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Report No:

Meeting Date: ·

Alameda-Contra Costa Transit District

STAFF REPORT TO: AC Transit Board of Directors

FROM: Michael A. Hursh, General Manager

SUBJECT: Monthly Legislative Report

BRIEFING ITEM

RECOMMENDED ACTION(S):

Consider receiving the Monthly Legislative Report.

BACKGROUND/RATIONALE:

Federal Legislation Update

16-119 May 25, 2016

Congress continues to prioritize the Fiscal Year (FY) 2017 annual appropriations bills to fund federal programs starting on October 1, 2016. However, there are time constraints on the legislative calendar due to the upcoming recess schedule that includes the presidential nominating conventions in late July and a full August and October break. ·

On April 21, 2016, the Senate Appropriations Committee voted 30 - 0 to approve the Transportation, Housing and Urban Development (THUD) appropriations bill, which includes $16.9 billion for the U.S. Department of Transportation. Key funding includes $44 billion from the Highway Trust Fund for Federal-Aid Highway programs, $12.3 billion for the Federal Transit Administration (FTA), and $525 for the TIGER grant program. It is unclear when the bill will be taken up the full Senate.

State Legislation Update

Governor Jerry Brown is expected to release his revised budget for FY 2016 - 2017 with updated revenue projections and changes to his January budget proposal on May 12, 2016. The May Revise will also reflect how the Governor wants to spend any additional revenue.

Earlier this year, the State Controller's Office (SCO) changed how it calculates the allocation of the revenue share of State Transit Assistance (STA) funds. Many public transportation agencies from across the state expressed concern about the unintended and potentially negative consequences of these administrative changes. In response, the Senate and Assembly Budget Subcommittees that oversee transportation funding items approved trailer bill language that would temporarily pause these changes through FY 2017 - 2018.

On April 19, 2016, the Senate Transportation Committee scheduled a hearing on SB 1051, which Senator Loni Hancock introduced on the District's behalf. This bill would authorize AC Transit to enforce parking violations in bus only lanes and stops with automated forward facing cameras. The committee approved the bill 11 - O and referred it to the Senate Judiciary

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Report No. 16-119 Page 2 of 2

Committee. Consequently, on May 3, 2016, the Senate Judiciary Committee approved SB 1051 by a vote of 6 - 0. The bill will now be voted on by the full Senate.

BUDGETARY/FISCAL IMPACT:

There is no budgetary or fiscal impact associated with this report.

ADVANTAGES/DISADVANTAGES:

This report is provided to inform the Board of monthly legislative activities and to seek its approval to support or oppose legislation affecting AC Transit. This provides clear direction to legislators and other bodies of AC Transit's positions.

ALTERNATIVES ANALYSIS:

This report provides an update of monthly legislative activities. AC Transit could opt to defer from legislative positions and operate without making its positions known, leaving the District vulnerable to unfavorable legislation.

PRIOR RELEVANT BOARD ACTION/POLICIES:

Staff Report 15-293a: 2016 Federal and State Legislative Advocacy Programs

ATIACHMENTS:

1: Federal Update from Van Scoyoc Associates 2: State Legislative Report from Platinum Advisors 3: State Legislative Bill Matrix 4: FY 2016 Federal Advocacy Program 5: FY 2016 State Advocacy Program

Approved by: Beverly Greene, Director of Legislative Affairs & Community Relations

Reviewed by: Beverly Greene, Director of Legislative Affairs & Community Relations

Prepared by: Estee Sepulveda, External Affairs Representative

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Steven 0. Palmer, Vice President C/u111no11 Ha1111a, Director David Haines, Manager

This Week

VAN SCOYOC A S 8 0 C I A T E S

Transportation Update Transportation Update

May 9, 2016

SR 16-119 Attachment 1

Heari11g: TSA Ma11agement Practices. On Thursday, May 12, the House Oversight Committee is scheduled to hold its second hearing on the management practices and misconduct at the Transportation Security Administration (TSA). Witnesses have not yet been announced.

Floor Debate: THUD Appropriations. This week, the Senate may begin debate on the FY 2017 Transpo1tation, Housing, and Urban Development (THUD) Appropriations bill. The bill , which passed out of Committee on April 21 provides $16.9 billion for the Depa1tment of Transportation.

Hearing: Customs and Border Protection. On Wednesday, May 11 , the Finance Committee will hold an oversight hearing on Customs and Border Protection (CPB). Commissioner R. Gil Kerlikowske will testify.

Last Week

FY 2016 TSA Reprogrammi11g. On May 4, following a request to redirect $34 million of appropriated FY 2016 funds for TSA to hire and train 768 security officers and more ove1time pay, that request was approved by the House and Senate Appropriations Committees. These funds were requested to help TSA address increasing delays at airpo1ts for passenger checkpoints.

The House was in recess last week.

The Senate was in recess last week.

Field Hearing: Keeping Goods Moving in America's Heartland. On May 2, the Subcommittee on Surface Transpmtation and Merchant Marine Infrastructure, Safety and Security held a field hearing on

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the implementation of the FAST Act, the impact of freight transportation to rural economies, and ways to strengthen local and regional transportation networks. Witness from the Nebraska Department of Roads, Western Nebraska Regional Airport Authority, Northwest Nebraska Development Corporation, BNSF Railway, Kelley Bean Company, and the Nebraska Transport Company.

Department of Transportation

DOT: Accessible Air Transportation. On May 2, DOT announced the appointment of members to the Advisory Committee on Accessible Air Transportation (ACCESS Advisory Committee). The ACCESS Advisory Committee was established to negotiate and develop a proposed rule concerning accommodations for air travelers with disabilities.

