SB63 - San Francisco Bay area: local revenue measure: public transit funding.

Senate Bill No. 63 CHAPTER 740 An act to add Title 7.85 (commencing with Section 67700) to, and to add and repeal Section 66513.5 of, the Government Code, and to amend Section 131102 of the Public Utilities Code, relating to transportation. [ Approved by Governor October 13, 2025. Filed with Secretary of State October 13, 2025. ] LEGISLATIVE COUNSEL'S DIGEST SB 63, Wiener. San Francisco Bay area: local revenue measure: public transit funding. (1) Existing law creates the Metropolitan Transportation Commission as a local area planning agency for the 9-county San Francisco Bay area with comprehensive regional transportation planning and other related responsibilities. Existing law creates various transit districts located in the San Francisco Bay area, with specified powers and duties relating to providing public transit services. This bill would establish the Public Transit Revenue Measure District with jurisdiction extending throughout the boundaries of the Counties of Alameda, Contra Costa, San Mateo, and Santa Clara and the City and County of San Francisco and would require the district to be governed by the same board that governs the commission, thereby imposing a state-mandated local program. The bill would authorize a retail transactions and use tax applicable to the entire district to be imposed by the board of the district or by a qualified voter initiative for a duration of 14 years, and in an amount of 0.5% in each of the above-described counties located within the district and 1% in the City and County of San Francisco, subject to voter approval at the November 3, 2026, statewide general election. After payments are made for various administrative expenses, the bill would require the district to transfer specified portions of the proceeds of the tax to the commission for allocation to certain programs and other purposes and for allocation to the Alameda-Contra Costa Transit District, the Peninsula Corridor Joint Powers Board, commonly known as Caltrain, the San Francisco Bay Area Rapid Transit District, the San Francisco Municipal Transportation Agency, and other specified transit agencies, for transit operations expenses, and would require the district to transfer specified portions of the proceeds of the tax directly to other specified local transportation agencies, including the San Mateo County Transit District and the Santa Clara Valley Transportation Authority, for public transit expenses, as prescribed. By adding to the duties of local officials with respect to elections procedures for this bill on behalf of the district, the bill would impose a state-mandated local program. (2) Existing law requires the commission to develop regional transit service objectives, develop performance measures of efficiency and effectiveness, specify uniform data requirements to assess public transit service benefits and costs, and formulate procedures for establishing regional transportation priorities in the allocation of funds for transportation purposes. This bill would require the commission to contract with, and manage, a third-party consultant to conduct a financial efficiency review of the Alameda-Contra Costa Transit District, Caltrain, the San Francisco Bay Area Rapid Transit District, and the San Francisco Municipal Transportation Agency, as specified. The bill would require the review to be completed in 2 phases, with the analysis for the 2nd phase only required if the tax measure is approved by the voters of the Public Transit Revenue Measure District. The bill would require the consultant to transmit the analysis for each phase to an oversight committee, which the bill would create with a prescribed membership, for review and adoption. The bill would require a transit operator subject to the financial efficiency review to take specified actions in response to the analysis for the first phase and, subject to review of the oversight committee, to adopt an implementation plan that describes the cost-saving measures identified in the analysis for the 2nd phase that the operator plans to implement, as specified. The bill would require a transit operator subject to the financial efficiency review to verify its compliance with the requirements of the review as a condition of receiving funds from the tax measure approved by the voters of the district. The bill would require each transit operator to which the commission allocates funds to comply with a maintenance of effort requirement as a condition of receiving those funds, as provided. This bill would require the commission, if the tax measure is approved by the voters of the district and other conditions are satisfied, to establish an ad hoc adjudication committee for a transit operator subject to the above-described financial efficiency review to assess and adjudicate petitions submitted by a participating county transportation entity, as defined, or a county board of supervisors with regard to the performance of the transit operator within the geographic jurisdiction of the entity submitting the petition, as provided. As part of this process, the bill would require an ad hoc adjudication committee, among other things, to determine whether to direct the commission to withhold funding from the tax measure allocated to the transit operator if the committee agrees with a claim regarding the performance of the transit operator, as specified. This bill would require the commission to submit a report to the Legislature on or before March 31, 2026, on its forecast of the impacts to ridership on the Alameda-Contra Costa Transit District, Caltrain, the San Francisco Bay Area Rapid Transit District, and the San Francisco Municipal Transportation Agency from planned transportation projects and strategies included in its adopted regional transportation plan. By adding to the duties of the commission, the bill would impose a state-mandated local program. (3) The Bay Area County Traffic and Transportation Funding Act authorizes the formation of county transportation authorities in each of the 9 bay area counties, and provides for the imposition of a retail transaction and use tax in each of those counties of either 1 / 2 of 1% or 1%, subject to voter approval, with revenues to be used for various transportation purposes. This bill would instead provide that a retail transaction and use tax imposed under those provisions in the County of San Mateo or the City and County of San Francisco may be imposed in 1 / 8 of 1% increments up to 1%. (4) This bill would declare that its provisions are severable. (5) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill Text The people of the State of California do enact as follows: SECTION 1. This act shall be known, and may be cited, as the Connect Bay Area Act. SEC. 2. The Legislature finds and declares all of the following: (a) The San Francisco Bay area needs a world-class, reliable, affordable, efficient, and connected transportation network that meets the needs of bay area residents, businesses, and visitors while also helping combat the climate crisis. The bay area’s public transit network is a critical component of the overall transportation network. (b) Public transit