BILL ANALYSIS                                                                                                                                                                                                    Ó






           SENATE TRANSPORTATION & HOUSING COMMITTEE       BILL NO: SB 1228
          SENATOR MARK DESAULNIER, CHAIRMAN              AUTHOR:  hueso
                                                         VERSION: 3/27/14
          Analysis by:  Erin Riches                      FISCAL:  yes
          Hearing date:  April 22, 2014



          SUBJECT:

          Trade Corridors Improvement Fund

          DESCRIPTION:

          This bill continues the existence of the Trade Corridors  
          Improvement Fund (TCIF) in order to receive revenues from new  
          funding sources and governs the expenditure of those funds.

          ANALYSIS:

          SB 1266 (Perata), Chapter 25, Statutes of 2006, authorized the  
          sale of nearly $20 billion in general obligation bonds for  
          transportation projects, upon voter approval.   In November  
          2006, voters approved Proposition 1B, the Highway Safety,  
          Traffic Reduction, Air Quality, and Port Security Bond Act of  
          2006.  Proposition 1B authorized the issuance of $19.9 billion  
          in general obligation bonds to fund transportation projects to  
          relieve congestion, improve the movement of goods, improve air  
          quality, and enhance the safety and security of the  
          transportation system.  

          Proposition 1B created the TCIF and funded it with $2 billion of  
          the total bond proceeds.  Proposition 1B directed the  
          Legislature to appropriate these funds for infrastructure  
          improvements along federally designated "Trade Corridors of  
          National Significance" or other high-volume freight corridors in  
          California as determined by the California Transportation  
          Commission (CTC).  Proposition 1B required the CTC, in  
          determining project eligibility, to consult the state trade  
          infrastructure and goods movement plan, the trade infrastructure  
          and goods movement plans adopted by regional transportation  
          planning agencies, regional transportation plans, and the  
          statewide port master plan.  Proposition 1B provided that  
          eligible projects included, but were not limited to,  
          improvements to highway capacity and operations, the freight  
          rail system, ports, truck corridors, and border access, as well  




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          as to surface transportation to facilitate goods movement to and  
          from airports.

          Although the CTC has fully programmed the entire $2 billion of  
          Proposition 1B funds in the TCIF, it has been able to program  
          additional projects as savings have materialized.  The CTC has  
          extended the program by two years, to fiscal year 2015-16, to  
          take advantage of any further contract savings that may occur.

           This bill  continues the existence of the TCIF indefinitely in  
          order to receive funds from non-Proposition 1B sources, and  
          governs the distribution of non-Proposition 1B funds as follows:

           Requires the CTC to allocate non-Proposition 1B monies in the  
            TCIF for infrastructure improvements along federally  
            designated "Trade Corridors of National Significance" or other  
            high-volume freight corridors in California, as determined by  
            the CTC.
           Requires the CTC, in determining project eligibility, to  
            consult the state trade infrastructure and goods movement  
            plan, trade infrastructure and goods movement plans adopted by  
            regional transportation planning agencies, regional  
            transportation plans, and the statewide port master plan.  

           Provides that eligible projects include, but are not limited  
            to:

             o    Improvements to highway capacity and operations to  
               facilitate goods movement, particularly in relation to the  
               state's land ports of entry and seaports, including inland  
               waterways between ports, and to relieve traffic congestion  
               along major trade or goods movement corridors.

             o    Improvements to the freight rail system to increase  
               efficiency and capacity and to enhance goods movement from  
               land ports of entry and seaports to warehousing and  
               distribution centers throughout the state, including  
               projects to separate rail lines from highway or local road  
               traffic, improve freight rail mobility through mountainous  
               regions, and relocate rail switching yards.  

             o    Improvements to enhance the capacity and efficiency of  
               land ports of entry and seaports.

             o    Improvements to truck corridors, including dedicated  
               truck facilities or truck toll facilities.  




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             o    Improvements to border access to enhance goods movement  
               between California and Mexico and maximize the state's  
               ability to access federal border infrastructure funds.

