BILL ANALYSIS Ó
SJR 22
Page 1
Date of Hearing: June 21, 2016
ASSEMBLY COMMITTEE ON JOBS, ECONOMIC DEVELOPMENT, AND THE ECONOMY
Eduardo Garcia, Chair
SJR
22 (Hueso) - As Introduced March 16, 2016
SENATE VOTE: 37-0
SUBJECT: Calexico West Land Port of Entry project: funding
SUMMARY: Memorializes the California Legislature's support for the
final federal funding to complete the Calexico West Land Port of Entry
expansion and reconfiguration project. Specifically, this bill:
1)Makes declarations as to the value of the enhanced port of entry, as
follows:
a) Traffic congestion and delays at the borders of the Counties
of San Diego and Imperial cost the economies of the United States
and Mexico an estimated $8.63 billion in gross output and more
than 73,900 jobs in 2007.
b) Completion of the reconfiguration and expansion of Calexico
West Land Port is anticipated to improve domestic supply chains,
strengthen national security, reduce the Port's carbon footprint,
and facilitate economic growth, not only for the County of
Imperial and California, but for the entire nation;
c) The completion of this project guarantees the economic
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activity of the border will not be lost. On an average day, more
than 11,000 privately operated vehicles and nearly 13,000
pedestrians enter the United States through the Calexico Land
Port of Entry; and
d) The collaboration between federal, state, and local agencies
is essential for the development of border infrastructure
projects and security. The U.S. General Accountability Office
and the U.S. Department of Homeland Security estimate that $6
billion in border infrastructure is needed to fulfill their
mission of preventing unlawful entry and smuggling while
facilitating legitimate trade and tourism.
2)Makes declarations as to the funding of the port of entry project,
as follows:
a) The Obama Administration's 2015 budget included a $98,062,000
investment in Calexico West Land Port of Entry Phase 1. This
first phase of the expansion project is currently underway and is
expected to be completed in 2018;
b) The Obama Administration included $248 million in funding for
Phase 2 of the Calexico West Land Port of Entry reconfiguration
and expansion project in the Financial Services and General
Government Appropriations bill is proposed by the President's
Fiscal Year 2017 Budget; and
c) Phase 2 will consist of the balance of the expansion of the
Calexico West Land Port, including additional site work, an
expanded pedestrian processing facility, administrative offices,
and six additional northbound privately owned vehicle inspection
lanes.
3)Makes declarations as to the importance of Mexico as a trade
partner, as follows:
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a) The U.S.' goods and private services trade with Mexico totaled
an estimated $536 billion in 2012, with exports totaling $243
billion and imports totaling $293 billion; and
b) Mexico is currently California's third largest goods trading
partner with almost $507 billion in total goods traded during
2013, with goods exports that totaled $226 billion and goods
imports that totaled $280 billion;
c) Ninety-nine percent of trade between California and Mexico is
carried by trucks; and the Calexico East Port of Entry provides
nearly all of the international truck traffic crossings through
Imperial County, with a total trade value of over $12 billion in
2012; and
d) The San Diego Association of Governments 2050 Comprehensive
Freight Gateway Study projects that the nearly two million trucks
that crossed the California-Mexico border in 2007 will increase
to nearly five million trucks in 2050.
4)Resolves that the California Senate and Assembly urge the U.S.
Congress to appropriate $248 million in funding to complete Phase 2
of the Calexico West Land Port of Entry reconfiguration.
5)Resolves that the Secretary of the Senate transmit copies of this
resolution to the U.S. President and Vice President and to the
leadership of the U.S. Senate and House of Representatives.
FISCAL EFFECT: None
POLICY ISSUE FRAME
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Mexico is California's largest trade partner with 99% of the movement
of goods being carried by trucks through California's six land-based
ports of entry. The Calexico ports of entry serve 15,000 to 20,000
northbound vehicles and 20,000 northbound pedestrians a day. These
Imperial County-based ports of entry play an important role in
connecting the Mexicali industrial base and other regions of Mexico to
the mega-markets throughout the U.S. National, state, and regional
evaluations have concluded that the current Calexico West Ports of
Entry facilities are inadequate to meet growing traffic demand and are
obsolete in terms of inspector safety and border security.