FTA: Mobility on Demand Sandbox Demonstration Grants. On May 3, the Federal Transportation Administration (FTA) announced the availability of $8 million in research funds for a new program to demonstrate and evaluate innovative approaches to integrated "Mobility on Demand" (MOD) solutions within a public transportation framework. The MOD Sandbox Demonstration Program is intended to provide a platform where integrated MOD concepts and solutions are supported and demonstrated through local partnerships in a real-world setting. Proposals are due by July 5, 2016.

FAA: Ground Access Transportation Projects Funded with PFC. On May 3, the Federal Aviation Administration (FAA) published a Federal Register notice proposing to amend its policy to allow rail projects that are located on airport, but that may not exclusively serve air traffic, be eligible to be funded with Passenger Facility Charges (PFC). Comments are due by June 2, 2016.

FAA: Drone Advisory Committee. On May 4, the FAA announced that a federal advisory committee is being formed to provide a venue for the FAA and key decision-makers supporting the safe introduction of Unmanned Aircraft Systems (UAS) into the National Airspace System (NAS). The Advisory Committee will be led by Intel CEO Brian Krzanich and FAA Administrator Michael Huerta will be the Designated Federal Official. Membership will be comprised of a cross-section of the UAS industry and with executives from key stakeholder organizations. Applications of interest are due by May 19, 2016 and selections will be announced by May 31, 2016.

FAA: Educational Use of Unmanned Aircraft Systems. On May 4, the FAA announced that it will begin allowing students to operate UAS for educational and research purposes. As a result, schools and students will no longer need an FAA Section 333 exemption or any other authorization to fly provided they follow the rules for model aircraft.

FHWA: Every Place Counts Deign Challenge. On May 4, the Federal Highway Administration (FHW A) announced the Every Day Counts Design Challenge, which aims to bring "community teams" to identify innovative solutions to reconnect communities to jobs, healthcare, education, and other essential services. Applicants must register their interest in participating by May 20 and final applications are due by June 3.

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SR 16-119 Attachment 2

May 6, 2016

TO: Director Chris Peeples, President, and

Members of the Board

Michael Hursh, General Manager

Beverly Greene, Director of Legislative Affairs & Community Relations

FR: Steve Wallauch Platinum Advisors

RE: LEGISLATIVE UPDATE

May Revise: It is anticipated that the Governor's presentation of the May Revision with updated revenue projections and changes to his January budget proposal on May 12. Numerous large-ticket items are under discussion between the two houses and the administration including housing, transportation, and early childhood education. Governor Brown has been consistent about his mantra to maintain fiscal discipline and prepare for future funding shortfalls, and the expectation remains that he will address the May Revise in a similar fashion. However, there are rumblings that he might be amenable to including housing proposals negotiated by the Legislature and other spending priorities.

Revenues: It is difficult and confusing, to pin point were the state stands in terms of revenues because the Department of Finance and the State Controller's Office count things differently, and adding to this is whether any surplus revenue is based on the revenue estimates from when the budget was signed last year, or estimates based on the Governor's budget proposal release in January. For example, for the month of March the DOF's monthly cash report illustrated cash for March missed the projections in the proposed 2016-17 budget by $170 million, while the Controller's monthly update for March stated cash receipts beat the projections in the proposed 2016-17 budget by $218 million - a nearly $400 million swing. _ Regardless, things are still looking positive overall.

Using the Governor's proposed 2016-17 budget as the base obscures the true revenue gains in the current fiscal year. Based on the revenue and expenditure projection used in the 2015-16 budget, revenues in the first nine month of this fiscal year are beating projections by $2.26 billion. In addition, preliminary estimates on the biggest revenue month, April, show income tax revenues beating the Governor's estimate of $12.2 billion by $1.6 billion - for a total take in April of $13.8 billion.

The May Revise will reflect how the Governor wants to spend any additional revenue. While the Governor's budget proposal puts most of the revenue gains into the Rainey Day Fund, the Legislature may have other ideas on how this revenue should be spent.

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STA Fix: Both the Senate Budget Subcommittee #2 and the Assembly Budget Subcommittee #3, which oversee transportation funding items, adopted budget trailer bill placeholder language taking the first step in addressing changes the State Controller's Office made in allocating the revenue portion of State Transit Assistance (STA) funds.

The Subcommittees approved the adoption of trailer bill language that would put a freeze on the changes implemented by the State Controller's Office on how the revenue portion of STA funds are allocated. The language would direct the Controller's Office to allocate the remaining 2015-16 funds and all of the 2016-17 and 2017-18 funds pursuant to the formula used to allocate the STA revenue funds in the 2014-15 fiscal year. This "timeout" would provide time for transit operators to work with the Controller on implementing any needed statutory changes next year.

As you may recall, the State Controller's Office (SCO) changed how it calculates the allocation of the revenue share of STA funds. The STA allocation formula allocates half of STA funds to a region based on the region's share of the statewide population, and half allocated to operators based the operator's proportionate share of fare box and other revenue sources.

Historically, the SCO calculates the revenue share based on the revenue from those transit operators that receive TDA Article 4 funds. If an operator does not receive Article 4 funds it is not eligible to receive STA funds. The SCO has changed its interpretation to now base the allocation of the STA revenue share to any entity that submits an annual financial transaction report to the SCO. This increased the number of eligible transit operators from about 150 to 250. These new potential claimants consist of van pools, paratransit providers, and some legitimate public transit operators. In addition, the SCO changed how it allocates these funds. The revenue is now allocated to the regional transportation agency, such as MTC, and it is at the regional transportation agency's discretion on how th~se funds are allocated to the operators within the region.

The impetus for this change remains murky, and there are many potential pitfalls to this change, such as could corporate shuttles become eligible for STA funds if they file a financial report. This change also impacts how LCTOP funds would be allocated.

Stop & Go: While there have been no public hearings or major announcements on any progress on reaching a transportation funding agreement, recent amendments to Senator Beall's SBX 1 does show some movement on trying to secure Republican support for a funding package. Many of the policy items added to SBX 1 have previously been proposed by Republican Caucus members. Attached is an updated comparison of the main proposals.

