AB 2560 designates specific state and federal revenues for investments in freight and trade-corridor infrastructure and instructs the California Transportation Commission (CTC) to allocate those funds under new guidelines. The statute ties eligibility to regional planning documents, requires projects to align with the state’s Climate Action Plan for Transportation Infrastructure goals, and directs the CTC to evaluate localized impacts on disadvantaged communities when selecting projects.
The bill sets practical constraints and priorities: it lists eligible project types (highway and rail freight improvements, port capacity, truck corridors, border access, and freight technology), bars use of funds to purchase fully automated cargo-handling equipment, and prescribes a 60/40 split between regionally nominated projects and department-nominated projects. It also authorizes conditional project delivery tools, such as letters of no prejudice, and establishes evaluation factors—velocity, throughput, reliability, and congestion reduction—that will drive funding decisions.
At a Glance
What It Does
Allocates Trade Corridors Enhancement Account revenues (excluding SB 132 appropriations) plus an equal amount of federal highway freight funds for freight-related infrastructure. Directs the CTC to adopt guidelines, prioritize projects that reduce emissions and harms in disadvantaged communities, and split funding 60/40 between regional nominations and department nominations.
Who It Affects
Regional transportation agencies, metropolitan planning organizations (MPOs), Caltrans/department of transportation, seaports, rail operators, border agencies, and freight-dependent businesses that must include projects in regional transportation plans and sustainable communities strategies where applicable.
Why It Matters
The bill converts a pool of freight funding into a program explicitly conditioned on climate and equity metrics, shaping which freight projects California will fund and how regions and ports compete for money. It also restricts the use of funds for certain automation technologies, which has operational and procurement implications for ports and terminal operators.
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What This Bill Actually Does
AB 2560 creates a programmatic framework tying specific revenue streams to freight and trade-corridor projects and makes those revenues available for allocation by the California Transportation Commission. The funding sources named are the Trade Corridors Enhancement Account (with a carve-out for prior SB 132 appropriations) and a federal match equal to the state's apportionment from the national highway freight programs.
The statute requires projects to be included in adopted regional transportation plans and, for MPO areas, in sustainable communities strategies that the Air Resources Board has determined meet greenhouse gas targets.
The bill enumerates eligible project categories with operational detail: highway and connector improvements focused on ingress/egress to ports, seaports and inland waterways capacity projects, freight rail improvements including grade separations, truck corridor facilities (including tolling and mitigation of truck emissions), border access investments, and freight-focused intelligent transportation systems. It explicitly permits infrastructure that enables zero- or near-zero-emission goods movement, and at the same time it bars use of program funds to purchase ‘‘fully automated’’ cargo-handling equipment—defined by whether equipment is remotely operated or monitored regardless of human intervention.Decision-making and project selection are structured around multiple, stated metrics.
The CTC must adopt transparent guidelines that weigh economic and non-economic benefits, assess localized impacts on disadvantaged communities, and use corridor-based thinking from the state freight plan. The statute prescribes a funding split—60 percent for projects nominated by regional/local agencies (with geographic targets but not hard constraints) and 40 percent for projects nominated by the department—and it gives priority to jointly nominated and funded projects.
The guidelines may authorize letters of no prejudice, allowing regions to spend locally identified future-program funds in advance of state reimbursement, but reimbursement is conditional on future fund availability.AB 2560 also directs the CTC to consider operational metrics—velocity (speed of cargo through the system), throughput (volume moved), reliability (predictability of travel times), and congestion reduction—when prioritizing projects. Finally, the bill requires consultation with agencies named in Executive Order B-32-15 and incorporation of disadvantaged- and low-income-community measures established by CalEPA and HCD, respectively, into the evaluation framework.
The statute concludes with an intent statement setting a date by which an initial program should be adopted, underscoring legislative urgency for implementation.
The Five Things You Need to Know
The bill dedicates two revenue streams: Trade Corridors Enhancement Account dollars (excluding amounts previously appropriated under SB 132) and an equal amount of federal national highway freight program funds under 23 U.S.C. §167.
