Solutions Act of 2006
(also known as AB 32), requires the California Air Resources
Board (ARB) to determine the 1990 statewide greenhouse gas
(GHG) emissions level and approve a statewide GHG emissions
limit that is equivalent to that level, to be achieved by
2020, and to adopt GHG emissions reductions measures by
regulation. ARB is authorized to include the use of
market-based mechanisms to comply with these regulations.
(Health and Safety Code §38500 et seq.)
2) Establishes the Greenhouse Gas Reduction Fund (GGRF) in the
State Treasury, requires all moneys, except for fines and
penalties, collected pursuant to a market-based mechanism be
deposited in the fund. (Government Code §16428.8)
3) Prohibits the state from approving allocations for a measure
or program using GGRF moneys except after determining that
the use of those moneys furthers the regulatory purposes of
AB 32, and requires moneys from the GGRF be used to
facilitate the achievement of reductions of GHG emissions in
California. (HSC §39712)
This bill:
SB 951 (McGuire) Page 2
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1)Creates the Golden State Patriot Passes Program administered
by the state Department of Transportation (Caltrans) to
provide free access to transit services for veterans, as
specified.
2)Provides an annual appropriation of $3 million in GGRF moneys
for fiscal years 2017-18 to 2020-21 for this program.
3)Requires Caltrans, in coordination with ARB, to develop
guidelines for participating transit providers to demonstrate
that proposed expenditures will reduce GHG emissions and
increase veteran mobility.
4)Requires Caltrans, by January 1, 2018, to select three transit
operator applicants to receive program funding.
Specifically:
a) Prohibits Caltrans from selecting an applicant that
already provides veterans with free access to transit
services in its service area.
b) Requires Caltrans to select applicants that serve
entirely different counties.
c) Provides that Caltrans shall select one applicant that
primarily serves an urban area, one that primarily serves
a suburban area, and one that primarily serves a rural
area (to be defined by Caltrans based on Census data).
Sets maximum allocations of $2 million for an urban area
applicant, $900,000 for a suburban area applicant, and
$100,000 for a rural area applicant.
5)Limits applicants to public agencies including, but not
limited to, transit operators within a city or county.
6)Requires a transit operator that is selected for the program
to provide a local match for any state funding it receives.
7)Requires Caltrans to ensure that benefits are provided by the
program to disadvantaged communities.
8)Requires participating transit operators to submit a report to
Caltrans by February 1, 2021 and requires Caltrans to submit
a report to the Legislature by August 1, 2021. The reports
SB 951 (McGuire) Page 3
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shall include, but not be limited to, cost, use of moneys,
estimated reduction in GHG emissions, and ridership.
9)Provides that in order to participate in the program, a
veteran must provide a veterans identification card issued by
a veterans service organization, or a driver's license or
identification card identifying the holder as a veteran.
10)Sunsets the program on January 1, 2022.
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Background
1) Sonoma County Veterans Subsidized Fare Program. Sonoma
County launched a pilot program on January 1, 2015 to provide
veterans free use of Sonoma County Transit. Specifically, a
veteran showing a VA identification card or a Sonoma County
Veterans identification card upon boarding a bus rides free,
and Sonoma County Transit is reimbursed by the county. The
county budgeted $45,000 (general fund) for this program for
the year and came in under budget. The county board of
supervisors unanimously voted in November to make the program
permanent as of January 1, 2016.
From January through June 2015, nearly 14,000 veteran trips
were provided through this program, with the majority of
trips occurring on weekdays. During this period, veteran
ridership increased by 34%. Approximately 19% of trips
occurred on the route that serves the VA Outpatient Clinic.
During this period, 845 Sonoma County Veterans identification
cards were issued. County staff estimated that about half of
these ID cards were issued specifically in relation to this
program.
2) Cap-and-trade auction revenue. Since November 2012, ARB
has conducted 14 cap-and-trade auctions, generating over
$4 billion in proceeds to the state.
State law specifies that the auction revenues must be
used to facilitate the achievement of GHG emissions
reductions and outlines various categories of allowable
expenditures. Statute further requires the Department
of Finance, in consultation with ARB and any other
relevant state agency, to develop a three-year
investment plan for the auction proceeds, which are
deposited in the GGRF. ARB is required to develop
guidance for administering agencies on reporting and
quantifying methodologies for programs and projects
SB 951 (McGuire) Page 5
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funded through the GGRF to ensure the investments
further the regulatory purposes of AB 32.
Disadvantaged communities. SB 535 (de León, Chapter 830,
Statutes of 2012) requires the Department of Finance, in
the investment plan, to allocate at least 25% of
available moneys in the GGRF to projects that provide
benefits to disadvantaged communities, and at least 10%
to projects located within disadvantaged communities.
To meet the SB 535 mandate, the Office of Environmental
Health Hazard Assessment, under the California
Environmental Protection Agency's (CalEPA) guidance,
developed a tool (termed CalEnviroScreen) to assess and
rank census tracts across the state that are
disproportionately affected by multiple types of
pollution and areas with vulnerable populations. CalEPA
has designated 25% of census tracts in California as
disadvantaged communities for the purpose of investing
cap-and-trade proceeds.