In general each of the proposals would create a Road Maintenance & Rehabilitation Account where all the new excise tax and vehicle fee revenue would be deposited. The proposals also augment by varying amounts the allocation of cap & trade funds to transit projects. Senator Beall's SBX 1 and Assemblyman Frazier's AB 1591 would dedicate 5% of the revenue to a State and Local Partnership Program that would be open to those counties that previously did not have a local transportation sales tax program. The balance of the funds would then be split with 50% allocated to Caltrans for the SHOPP and other eligible projects, and 50% allocated to cities and counties for local street and road projects.

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The amendments to SBX 1 illustrate progress in reaching a bi-partisan agreement on a meaningful transportation funding package. This will hopefully spur momentum to reach an agreement as part of the budget. The following summarizes the more significant changes made to SBX 1.

Revenue Tweaks: SBX 1 not only requires the excise taxes to be adjusted for inflation, but the amendments also require the excise tax to be adjusted to account for improving vehicle fuel efficiency. In addition, the amendments require the vehicle registration fee and the Road User Charge to also be annually adjusted for inflation.

In other areas, the amendments would capture and return to transportation programs the increased gas tax revenue derived from fuel sales for boats, agricultural vehicles, and off­highway vehicles. This revenue is currently directed to the general fund. The amendments would allocate this revenue pursuant to the Prop 42 formula of 44% STIP, 12% SHOPP, and 40% local streets and roads.

Sales Tax: In a surprising move, SBX 1 was amended to increase the sales tax add-on for diesel fuel from 1.87% to 5.25%. The 1.87% add-on was enacted as part of the fuel tax swap in order to stabilize State Transit Assistance (STA) funding. STA provides operating funds for transit operators. This increase to 5.25% would increase STA funding by about $300 million. While STA revenue would climb by $300 million for total balance of $600 million, not all the sales tax money is used for transit. SBX 1 would direct 1.75% of the increase to the Transportation Debt Service Account to pay the debt service on Prop 108, 116 and 18 bonds. An amount of cap & trade dollars equal to the 1.75% would be deposited into the STA to keep transit whole.

Cap & Trade Revenue: The amendments significantly increase the amount of cap & trade auction revenue allocated for transportation purposes. The changes would increase the current 60% of revenue continuously appropriated to nearly 80% of all auction revenues. This expanded allocation of cap & trade revenue will impact the negotiations on the cap & trade expenditure plan, and will likely draw the opposition of numerous groups advocating to use cap & trade revenue for numerous other programs. The cap & trade expenditures in SBX 1 include the following:

• Increase from 5% to 10% the continuous appropriation for the Low Carbon Transit Operations Program. Increasing the program from $100 million to $200 million annually.

• Increase from 10% to 20% the continuous appropriation for the Transit & Intercity Rail Capital Program. Increasing the program from $200 million to $400 million annually.

• Continuously appropriate $100 million in auction proceeds to the Active Transportation Program.

• Annually appropriate an amount equal to 1.75% of the diesel fuel sales tax to the State Transit Assistance Program. These funds would backfill the reduction of a similar amount of revenue being used for bond debt service.

• Annually appropriate to the Transportation Debt Service Fund an amount equivalent to the cost of bond debt service for Prop lA- High Speed Rail Bonds.

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• Require the High Speed Rail Authority to set aside over time from the 25% of cap & trade funds that the Authority receives $550 million for a competitive grant program for commuter rail and intercity rail connectivity projects.

Truck Weight Fees: SBX 1 would phase out the use of truck weight fees for bond debt

service. To avoid any impact to the general fund, SBX 1 uses cap & trade revenue for the debt service on High Speed Rail bonds, and a portion of the increase sales tax on diesel fuel

is used for the debt service on Prop 108, 116, and 18 bonds. Truck weight fee will continue

to be used for the balance of debt service demands. However, amendments direct the

Department of Finance, CalSTA, and the CTC to develop a plan that will phase out the use

of weight fees starting no later than the 2021-22 fiscal year.

Environmental Review: SBX 1 amendments make several changes aimed at improving the

environmental review process. The bill would expand an existing CEQA exemption that

currently applies in rural counties to allow any city or county to proceed with maintenance and repair projects within an existing right-of-way without CEQA review. This exemption

for all counties and cities would sunset on January 1, 2025. SBX 1 would also repeal the sunset date on delegating the NEPA process to Caltrans.

The most significant addition to SBX 1 is the creation of the Advanced Transportation Project Mitigation Program. Amendments add a detailed proposal to create this mitigation bank. In general the Act directs the Natural Resources Agency to develop guidelines to

prepare and implement mitigation plans. The language also directs any state, regional or local transportation entity to enter into an MOU to implement a mitigation plan.

Reforms: The amendments will once again make the California Transportation Commission

(CTC) and independent entity. Under the reorganization plan that created CalSTA, the CTC was partially placed under the oversight of CalSTA. In addition, amendments would create

the Office of Transportation Inspector General. This would also be an independent entity

that would have the power to review policies and audit programs that involve transportation funds.

Bike & Ped: The amendments replace onerous provisions that required the inclusion of bicycle and pedestrian components to any STIP or SHOPP project. The changes would

elevate the importance of bicycles and pedestrian projects within Caltrans:

• Requires Caltrans to amend the Highway Design Manual by January 1, 2017 to incorporate complete streets design concepts.

• Creates within Caltrans the Division of Active Transportation.

• Appropriates $100 million in cap & trade revenue annually to the Active Transportation Program

• SBX 1 continues to include as an eligible expense bicycle and pedestrian component included in a local street and road maintenance or safety project.

