BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
                              Senator Jim Beall, Chair
                                2015 - 2016  Regular 

          Bill No:          AB 2170           Hearing Date:     6/21/2016
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          |Author:   |Frazier                                               |
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          |Version:  |6/9/2016                                              |
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          |Urgency:  |No                     |Fiscal:      |Yes             |
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          |Consultant|Erin Riches                                           |
          |:         |                                                      |
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          SUBJECT:  Trade Corridors Improvement Fund:  federal funds


            DIGEST:  This bill requires federal freight funds apportioned to  
          California under the federal Fixing America's Surface  
          Transportation (FAST) Act to be allocated to projects through  
          the state Trade Corridor Improvement Fund (TCIF) program.    

          ANALYSIS:
          
          1)Proposition 1B and TCIF

            Proposition 1B, the Highway Safety, Traffic Reduction, Air  
            Quality, and Port Security Bond Act of 2006, was approved by  
            California voters in November 2006.  Proposition 1B authorized  
            the issuance of $19.9 billion in general obligation bonds to  
            fund a variety of transportation projects.  Of this amount, $2  
            billion was allocated to the TCIF for infrastructure  
            improvements along federally designated "Trade Corridors of  
            National Significance" or other high-volume freight corridors.  
               

            In determining project eligibility under the TCIF, the  
            California Transportation Commission (CTC) must consult  
            various plans, including the California State Transportation  
            Agency's (CalSTA) state freight plan, the state Air Resources  
            Board's (ARB) Sustainable Freight Strategy, and the statewide  
            port master plan developed by the California Marine and  
            Intermodal Transportation System Advisory Council  
            (Cal-MITSAC), among others.  Eligible projects include, but  







          AB 2170 (Frazier)                                  Page 2 of ?
          
          
            are not limited to, improvements to highway capacity and  
            operations, the freight rail system, ports, truck corridors,  
            and border access, as well as improvements to surface  
            transportation to facilitate goods movement to and from  
            airports.  TCIF applicants must provide at least a 50% match  
            from local, federal, or private sources.  TCIF funds have been  
            fully programmed, but SB 1228 of 2014 (see "Related  
            Legislation" below) authorized continuation of the program so  
            it could receive funds in the future.  


          2)California Freight Mobility Plan (CFMP)

            The federal transportation funding authorization act of 2012,  
            the Moving Ahead for Progress in the 20th Century Act  
            (MAP-21), required the U.S. Department of Transportation to  
            develop a national freight strategic plan and encouraged  
            states to develop their own freight plans.  AB 14 of 2013 (see  
            "Related Legislation" below) required CalSTA to develop a  
            state freight plan and to establish a freight advisory  
            committee made up of federal, state, local, and regional  
            representatives as well as private sector and other interest  
            groups, to guide the development of the plan.  The CFMP was  
            adopted in December 2015.

          3)FAST Act freight funding

            The new federal transportation funding authorization, the FAST  
            Act, was signed into law in December 2015.  The FAST Act  
            establishes a new Nationally Significant Freight and Highway  
            Projects Program - the first time a federal transportation  
            authorization has included a dedicated source of funding for  
            freight projects.  This program will provide competitive  
            grants, known as FASTLANE grants, or credit assistance to  
            projects such as highway freight projects on the National  
            Highway Freight Network, highway or bridge projects on the  
            National Highway System, railway-highway grade crossings or  
            grade separation projects, and freight intermodal projects.   
            The FAST Act requires a state receiving FASTLANE funds to  
            develop a freight plan, and deems that in order to be eligible  
            for freight funds a project must be included in the freight  
            plan.   

          4)Sustainable Freight Action Plan









          AB 2170 (Frazier)                                  Page 3 of ?
          
          
            Through an executive order in July 2015, Governor Brown  
            directed CalSTA, the California Environmental Protection  
            Agency, the Natural Resources Agency, ARB, the California  
            Department of Transportation (Caltrans), the Energy  
            Commission, and the Governor's Office of Business and Economic  
            Development to develop an integrated action plan by July 2016  
            that establishes targets to improve freight efficiency,  
            transition to zero-emission technologies, and increase the  
            competitiveness of California's freight system.  This plan is  
            to be informed by existing state strategies such as the CFMP.   
            The Executive Order also directed departments to initiate work  
            on freight pilot projects within the state's primary freight  
            corridors that integrate advanced technologies, alternative  
            fuels, freight and fuel infrastructure, and local economic  
            development opportunities.  

          5)SHOPP and STIP

            The State Highway Operation and Protection Program (SHOPP)  
            guides the expenditure of funds for capital improvements  
            necessary to manage, preserve, and protect the state highway  
            system.  The SHOPP receives state and federal funding from  
            taxes and fees placed on vehicle fuels.  In order to  
            anticipate and schedule future needs, Caltrans develops a  
            SHOPP plan that identifies goal-based needs over a 10-year  
            period, and updates the plan every two years.  The SHOPP is  
            primarily limited to capital improvement projects related to  
            maintenance, safety, and rehabilitation of state highways and  
            bridges that do not add a new traffic lane to the system.  

