BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2170


                                                                    Page  1





          GOVERNOR'S VETO


          AB  
          2170 (Frazier)


          As Enrolled  September 9, 2016


          2/3 vote


           -------------------------------------------------------------------- 
          |ASSEMBLY:  |80-0  |(May 31, 2016) |SENATE: |22-13 |(August 31,      |
          |           |      |               |        |      |2016)            |
          |           |      |               |        |      |                 |
          |           |      |               |        |      |                 |
           -------------------------------------------------------------------- 



           -------------------------------------------------------------------- 
          |ASSEMBLY:  |77-1  |(August 31,    |        |      |                 |
          |           |      |2016)          |        |      |                 |
          |           |      |               |        |      |                 |
          |           |      |               |        |      |                 |
           -------------------------------------------------------------------- 


          Original Committee Reference:  TRANS.


          SUMMARY:  Requires federal freight revenues apportioned to  
          California from the Fixing America's Surface Transportation  
          (FAST) Act be deposited into the Trade Corridor Improvement Fund  
          (TCIF) and apportioned to state, regional, and local  
          transportation entities by the California Transportation  
          Commission (Commission).








                                                                    AB 2170


                                                                    Page  2







          The Senate amendments:


          1)Requires that federal FAST Act freight funding be deposited  
            into the TCIF and allocated in accordance with TCIF program  
            guidelines as well as FAST Act requirements.


          2)Provides that the recently released California Sustainable  
            Freight Action Plan developed pursuant to Executive Order  
            B-32-15 be among the documents consulted by the Commission in  
            determining eligible projects for funding and deletes  
            reference to obsolete documents.


          3)Requires that projects considered for funding by the  
            Commission further the state's economic, environmental, and  
            public health objectives and goals for freight policy, as  
            articulated in the plans to be consulted by the Commission.


          4)Requires the Commission, when selecting projects for inclusion  
            in the program, to evaluate the total potential costs and  
            total potential economic and non-economic benefits of the  
            program to California's economy, environment and public  
            health.


          5)Requires the Commission to adopt any amendments to the 2007  
            TCIF guidelines on or before April 1, 2017.


          6)Requires the Commission, when adopting amended guidelines and  
            developing and adopting the program, to accept project  
            nominations from regional and local transportation agencies  
            and the California Department of Transportation (Caltrans),  
            recognize the key role of the state in project identification,  








                                                                    AB 2170


                                                                    Page  3





            support integrating statewide goods movement priorities into a  
            corridor approach, and make a finding that the adoption and  
            delivery of the program is in the public interest.


          7)Made related, clarifying changes.


          AS PASSED BY THE ASSEMBLY, this bill:


          1)Required that federal FAST Act freight funding be deposited  
            into the TCIF and allocated in accordance with TCIF program  
            guidelines as well as FAST Act requirements.


          2)Updated the list of plans guiding TCIF investments by deleting  
            references to the outdated port master plan developed by the  
            California Marine and Intermodal Transportation System  
            Advisory (CALMITSAC) and the California Air Resources Board's  
            (ARB's) Sustainable Freight Strategy.


          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee:


          1)Caltrans estimates it would incur annual costs in the range of  
            $300,000 to $600,000 annually for two to four personnel year  
            (PY) of staff to administer federal funds and support the  
            Commission in selecting projects eligible for funding.  


          2)Ongoing Commission costs of approximately $55,000 (1/2 PY) to  
            update TCIF guidelines and continue to administer the program.  



          COMMENTS:  The TCIF program was created after voters approved  








                                                                    AB 2170


                                                                    Page  4





          Proposition 1B in 2006 which authorized the sale of general  
          obligation bonds to fund transportation projects across the  
          state to relieve congestion, improve goods movement flow,  
          enhance the safety and security of the transportation system,  
          and improve the state's air quality.  Of the $19.9 billion  
          approved by voters, $2 billion of bond proceeds were placed into  
          the then-newly created TCIF program to fund transportation  
          corridor improvements.  The TCIF program, administered by the  
          Commission in accordance with the TCIF guidelines, was  
          designated to fund projects identified in specified  
          transportation infrastructure planning documents.  The TCIF  
          guidelines ensured that funds were equitably distributed across  
          the state, that the highest statewide priority projects were  
          funded, and that funds were leveraged to ensure that the  
          greatest number of projects were completed.  The Commission also  
          successfully ensured that these projects were completed on  
          schedule and within budget.  