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California Transportation Funding Proposals

AB 1591 (Frazier) Governor's Proposal SBX 1 (Beall} As Introduced 1/6/16 As Amended on 4/21/16

Truck Weight Returns weight fees that are No Proposal Amendments create a structure to phase out the use of weight fees for bond debt service. Fees being diverted to the

general fund to pay for bond Keep using weight fees for • The bill now directs Finance, CalSTA, and the CTC to develop a plan, which may debt to the SHA. debt service. include statutory changes, so that 100% of weight fees are returned to the State ($1 billion) Highway Account starting no later than the 2021-22 fiscal year.

• To phase out the use of weight fees for debt service the bill would use cap & trade auction revenue to pay the debt service on Prop lA, high speed rail bonds. In addition, the bill would dedicate 1.75% of the sales tax on diesel fuel to paying the debt service on Prop 116, Prop 108, and Prop 1B bonds. SBX 1 would increase the sales tax on diesel fuel by 5.25% as described under Fuel Excise & Sales Taxes.

Loan Repayment Repay over two years $879 Repay $879 million over the This bill would require the Department of Finance to compute the amount of outstanding million in outstanding loans next four fiscal years. loans made to the general funds from various transportation accounts. The loans sha ll be made from various repaid by June 30, 2016, and the payments wi ll be made to the accounts from which the

transportation accounts to loans were made. The bill appropriates this payment from revenue in the Budget the general fund. This Stabilization Account (Rainy Day Fund) ($879 million) revenue would be allocated to cities and counties for road improvement projects.

Fuel Excise & 22.S cent increase to the Replaces the price based • 12 cent increase on gasoline. ($2 billion). The BOE's annual adjustment of the

Sales Tax gasoline excise tax ($3.3 excise tax on gasoline with a price based excise tax is repealed. The excise tax would be adjusted every three billion). The BOE' s annual fixed 18 cents ($500 years for inflation as well as adjusted every three years to adjust the rate to take adjustment of the price million). This is the historical into account improvements in fuel economy. based excise tax is repealed. average for the gasoline This new base rate wou ld be excise tax rate. Repeals the • 22 cent increase on diesel fuel. ($600 million) The BOE's annual adjustment of adjusted for inflat ion. current annual BOE the price based tax is repealed. Diesel excise tax would be adjusted for inflation

adjustments, and replaces it every three years, as well as adjust to take into account improvements in fuel 30 cent increase to the with an annual inflation economy. diesel fuel excise tax ($840 adjustment. million), and indexing the • Replaces the existing 1.87% diesel fuel sales tax add-on enacted as part of the base 13 cent rate and this 11 cent increase to the swap to shore up transit operating funds with a 5.25% sales tax add-on. This new addition for inflation. diesel excise tax ($500 would increase total diesel fuel sales tax from 9.25% to 12. 75%, and generate an

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California Transportation Funding Proposals

This revenue wou ld be million) starting in 2017-18. additional $300 million annually. While the total dollar value of t his increase dedicated the Trade The entire diesel excise tax would be deposited into the State Transit Assistance account, 1.75% of this Corridor Investment Fund. would also be adjusted increase would be deposited into the Transportation Debt Service Account . The

annually remaining 3.5% wou ld be deposited into the STA account, along with cap & trade for inflation. auction revenues in an amount equivalent to the 1. 75%,

Vehicle $38 vehicle regist ration fees $65 fee on all vehicles, • $35 per vehicle registrat ion fee. ($1 billion) This fee would be adjusted annually Registration Fees increase {$1.24 billion). including zero emission and for inflation.

These funds would be alternatively fueled vehicles • $35 per vehicle road access charge {$1 billion) Th is fee wou ld be adjusted deposited in the Road ($2 billion) annually for inflation. Maintenance and • $100 fee on zero emission and alternatively fueled vehicles. ($25 million) Rehabilitation Account.

$165 annual surcharge of on

all zero emission vehicles and alternatively fueled vehicles. {$16 million)

Cap & Trade Increase the share of cap & $500 million in add itional SBX 1 has been amended to use cap & t rade funds as fo llows:

Revenue trade auct ion revenue Cap and Trade proceeds appropriated to the Transit dedicated to transit capital • Increase from 5% to 10% the continuous appropriation for the Low Carbon & Intercity Rail Program projects and complete Transit Operations Program. Increasing the program from $100 million to $200 from 10% to 20%. This streets projects. million annually. {+$100 million) would increase this Program from $200 million to $400 $400 million appropriated • Increase from 10% to 20% the continuous appropriation for the Transit & million annually. annually to the Transit Intercity Rail Capital Program. Increasing the program from $200 million to $400

Capital & Intercity Rail million annually. {+$200 million) Annually appropriate 20% of Program, and $100 million

cap & trade auction cities and counties for • Cont inuously appropriate $100 million in auct ion proceeds to the Active revenue, about $400 million complete streets. Transportation Program. ($100 million) per year, to the Trade Corridor Investment Fund. • Annua lly appropriate an amount equal to 1.75% of the diesel fuel sales tax to the This new program would State Transit Assistance Program. These funds would backfill the reduct ion of a use cap & trade revenue to similar amount of revenue being used for bond debt service. (approximately improve the state's freight $125 million) corridors.

• Annually appropriate to the Transportat ion Debt Service Fund an amount

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California Transportation Funding Proposals

equivalent to the cost of bond debt service for Prop lA- High Speed Rail Bonds.

• Require the High Speed Rail Authority to set aside over time $550 million of the revenue it expects to receive in cap & trade auction proceeds for a competitive grant program for commuter rail and intercity rail connectivity projects.

General Fund No Proposal No Proposal No Proposal

Trade Corridor This proposal dedicates Allocates $200 million for Dedicates 12 cents of the diesel fuel excise tax increase, approximately $300 million Investments $400 million in cap & trade trade corridor projects. annually, to trade corridor projects.

revenue and $840 million in

diesel excise tax revenue to trade corridor projects.

