BILL ANALYSIS �
AB 432
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Date of Hearing: August 20, 2012
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
AB 432 (Dickenson) - As Amended: June 21, 2012
SUBJECT : Local public transportation funding
SUMMARY : Authorizes the Sacramento Area Council of Governments
(SACOG) to create a combined farebox recovery ratio for the
Sacramento County transit operators (Sacramento Regional Transit
District, Elk Grove transit, Folsom transit, South County
Transit (Galt), and Sacramento County transit services) for
purposes of determining eligibility for receiving public
transportation operating subsidies. Requires the Sacramento
Regional Transit District to cover no less than 23% of operating
costs from fares even if the transit operators serving
Sacramento County are evaluated as a group.
EXISTING LAW :
1)Known as the Transportation Development Act of 1971 (TDA),
provides funding for transit and non-transit related purposes
that comply with regional transportation plans. Serves to
improve existing public transportation services and encourage
regional transportation coordination.
2)Authorizes transportation planning agencies to administer
transit funding made available under the TDA. Imposes certain
financial requirements on transit operators making claims for
transit funds, including requirements that fares collected by
the operator cover a specified percentage of operating costs.
Establishes different farebox requirements depending upon
population.
3)Authorizes the San Francisco Bay Area Metropolitan
Transportation Commission (for transit operations serving the
San Francisco Bay Area Rapid Transit District area) and the
San Diego Metropolitan Transit System to make a determination
as to whether transit operators for specified service areas
have met the requirements for claims for transit funds by
evaluating the operators as a group rather than individually.
FISCAL EFFECT : Unknown
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COMMENTS : The TDA provides funding for public transportation
services. Funds are allocated to each county based on
population, taxable sales and transit performance. TDA is
funded through local sales tax revenues that are collected by
the state and returned to the local governments and transit
operators through the regional transportation planning agencies
(RTPA). Generating $1.3 billion dollars in the 2010/11 fiscal
year, TDA is a major funding source for public transportation in
California.
To be eligible to receive TDA funds, a transit operator must
meet a specified ratio of fare revenues to operating cost,
referred to as the farebox recovery ratio. The ratio varies
according to different circumstances. For operators that were
providing transit services in urbanized areas in 1979, their
ratio is what they achieved that year. For operators who began
providing service after 1979, their ratio is the average of the
first three years of operation, with a minimum ratio of 20%.
New operators in nonurbanized areas have five-years to determine
their farebox recovery ratio. In addition, if an operator
receives funds from a local transportation sales tax or some
other local revenue sources, it can meet its farebox recovery
ratio by combining fare revenues with that local support.
According to the author, the TDA law establishes a formula for
transit operators to measure how much of their funding comes
from ticket and passes. This "farebox requirement" is often
difficult for smaller and rural transit operators to meet. This
state-imposed requirement limits the ability of local government
to meet the transit needs of the diverse communities in
Sacramento County. The author contends that Sacramento County
is the only county in SACOG's regional transportation planning
jurisdictional area with a population greater than 500,000.
Under current law, RTPA's have discretion to adjust the farebox
requirement to meet local needs for counties with a population
less than 500,000.
The purpose of this bill is to allow SACOG to make adjustment
for rural and smaller operators that are within the larger
urbanized Sacramento County thereby allowing transit operations
for the cities of Elk Grove, Folsom, Galt and the County of
Sacramento to remain eligible to receive TDA funding by creating
a regional ratio of fare revenues to operating cost. The author
indicates that these operators are finding it difficult to meet
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the farebox recovery minimum requirements and asserts that "the
City of Galt, as a result of a modest population increase as
determined by the recent census, has gone from being considered
a rural community to an urban one. The result is a requirement
that doubles the farebox recovery ratio requirement for South
County Transit/Link, which serves Galt and portions of
Sacramento County. This is difficult for Galt to meet because
it has a transit service model based on the historic share of
state/local revenues and farebox revenues."
This bill would provide flexibility to SACOG in determining
compliance with TDA farebox recovery requirements. For purposes
of establishing a group farebox recovery ratio, this bill would
allow the costs and revenues of the urban and suburban operators
within Sacramento County to be combined. Additionally, as the
bill requires that Sacramento Regional Transit District cover no
less than 23% of the regional operating costs from fares,
minimum performance requirements are established for Sacramento
County operators to meet as a whole. Combining farebox recovery
ratios as proposed by this bill are not new TDA allowances as
grouping requirements are currently authorized for the San
Francisco Bay Area Rapid Transit District service area and for
the service area of the Metropolitan Transit System in San
Diego.
Writing is support of the bill as its sponsor, SACOG indicates
that RTPAs have discretion to adjust the farebox requirement to
meet the local needs for counties with a population less than
500,000 and that the bill would allow it to make adjustments for
rural and smaller operators within Sacramento County with a
population larger than that. SACOG cites the difficulties of
the Cities of Elk Grove and Folsom in meeting farebox recovery
ratio requirements in addition to Galt mentioned above.
REGISTERED SUPPORT / OPPOSITION :
Support
Sacramento Area Council of Governments (sponsor)
City of Elk Grove
City of Galt
City of Folsom
County of Sacramento
Opposition
AB 432
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None on file
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093