BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair AB 680 (Salas) - State Highway Route 43: interregional highway funding. Amended: March 19, 2013 Policy Vote: T&H 8-2 Urgency: No Mandate: No Hearing Date: July 1, 2013 Consultant: Mark McKenzie This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 680 would add State Highway Route (SR) 43 to the list of eligible interregional and intercounty routes on the state highway system that are eligible for state interregional transportation improvement project (ITIP) funding. Fiscal Impact: Unknown future cost pressures, in the millions beginning in 2014-15, to provide state ITIP funds for improvements on SR 43 (State Highway Account), potentially displacing funding for other interregional projects. Background: Existing law requires that 25 percent of funds appropriated for capital improvements programmed into the state transportation improvement program (STIP) be spent for interregional improvements, while the remaining 75 percent must be spent for regional improvements, as specified. The Department of Transportation (Caltrans) recommends projects that facilitate interregional movement of people and goods for inclusion in the ITIP, and 60 percent of ITIP funds must be dedicated to highway projects outside of urban areas or intercity rail projects. Existing law specifies 93 state highways that comprise the interregional road system (IRRS), and within this network there is a subset of 34 high-emphasis routes consisting of most of the interstate highways, and ten non-interstate "focus routes" that represent the most critical interregional corridors with the highest priority for upgrades. SR 43 connects Hanford, the county seat of Kings County, to other south-central San Joaquin Valley communities over a distance of 98 miles through the Counties of Kern, Kings, and into Fresno, from southwest of Bakersfield in the south to an interchange with SR 99 in Selma at the northern terminus. The AB 680 (Salas) Page 1 highway roughly parallels SR 99 and primarily traverses agricultural areas. Caltrans guidelines require that interregional routes carry large volumes of traffic into or out of the state, serve corridors of substantial statewide interstate or international significance, connect metropolitan and urban areas, and all county seats, and serve other destinations of statewide or regional importance not otherwise served. Proposed Law: AB 680 would add SR 43 to the statutory list of interregional and intercounty state highways that are eligible for ITIP funding. Related Legislation: AB 2143 (Parra), introduced in the 2005-06 legislative session, would have added SR 43 to the IRRS. That bill failed passage on the Senate Floor. Staff Comments: Due to a variety of external pressures, total STIP funding has declined significantly over the last decade. The 2012 STIP includes approximately $1.1 billion in funding for IRRS projects over the five-year planning period. Adding the approximately 100 miles of SR 43 to the IRRS would exacerbate an already severely overburdened program for funding interregional projects. As such, the bill would create significant new cost pressures that could result in the diversion of funding from interregional projects that would otherwise receive funding, absent the bill. Staff notes, however, that the bill is not likely to result in the appropriation of any new funds for the ITIP, and Caltrans is not likely to include SR 43 as a focus route eligible for priority funding in the near future. To the extent that highways are reclassified as interregional routes instead of regional routes, there are increased cost pressures on the state's share of capital improvement funds.