BILL ANALYSIS                                                                                                                                                                                                    


          |SENATE RULES COMMITTEE            |                   AB 432|
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                                 THIRD READING

          Bill No:  AB 432
          Author:   Dickinson (D), et al.
          Amended:  6/21/12 in Senate
          Vote:     21

          AYES:  DeSaulnier, Gaines, Kehoe, Lowenthal, Pavley, Rubio, 
            Simitian, Wyland
          NO VOTE RECORDED:  Harman

           ASSEMBLY FLOOR  :  Not relevant

           SUBJECT  :    Transit:  Sacramento County

           SOURCE  :     Sacramento Area Council of Governments

           DIGEST  :    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.

           ANALYSIS  :    The Legislature enacted the Transportation 
          Development Act (TDA), SB 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 


                                                                AB 432

          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% 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%.  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.

          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% and SACOG finds that the services are 


          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. 

           Farebox ratio status of Sacramento County operators  .  
          According to the State 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%
           Folsom - 21.9%



                                                                AB 432

           Elk Grove - 16.6%
           County of Sacramento - 8.9%

          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 

          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. 

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No   
          Local:  No

           SUPPORT  :   (Verified  7/6/12)

          Sacramento Area Council of Governments (source)

          CTW:m  7/6/12   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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