Policy & 5% of revenue to a State & $250 million annually a • Creates the Division of Active Transportat ion w ithin Caltrans Miscellaneous Local Partnership Program State & Local Partnership

Provisions that is open only to those Program to provide • Requires Caltrans to update by January 1, 2017 the Highway Design Manual to counties that previously did matching grants for locally incorporate the complete streets design concept. not have a local sales tax imposed transportation tax program. revenue. • Creates the Office of Transportation Inspector General, which would be an

independent entity charged with overseeing Caltrans, the High Speed Rail Requires Caltrans to submit Requires Caltrans Authority and any other state agency expending transportation funds. a supplemental allocation efficiencies to produce $100 request to the CTC for any million. • Re-establishes the CTC as an independent entity outside the oversight of CalSTA. cost increases on projects listed in the SHOPP. • Increases the CTC's oversight and approval of the SHOPP prepared by Caltrans .

The CTC would be authorized to adopt and/or reject individual projects included in the SHOPP.

• Caltrans is required to provide the CTC a plan to improve efficiencies by 30% over the next three years.

• Caltrans is required to provide the CTC a five year plan to increase income through property leases, sales, or joint use of highway properties by business activities.

• Includes a " true-up" provision whereby funds transferred to the Transportation

Bond Debt Account but not used due to reduced costs associated with refunding bonds. These savings would be appropriated to the CTC for allocation to high

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California Transportation Funding Proposals

priority state or local rehabilitation projects.

• Existing CEOA exemption for rural counties is expanded to include all counties and state highways.

• Enacts the Advanced Transportation Project Mitigation Program Act.

• The increased revenue resulting from the higher excise tax revenue resulting from sales for boating, agriculture, and off-road vehicle use would not be deposited into special accounts, but would be divided as follows: 44% STIP, 12%

SHOPP, and 40% local street & roads.

• Halts the transfer of all Non-Article 19 revenue to the Transportation Debt Service Fund.

• Deletes the sunset date on the authority for Caltrans to oversee the NEPA process.

• Continues to set aside 5% of revenue to a State & Local Partnership Program that is open only to those counties that previously did not have a local sales tax program.

• Caltrans and any local agency receiving any funds shall adopt and implement a preapprenticeship employment and training program.

Sunset Date Not specified Assumes 10 year life None

Total Added $7 .859 billion $4.38 billion (includes $6.5 billion

Revenue one-time repayment of loans)

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SR 16-119 Attachment 3

May 6, 2016

Table 1: Board Action Positions

Bills Subject Status Client - Position

IAB 516 This bill was placed on the Inactive File in order to SENATE INACTIVE FILE !SUPPORT {Mullin D} provide additional time to address concerns expressed >- Two-Year Bill ~ehicles: by the CHP on whether the temporary plates are temporary license readable by photo scanners, as well as work with the plates Administration on the authority for car dealers to

impose a fee to issue these temporary plates.

IAB 516 would require the DMV to develop a system that issues a temporary license plate that would be installed when a vehicle is sold . The purpose of the bill is to improve the ability to identify vehicles and eliminate any reason for a vehicle to be driven without a plate.

A8857 IAB 857 was recently gutted and amended to now SENATE Pub Safety Oppose - Prior Version {Cooper D) deals with a firearms issue now authored by Firearms: !Assemblyman Copper. This bill will be removed from Identifying future charts. Information

AB 1591 !AB 1591 which would generate nearly $8 billion IASSEMBL Y TRANS !Support & Seek {Frazier D) annually for transportation investments. This !Amendment !Transportation proposal shares many elements with Senator Beall's funding. proposal, and the other funding proposals released

last year.

The recommended position is to support AB 1591 and seek amendments that would split the allocation of cap & trade funds equally between the low Carbon h"ransit Program (LCTOP) and the Transit & Intercity Rail Capital Program (TIRCP). The bill currently calls for increasing the share of cap & trade funds for the LCTIP from 10% to 20%. The amendment would increase the share of funds to LCTOP from 5% to 10%, and increase the share to TIRCP from 10% to 15%.

h"he bill includes the following funding elements:

• $3.3 billion annually by increasing the gasoline excise by 22.5 cents. This new base rate would be adjusted for inflation. 5% of these funds would be set aside for a State and local Partnership Program for counties currently

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without a local transportation sales tax program. The remaining would be placed in the Road Maintenance and Rehabilitation Account, where the funds would be split equally with 50% allocated to state highway maintenance projects and 50% allocated to cities and counties for street and road maintenance projects.

• $840 million annually by increasing the diesel fuel excise tax by 30 cents, and indexing it for inflation. This revenue would be dedicated the Trade Corridor Investment Fund.

• $1.24 billion by increasing vehicles registration fees by $38. These funds would be deposited in the Road Maintenance and Rehabilitation Account.

• $16 million by imposing an annual surcharge of $165 on all zero emission vehicles. These funds would be deposited in the Road Maintenance and Rehabilitation Account.

• Return nearly $1 billion in truck weight fees annually to the State Highway Account. This halts the use of truck weight fees for transportation bond debt payments.

• Repay over two years $879 million in outstanding loans made from various transportation accounts to the general fund. This one time revenue would be allocated to cities and counties for road improvement projects.

• Increase the share of cap & trade auction revenue appropriated to the Transit & Intercity Rail Program from 10% to 20%. This would increase this Program from $200 million annually to $400 million annually.

• Annually appropriate 20% of cap & trade auction revenue, about $400 million per year, to the Trade Corridor Investment Fund. This new program would use cap & trade revenue to improve the state's freight corridors.

AB 1746 AB 1746 was unanimously approved by the SENATE RULES 6 Support (Stone, Mark D) Assembly on a vote of 76-0. Transit buses

AB 1746 adds AC Transit, the Central Contra Costa

Transit Authority, the Livermore Amador Valley

Transit Authority, the North County Transit

District, the San Diego Association of

Governments, the San Diego Metropolitan Transit

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System, and the Santa Clara Valley Transportation

Authority to an existing program that allows

buses to operate on the shoulder of a state

highway upon approval of Caltrans and the CHP.

rrhis was initially a pilot program that authorized

Monterey-Salinas Transit District and the Santa

Cruz Metropolitan Transit District to utilize

shoulders along heavily congested highways.

