Amended  IN  Assembly  June 14, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 103

Introduced by Committee on Budget and Fiscal Review

January 11, 2017

An act relating to the Budget Act of 2017. An act to repeal Section 1861 of the Fish and Game Code, and to amend Sections 800, 2192, and 2192.2 of, and to add Sections 800.5, 800.6, 800.7, 800.8, and 800.9 to, the Streets and Highways Code, relating to transportation, and making an appropriation therefor, to take effect immediately, bill related to the budget.


LEGISLATIVE COUNSEL'S DIGEST


SB 103, as amended, Committee on Budget and Fiscal Review. Budget Act of 2017. Transportation: advance mitigation: trade corridor improvements.
(1) Existing law creates the Advance Mitigation Program to enhance communications between the Department of Transportation and stakeholders to, among other things, protect natural resources and accelerate project delivery. Existing law requires the department to set aside not less than $30,000,000 annually for 4 years for the program from capital outlay revenues for purposes of the program.
This bill would create the Advance Mitigation Account in the State Transportation Fund as a revolving fund. The bill would require expenditures from the account to later be reimbursed from project funding available at the time a planned transportation project is constructed. The bill would continuously appropriate the moneys in the fund for the purposes of the Advance Mitigation Program and state that the Advanced Mitigation Program is intended to become self-sustaining.
The bill would authorize the department to engage in various activities to implement the Advance Mitigation Program, including, among other things, purchasing, or funding the purchase of, credits from mitigation banks, conservation banks, or in-lieu fee programs approved by one or more regulatory agencies. The bill would also authorize the department to establish, or fund the establishment of, those types of activities if the department determines that those activities would provide appropriate mitigation of the anticipated potential impacts of planned transportation improvements, as defined. The bill would authorize the department to pay or fund the payment of mitigation fees for the department’s or transportation agency’s covered activities under natural community conservation plans approved by the Department of Fish and Wildlife under the Natural Community Conservation Planning Act.
The bill would authorize the department to use, or allow other transportation agencies to use, mitigation credits or values generated or obtained under the program to fulfill the mitigation requirements of planned transportation improvements if the applicable transportation agency reimburses the program for all costs of purchasing or creating the mitigation credits or values, as determined by the department. The bill would prohibit funds in the Advanced Mitigation Account from being used for high-speed rail or for projects associated with or interacting with the high-speed rail program. The bill would require the department to track all implemented advance mitigation projects to use as credits for environmental mitigation, and would require the department, and the Department of Fish and Wildlife to report to the Legislature on the Advanced Mitigation Program.
(2) Existing law authorizes the Department of Fish and Wildlife to approve a regional conservation investment strategy, as defined, upon request of one or more state agencies, under specified circumstances. Existing law provides that the department shall not approve more than 8 regional conservation investment strategies under these provisions before January 1, 2020, and prohibits the department from approving a regional conservation investment strategy, or from entering into a mitigation credit agreement under these provisions, after that date.
This bill would repeal these January 1, 2020, restrictions.
(3) Existing law continues in existence the Trade Corridors Improvement Fund to fund trade corridor improvements consistent with various requirements. Existing law also creates the Trade Corridor Enhancement Account to receive funding from the Road Repair and Accountability Act of 2017 for corridor-based freight projects nominated by local agencies and the state.
This bill would delete these references to the Trade Corridors Improvement Fund, and instead revise and recast the requirements currently applicable to that fund and make them applicable to the Trade Corridor Enhancement Account. The bill would provide that certain federal funds apportioned to the state shall be expended consistent with these revised requirements. The bill would require the California Transportation Commission to allocate 60% of available funds to projects nominated by regional transportation agencies and other local agencies, with the remaining 40% of available funds to be allocated to projects nominated by the Department of Transportation. The bill would prohibit funding of projects that include the purchase of fully automated cargo handling equipment, as specified or that include fueling stations for diesel, natural gas, or other combustible fuels located near disadvantaged communities or low-income communities, as defined. The bill would require the California Transportation Commission to adopt guidelines for the purpose of administering these funds.
(4)This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2017.

