BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 2170 (Frazier) - Trade Corridors Improvement Fund:  federal  
          funds
          
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          |Version: August 2, 2016         |Policy Vote: T. & H. 10 - 0,    |
          |                                |          E.Q. 7 - 0            |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 8, 2016    |Consultant: Mark McKenzie       |
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          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----








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           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  








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          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  








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            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


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