AB 2090 ~B 2090 would amend the Low Carbon Transit ~SSEMBLY APPR- ~UPPORT

{Alejo D) Operations Program (LCTOP) to allow a transit Suspense File Low Carbon Transit operator to expend its share of LCTOP funds to Operations operate existing transit service if the governing Program.

board of the transit operator declares a fiscal

emergency and makes specified findings.

An operator could not ask for this use of LCTOP

funds for more than 3 consecutive years, and the

operator must declare a fiscal emergency for

each year LCTOP funds will be used for existing

operations.

AB 2094 In short, AB 2094 would swap existing transit revenue ASSEMBLY TRANS Oppose (Obernolte R) with cap & trade auction revenue, and then dedicate Transportation: the transit revenue to roadway repairs . DEAD-Failed Deadline Greenhouse Gas Reduction Fund: As amended, AB 2094 would continuously appropriate state and local $1 billion of cap & trade auction revenue to the local transportation transportation fund within the Retail Sales Tax Fund. funds The local transportation fund is the X cent sa les tax

revenue that is dedicated primarily to fund public transit service, which was enacted as part Transit Development Act. In addition, AB 2094 would then transfer $1 billion from the local transportation and split these funds equa lly between state highway projects and local streets and roads.

AB 2415 AB 2415 is the reintroduction of AB 857 from last year ll\SSEMBLY APPR Oppose (Edwardo Garcia that the AC Transit Board opposed. D) Clean Truck, Bus rThe legislature passed and the Governor signed SB and Off-Road 1204, which placed in statute the California Clean ~ehicle and rrruck, Bus, and Off-Road Vehicle and Equipment Equipment rrechnology Program. This program essentially rrechnology codifies CARB's existing programs aimed at funding Program projects that lead to the commercialization of zero

emission trucks and buses. SB 1204 also directs until Uanuary 1, 2018, 20% of the fund s annually to truck projects.

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lAB 2415 would increase the amount of funds dedicated to truck projects. From January 2, 2018 to Uanuary 1, 2023. The bill would require CARB to direct at least 50% of cap &trade revenue dedicated to this program toward low emission natural gas trucks.

AB 857 would significantly increase the truck set-aside, which would limit CARB's ability to fund zero emission bus projects.

~ ACA 4 would amend the Constitution to lower ASSEMBLY APPR - SUPPORT (Frazier D) approval threshold to impose a special sales tax that Suspense File Local government provides funding for local transportation project to transportation 55%. Local transportation projects are defined to projects: special include the funding needs for local streets and roads, taxes: voter state highways and freeways, and public transit approval. systems. ACA 4 does not lower the voter threshold

for parcel taxes.

IABXl 7 ~BX 7 would increase the share of cap & trade funds ASSEMBLY PRINT 5UPPORT (Nazarian D) dedicated to transit. The bill would increase the Public transit: amount allocated to the Low Carbon Transit funding. Operations Program from 5% to 10%, and increase the

amount allocated to the Transit & Intercity Rail Capital Program from 10% to 20%.

ABXl 8 Starting on July 1, 2016, ABX 8 would impose a sales ASSEMBLY PRINT 5UPPORT (Chiu D) tax on diesel fuel sales of 5.25%. This revenue would Diesel sales and be deposited into the Public Transportation Account use tax. and allocated to operators through the State Transit

Assistance formula .

The bill would also sunset the existing 1.75% gas tax swap add-on sales tax imposed on diesel fuel sales on July 1, 2016. Thus replacing the existing 1.75% rate with the 5.25% rate .

SB 824 SB 824 was unanimously approved by the Senate SENATE APPR Support (Beall D} Committee on Transportation & Housing. Low Carbon Transit Operations lAs recently amended, SB 824 would amend the Program

Low Carbon Transit Operations Program (LCTOP}

~o essentially allow an operator to bank or loan

its share of these funds. Specifically, SB 824 would allow a recipient to do the following:

• Use these funds for new or expanded

service in the first year of operation and in

any subsequent year if the operator can

demonstrate G HG reductions.

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• Accumulate and utilize its funding share at

a later date, but the operator must specify

how long it intends to save the money and

how it intends to spend the accumulated

funds.

• Loan or transfer its funding share to

another operator.

• Pool its funding share with other

operators for an identified project .

• Reassign any savings allocated to an

operator for one project to another

eligible project.

SB 824 would also expand the audits conducted under

the Transportation Development Act to include

!verification of recipient of LCTOP funds and the

appropriate expenditure of the LCTOP funds. In

addition, SB 824 would allow an operator to apply to

Caltrans for a "letter of no prejudice" that would allow

an operator to proceed with an eligible project using its own funds and then use LCTOP funds to reimburse

the operator.

SB998 SB 998 clarifies existing law to prohibit a person from Senate Floor !Support (Wieckowski D) driving, parking, stopping, or leaving a vehicle on a

!Vehicles: mass public mass transit guideway, such as a dedicated BRT Co-Sponsor with Santa transit guideways lane. This clarification is needed because existing law Clara VTA

does not specifically prohibit a vehicle from stopping in a dedicated bus only lane.

SB 1051 SB 1051 was unanimously approved by the Senate Senate Floor 5ponsor (Hancock D) Committee on Transportation and the Senate Parking Committee on Judiciary.

enforcement;

video image SB 1051 was introduced by Senator Loni Hancock on

evidence behalf of AC Transit. As amended in the Senate

Uudiciary Committee, SB 1051 authorize AC Transit to

enact pilot program testing the use of forward facing

rvideo cameras on its buses to issue citations for any

rvehicle stopped or parked in a bus only lane or at a

bus stop. This pilot program authority would sunset in

5 years and a report would be due at the end of the 4 th year.

