House Bill 2017 Public Transportation: State Transportation Improvement Funding Summary

House Bill 2017 Public Transportation (Section 122)
State Transportation Improvement Funding Summary

On July 6, the Oregon State Legislature passed HB 2017, which makes significant multi-modal transportation investments in Oregon. The bill is now awaiting Governor Brown’s signature. The following is a brief summary of public transportation improvements found in Section 122 of the bill, as well as a high level summary of next steps and a preliminary schedule.

Statewide Transportation Improvement Fund Revenues

Section 122 provides statewide funding for public transportation service with moneys coming from a new payroll tax of one-tenth of one percent on wages paid to employees. Proceeds from the payroll tax will be deposited into the Statewide Transportation Improvement Fund, or STIF. The Department of Revenue will begin collecting revenues on or after July 1, 2018. The Oregon Department of Transportation, or ODOT, will begin necessary actions required for the program to become operative January 1, 2019.

STIF Distribution

The programs funded by these revenues will be operative on or after January 1, 2019, with distributions as follows:

• Ninety percent to counties without a mass transit district or transportation district, mass transit districts, transportation districts, and federally-recognized tribes;
• Five percent to “public transportation service providers” (see Section 122m(1) for definition) based on a competitive grant program adopted by the Oregon Transportation Commission, or OTC, by rule;
• Four percent to public transportation service providers to improve public transportation between two or more communities; and
• One percent to ODOT to establish a statewide public transportation technical resource center to assist public transportation providers in rural areas with training, planning, and information technology

Eligibility

To be eligible to receive a portion of the 90 percent distribution under this program, a “qualified entity” (see Section 122m(2) for definition) must prepare and submit a public transportation improvement plan to the OTC for approval.

At a minimum, each plan must specify the amount of money from the proposed distribution that would be allocated to fund the following:

• Increased service frequency and expansion of bus routes in communities with a high percentage of low-income households;
• Procurement of buses powered by natural gas or electricity for use in areas with populations of 200,000 or more;
• Reduced fares in communities with a high percentage of low-income households;
• Improved frequency and reliability of service connections inside and outside of the qualified entities service area; and 
• Coordination between public transportation service providers to reduce fragmentation of services

Reporting Requirements

Qualified entities will be required to provide a summary of any plans and project proposals approved by an advisory committee and describe how the previous year’s distribution was allocated to projects for the purposes just described.

Qualified entities that receive a proportionate share of the 90 percent distribution will be required to submit the following documentation to ODOT 30 days prior to the end of the fiscal year: 

• a report detailing actions taken to mitigate impacts of the new payroll tax on low-income passengers, 
• an adopted annual budget for the upcoming fiscal year, and 
• the results of any audits.

The OTC will be required to submit a report to the Joint Committee on Transportation on STIF program implementation and outcomes no later than February 1, 2020.

Next Steps

Many of the STIF program details will be determined over the next year. ODOT staff are working on developing an STIF Implementation Plan. This plan will describe the process and schedule for making the STIF program operative by January 1, 2019. We will continue to inform and involve public transportation providers and key stakeholders as the process continues, and will develop a Frequently Asked Questions document for distribution in the near future.

We are excited to enter this transformational time for public transportation in Oregon.

Marsha A Hoskins, Public Transportation Manager
ODOT Rail and Public Transit Division