Vote: MAJORITY   Appropriation: NOYES   Fiscal Committee: NOYES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 1861 of the Fish and Game Code is repealed.
1861.

The department shall approve no more than eight regional conservation investment strategies before January 1, 2020. The department shall not approve a regional conservation investment strategy or regional conservation assessment pursuant to this chapter on or after January 1, 2020, and shall not enter into a mitigation credit agreement pursuant to this chapter on or after January 1, 2020.

SEC. 2.

 Section 800 of the Streets and Highways Code is amended to read:

800.
 (a) The Advance Mitigation Program is hereby created in the department to enhance communications between the department and stakeholders to protect natural resources through project mitigation, to meet or exceed applicable environmental requirements, to accelerate project delivery, and to fully mitigate mitigate, to the maximum extent of the law, environmental impacts from transportation infrastructure projects. The department shall consult on all activities pursuant to this article with the Department of Fish and Wildlife, including activities pursuant to Chapter 9 (commencing with Section 1850) of Division 2 of the Fish and Game Code.
(b) Commencing with the 2017–18 fiscal year, and for a period of four years, the department shall set aside no less than thirty million dollars ($30,000,000) annually for the Advance Mitigation Program from the annual appropriations for the State Transportation Improvement Program and the State Highway Operation and Protection Program for the planning and implementation of projects in the Advanced Mitigation Program. Mitigation credits or values generated or obtained with these funds may be used only for transportation improvements in the State Transportation Improvement Program or the State Highway Operation and Protection Program, and may be transferred to another agency, but only upon full reimbursement of the department pursuant to subdivision (b) of Section 800.6.
(c) Upon the order of the Director of Finance, the Controller shall transfer the amount identified for the Advance Mitigation Program in subdivision (b), as determined by the department and the Department of Finance, to the Advance Mitigation Account in the State Transportation Fund.

(c)

(d) The annual Budget Act and subsequent legislation may establish additional provisions and requirements for the program.

SEC. 3.

 Section 800.5 is added to the Streets and Highways Code, to read:

800.5.
 For purposes of this article, the following terms have the following meanings:
(a) “Acquire” and “acquisition” mean, with respect to land or a waterway, acquisition of fee title or purchase of a conservation easement that protects conservation and mitigation values on the land or waterway in perpetuity.
(b) “Administrative draft natural community conservation plan” means a substantially complete draft of a natural community conservation plan that is released after January 1, 2016, to the general public, plan participants, and the department.
(c) “Advance mitigation” means mitigation implemented before, and in anticipation of, environmental effects of planned transportation improvements.
(d) “Commission” means the California Transportation Commission.
(e) “Conservation easement” means a perpetual conservation easement that complies with Chapter 4 (commencing with Section 815) of Title 2 of Part 2 of Division 2 of the Civil Code.
(f) “Department” means the Department of Transportation.
(g) “Mitigation credit agreement” means a mitigation credit agreement pursuant to Chapter 9 (commencing with Section 1850) of Division 2 of the Fish and Game Code.
(h) “Natural Communities Conservation Plan” means a plan developed pursuant to Chapter 10 (commencing with Section 2800) of Division 3 of the Fish and Game Code.
(i) “Transportation agency” means the department, a metropolitan planning organization, a regional transportation planning agency, or another public agency that implements transportation improvements, except as otherwise provided in Section 800.7.
(j) “Transportation improvement” means a transportation capital improvement project.
(k) “Planned transportation improvement” means a transportation project that a transportation agency has identified in a regional transportation plan, an interregional transportation plan, a capital improvement program, or other approved transportation planning document. A planned transportation improvement may include, but is not limited to, a transportation project that has been planned, programmed, proposed for approval, or that has been approved.
(l) “Program” means the Advance Mitigation Program implemented pursuant to this article.
(m) “Regional conservation investment strategy” means a regional conservation investment strategy approved by the Department of Fish and Wildlife pursuant to Chapter 9 (commencing with Section 1850) of Division 2 of the Fish and Game Code.
(n) “Regulatory agency” means a state or federal natural resource protection agency with regulatory authority over planned transportation improvements. A regulatory agency includes, but is not limited to, the Natural Resources Agency, the Department of Fish and Wildlife, California regional water quality control boards, the United States Fish and Wildlife Service, the National Marine Fisheries Service, the United States Environmental Protection Agency, and the United States Army Corps of Engineers.