Additionally, SB 862 (Committee on Budget and Fiscal
Review, Chapter 36, Statutes of 2014) requires ARB to
develop guidelines on maximizing benefits for
disadvantaged communities by agencies administering GGRF
funds.
Legal consideration of cap-and-trade auction revenues.
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The 2012-13 Budget analysis of cap-and-trade auction
revenue by the Legislative Analyst's Office noted that,
based on an opinion from the Office of Legislative
Counsel, the auction revenues should be considered
"mitigation" fee revenues, subject to the "Sinclair
Nexus Test." This test requires that a clear nexus must
exist between an activity for which a mitigation fee is
used and the adverse effects related to the activity on
which that fee is levied. The LAO concluded, based on
the opinion, that in order for their use to be valid as
mitigation fees, revenues from the cap-and-trade auction
must be used to mitigate GHG emissions or the harms
caused by GHG emissions.
In 2012, the California Chamber of Commerce filed a
lawsuit against the ARB claiming that cap-and-trade
auction revenues constitute illegal tax revenue. In
November 2013, the superior court ruling declined to
hold the auction a tax, concluding that it is more akin
to a regulatory fee. In February of 2014, the
plaintiffs filed an appeal with the 3rd District Court
of Appeal in Sacramento. That case is currently pending.
Budget allocations. SB 862 (Committee on Budget and
Fiscal Review, Chapter 36, Statutes of 2014) established
a long-term cap-and-trade expenditure plan by
continuously appropriating portions of the funds for
designated programs or purposes. The legislation
appropriates 25% for the state's high-speed rail
project, 20% for affordable housing and sustainable
communities grants, 10% to the Transit and Intercity
Rail Capital Program, and 5% for low-carbon transit
operations. The remaining 40% is available for annual
appropriation by the Legislature.
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The Governor's 2016-17 proposed budget appropriates over
$3 billion to a variety of programs and projects in the
transportation, energy, natural resources, and waste
diversion sectors.
Comments
1) Purpose of Bill. According to the author there is a
significant need to not only provide better services for
California's roughly two million veterans, but also to make
sure all our veterans, especially the most vulnerable, have
access and transportation to these services. Only 19% of
veterans in California utilize the benefits to which they are
entitled. Approximately 26% of veterans report having a
disability; of these, 32% indicate that their disability has
interfered with obtaining or holding a job. Additionally,
18-30 year-old veterans living in poverty are 3.5 times more
likely to become homeless as compared to non-veteran adults
living in poverty. The author states that, with veterans
being more vulnerable to unemployment and homelessness, it is
paramount to provide them with affordable means to succeed.
2) Does This Bill Advance the Goals of AB 32? Any projects
funded through GGRF moneys are required to facilitate the
achievement of GHG emission reductions and advance the
regulatory purposes of AB 32.
It is not clear that the appropriation in SB 951 advances the
regulatory purposes of AB 32 and reduces GHG emissions. Only
in cases where a veteran was switching from car travel to bus
travel might there be a reduction of GHG emissions. However,
it is unclear what that level of GHG emissions reductions
might be, and whether that transit shift is taking place for
veterans participating in the Sonoma County pilot program.
In fact, it seems that the intent of the author with this
bill is to provide services to veterans who currently do not
have the means to transport themselves, or pay for public
transportation. In these cases where veterans were already
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using public transit but having to pay, or walking or riding
bicycles, there would not be GHG emissions reductions under
this program.
Legal risk. As noted in the background, the issue of whether
auction proceeds constitute an illegal tax is currently under
appeal. The more tenuous the nexus between GGRF investments
and GHG emissions reductions, the greater the legal risk that
future court decisions may find those GGRF revenue
allocations illegitimate, with possible consequences
including invalidation of that particular appropriation or of
the overall legislative allocation of GGRF.
3) Amendment needed. Although the program created in SB 951 has
a laudable goal of helping veterans access transit, it is not
clear that the program would result in GHG emissions
reductions. An amendment is needed to strike the $3 million
appropriation from the GGRF, as well as other provisions
relating to funding from GGRF, from the bill. The author
should work to find a more appropriate funding source as the
bill moves forward.
Related/Prior Legislation
AB 2222 (Holden) provides a continuous appropriation of $50
million per year from the GGRF for the Transit Pass Program, to
be administered by Caltrans. This program would support transit
pass programs of public agencies that provide free or
reduced-fare transit passes to public school students and
community college, California State University, and University
of California students. AB 2222 requires at least 50% of
program funding to benefit disadvantaged communities. This bill
is pending in the Assembly Transportation Committee.
SOURCE: Author
SUPPORT:
American GI Forum of California
AMVETS - Department of California
California Association of County Veterans Service Officers
Gamaliel of California
Military Officers Association of America, California Council of
Chapters
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Military Order of the Purple Heart of the U.S.A., Inc.,
Department of California
Sonoma County Board of Supervisors
VFW - Department of California
Vietnam Veterans of America - California State Council
OPPOSITION:
CalTax
DOUBLE REFERRAL:
This measure was heard in the Senate Transportation and Housing
Committee on March 29, 2016, and passed out of committee with a
vote of 10-0.
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