SB 1128 SB 1128 was unanimously approved by the ASSEMBLY DESK Support (Glazer D) Senate. This bill would delete the sunset date on Commute benefit MTC's and the Bay Area Air Quality District's policies. authority to adopt a commute benefit ordinance.

!This authority is scheduled to sunset on January

1, 2017.

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Current law authorizes MTC and the Air District to

uointly adopt a commute benefit ordinance that

requires covered employers operating within the

Bay Area with a specified number of covered

employees to offer those employees certain

commute benefits through a pilot program .

>BXl 1 This bill remains in the Senate Committee on SENATE APPR SUPPORT & SEEK (Beall D) Appropriations. SBXl 1 is the Senate Democrats' ~MENDMENTS [Transportation transportation funding proposal that would generate funding. up to $6.S billion annually in new revenue. The funds

would primarily be used to fund state highway and local and street and road maintenance needs.

The bill was recently amended to double the share of cap & trade funds dedicated to transit. The amendments also add several policy provisions on CEQA, Transportation Inspector General, and creation of a mitigation bank.

SBXl 2 SBX 2 is part of the Senate Republican Caucuses SENATE T. & I.D. - OPPOSE (Huff R) proposal to direct cap & trade auction revenue to Failed Passage Greenhouse Gas transportation projects. It is estimated that this Reduction Fund. would direct $1.9 billion to transportation projects.

SBX 2 would direct all auction proceeds that are derived from including transportation fuels in the cap & trade program shall be appropriated by the Legislature for transportation infrastructure, including public streets and highways, but not high speed rail.

SBXl 7 Identical to ABX 8, SBX 7 would replace the existing SENATE APPR SUPPORT (Allen D) 1.75% diesel fuel sales tax that was imposed as part of Diesel sales and the gas tax swap with a 5.25% sales tax rate. use tax.

Starting on July 1, 2016, SBX 7 would impose a sales tax on diesel fuel sa les of 5.25%, and sunset the existing 1.75% sa les tax rate imposed on diesel fuel sales. This revenue would be deposited into the Public Transportation Account and allocated to operators through the State Transit Assistance formula

SBXl 8 SBX 8 is identical to ABX 7. SENATE APPR SUPPORT (Hill D) Public transit: SBX 8 would the amount allocated to the Low Carbon funding. [Transit Operations Program from 5% to 10%, and

increase the amount allocated to the Transit & Intercity Rail Capital Program from 10% to 20%.

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Table 2: Board Watch Positions

Bills Subject Status Client - Position

AB 1595 AB 1595 was unanimously approved by the Assembly APPR Watch (Campos D) Assembly Committee on Labor. This bill would Employment: require a public or private employer that provides human trafficking mass transportation services to train its training: mass

employees to recognize the signs of human transportation

trafficking and how to report those signs to law employers.

enforcement. The bill requires the Department o

Justice to develop the guidelines for the training

program. By January 1, 2018, this training

program shall be incorporated into the training

process for all new employees, and all existing

employees must complete the training by January

1, 2018.

AB 1641 ~B 1641 and ABX 25 are identical bills that are similar ~SSEMBLY TRANS. - !Watch (Allen, Travis R) to AB 61, which the Board adopted a watch position March 14, 2016 Shuttle services: on last year. loading and unloading of ~B 1641 and ABX 25 would allow a local government passengers. to permit private shuttle bus provider to use public

transit stops if an agreement is reached between the ABXl 25 public transit operator and the private shuttle (Allen, Travis R) operator. Shuttle services: loading and unloading of passengers.

AB 2222 AB 2222 would create a new program that would lA.SSEMBLY APPR - Watch (Holden D) continuously appropriate $50 million annually Suspense File Transit passes. from the Greenhouse Gas Reduction Fund for a

Transit Pass Program.

The bill directs Caltrans to work with the Air

Board on developing guidelines for this program.

The funds would be allocated pursuant to the STA

formula, but it would provide that each operator

would receive at least $20,000.

ABXl 24 ~BXl 24 would re-designate MTC the Bay Area ASSEMBLY PRINT WATCH (Levine D) rrransportation Commission, whose board would be Bay Area comprised of directly elected representatives. The bill Transportation would establish the election of commissioners with Commission: districts consisting of 750,000 residents. However, election of districts that include a toll bridge within the district

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commissioners. boundaries shall elect two commissioners from that district. The bill would also merge BATA into the new

Bay Area Transportation Commission.

SB 254 SB 254 was gutted and amended to deal with a ASSEMBLY FLOOR Watch - Prior Version (Allen D) campaign finance reform issue. This bill will be

campaign finance: removed from future charts.

voter instruction

Previously, SB 254 would allow the CTC to relinquish

any portion of the state highway once Caltrans has

entered into an agreement with the recipient of the

highway segment and has placed the highway in a

"state of good repair."

SBX16 SBX 6 makes two significant changes. First, it would SENATE T. & I.D. !WATCH (Runner R) delete the continuous appropriation of 25% of cap & Greenhouse Gas trade funds to the High Speed Rail Authority. Failed Passage

Reduction Fund:

transportation Second, after the allocations are made to the Low

expenditures. Carbon Transit Operations Program, Transit & Intercity Rail Program, and the Affordable Housing & Sustainable Communities Program, the remaining 65%

would be continuously appropriated to the CTC. The CTC would allocate the funds to high-priority

transportation projects with 40% to state highway

projects, 40% to local street and road projects, and

20% to transit.

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SR 16-119 Attachment 4

2016 Federal Advocacy Program

Funding

• FY 2016 Grant Opportunities- Secure federal funds for key capital projects and support funding for 2016 Project Priorities for:

o Within the Small Starts Program and other programs o AC Transit's Intelligent Transportation and Communication System upgrades o Bus lifting equipment program o Rehabilitation of aging facilities o Zero Emission Bus Programs

• Advocate for supplemental funding through the Federal Transit Administration to offset rising operating costs without jeopardizing total funding available for capital projects.

