BILL ANALYSIS Ó
SB 1228
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Date of Hearing: June 23, 2014
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
SB 1228 (Hueso) - As Amended: June 25, 2014
SENATE VOTE : 35-1
SUBJECT : Trade Corridors Improvement Fund
SUMMARY : Continues the existence of the Trade Corridors
Improvement Fund (TCIF) to receive funding from sources
including transfers from the Greenhouse Gas Reduction Fund (cap
and trade auction revenues) for specified trade corridor
infrastructure improvements. Specifically, this bill :
1)Makes findings and declarations about the increasingly
important role of goods movement and the value it brings to
the state's economy.
2)Continues the TCIF, originally created to receive
approximately $2 billion in revenues from the Highway Safety,
Traffic Reduction, Air Quality, and Port Security Bond Act of
2006 (Proposition 1B) for trade corridor improvement projects.
3)Requires that monies in TCIF, from sources other than
Proposition 1B, be available for appropriation for allocation
by the California Transportation Commission (CTC) for
infrastructure improvements on federally designated corridors,
as determined by CTC.
4)Requires CTC, in determining projects eligible for funding, to
consult infrastructure planning documents including the state
Transportation Agency's state freight plan and the California
Air Resources Board's (ARB's) Sustainable Freight Strategy, as
specified.
5)Specifies that projects eligible for TCIF funding include, but
are not limited to, highway capacity and operational
improvements, freight rail system improvements, land port,
airport, and seaport efficiency enhancements, truck corridor
improvements, surface transportation an connector road
improvements, and border access improvements.
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6)Requires CTC to allocate funds in a manner that addresses
urgent need, balances demands of various sized ports, provides
reasonable geographic balance, places emphasis on projects
that improve trade corridor mobility while reducing emissions,
and other factors related to improving goods movement and in a
manner consistent with existing statutory requirements for
TCIF and in accordance with guidelines adopted by the CTC on
November 27, 2007.
7)Requires that if cap and trade auction revenues are
transferred into the TCIF, projects funded with those monies
must demonstrate how they will reduce emissions consistent
with the goals and objectives of the state's greenhouse gas
emissions (GHG) reduction policy as set forth in AB 32
(Nunez), Chapter 488, Statutes of 2006 (AB 32).
8)Requires CTC to allocate monies available in TCIF to projects
that have identified and committed supplemental funding from
appropriate local, federal, or private sources and directs CTC
to determine the appropriate amount of supplemental funding to
be required, based on a project-by-project review and
assessment of each project's benefit to the state and the
program.
9)Requires that, except for border access improvements,
improvements funded from TCIF have supplemental funding that
is at least equal to the amount contributed from the fund.
10)Authorizes CTC to give priority for funding to projects with
higher levels of committed supplemental funding.
11)Requires CTC to include in its annual report to the
Legislature, a summary of its activities related to TCIF that
include a description and the location of projects that are
funded, the amount of funds allocated to each project, the
status of each project, and a description of the mobility and
air quality improvements the program would achieve.
EXISTING LAW :
1)Encourages states, under the federal Moving Ahead for Progress
in the 21st Century Act (MAP-21), to establish freight
advisory committees to aid in the development of state freight
plans for submittal to the Federal Highway Administration.
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2)Mandates the establishment of an advisory committee to help
guide the California Transportation Agency (CalSTA) in the
development of a state freight plan, to be completed by
December 31, 2014, and updated every 5 years thereafter.
3)Requires the ARB to determine the 1990 statewide GHG emissions
levels and approve a statewide GHG emissions limit that is
equivalent to that level to be achieved by 2020 (AB 32).
4)Requires ARB, pursuant to AB 32, to develop a Sustainable
Freight Strategy (SFS) to identify and prioritize actions
necessary to move California towards a sustainable freight
transport system characterized by zero- or near-zero
emissions.
5)Authorized Proposition 1B with the passage of the Highway
Safety, Traffic Reduction, Air Quality, and Port Security Bond
Act of 2006 which authorized the sale of $19.925 billion of
general obligation bonds including $2 billion for trade
corridor improvements.
6)Created the TCIF as a repository for Proposition 1B funds and
for expenditure in accordance with guidelines adopted by CTC
on November 27, 2007.
FISCAL EFFECT : According to the Senate Appropriations
Committee, this bill would create cost pressures in the hundreds
of millions of dollars to dedicate future revenues to specified
trade corridor improvements in lieu of other transportation
projects or other programs that achieve GHG reductions. It is
estimated that staffing costs to manage the fund would be
approximately $280,000 for 2 personnel years (PYs) of California
Department of Transportation (Caltrans) staff to continue the
administration and oversight of the program; however, actual
resource needs would depend upon availability of funds and the
size of the program. This bill is also estimated to create
staffing cost pressures of $100,000 to $150,000 for 1 PY of
staff at CTC to program projects and allocate funds. Again,
actual resource needs would depend upon availability of funds
and the size of the program.
COMMENTS : California is one of the 10 largest economies in the
world with a gross state product of more than $1.9 trillion.
Our state's goods movement system is the bedrock of the state's
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economy with land, air, and sea ports of entry serving as key
international commercial gateways for the more than $500 billion
in products entering and exiting the U.S. each year.
Moving the goods that come into and through California has
presented a tremendous challenge and has placed pressure on all
modes of transportation and the environment. The movement of
goods, particularly as it relates to marine shipping and
trucking, has resulted in impacts to the state's quality of life
through increased roadway congestion, noise, and air quality
impacts, particularly in low-income and disadvantaged
communities near transportation hubs and corridors.
