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