• Support funding for the Transbay Terminal.

• Support/seek additional funding for essential services including, but not limited to services for access to work, school or medical facilities.

• Support efforts to rescind the planned across-the-board cuts to all federal programs, called "Sequestration," as enacted under the Budget Control Act of 2011.

• Support federal funds for the purchase of zero emission buses.

• Support funding initiatives that maintain the fiscal integrity of the District and that all unfunded federal mandates are funded , including Safety Management Systems (SMS).

• Support funding initiatives that enable the District to maintain buses and bus facilities in a state of good repair.

Transportation Authorization Principles

• Support efforts to increase the gas tax or to increase other revenues to replenish and sustain long-term growth of the Highway Trust Fund/Mass Transit Account.

• Support transportation authorization reform that emphasizes greater funding levels to urban mass transit systems, and oppose efforts to reduce spending on transit formula programs, and support stronger performance criteria.

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• Support FTA and Congressional efforts to make State of Good Repair for transit bus systems a strategic priority and include more funding.

• Support increased funding for Small Starts programs and broad funding eligibility in federal transit programs, including Small Starts programs.

• Seek revisions to the Metropolitan Planning Organization (MPO) grandfather clause that supports the direct representation of transit properties on MPOs.

• Support legislation through the federal highway and transportation authorization for safety requirements based on agency size and transportation mode.

Other Advocacy

• Advocate for transit-supportive legislation that mitigates climate change and/or calls for environmental stewardship and related funding.

• Support funding and coordination between Health and Human Service (HHS) agencies and other transportation agencies to provide services to HHS clients.

• Support modal parity in the commute tax benefits.

• Support legislation that relieves the fiscal burden of mandatory regulations.

• Support legislation that encourages Single Payer health insurance.

• Advocate for American with Disabilities Act improvements

• Monitor actions regarding the pension reform law (PEPRA).

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SR 16-119 Attachment 5

2016 State Advocacy Program

Funding

• Support efforts to implement future transportation authorizations that at least maintain funding level for mass transit projects and programs for bus operators in the Bay Area.

• Support the development and implementation of an expenditure plan for AB 32 cap and trade revenue that provides an equitable investment in mass transit capital improvements, operations, and infill/transit oriented development (TOD).

• Actively participate in the California Air Resources Board's (GARB) Advanced Clean Transit regulatory process.

• Support efforts that create new sources of operating funds with equitable distribution to reflect urban transit needs.

• Support efforts to sustain existing transit revenues, including the State Transit Assistance (STA) program to offset the decrease in diesel fuel consumption.

• Support efforts that would exempt public transit providers from state sales tax.

• Support local ability to increase fees and gas taxes to be used for local mass transit purposes.

• Support legislation and programs that would provide funding to offset the costs of climate change initiatives, clean air and clean fuels and implementation of AC Transit's Climate Action Plan.

• Support congestion pricing strategies and legislation that provide an equitable multi­modal distribution of generated revenues.

• Support legislative or administrative action to remove State barriers so that Medicaid transportation funds can be used for public transit services, including ADA paratransit services.

• Support funding and coordination between Health and Human Service (HHS) agencies and other transportation agencies to provide services to HHS clients.

• Support efforts to provide funding for essential services including, but not limited to, services for access to work, school or medical facilities.

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• Support funding initiatives that maintain the fiscal integrity of the District and that all mandates that require funding are sufficiently funded by mandating agency.

Equipment and Operations

• Support legislation or administrative action that would direct Caltrans to establish and maintain HOV and HOT lanes on state highway routes and to improve existing lane management to maximize throughput.

• Support incentives to provide bus contra flow lanes on the San Francisco-Oakland Bay Bridge to/from the Transbay Terminal.

• Support legislation to exempt public transit vehicles from state and local truck route ordinances.

• Support legislation or administrative action that would direct Caltrans to permit permanent use of freeway shoulders by public transit buses.

Transit Incentives

• Support legislation to provide incentives for employees and employers to use public transportation to commute to work, including tax credits for purchasing transit passes.

• Support Clean Air Initiatives that encourage increased public transit use.

• Support incentives that would give auto insurance credits to heavy transit users.

• Support legislation to provide incentives for local governments and developers to incorporate transit passes into the cost of housing.

Environment and Transit Supportive Land Use

• Advocate for transit-supportive legislation that addresses climate change, healthy communities and environments.

• Foster transit supportive land use initiatives that require coordination with transit providers in the initial stages of local planning or project development that impacts transit, including density level decisions or T0Ds; and advocate for the required use of:

o Transit streets agreements, and o Complete streets plans in which local transportation plans anticipate use of all

modes.

• Support improvement to the California Environmental Protection Agency's (Cal/EPA) screening process to better reflect the disadvantage communities of the East Bay.

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Policy Interests

• Support simple majority vote for local transportation ballot tax initiatives.

• Support legislation to allow District to ban persons for specified offenses from entering district property, including buses.

• Seek revisions to the Metropolitan Planning Organization (MPO) grandfather clause that supports the direct representation of transit properties on MPOs.

• Support legislation for STA formula reform that includes federal operating funding as eligible revenue.

• Support efforts that maintain existing Workers' Compensation regulation.

• Consider efforts to reform tort general damages.

• Monitor actions regarding the pension reform law (PEPRA).

• Support legislation that requires jurisdictions to install Transit Signal Priority equipment in order to receive money for traffic signal upgrades.

• Support efforts to authorize AC Transit to enforce parking and moving violations in bus­only lanes and bus stops through forward-facing cameras and contracted county law enforcement departments.

• Seek to clarify treatment of independent transit agency retirement systems.

• Support legislation that reduces liability for common carriers.

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