President Barak Obama has included $248 million in the proposed 2017
federal budget to complete the final phase of the expanded and
reconfigured Calexico West Land Port of Entry. This resolution
expresses the Legislature's support for these moneys. The analysis
includes information on the importance of trade to the California
economy, the need for infrastructure investments to keep pace with
global competitiveness, and details on the Calexico project.
Amendments are discussed in Comment #6.
COMMENTS:
1)Author Purpose: According to the author, "It is estimated that by
2050, border crossings in San Diego County will exceed 4.4 million
truckloads per year and 39 million tons of goods, valued at $309
billion. On an average day, more than 11,000 privately operated
vehicles (POV) and nearly 13,000 pedestrians enter the United States
through the Calexico Land Port of Entry. California exports to
Mexico amounted to $26.8 billion in 2015, a 5.5 percent increase
from 2014. Moreover, 99 percent of trade between California and
Mexico is carried by trucks.
SJR 22 would respectfully urge Congress to appropriate $248 million
in funding as proposed by the President's Fiscal Year 2017 Budget to
complete Phase 2 of the Calexico West Land Port of Entry
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Reconfiguration and Expansion project, due to the benefits the
improvements of this project will have on the nation's economy."
2)Ports of Entry between Mexico and California: There are six land
crossings along the California and Mexico border. The chart below
shows the general location of each of the ports. Starting from the
Pacific Ocean, trade through the San Diego County-Tijuana/Tecate
region flows through the San Ysidro-Puerta México, the Otay
Mesa-Mesa de Otay, and the Tecate-Tecate Land Ports of Entry. San
Ysidro is the largest port of entry in the western hemisphere,
currently processing an average of 50,000 northbound vehicles and
25,000 southbound vehicles per day. The San Diego Association of
Governments estimates an 87% increase in vehicle traffic by 2030.
The Imperial County-Mexicali region includes the state's most
eastern ports of entry points and abuts Arizona. These crossings
include Calexico West-Mexicali, Calexico East-Mexicali II, and
Andrade-Los Algodones Land Ports of Entry.
The Calexico East and West Land Ports of Entry serve 15,000 to
20,000 northbound vehicles and 20,000 northbound pedestrians a day.
Calexico West was built in 1974 when California trade with Mexico
was still in its infancy. As Mexico became an increasingly
important trade partner congestion at the ports of entry increased
and upgraded facilities were required. Calexico East was built in
1994 to ease the traffic impacts on Calexico West and was designed
to primarily serve commercial operations. According to national,
state, and regional evaluations, the Calexico West Land Port of
Entry facilities are again inadequate to meet traffic demand and
obsolete in terms of inspector safety and border security.
The General Services Administration (GSA) is in the final phase of a
$370 million project to expand and realign the Calexico West Land
Port of Entry. The U.S. Congress previously appropriated $24
million for site acquisition and project design and $98 million for
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Phase 1 construction. An additional $248 million is needed to fund
phase 2. This money, as noted above, has been included within the
President's proposed budget for federal Fiscal Year 2017.
Upon completion of the project, the Calexico West Land Port of Entry
will have:
10 southbound lanes for privately owned vehicles, including 5
with canopies and booths;
Southbound bridge over the New River;
16 northbound inspection lanes, including 10 with primary and
secondary inspection canopies, booths, and inspection equipment;
A new head house and administrative offices; and
A new pedestrian processing facility.
While initially designed in 2007 to meet LEED Silver standards,
GSA's current goal is to achieve a LEED Gold rating. Energy and
sustainability features in the project include, a solar photovoltaic
system, solar thermal hot water system, earth bermed administration
building, ultra-low flow fixtures, and drought tolerant landscaping.