SEC. 4.

 Section 800.6 is added to the Streets and Highways Code, to read:

800.6.
 (a) The funds in the Advance Mitigation Account shall be used only for the following:
(1) Purchase, or fund the purchase of, credits from mitigation banks, conservation banks, or in-lieu fee programs approved by one or more regulatory agencies. The department may also establish mitigation banks, conservation banks, or in-lieu fee programs, or fund the establishment of mitigation banks, conservation banks, or in-lieu fee programs, in accordance with applicable state and federal standards, if the department determines that those banks or in-lieu fee programs would provide appropriate mitigation of the anticipated potential impacts of planned transportation improvements identified pursuant to Section 800.8.
(2) Pay, or fund the payment of, mitigation fees or other costs or payments associated with the department’s or other transportation agency’s projects under natural community conservation plans approved pursuant to Chapter 10 (commencing with Section 2800) of Division 3 of the Fish and Game Code, or habitat conservation plans approved in accordance with the federal Endangered Species Act. The department shall, upon commencement of a regional conservation investment strategy pursuant to paragraph (3), provide written notification thereof to the executive administrative officer of any administrative draft natural community conservation plan, approved natural community conservation plan, or approved regional federal habitat conservation plan that overlaps the proposed area of the regional conservation investment strategy.
(3) Prepare, or fund the preparation of, regional conservation assessments and regional conservation investment strategies. Where a regional conservation investment strategy has been approved by the Department of Fish and Wildlife, the department may do either of the following:
(A) Enter into, or fund the preparation of, mitigation credit agreements with the Department of Fish and Wildlife; purchase credits from an established mitigation credit agreement; or implement, or fund the implementation of, conservation actions and habitat enhancement actions as needed to generate mitigation credits pursuant to those mitigation credit agreements.
(B) Acquire, restore, manage, monitor, enhance, and preserve lands, waterways, aquatic resources, or fisheries, or fund the acquisition, restoration, management, monitoring, enhancement, and preservation of lands, waterways, aquatic resources, or fisheries that would measurably advance a conservation objective in the regional conservation investment strategy if the department concludes that the action or actions could conserve or create environmental values that are appropriate to mitigate the anticipated potential impacts of planned transportation improvements.
(4) Where the advance mitigation mechanisms in paragraphs (1) to (3), inclusive, are not practicable, the department may implement advance mitigation, or fund the implementation of advance mitigation, in accordance with a programmatic mitigation plan pursuant to Section 800.9. No more than 10 percent of the funds in the Advance Mitigation Account may be allocated for this purpose over a four-year period.
(b) The department may use, or allow other transportation agencies to use, mitigation credits or values generated or obtained under the program to fulfill the mitigation requirements of planned transportation improvements if the applicable transportation agency reimburses the program for all costs of purchasing or creating the mitigation credits or values, as determined by the department. Those costs shall be calculated using total cost accounting and shall include, as applicable, land acquisition or conservation easement costs, monitoring and enforcement costs, restoration costs, transaction costs, administrative costs, contingency costs, and land management, monitoring, and protection costs.
(c) The department shall track all implemented advance mitigation projects to use as credits for environmental mitigation.
(d) Projects or plans prepared pursuant to this section that overlap with any approved natural community conservation plan or approved regional federal habitat conservation plan, shall be consistent with that plan and shall include an explanation of whether and to what extent they are consistent with any overlapping state or federal recovery plan, or other state-approved or federal-approved conservation strategy.
(e) Mitigation credits created pursuant to this section may be used for covered activities under an approved natural community conservation plan only in accordance with the requirements of the plan. Individuals and entities eligible for coverage as a participating special entity under an approved natural community conservation plan may use mitigation credits created pursuant to this section only if the plan’s implementing entity declines to extend coverage to the covered activity proposed by the eligible individual or entity.
(f) Prior to making any expenditure from the Advanced Mitigation Program Fund, the Director of Transportation shall make a determination and justification that the proposed expenditure is likely to accelerate project delivery of specific projects.
(g) By July 1, 2019, and biennially thereafter, the department, pursuant to Section 9795 of the Government Code, and notwithstanding Section 10231.5 of the Government Code, shall submit to the Legislature a report that describes to what extent the Advanced Mitigation Program has accelerated delivery of transportation projects. At a minimum, the report shall include the following:
(1) An accounting of the Advanced Mitigation Program funds.
(2) Identification of expected state and federal resource and regulatory agency mitigation requirements for transportation projects utilizing the Advanced Mitigation Program.
(3) A discussion of the extent to which those requirements are satisfied using advanced mitigation credits.
(4) Recommendations for maximizing the ability of the Advance Mitigation Program to satisfy state and federal mitigation requirements.
(h) By July 1, 2018, or one year after the Advanced Mitigation Program is first funded, whichever is earlier, and biennially thereafter, the Department of Fish and Wildlife shall, pursuant to Section 9795 of the Government Code, and notwithstanding Section 10231.5 of the Government Code, submit a report to the Legislature that describes the extent to which the Advanced Mitigation Program has improved the quality of habitat mitigation provided by the department for transportation projects. The report shall also include recommendations on maximizing the quality and effectiveness of habitat mitigation developed pursuant to the Advanced Mitigation Program.
(i) Nothing in this section shall be construed to impose any restrictions or requirements on the department for activities that do not involve the utilization of Advance Mitigation Program funds.