            The State Transportation Improvement Program (STIP) is a  
            multi-year capital improvement program of transportation  
            projects on and off the State Highway System, funded from the  
            State Highway Account.  The STIP is composed of two  
            categories: 75% of STIP funds go toward projects in the  
            Regional Transportation Improvement Program (RTIP) and 25% go  
            to the Interregional Transportation Improvement Program  
            (ITIP).  Each STIP covers a five-year period and adds two new  
            years of programming capacity.  Additionally, each new STIP  
            includes projects carried forward from the previous STIP, plus  
            new projects from among those proposed by regional  
            transportation planning agencies in their RTIPs and by  
            Caltrans in its ITIP.  

          This bill:








          AB 2170 (Frazier)                                  Page 4 of ?
          
          

          1)Requires federal freight funds apportioned to California under  
            the FAST Act to be allocated to projects through the TCIF.

          2)Deletes the requirement for the CTC to consult the ARB's  
            Sustainable Freight Strategy and requires the CTC to consult  
            the applicable port master plan (in place of the now-outdated  
            statewide port master plan prepared by Cal-MITSAC), in  
            determining project eligibility.

          3)Adds rail landside access improvements (e.g., rail access to  
            ports), landside freight access improvements to airports, and  
            rail terminals to the list of projects eligible for TCIF  
            funding, as well as capital and operational improvements to  
            truck corridors and borders.  

          4)Adds improving trade corridor safety and making a significant  
            contribution to the state's economy to the criteria the CTC  
            must follow in allocating funds.  


          COMMENTS:

          1)Purpose.  The author states that the highly successful TCIF  
            program encouraged transportation stakeholders to collectively  
            identify important trade corridor improvement projects and  
            required funding recipients to provide at least 50% in  
            matching funds, resulting in the construction of scores of  
            significant trade corridor projects across California.  The  
            CTC's management of TCIF resulted in on-time, on-budget  
            transportation improvements throughout the state, and $2  
            billion in TCIF funds resulted in the construction of $7.2  
            billion of transportation improvements along California's  
            trade corridors.  Using this proven methodology for the  
            approximately $116 million per year that California is  
            expected to receive in FAST Act freight funds will help the  
            state develop critically needed freight projects and increase  
            leveraging of this funding so that more projects can be  
            completed.     

          2)Which freight plan?  The state currently has a number of  
            freight plans, including the CFMP, ARB's Sustainable Freight  
            Strategy, and the upcoming Sustainable Freight Action Plan.   
            The author notes, however, that the FAST Act requires the  
            federal freight funds to be allocated to projects in the CFMP,  








          AB 2170 (Frazier)                                  Page 5 of ?
          
          
            which was created for that specific purpose pursuant to  
            MAP-21.  The CFMP identifies a list of projects that was  
            developed by Caltrans with input from the freight advisory  
            committee.  These projects came from regional planning  
            documents and are therefore fully vetted and meet all  
            environmental requirements.  The author states that federal  
            freight funds could be used most efficiently and effectively  
            by placing them in the TCIF and directing them toward projects  
            identified in the CFMP.

          3)Opposition concerns.  The Department of Finance (DOF) states  
            that this bill is "premature."  DOF states that it is working  
            with stakeholders to identify the best uses for any new  
            federal funding, and expresses concern that this bill could  
            potentially circumvent that process and prevent Caltrans from  
            directing new federal funds to important SHOPP and STIP  
            priorities.  The author notes that the Administration has  
            indicated, through budget proposals, its intent to give 50% of  
            the federal funds to the state (Caltrans) and 50% to the  
            regions.  The author states that this distribution would not  
            result in significant leveraging of the funds, achieve  
            geographic balance, or ensure that monies are put toward  
            priority freight projects, as would occur through the TCIF.

          4)Double-referral.  This bill has also been referred to the  
            Environmental Quality Committee.



          Related Legislation:
          
          SB 1228 (Hueso), Chapter 787, Statutes of 2014) - continues the  
          existence of TCIF in order to receive revenues from new funding  
          sources, and governs the expenditure of those funds.

          AB 14 (Lowenthal, Chapter 223, Statutes of 2013) - required  
          CalSTA to develop a state freight plan and to establish a  
          freight advisory committee.  

          Assembly Votes:

            Floor:         80-0
            Appr:          20-0
            Trans:         16-0
          








          AB 2170 (Frazier)                                  Page 6 of ?
          
          
          FISCAL EFFECT:  Appropriation:  No    Fiscal Com.:  Yes     
          Local:  No


            POSITIONS:  (Communicated to the committee before noon on  
          Wednesday,
                          June 15, 2016.)
          
            SUPPORT:  

          Southern California Association of Governments (sponsor)
          Alameda Corridor-East Construction Authority 
          Automobile Club of Southern California
          California Asphalt Pavement Association
          California Association of Port Authorities
          California Trade Coalition
          California Transportation Commission
          Imperial County Transportation Commission
          Los Angeles County Metropolitan Transportation Authority
          Metropolitan Transportation Commission
          Orange County Transportation Authority
          Pacific Merchant Shipping Association 
          Port of Long Beach 
          Port of Los Angeles
          Port of San Diego
          Riverside County Transportation Commission
          San Bernardino Associated Governments
          San Diego Association of Governments
          San Gabriel Valley Council of Governments
          Ventura County Transportation Commission

          OPPOSITION:

          Department of Finance

                                      -- END --