Once complete, the GSA states that the Calexico West Land Port of
Entry will have adequate operational space, reduced traffic
congestion, and a safe environment for port employees and visitors.
1)California and Mexico Trade: California's $2.4 trillion economy is
highly dependent on international trade and foreign investment. In
2015, California exported $165 billion in goods to over 220 foreign
markets. Mexico, once again, was the state's top trade partner,
accepting $26.8 billion (16.2%) in goods.
Computers and electronic products have been California's highest
single export to Mexico since 2000. The top five exports to Mexico
in 2015 were: Computer and Electronic Products (25.1% - $6.7
billion); Transportation Equipment ($2.9 billion - 10.9%);
Machinery, except Electrical ($2.0 billion - 7.7%); Chemicals ($1.7
billion - 6.4%); and Electrical Equipment, Appliances and Components
($1.6 billion - 6.1%).
Over 90% of trade between California and Mexico occurs by truck,
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making California's land-based ports of entry very important to the
state economy and play a significant role within global supply
chains. The Calexico East Land Port of Entry serves as the primary
international crossings in Imperial County for trucks with a total
trade value of over $12 billion in 2012.
One report from the Wilson Center on Mexico, states that, on
average, products exported from Mexico include more than 40% U.S.
components. Research by the California State Library Research
Bureau, found that in the late 1990s, a new trade pattern between
California and Mexico developed where it was not uncommon that
components and partially assembled products passed between the U.S.
and Mexico multiple times before becoming a final product. Today,
four of the five top California exports to Mexico include
components, as well as finished products.
2)Infrastructure: A Major Challenge to California's Competitiveness:
World class infrastructure plays a key role in business attraction,
as multinational companies consistently rank the quality of
infrastructure among their top four criteria in making investment
decisions. Research shows that as U.S. infrastructure has been in
decline, infrastructure in other countries is rapidly increasing.
The 2015-16 Global Competitiveness Report by the World Economic
Forum places U.S. infrastructure 11th in the world, a drop from its
rank of 7th in 2000.
California's infrastructure is in a similar state, according to the
American Society of Civil Engineers California Infrastructure Report
Card 2012, with an estimated $65 billion a year investment gap. The
impact of this underinvestment is compounded by the substantial new
investments made in other states and nations, including the
expansion of the Panama Canal.
3)Border Delays and Goods Movement Infrastructure: Goods movement
supports employment, business profit, and state and local tax
revenue. California businesses rely heavily on the state's ports and
their related transportation systems to move manufactured goods.
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Firms rely on fast, flexible, and reliable shipping to link national
and global supply chains and bring products to the retail market.
Transportation breakdowns and congestion can idle entire global
production networks. As a result, the capacity and efficiency of
land ports, seaports, and airports have become critical factors in
global trade.
Changes in U.S. and global trade patterns since the enactment of
NAFTA and the continuing development of foreign markets in Mexico
and Latin America are placing increased challenges on California's
southern land-based ports of entry. For California's border region,
the increased tourism, as well as the expanded supply chains for
manufacturing and product distribution have resulted in significant
delays at border crossings, decreased regional air quality, and
border crossings that are difficult to secure.