          Not only did TCIF achieve the goal of getting regions around the  
          state to work together to complete priority projects, it also  
          created jobs, reduced congestion, improved the state's air  
          quality, and helped the state achieve its emissions reduction  
          goals.  Additionally, by requiring that projects receive  
          matching funds, the TCIF successfully leveraged the program's $2  
          billion in bond funds to complete $7.2 billion in projects.  


          While the TCIF program was created to distribute Proposition 1B  
          funds specifically, in 2014 SB 1228 (Hueso), Chapter 787,  
          Statutes of 2014, continued the existence of the TCIF and  
          allowed it to receive funding from sources other than the  
          general obligation bonds originally authorized under Proposition  
          1B.  In accordance with SB 1228, revenues appropriated by the  
          Legislature, such as cap and trade revenues, can be transferred  
          into the TCIF and allocated by the Commission for specified  
          projects in accordance with TCIF.  










                                                                    AB 2170


                                                                    Page  5





          In recent years, the federal government has placed a greater  
          emphasis on planning and funding goods movement projects.  For  
          example, MAP-21 specifically directed the states to create state  
          freight plans in order to be able to be eligible for future  
          freight funding.  In response, the Legislature passed AB 14  
          (Lowenthal), Chapter 233, Statutes of 2013, which directed the  
          development of a state freight plan in accordance with MAP-21  
          requirements, no later than December, 2014.  This plan, the  
          California Freight Mobility Plan (CFMP), addressed the state's  
          strategic goals for freight transportation and identified a  
          total of $138 billion worth of freight system projects across  
          the state with a total of 94 projects, totaling nearly $31  
          billion, identified as Tier 1 projects. 


          On December 4, 2015, the FAST Act was signed into law and  
          becoming the first federal transportation bill to emphasize  
          goods movement projects by dedicating up to $6.2 billion  
          nationally for freight-related projects over five years.  Of  
          this total, California expects to receive an annual average of  
          $116 million per year over five years for freight projects  
          identified the CFMP.  Beyond the requirement that projects be  
          included in a state freight plan, however, the FAST Act did  
          specifically outline how the federal freight funding should be  
          distributed.  Recently, the Administration indicated their  
          intent, through budget trailer bill language, to distribute the  
          federal freight funds with 50% of the funds allocated to the  
          state and 50% to the regions through a modified TCIF program.   
          The language in the budget proposal was dropped because of AB  
          2170, which seeks to direct the same funds was already moving  
          through policy committees.  


          This bill will direct how the FAST Act funds will be spent and  
          the amendments taken in the Senate help to prioritize these  
          expenditures to ensure that key freight projects across the  
          state are funded to help improve freight mobility, relieve  
          congestion, and improve air quality.









                                                                    AB 2170


                                                                    Page  6






          GOVERNOR'S VETO MESSAGE:


          I am returning Assembly Bill 2170 without my signature.


          This bill allocates federal funds through the California  
          Transportation Commission to improve trade corridors in the  
          state.


          Unfortunately, the bill does not include key amendments agreed  
          to by the author to ensure urgent state priorities are  
          addressed, including improvements to California's border with  
          Mexico and important rail safety projects.


          I direct the Transportation Agency to work with the Commission  
          and the author to ensure these funds are allocated to  
          high-priority trade projects as soon as practicable.




          Analysis Prepared by:                                             
                          Victoria Alvarez / TRANS. / (916) 319-2093  FN:   
          0005129



















                                                                    AB 2170


                                                                    Page  7