Proposition 1B and the Creation of TCIF : In 2006, voters
approved Proposition 1B, which authorized the issuance of
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. Following the passage of Proposition 1B,
the TCIF was created to hold the $2 billion in bond proceeds and
directed CTC to allocate the funds to goods movement projects
identified in statewide planning documents. The geographic
distribution of TCIF funds was codified and guidelines adopted
by CTC on November 27, 2007. To date, all of the $2 billion
Proposition 1B bond proceeds have expended or dedicated for
specific projects. Therefore, while TCIF remains in existence,
all of the monies in the fund are obligated.
Renewed Federal Focus on Goods Movement : The most recent
federal transportation reauthorization, (MAP-21), specifically
addressed the need for comprehensive goods movement planning
across the nation. While MAP-21 did not specifically require
that the state's produce freight plans, MAP-21 indicated that
those states with such plans in place would be primed to receive
federal monies for goods movement if they should become
available. MAP-21 directed the U.S. Department of
Transportation (USDOT) to develop a national freight program to
provide a basis for federal investment in trade-facilitating
infrastructure development and convened a National Freight
Advisory Committee to advise and make recommendations to the
USDOT on matters related to freight transportation in the United
States.
California's Freight Planning Efforts : AB 14 (Lowenthal,
Chapter 223, Statutes of 2013) answered MAP-21's call for state
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freight planning and mandated the preparation of a state freight
plan by CalSTA through the establishment of the California
Freight Advisory Committee (CFAC) whose membership represents a
broad cross section of state, federal, local, business and
community interests in goods movement. Specifically, AB 14
requires CalSTA to complete the state freight plan with
specified elements to govern immediate and long-range planning
activities and capital investments with respect to freight
movement. The state freight plan is required to comply with the
relevant provisions of MAP-21 and be completed by December 1,
2014, and updated every 5 years thereafter.
In addition to the development of the state freight plan, ARB is
also addressing goods movement as it relates to emissions
reductions goals through the development of a SFS. The SFS is
currently under development by ARB and, through the involvement
of stakeholders, seeks to identify and prioritize actions that
would move California towards a sustainable freight transport
system characterized by zero- or near-zero emissions. ARB and
CalSTA are working closely to ensure that the state freight plan
and the SFS are fully coordinated.
According to the author, there is still significant need to
address goods movement in California. Specifically, he notes
that long wait times at borders (sometimes as long as three to
four hours) create delays along the supply chain and result in
significant air quality impacts. The author points out that
significant state investment is needed for infrastructure
improvements that will create supply chain efficiencies across
all modes.
To address these needs, the author has introduced this bill to
ensure there is a reliable funding mechanism in place for
critical goods movement-related infrastructure projects. To
accomplish this, the bill would continue the existence of TCIF,
originally created to hold and distribute Proposition 1B funds,
so that monies received from new funding sources (as yet
unnamed) can be placed into the TCIF for distribution by CTC for
infrastructure improvements on federally designated Trade
Corridors of National and Regional Significance, the Primary
Freight Network, and along other corridors that have a high
volumes of freight movement, as determined by CTC.
Writing in support of this bill, the East Otay Mesa Property
Owners Association notes that the bill would promote investments
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in infrastructure improvements along federally-designated trade
corridors and other important corridors that have a high volume
of freight movement. They note that continuing the existence of
the Proposition 1B fund and allowing it to receive revenues from
other sources, would allow the important work begun with
Proposition 1B to continue.
Writing in opposition to this bill, the Department of Finance
(DOF) claims that the bill is unnecessary because highway and
rail projects that support goods movement can currently be
funded from a variety of existing federal, state, and local
programs. DOF notes that this bill continues TCIF but with a
much more narrow focus while removing the requirement for
eligible projects to identify and commit supplemental funding.
Further, DOF contends that by creating a new, unfunded program,
this bill would create added pressure on the already
under-funded and fiscally constrained State Operation and
Protection Program by potentially diverting funding away from
maintenance and safety to land and sea port projects.
Previous legislation : AB 14 (Lowenthal), Chapter 223, Statutes
of 2013, requires CalSTA to prepare a state freight plan to
govern the immediate and long-range planning activities and
capital investments of the state with respect to the movement of
freight.
AB 32 (Nunez), Chapter 488, Statutes of 2006, required the ARB
to develop a plan of how to reduce emissions to 1990 levels by
the year 2020.
SB 1266 (Perata), Chapter 25, Statutes of 2006, authorized the
sale of $18.925 billion of general obligation bonds for a
spectrum of transportation-related capital improvements, upon
voter approval.
REGISTERED SUPPORT / OPPOSITION :
Support
Alameda Corridor-East Construction Authority (with amendments)
California Association of Port Authorities
California Transportation Commission
Carpi & Clay
ColRich
City of San Diego
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David Alvarez, Councilmember, City of San Diego
East Otay Mesa Property Owners Association
Hamann Companies
Imperial County Transportation Commission
Ingall's Enterprises
Juan Vargas, Congressman 51st District, California
Landmark Development Services Inc.
Murphy Development Company
National Enterprises Incorporated
NAI San Diego Commercial Real Estate Services, Worldwide
OCTA (with amendments)
Otay Mesa Chamber of Commerce
Otay Mesa Property Owners Association
Port of Los Angeles (with amendments)
San Diego Association of Governments (SANDAG)
San Diego Regional Chamber of Commerce
San Diego Tenant's Association
SCAG (with amendments)
The Judd Company
Unified Port of San Diego
1 Individual
Opposition
Department of Finance
Analysis Prepared by : Victoria Alvarez / TRANS. / (916) 319-
2093