SEC. 5.

 Section 800.7 is added to the Streets and Highways Code, to read:

800.7.
 The Advance Mitigation Account is hereby created in the State Transportation Fund as a revolving fund. Notwithstanding Section 13340 of the Government Code, the fund shall be continuously appropriated without regard to fiscal years for purposes of the Advance Mitigation Program. The activity of the account shall be reported to the commission. The program is intended to become self-sustaining. Expenditures from the account shall later be reimbursed from project funding available at the time a planned transportation project is constructed. However, funds in the Advance Mitigation Account shall not be used for high-speed rail projects or other transportation improvement projects associated with or interacting with the high-speed rail program.

SEC. 6.

 Section 800.8 is added to the Streets and Highways Code, to read:

800.8.
 The program is intended to improve the efficiency and efficacy of mitigation only and is not intended to supplant the requirements of the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resource Code) or any other environmental law. The identification of planned transportation projects and of mitigation projects or measures for planned transportation projects under this article does not imply or require approval of those projects for purposes of the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resource Code) or any other environmental law.

SEC. 7.

 Section 800.9 is added to the Streets and Highways Code, to read:

800.9.
 The department, pursuant to this article and for the purpose of implementing the Advance Mitigation Program, may develop a programmatic mitigation plan pursuant to Section 169 of Title 23 of the United States Code to address the potential environmental impacts of future transportation projects.

SEC. 8.

 Section 2192 of the Streets and Highways Code is amended to read:

2192.
 (a) The following revenues shall be allocated for trade corridor infrastructure projects pursuant to this section:
(1) The revenues deposited in the Trade Corridors Enhancement Account pursuant to Section 2192.4.

(a) The Trade Corridors Improvement Fund, created pursuant to subdivision (c) of Section 8879.23 of the Government Code, is hereby continued in existence to receive revenues from sources other than the Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond

