BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session AB 2170 (Frazier) - Trade Corridors Improvement Fund: federal funds ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: August 2, 2016 |Policy Vote: T. & H. 10 - 0, | | | E.Q. 7 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 8, 2016 |Consultant: Mark McKenzie | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 2170 would require 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. Fiscal Impact: The Department of Transportation (Caltrans) estimates it would incur annual costs in the range of $300,000 to $600,000 annually for 2-4 PY of staff to administer federal funds and support the California Transportation Commission (CTC) in selecting projects eligible for funding. (federal funds) ----see staff comments---- AB 2170 (Frazier) Page 1 of ? Ongoing CTC costs of approximately $55,000 (1/2 PY) to update TCIF guidelines and continue to administer the program. (federal funds) Background: Existing law established the TCIF with the passage of Proposition 1B, the Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006. Proposition 1B, among other things, authorized the issuance of $2 billion in general obligation bonds for the TCIF for infrastructure improvements along federally designated "Trade Corridors of National Significance" or other high-volume freight corridors. In determining project eligibility, the 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, among others. Eligible projects include 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. 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. CalSTA subsequently developed 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. This California Freight Management Plan (CFMP) was adopted in December 2015. 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, providing a dedicated source of funding for freight projects. This program will provide competitive grants, known as FASTLANE grants, or credit assistance to specified projects, including highway freight projects, highway or bridge projects on the National Highway System, railway-highway grade AB 2170 (Frazier) Page 2 of ? 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. Through an executive order in July 2015, Governor Brown directed CalSTA, the California Environmental Protection Agency, the Natural Resources Agency, ARB, 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. Proposed Law: AB 2170 would require federal freight funds apportioned to California under the FAST Act to be allocated to projects through the TCIF. This bill would also: Delete he requirement for the CTC to consult the ARB's Sustainable Freight Strategy Require CTC to consult the applicable port master plan when determining project eligibility, instead of a specified statewide port master plan that is out-of-date. Require CTC to also consult the CFMP when determining eligible projects for funding with funds that are not apportioned to the state under the FAST Act. Add rail landside access improvements, landside freight access improvement 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. Specify that eligible truck corridor and border improvements include both capital and operational improvements. Require CTC to allocate funds in a manner that reduces negative community impacts and makes a significant AB 2170 (Frazier) Page 3 of ? contribution to the state's economy, in addition to other specified criteria. Require CTC to allocate federal freight funding pursuant to the original TCIF Guidelines, as adopted on November 27, 2007, in the manner specified. Staff Comments: Staff notes that California is expected to receive approximately $116 million annually over five years for freight projects through the FAST Act. The Act requires states receiving these funds to develop a freight plan, and requires a project to be included in the freight plan in order to receive an allocation of federal funds. Caltrans notes that the bill directs all federal funding to regional priorities and does not provide for statewide priorities. In addition, it relies on TCIF guidelines that are nearly 10 years old, and include outdated information and timelines. CTC indicates it would update the guidelines. Caltrans estimates that it would need 2-4 PY of staff to administer the program, at an annual cost of $300,000 to $600,000. Staff notes that some of these costs would likely be incurred to administer federal freight funding, regardless of the requirements in the bill -- END --