--------------------------------------------------------------------
| Border Wait Times - June 13, 2016 at 5 p.m. |
|--------------------------------------------------------------------|
|Calexico - East |
--------------------------------------------------------------------
|----------------------+----------------------+----------------------|
|Commercial Vehicles |Standard Lanes |No delay - 2 lanes |
|Maximum Lanes: 3 | |open |
|----------------------+----------------------+----------------------|
| |Fast Lanes |No delay - 1 lane |
| | |open |
|----------------------+----------------------+----------------------|
|Passenger Vehicles |Standard Lanes |60 minute wait, 2 |
|Maximum Lanes: 8 | |lanes open |
|----------------------+----------------------+----------------------|
| |Readylane |45 minute wait, 4 |
| | |lanes open |
|----------------------+----------------------+----------------------|
| |Sentri Lanes |No delay, 1 lanes |
| | |open |
--------------------------------------------------------------------
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|Pedestrian |Standard Lanes |No delay, 2 lanes |
|Maximum Lanes: 4 | |open |
|----------------------+----------------------+----------------------|
| |Readylane |N/A |
--------------------------------------------------------------------
--------------------------------------------------------------------
|Calexico - West |
--------------------------------------------------------------------
--------------------------------------------------------------------
|Commercial Vehicles |Standard Lanes |N/A |
|Maximum Lanes: N/A | | |
--------------------------------------------------------------------
| |Fast Lanes |N/A |
--------------------------------------------------------------------
|Passenger Vehicles |Standard Lanes |50 minute, 7 lanes |
|Maximum Lanes: 10 | |open |
--------------------------------------------------------------------
| |Readylane |N/A |
--------------------------------------------------------------------
| |Sentri Lanes |10 minute wait, 2 |
| | |lanes open |
--------------------------------------------------------------------
|Pedestrian |Standard Lanes |No delay, 3 lane(s) |
|Maximum Lanes: 6 | |open |
|----------------------+----------------------+----------------------|
| |Readylane |No delay, 3 lane(s) |
| | |open |
--------------------------------------------------------------------
--------------------------------------------------------------------
|Source: U.S. Customs and Border Protections; accessed |
|6/13/2016 |
--------------------------------------------------------------------
U.S. firms with significant business passing through the three
Imperial Valley ports of entry report that their logistics-supply
chain is highly time sensitive and long wait times delay access to
intermediary goods and ultimately lead to problems in the
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manufacturing chain. Long wait times (as high as three to four
hours) between Imperial County and the Mexico border accounted for
an estimated output loss of $1.4 billion and 11,600 lost jobs
nationally in 2007. More recent studies (2011) on the Imperial
ports of entry show that losses to California, alone, were $620
million.
4)Suggested Technical Amendments: Committee staff have researched and
identified more current data relative to the important role Mexico
plays within the California and U.S. economy. The author is
amenable to amendments that update the resolution.
5)Related Legislation: Below is a list of the related bills.
a) AJR 4 (Hueso and Pérez) Berryessa Snow Mountain National
Monument: requests that the federal government, including the
Department of Homeland Security and the GSA, fund necessary
improvements at the San Ysidro, Calexico, and Otay Mesa Ports of
Entry. Status: Adopted, Resolution Chapter 24, Statutes of
2013.
b) AB 1545 (V. Manuel Perez) Bi-National Infrastructure and
Economic Development Bank: This bill would have expanded the role
of the California Infrastructure and Economic Development Bank
(I-Bank) to include facilitating infrastructure and economic
development financing activities within the California and Mexico
border region. Status: Held in the Senate Committee on
Appropriations, 2012.
c) SJR 16 (Vargas) Calexico West Port of Entry: This resolution
declares the Legislature's support for a public-private
partnership to renovate and expand the Calexico West Port of
Entry and urges Congress to enact guiding legislation to
authorize private-public partnerships, such as the one proposed
for the expansion of the Calexico West Port of Entry. Status:
Approved, Resolution Chapter 124, Statutes of 2012.
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REGISTERED SUPPORT / OPPOSITION:
Support
California Chamber of Commerce
Calexico Chamber of Commerce
City of El Centro
City of Holtville
County of Imperial
The Dahm Team Real Estate Company
El Centro Chamber of Commerce
Imperial County Transportation Commission
Imperial Mexicali Binational Alliance
Imperial Valley College
Imperial Valley Economic Development Corporation
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Imperial Valley Joint Chambers of Commerce
San Diego Regional Chamber of Commerce
Opposition
None received
Analysis Prepared by: Toni Symonds / J., E.D., & E. / (916) 319-2090