(2) An amount of federal funds equal to the amount of revenue apportioned to the state under Section 167 of Title 23 of the United States Code from the national highway freight programs, pursuant to the federal Fixing America’s Surface Transportation Act of 2006. This chapter shall govern expenditure of those other revenues. (“FAST Act,” Public Law 114-94).
(b) The moneys funding described in the fund from those other sources subdivision (a) shall be available upon appropriation for allocation by the California Transportation Commission for infrastructure improvements in this state on federally designated Trade Corridors of National and Regional Significance, on the Primary Freight Network, and along other corridors that have a high volume of freight movement, as determined by the commission. In determining the projects eligible for funding, the commission shall consult the Transportation Agency’s and as identified in the state freight plan as described in developed pursuant to Section 13978.8 of the Government Code, Code. Projects eligible for funding shall be included in the State Air Resources Board’s Sustainable Freight Strategy state freight plan, in an adopted by Resolution 14-2, regional freight plan, if applicable, and the trade infrastructure and goods movement plan submitted to the commission by the Secretary of Transportation and the Secretary for Environmental Protection. The commission shall also consult trade infrastructure and goods movement plans adopted by regional transportation planning agencies, in an adopted regional transportation plan. Projects within the boundaries of a metropolitan planning organization shall be included in an adopted regional transportation plans required by state and federal law, and the statewide port master plan prepared plan that includes a sustainable communities strategy determined by the State Air Resources Board to achieve the region’s greenhouse gas emissions reduction targets. In developing guidelines for implementing this section, the commission shall (1) apply the guiding principles, to the maximum extent practicable, in the California Marine and Intermodal Transportation System Advisory Council (Cal-MITSAC) Sustainable Freight Action Plan released in July 2016 pursuant to Section 1730 of the Harbors Executive Order B-32-15, and Navigation Code, when determining eligible projects for funding. Eligible projects for these funds include, but are not limited to, all of the following: (2) consult the applicable port master plan.
(c) Eligible projects for these funds include, but are not limited to, all of the following:
(1) Highway capacity improvements and operational improvements to more efficiently accommodate the movement of freight, particularly for ingress and egress to and from the state’s land ports of entry entry, rail terminals, and seaports, including navigable inland waterways used to transport freight between seaports, land ports of entry, and airports, and to relieve traffic congestion along major trade or goods movement corridors.
(2) Freight rail system improvements to enhance the ability to move goods from seaports, land ports of entry, and airports to warehousing and distribution centers throughout California, including projects that separate rail lines from highway or local road traffic, improve freight rail mobility through mountainous regions, relocate rail switching yards, and other projects that improve the efficiency and capacity of the rail freight system.
(3) Projects to enhance the capacity and efficiency of ports. ports, except that funds available under this section shall not be allocated to a project that includes the purchase of fully automated cargo handling equipment. For the purposes of this paragraph, “fully automated” means equipment that is remotely operated or remotely monitored, with or without the exercise of human intervention or control. Nothing in this paragraph shall prohibit the use of funds available pursuant to this section for a project that includes the purchase of human-operated zero-emission equipment, human-operated near-zero-emission equipment, and infrastructure supporting that human-operated equipment. Furthermore, nothing in this section shall prohibit the purchase of devices that support that human-operated equipment, including equipment to evaluate the utilization and environmental benefits of that human-operated equipment.
(4) Truck corridor improvements, including dedicated truck facilities or truck toll facilities.
(5) Border access improvements that enhance goods movement between California and Mexico and that maximize the state’s ability to access coordinated border infrastructure funds made available to the state by federal law.
(6) Surface transportation and connector road improvements to effectively facilitate the movement of goods, particularly for ingress and egress to and from the state’s land ports of entry, airports, and seaports, to relieve traffic congestion along major trade or goods movement corridors.
(d) No funds available under this section shall be awarded to projects that include fueling stations for diesel, natural gas, or other combustion fuels if those fueling stations are or will be located within one-half mile of disadvantaged communities, or within the boundaries of low-income communities that are outside of, but within one-half mile of, disadvantaged communities.
(e) Projects funded with revenues identified in paragraph (1) of subdivision (a) shall be consistent with Article XIX of the California Constitution.
(f) (1) In adopting the program of projects to be funded with funds described in subdivision (a), the commission shall evaluate the total potential economic and noneconomic benefits of the program of projects to California’s economy, environment, and public health. The evaluation shall specifically assess localized impacts in disadvantaged communities. The commission shall consult with the agencies identified in Executive Order B-32-15 and metropolitan planning organizations in order to utilize the appropriate models, techniques, and methods to develop the parameters for evaluating the program of projects. The commission shall allocate the funding from subdivision (a) for trade infrastructure improvements as follows:
(A) Sixty percent of the funds shall be available for projects nominated by regional transportation agencies and other public agencies, including counties, cities, and port authorities, in consultation with the department. The commission shall provide reasonable geographic corridor-based targets for funding allocations without constraining what an agency may propose or what the commission may approve.
(B) Forty percent of the funds shall be available for projects nominated by the department, in consultation with regional transportation agencies.
(2) In adopting a program of projects pursuant to paragraph (1), the commission shall prioritize projects jointly nominated and jointly funded by the state and local agencies. In considering geographic balance for the overall program, the commission may adjust the geographic corridor-based targets in subparagraph (A) of paragraph (1) to account for projects programmed pursuant to subparagraph (B) of paragraph (1).