           Requires the CTC to allocate TCIF funds in a manner that  
            addresses the state's most urgent needs, balances the demands  
            of various land ports of entry and seaports, provides  
            reasonable geographic balance among the state's regions, and  
            prioritizes projects that improve trade corridor mobility  
            while reducing emissions of diesel particulate and other  
            pollutant emissions.

           Requires the CTC, when allocating TCIF funds, to consider the  
            speed and volume of large cargo traveling through the  
            distribution system, a reasonably consistent and predictable  
            amount of time for cargo to travel from one point to another  
            within the system, and a reduction in the recurrent daily  
            hours of delay.

           Requires the CTC, when allocating any Greenhouse Gas Reduction  
            Fund (commonly known as cap-and-trade) monies transferred to  
            the TCIF, to require these projects to demonstrate how they  
            will reduce emissions consistent with the goals and objectives  
            of cap-and-trade. 

           Requires the CTC to allocate any non-Proposition 1B funds in  
            the TCIF to projects that have identified committed  
            supplemental funding from local, federal, or private sources.   
            The CTC must determine an appropriate match, but the match  
            must be at least equal to the TCIF allocation, other than for  
            border access improvements.  The CTC may prioritize projects  
            with higher levels of committed supplemental funds.

















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           Requires the CTC to incorporate into its annual report to the  
            Legislature a summary of its TCIF-related activities,  
            including, at minimum, a description and location of the  
            projects funded by TCIF, the status of each project, and a  
            description of the mobility and air-quality improvements the  
            program is achieving.

          COMMENTS:

           1.Purpose  .  The author states that California's land and sea  
            ports of entry serve as key international commercial gateways  
            for the more than $500 billion in products entering and  
            exiting the US each year.  Long wait times at border ports of  
            entry delay access to intermediary goods, lead to problems in  
            the manufacturing chain, and create significant negative  
            traffic congestion and air-quality impacts.  The author states  
            that in order to leverage fully California's trade-related  
            economic opportunities, the state needs a modern, robust, and  
            multimodal goods movement network.  Investing in  
            infrastructure improvements at sea ports of entry can help  
            federally designated marine highways provide large reductions  
            in greenhouse gas emissions and air pollutants, relieve  
            traffic congestion and wear and tear on highways, and provide  
            an influx of economic activity throughout the state.  

           2.Background  .  The Legislative Analyst's Office Analysis of the  
            2008-09 Budget Bill noted that prior to Proposition 1B, the  
            state did not dedicate transportation funding specifically to  
            trade corridor mobility; furthermore, the state had not  
            traditionally provided state funds for projects such as  
            freight rail improvements.  The CTC decided to try to  
            establish the TCIF as an ongoing program, rather than a  
            one-time bond program.  The CTC adopted the initial TCIF  
            program of 79 projects, totaling $3.1 billion, in April 2008 -  
            deliberately over-programming the TCIF in anticipation of  
            additional revenue sources becoming available, including State  
            Highway Account funds.  Additional revenue did not materialize  
            due to economic conditions, and the CTC ended up working with  
            stakeholders to eliminate the over-programming.  

           3.Where will the money come from  ?  No uncommitted Proposition 1B  
            monies remain in the TCIF, nor does this bill appropriate  
            further funds to the TCIF.  It does, however, cite  
            cap-and-trade monies as a potential funding source.  

           4.No funding for airports  .  This bill essentially lifts all the  




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            Proposition 1B language relating to TCIF project eligibility,  
            allocations, and reporting, but, unlike Proposition 1B, it  
            does not include projects relating to goods movement in and  
            out of airports as TCIF-eligible.  The author indicates a  
            desire to focus scarce resources on land ports of entry and  
            seaports that are key to trade with Mexico.
                
            5.Double-referral  .  The Rules Committee has referred this bill  
            to both this committee and the Environmental Quality  
            Committee.   
          







































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          POSITIONS:  (Communicated to the committee before noon on  
          Wednesday,                                             April 16,  
          2014.)

               SUPPORT:  East Otay Mesa Property Owners Association
                         Hamann Companies
                         Murphy Development Company
                         Otay Mesa Property Owners Association
                         San Diego Regional Chamber of Commerce
                         United Port of San Diego

               OPPOSED:  None received.