BILL ANALYSIS                                                                                                                                                                                                    






           SENATE TRANSPORTATION & HOUSING COMMITTEE       BILL NO: AB 432
          SENATOR MARK DESAULNIER, CHAIRMAN              AUTHOR:  dickinson
                                                         VERSION: 
          6/21/2012
          Analysis by:  Art Bauer                        FISCAL:  no
          Hearing date:  July 3, 2012



          SUBJECT:

          Transportation funding

          DESCRIPTION:

          This bill authorizes the Sacramento Area Council of Governments 
          (SACOG) to create a combined farebox recovery ratio for the 
          Sacramento County transit operators-Sacramento Regional Transit, 
          Folsom transit, Elk Grove transit, and Sacramento County transit 
          services-to be eligible to receive subsidies from the 
          Transportation Development Act (TDA).

          ANALYSIS:

          The Legislature enacted the Transportation Development Act 
          (TDA), Senate Bill 325, Chapter 1400, Statutes of 1971, in order 
          to ensure "the efficient and orderly movement of people and 
          goods in the urban areas of the state."  The TDA authorized the 
          boards of supervisors in each county to impose a  percent local 
          sales tax for transportation purposes.  All counties imposed the 
          tax in 1972, because if they had not, the state, under 
          California's uniform tax law, would not have collected the 1 
          percent local sales tax that supports the general funds of 
          cities and counties. 

          To be eligible to receive TDA funds, a transit operator must 
          meet a specified ratio of fare revenues to operating cost.  The 
          ratio varies.  For operators that were providing transit at the 
          time this provision become law 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, provided it is not below 20 percent.  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 




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          ratio by combining fare revenues with that local support.

           This bill  authorizes SACOG to determine the farebox recovery 
          ratio for all operators in Sacramento County, provided the ratio 
          for Sacramento Regional Transit (RT) is not less than 23 percent 
          and SACOG finds that the services are coordinate. 

          COMMENTS:

           1.Purpose  .  The purpose of this bill is to ensure that the three 
            transit operators- Elk Grove, Folsom, and the County of 
            Sacramento- in the SACOG area will remain eligible to receive 
            TDA funding by creating a regional ratio of fare revenues to 
            operating cost that will include RT. Essentially, RT's revenue 
            base will ensure that the three smaller operators will remain 
            eligible for TDA funding. 
           2.Farebox ratio status of Sacramento County operators  .  
            According to the Controller's report on TDA expenditures for 
            2010, the ratio of fare revenues to operating cost for the 
            Sacramento County transit operators is as follows:  RT 24 
            percent, Folsom 21.9 percent, Elk Grove 16.6 percent, and 
            County of Sacramento 8.9 percent. 
             
             Other than RT, the remaining operators are finding it 
            difficult to meet the farebox recovery minimum requirements.  
            In fact, SACOG, under the terms of TDA, had to penalize Elk 
            Grove by withholding $300,000 from the city's apportionment of 
            funds for failing to meet the requirement. 

            By linking the three smaller operators to RT, SACOG will have 
            to manage their farebox recovery ratio in a way that ensures 
            the suburban operators continue to maintain a fare level that 
            does not require RT to increase fares or alter its service 
            levels to accommodate the smaller operators. Combining farebox 
            recovery ratios are authorized for the BART service area and 
            for the service area of the Metropolitan Transit System in San 
            Diego. 

          Assembly Votes:  

               Previous votes are not relevant.
               
          POSITIONS:  (Communicated to the committee before noon on 
          Wednesday, 
                     June 27, 2012)





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               SUPPORT:  City of Folsom
                         County of Sacramento

               OPPOSED:  None received.