BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 432
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          AB 432 (Dickinson)
          As Amended  June 21, 2012
          Majority vote
          |ASSEMBLY:  |     |(May 31, 2011)  |SENATE: |38-0 |(August 6,     |
          |           |     |                |        |     |2012)          |
                     (vote not relevant)

          Original Committee Reference:   TRANS  .

           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) to be 
          eligible to receive public transportation operating subsidies 
          from the Transportation Development Act of 1971 (TDA).  

           The Senate amendments  delete the contents of the bill as passed 
          by the Assembly and instead authorize SACOG to determine whether 
          transit operators serving Sacramento County, as a group, have 
          met the requirements for claims for transit funds.  The bill 
          would require 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 

          EXISTING LAW  :  

          1)Provides funding for transit and non-transit related purposes 
            that comply with regional transportation plans.  TPA 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.  

          3)Authorizes separately the San Francisco Bay Area Metropolitan 


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            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 serving a specified area have 
            met the requirements for claims for transit funds by 
            evaluating the operators as a group rather than individually.  

           AS PASSED BY THE ASSEMBLY  , this bill required that a peace 
          officer or law enforcement agency issue the notice to appear for 
          an automated enforcement citation and that the notice be 
          accompanied by a certificate of mail obtained through the United 
          States Postal Service, completed by the local law enforcement 
           FISCAL EFFECT  :  Unknown.  This bill is keyed non-fiscal by the 
          Legislative Counsel.

           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 

          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 establishes a formula for 
          transit operators to measure how much of their funding comes 
          from ticket and passes.  This "farebox requirement" is often 


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          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 further 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 contends that these operators are 
          finding it difficult to meet 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 

          The bill was substantially amended in the Senate and the 
          contents of the bill have not been heard in the Assembly.  



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          Analysis Prepared by  :   Ed Imai / TRANS. / (916) 319- 2093 FN: