BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE  
          DEVELOPMENT
                              Senator Jim Beall, Chair
                           2015 - 2016 First Extraordinary

          Bill No:          SBX1 10           Hearing Date:     9/1/2015
           ----------------------------------------------------------------- 
          |Author:   |Bates                                                 |
          |----------+------------------------------------------------------|
          |Version:  |7/16/2015                                             |
           ----------------------------------------------------------------- 
           ----------------------------------------------------------------- 
          |Urgency:  |No                     |Fiscal:      |Yes             |
           ----------------------------------------------------------------- 
           ----------------------------------------------------------------- 
          |Consultant|Eric Thronson                                         |
          |:         |                                                      |
           ----------------------------------------------------------------- 
          

          SUBJECT:  Regional transportation capital improvement funds


            DIGEST:  This bill requires the California Department of  
          Transportation (Caltrans) to apportion annually to each regional  
          transportation planning agency the amount of county share  
          funding identified in the most recently adopted Fund Estimate.

          ANALYSIS:
          
          Existing law:
          
          1)Assigns to the California Transportation Commission (CTC) the  
            responsibility of advising and assisting the administration  
            and the Legislature in formulating and evaluating state  
            policies and plans for California's transportation programs.   
            A large part of this responsibility currently includes  
            approving various programs of transportation projects funded  
            by state and federal funds and proposed by both the state and  
            regional transportation planning entities.

          2)Requires regional transportation planning agencies to  
            determine a short-term list of specific transportation  
            projects through a public input process and based on the  
            region's reasonably expected revenues.  This project list is  
            called the Regional Transportation Improvement Program (RTIP),  
            which includes the highest priority transportation projects  
            needed to implement the region's long-term transportation and  
            land use vision.  







          SBX1 10 (Bates)                                    Page 2 of ?
          
          

          3)Requires Caltrans to develop a five-year Interregional  
            Transportation Improvement Plan (ITIP) consisting of projects  
            improving interregional movement of people, vehicles, and  
            goods.  

          4)Requires, every two years, Caltrans to submit the ITIP and the  
            regional transportation entities to submit their RTIPs to CTC  
            for inclusion in a statewide plan called the State  
            Transportation Improvement Plan (STIP).  The STIP is a  
            five-year program of future state transportation funding  
            allocations for state highway, intercity rail, and regional  
            highway and transit improvements.  

          5)Requires, every two years, Caltrans to develop and CTC to  
            adopt a five-year estimate of all state and federal funds that  
            will reasonably be expected and available for projects in the  
            STIP.  This is called the STIP Fund Estimate.

          6)Allocates 75% of all the funds available for the STIP to  
            regions for projects in each RTIP, while the state maintains  
            25% of these funds for projects identified in the ITIP.    

          7)Requires, generally, CTC to allocate funds for each project  
            during the fiscal year that the project is identified in the  
            STIP, and makes the funding available for that project for up  
            to three years following the CTC allocation.

          8)Requires CTC to compute, based on specific definitions and  
            parameters, the share of STIP funding the CTC should allocate  
            to each county over the course of the five-year Fund Estimate  
            for STIP projects.

          9)Specifies that any projects on state highways funded from the  
            state highway account be completed by Caltrans.

          This bill:
          
          1)Requires Caltrans to apportion annually to each regional  
            transportation planning agency the amount of county share  
            funding identified in the most recently adopted STIP Fund  
            Estimate.

          2)Requires the Legislature to include in the annual budget act  
            an appropriation of federal and state transportation funds for  








          SBX1 10 (Bates)                                    Page 3 of ?
          
          
            Caltrans to apportion to the regional transportation planning  
            agencies.

          3)Eliminates the CTC's responsibility of allocating funds for  
            each project in the STIP that is included in an RTIP.

          4)Eliminates the CTC's ability to resolve any conflicts between  
            projects in the various RTIPs.

          5)Deletes most of the specific definitions and parameters upon  
            which county shares are computed and which govern how the  
            money can be spent.

          6)Deletes any reference to county balances and adjustments to  
            county shares of STIP funding.

          7)Allows anyone to do projects on the state highway system, not  
            just Caltrans.

          COMMENTS:

          1)Purpose.  According to the author, this bill is intended to  
            speed up delivery of transportation projects by transforming  
            the STIP process into a grant program for the regions.  This  
            will allow, presumably, each region to focus maximum effort on  
            delivering high-priority projects instead of wasting time  
            navigating the byzantine bureaucratic process in Sacramento.

          2)Reform is reasonable.  Nearly everyone agrees, including the  
            administration and Caltrans itself, that reforming how  
            Caltrans operates and how the state plans and funds  
            transportation projects is necessary and overdue.  For  
            example, in 2014 the California Transportation Agency released  
            a report by an outside management consultant that described  
            significant challenges within Caltrans and issued a call for  
            change.  In response, Caltrans released the Caltrans  
            Improvement Project, which has one goal: to make Caltrans into  
            a high-performance, efficient, transparent, accountable, and  
            modern organization.  In addition, the Legislature passed and  
            the governor signed a number of bills in the last few years  
            that were intended to encourage and facilitate reform of state  
            transportation.  This bill attempts to continue this effort to  
            improve the state's delivery of transportation projects.  

          3)Novel idea, poor execution.  In essence, this bill attempts to  








          SBX1 10 (Bates)                                    Page 4 of ?
          
          
            turn the regional portion of the STIP into a block grant  
            program in order to create flexibility and reduce bureaucracy.  
             Practically, however, this bill tries to shoehorn this block  
            grant concept into an existing allocation and funding system  
            that seems to be effective as-is.  This large-scale  
            reconstruction of the existing, complex STIP process, without  
            proper analysis of all the ramifications of the proposed  
            changes, will lead to a variety of unintended and potentially  
            dire consequences.  For example, this bill eliminates CTC's  
            ability to make changes necessary to resolve conflicts between  
            neighboring RTIPs, or to adjust county shares from year to  
            year in order to reflect changing project costs.  Limiting  
            these CTC mechanisms could do significantly more damage to  
            regions and the way the state delivers transportation projects  
            than any potential gains this bill may achieve.  Considering  
            all the challenges this bill could create, it appears to be  
            potentially very harmful legislation as written.   
            Notwithstanding the merits of the concept to give regions  
            their funds with fewer strings attached, the way this bill  
            executes that concept is fatally flawed.
            If the goal of this bill is to increase the amount of funding  
            the regions control without increasing overall funding, there  
            may be better ways to accomplish this aim.  For example, the  
            Legislature could simply adjust the statutory distribution  
            calculation of transportation to send more to the locals and  
            less to the STIP.  This would accomplish the goal without  
            creating the opportunity for potential unintended  
            complications the scheme in this bill could encounter.  In  
            order to avoid the various and unknown unintended consequences  
            of the existing proposal in this bill, the committee may wish  
            to amend the bill to increase the amount of funding  
            distributed by formula to the locals by the amount of the  
            regional share of the STIP, and reduce the regional STIP  
            funding by a similar amount.  
          
          FISCAL EFFECT:  Appropriation:  No    Fiscal Com.:  Yes     
          Local:  No


            POSITIONS:  (Communicated to the committee before noon on  
          Thursday,
                          August 27, 2015.)
          
            SUPPORT:  









          SBX1 10 (Bates)                                    Page 5 of ?
          
          
          None received

          OPPOSITION:

          Sierra Club California

                                      -- END --