BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  SB 1228
          Author:   Hueso (D)
          Amended:  3/27/14
          Vote:     21

           
           SENATE TRANSPORTATION & HOUSING COMMITTEE  :  10-0, 4/22/14
          AYES:  DeSaulnier, Gaines, Beall, Cannella, Galgiani, Hueso,  
            Lara, Liu, Pavley, Roth
          NO VOTE RECORDED:  Wyland

           SENATE ENVIRONMENTAL QUALITY COMMITTEE  :  7-0, 4/30/14
          AYES:  Hill, Gaines, Fuller, Hancock, Jackson, Leno, Pavley

           SENATE APPROPRIATIONS COMMITTEE  : 7-0, 5/23/14
          AYES: De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg


           SUBJECT  :    Trade Corridors Improvement Fund

           SOURCE  :     San Diego Regional Chamber of Commerce


           DIGEST  :    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  
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          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  
          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:

          1.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.

          2.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  

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            transportation plans, and the statewide port master plan.  

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

             A.   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.

             B.   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.  

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

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

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

          1.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.

          2.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.


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          3.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. 

          4.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.

          5.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.

           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.  

           Comments
           
          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 U.S. each  
          year.  Long wait times at border ports of entry delay access to  
          intermediary goods, lead to problems in the manufacturing chain,  

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          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.  

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

          According to the Senate Appropriations Committee:

              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 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)


           SUPPORT :   (Verified  5/23/14)

          San Diego Regional Chamber of Commerce (source) 
          California Association of Port Authorities
          City of San Diego
          ColRich

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          Congress Member Juan Vargas
          Councilmember David Alvarez, City of San Diego
          East Otay Mesa Property Owners Association
          Hamann Companies
          Imperial County Transportation Commission
          Ingall's Enterprises
          Landmark Development Services, Inc.
          Murphy Development Company
          NAI San Diego Commercial Real Estate
          National Enterprises, Inc.
          Otay Canyon Ranch, LLC
          Otay Mesa Chamber of Commerce
          Otay Mesa Property Owner's Association
          Port of San Diego






          San Diego Port Tenants Association
          The Judd Company
          Unified Port of San Diego

          JA:nl  5/23/14   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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