is of regional and local benefit, serving both regional and local trips for residents of all income levels. (c) Preserving, improving, and expanding public transit to ensure a world-class public transit network will enhance access to opportunity, lower emissions of greenhouse gases, strengthen the region’s economy, support increased housing production, and improve quality of life. (d) To achieve that vision, the San Francisco Bay area needs a public transit network that offers safe, clean, frequent, accessible, easy-to-navigate, and reliable service that gets transit riders where they want and need to go safely, affordably, quickly, and seamlessly. The San Francisco Bay area also needs to prioritize increasing ridership to ensure the region’s transit network is sustainable. (e) Regional funding, increased coordination, financial efficiency, and safety, cleanliness, and reliability reforms are urgently needed to both preserve and improve public transit service. SEC. 3. Section 66513.5 is added to the Government Code, to read: 66513.5. (a) The commission shall submit a report to the Legislature on or before March 31, 2026, on its forecast of the impacts to ridership on the Alameda-Contra Costa Transit District, the Peninsula Corridor Joint Powers Board, the San Francisco Bay Area Rapid Transit District, and the San Francisco Municipal Transportation Agency from planned transportation projects and strategies included in its adopted regional transportation plan, with an emphasis on rail connectivity projects that may increase ridership, reduce operating costs, or help with enhanced mobility. (b) (1) A report to be submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795. (2) Pursuant to Section 10231.5, this section is inoperative on March 31, 2030, and, as of January 1, 2031, is repealed. SEC. 4. Title 7.85 (commencing with Section 67700) is added to the Government Code, to read: TITLE 7.85. San Francisco Bay Area Regional Public Transit Finance PART 1. Formation of the Public Transit Revenue Measure District CHAPTER 1. General Provisions 67700. For purposes of this title, the following definitions apply: (a) “AC Transit” means the Alameda-Contra Costa Transit District. (b) “Alameda County small bus operators” means the Livermore Amador Valley Transit Authority and Union City Transit. (c) “BART” means the San Francisco Bay Area Rapid Transit District. (d) “Board” means the governing board of the Public Transit Revenue Measure District. (e) “Caltrain” means the Peninsula Corridor Joint Powers Board. (f) “Commission” means the Metropolitan Transportation Commission. (g) “Commissioner” means a voting member serving on the commission pursuant to Section 66503. (h) “Contra Costa County small bus operators” means the Central Contra Costa Transit Authority, the Western Contra Costa Transit Authority, and the Eastern Contra Costa Transit Authority. (i) “County” includes city and county. (j) “County elections official” means a county clerk, registrar of voters, or elections supervisor having jurisdiction over elections within the county. (k) “District” means the Public Transit Revenue Measure District. (l) (1) “District elections official” means the official designated by the board to perform the duties required for the purposes of an initiative under Article 1 (commencing with Section 9300) of Chapter 4 of Division 9 of the Elections Code, except as provided in paragraph (2). (2) For purposes of Section 9306, subdivisions (a) and (b) of Section 9308, subdivisions (a), (b), and (c) of Section 9309, and Section 9312, of the Elections Code, “district elections official” refers to the county elections officials charged with the duty of conducting the election for the counties participating in the measure. (3) This subdivision shall become inoperative on December 31, 2026. (m) “Golden Gate Transit” means the Golden Gate Bridge, Highway and Transportation District. (n) “Muni” means the San Francisco Municipal Transportation Agency. (o) “Participating county transportation entity” means any of the following: (1) Alameda County Transportation Commission, also referred to as ACTC. (2) Contra Costa Transportation Authority, also referred to as CCTA. (3) San Francisco County Transportation Authority, also referred to as SFCTA. (4) San Mateo County Transit District, also referred to as SMCTD. (5) Santa Clara Valley Transportation Authority, also referred to as SCVTA. (p) “Public transit expenses” means public transit operations expenses, or expenses for public transit capital improvement projects that maintain or improve public transit service, including expenses for public transit-specific components of a multimodal transportation project. (q) “San Francisco Bay Ferry” means the San Francisco Bay Area Water Emergency Transportation Authority. (r) “Subject operator” means a transit operator subject to the financial efficiency review pursuant to Chapter 4 (commencing with Section 67760) of Part 2. CHAPTER 2. The Public Transit Revenue Measure District and Governing Board 67710. (a) The Public Transit Revenue Measure District is hereby established with jurisdiction extending throughout the territorial boundaries of the Counties of Alameda, Contra Costa, San Mateo, and Santa Clara, and the City and County of San Francisco. (b) The district shall be governed by the same board that governs the commission. The district shall be a separate legal entity from the commission. (c) The formation and jurisdictional boundaries of the district are not subject to the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 (Division 3 (commencing with Section 56000) of Title 5). (d) The district shall be staffed by the existing staff of the commission or any successor agency, with the understanding that additional staff may be needed to administer the requirements of this title. 67712. This title shall apply only to the counties and city and county identified pursuant to Section 67710. PART 2. Transactions and Use Taxes CHAPTER 1. Retail Transactions and Use Tax Authorization 67730. (a) The board may impose a retail transactions and use tax ordinance applicable to the entire district in accordance with Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code if the electors voting on the measure vote to approve its imposition at the election described in Section 67734 in accordance with this title and Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code. (b) The board may impose a retail transactions and use tax pursuant to subdivision (a) that, in combination with all taxes imposed in accordance with Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code, exceeds the limit established in Section 7251.1 of the Revenue and Taxation Code. (c) The board, in the ordinance, shall do all of the following: (1) State the nature of the tax to be imposed. (2) Provide the tax rates as follows: (A) Except as provided in subparagraph (B), the tax rate shall be one-half of 1 percent in each county comprising the district. (B) The tax rate in the City and County of San Francisco shall be 1 percent. (3) Specify the period during which the tax will be imposed, which shall be 14 years beginning on the date the ordinance [Text truncated for display. Full text available on Congress.gov.]