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)

        |COMMITTEE VOTE:  |13-1 |(August 20, 2012)   |RECOMMENDATION: |concur    |
        |                 |     |                    |                |          |

        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) for purposes of 
        determining eligibility for receiving public transportation 
        operating subsidies.   

         The Senate amendments  delete all prior contents of the bill and 
        instead authorize SACOG to determine whether transit operators 
        serving Sacramento County, as a group, have met the eligibility 
        requirements in order to receive public transportation operating 
        subsidies from the Transportation Development Act of 1971 (TDA).  
        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, known as TDA, 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 


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          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 
          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 agency.  
         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 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.  


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        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 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 

        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.  

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


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