(c)(1)

(g) The commission shall adopt guidelines, including a transparent process to evaluate projects and to allocate funds for trade infrastructure improvements from the fund consistent with Section 8879.52 of the Government Code and the Trade Corridors Improvement Fund (TCIF) Guidelines adopted by the commission on November 27, 2007, or as amended by the commission, and the funding described in subdivision (a) for trade infrastructure improvements in a manner that (A)(1) addresses the state’s most urgent needs, (B)(2) balances the demands of various land ports of entry, seaports, and airports, (C) provides reasonable geographic balance between the state’s regions, and (D) (3) places emphasis on projects that improve trade corridor mobility and safety while reducing emissions of diesel particulate particulates, greenhouse gases, and other pollutant emissions. pollutants and reducing other negative community impacts, especially in disadvantaged communities, (4) makes a significant contribution to the state’s economy, (5) recognizes the key role of the state in project identification, (6) supports integrating statewide goods movement priorities in a corridor approach, and (7) includes disadvantaged communities measures, as established by the California Environmental Protection Agency pursuant to Section 39711 of the Health and Safety Code, and other tools the commission determines, for evaluating benefits or costs for disadvantaged communities and low-income communities. Project nominations shall include either a quantitative or qualitative assessment of the benefits the project is expected to achieve relative to the evaluation criteria.

(2)

(h) In addition, the commission shall also consider the following factors when allocating these funds:

(A)

(1) “Velocity,” which means the speed by which large cargo would travel from the land port of entry or seaport through the distribution system.

(B)

(2) “Throughput,” which means the volume of cargo that would move from the land port of entry or seaport through the distribution system.

(C)

(3) “Reliability,” which means a reasonably consistent and predictable amount of time for cargo to travel from one point to another on any given day or at any given time in California.

(D)

(4) “Congestion reduction,” which means the reduction in recurrent daily hours of delay to be achieved.
(i) For purposes of this section, the following terms have the following meanings:
(1) “Disadvantaged communities” are those communities identified by the California Environmental Protection Agency pursuant to Section 39711 of the Health and Safety Code.
(2) “Low-income communities” are census tracts with median household incomes at or below 80 percent of the statewide median income or with median household incomes at or below the threshold designated as low income by the Department of Housing and Community Development’s list of state income limits adopted pursuant to Section 50093 of the Health and Safety Code.

SEC. 9.

 Section 2192.2 of the Streets and Highways Code is amended to read:

2192.2.
 The commission shall allocate funds made available by this chapter to projects that have identified and committed supplemental funding from appropriate local, federal, or private sources. The commission shall determine the appropriate amount of supplemental funding each project should have to be eligible for moneys from the fund based on a project-by-project review and an assessment of the project’s benefit to the state and the program. Except for border access improvements described in paragraph (5) of subdivision (b) of Section 2192, improvements Improvements to be funded with moneys from the fund shall have supplemental funding that is at least equal to the amount of the contribution from the fund. under this chapter. The commission may give priority for funding to projects with higher levels of committed supplemental funding.

SEC. 10.

  This act is a bill providing for appropriations related to the Budget Bill within the meaning of subdivision (e) of Section 12 of Article IV of the California Constitution, has been identified as related to the budget in the Budget Bill, and shall take effect immediately.
SECTION 1.

It is the intent of the Legislature to enact statutory changes relating to the Budget Act of 2017.