BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 1228 (Hueso) - Trade Corridors Improvement Program.
Amended: March 27, 2014 Policy Vote: T&H 10-0; EQ 7-0
Urgency: No Mandate: No
Hearing Date: May 12, 2014 Consultant: Mark McKenzie
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 1228 would continue the existence of the Trade
Corridors Improvement Fund (TCIF) to receive funding from
sources other than Proposition 1B general obligation bond funds,
including transfers from the Greenhouse Gas Reduction Fund
(cap-and-trade auction revenues), for specified trade corridor
infrastructure improvements.
Fiscal Impact:
Cost pressures in the hundreds of millions to dedicate
future revenues to specified trade corridor improvements in
lieu of other transportation projects or other programs that
achieve greenhouse gas reductions. (State Highway Account,
Greenhouse Gas Reduction Fund, General Fund, federal funds,
special funds)
Estimated staffing cost pressures of approximately $280,000
for 2 PY of Caltrans staff to continue the administration
and oversight of the program. Actual resource needs would
depend upon availability of funds and the size of the
program. (State Highway Account)
Estimated staffing cost pressures of $100,000 to $150,000
for 1 PY of staff at the California Transportation
Commission (CTC) to program projects and allocate TCIF
funds. Actual resource needs would depend upon availability
of funds and the size of the program. (State Highway
Account)
Background: Proposition 1B, the Highway Safety, Traffic
Reduction, Air Quality, and Port Security Bond Act of 2006, was
approved by voters in November of 2006. Proposition 1B
authorized the issuance of $19.9 billion in general obligation
bonds for specified transportation infrastructure projects,
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including $2 billion for deposit in the TCIF for infrastructure
improvements along federally designated Trade Corridors of
National Significance or other high-volume freight corridors, as
determined by CTC. Proposition 1B specified that eligible
projects included improvements to highway capacity and
operations, the freight rail system, ports, truck corridors, and
border access, and well as surface transportation that
facilitates goods movement to and from airports.
The CTC adopted the initial TCIF program of 79 projects,
totaling $3.1 billion, in April 2008. The CTC deliberately
over-programmed projects in the TCIF in anticipation of
additional revenue that did not materialize, including State
Highway Account funds. Although the full $2 billion in
available Proposition 1B funds has been allocated in the TCIF,
CTC 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. Caltrans has submitted a request with
the 2014-15 proposed budget to continue 2PY of temporary state
operations staff for the administration of the program through
the extended period approved by the CTC.
Proposed Law: SB 1228 would continue 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 in a manner that generally mirrors the existing program 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 specified.
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 Highway capacity and operational improvements to
facilitate goods movement relative to land ports of entry
and seaports, including navigable inland waterways, and to
relieve traffic congestion along major trade or goods
movement corridors.
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o Freight rail system improvements that improve goods
movement between land and sea ports and distribution
centers, including grade separation projects and other
projects that improve capacity and efficiency.
o Land and sea port improvements that enhance capacity and
efficiency.
o Truck corridor improvements, including toll or other
dedicated truck facilities.
o Border access improvements that enhance goods movement
between California and Mexico and maximize the state access
to 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 (cap-and-trade) monies transferred to the TCIF, to
require projects to demonstrate how they will reduce emissions
consistent with the goals and objectives of cap-and-trade.
Requires the CTC to allocate funds to projects that have
identified committed supplemental funding from local, federal,
or private sources that is 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.
Requires the CTC to incorporate a summary of its TCIF-related
activities into its annual report to the Legislature, as
specified.
Staff Comments: This bill would create major cost pressures by
continuing a program for which there is no dedicated funding,
but has unmet demand. As noted above, the CTC's initial TCIF
programming document included projects that exceeded the amount
of available bond funding by over $1 billion. Any allocation of
funding to TCIF projects in the future would be at the expense
of other transportation projects, including capacity projects in
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the State Transportation Improvement Program (STIP), highway
maintenance, rehabilitation, and safety projects in the State
Highway Operation and Protection Program (SHOPP), or rail
projects.