Sixty percent of allocated funds are reserved for projects nominated by regional transportation agencies and other public agencies; forty percent are reserved for projects nominated by the state department (Caltrans).
Program funds may not be used to purchase ‘‘fully automated’’ cargo-handling equipment—defined as equipment remotely operated or monitored, regardless of human intervention—while purchases of human-operated zero- or near-zero-emission equipment remain eligible.
Projects must be in an adopted regional transportation plan, and, within MPO boundaries, in a regional sustainable communities strategy that CARB has determined will achieve the region’s greenhouse gas targets.
The CTC’s guidelines may allow a letter of no prejudice so local/regional agencies can spend identified future program dollars in advance, but reimbursement is limited to when sufficient program funds are available.
Section-by-Section Breakdown
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Specified revenue sources for the program
Subdivision (a) names the funding the program will use: revenues deposited in the Trade Corridors Enhancement Account (with an explicit carve-out for amounts appropriated by SB 132, 2017–18) and an equal amount of federal funds apportioned under the national highway freight program (23 U.S.C. §167) per the FAST Act. Practically, this ties the program to an existing state account and a federal apportionment stream, so CTC allocations will depend on both state account balances and federal apportionments.
Scope, eligibility and planning integration
Subdivision (b) limits eligible projects to those on federally designated trade corridors, the Primary Freight Network, and other high-volume freight corridors as identified in the state freight plan; projects must be included in adopted regional transportation plans. For MPOs, the RTT requirement is stricter: the RTP must contain a sustainable communities strategy that CARB has found will meet GHG targets. The CTC must consult the state freight plan and applicable port master plans and apply the California Sustainable Freight Action Plan’s guiding principles when developing implementation guidelines.
Highway, rail, and port project types and limits
Subdivision (c) lists eligible categories—highway improvements for freight ingress/egress, freight-rail system upgrades (including grade separations), and port capacity projects—but places a procurement limit on ports: program funds cannot buy fully automated cargo-handling equipment. The provision clarifies that funding can be used for human-operated zero- and near-zero-emission equipment and the supporting infrastructure and measurement devices to evaluate their benefits, creating a targeted procurement constraint tied to emissions and labor considerations.
Truck corridors, border access, connectors, technology, and mitigation
The statute explicitly authorizes truck-corridor investments (including dedicated truck facilities and tolling), border access projects to improve trade with Mexico, connector-road improvements to relieve congestion, freight-focused intelligent transportation systems, and environmental/community mitigation projects (noise reduction, anti-idling measures, advanced traveler information to reduce empty trips). This broad eligibility gives regions discretion to program both physical capacity and operations/technology interventions targeted at emissions and community impacts.
Consistency requirements, evaluation criteria, and funding split
Subdivision (d) requires projects funded from the Trade Corridors Enhancement Account to be consistent with Article XIX of the California Constitution and to apply the Climate Action Plan for Transportation Infrastructure goals within a fix-it-first approach where feasible. Subdivision (e) directs the CTC to evaluate total economic and non-economic benefits including localized impacts on disadvantaged communities, to consult with agencies named in EO B-32-15, and then to allocate funds 60 percent to regionally nominated projects and 40 percent to department-nominated projects, with priority given to jointly nominated and jointly funded projects.
Guidelines and letter of no prejudice
Subdivision (f) tasks the CTC with adopting transparent guidelines and evaluation processes; those guidelines must require project nominations to include quantitative or qualitative benefit assessments and may streamline delivery by authorizing letters of no prejudice. The letter of no prejudice permits local agencies to expend their own identified future program funds ahead of state allocation and seek later reimbursement, but reimbursement is explicitly contingent on the availability of sufficient program funds when the reimbursement is sought.
Performance factors and statutory definitions
Subdivision (g) lists operational metrics the CTC must consider—velocity, throughput, reliability, and congestion reduction—creating a corridor-performance orientation rather than only a project-level focus. Subdivision (h) defines ‘‘disadvantaged communities’’ by reference to CalEPA’s Section 39711 listings and ‘‘low-income communities’’ by HCD income threshold rules, which anchors equity evaluation to existing state tools and definitions rather than creating new metrics.
Legislative intent on program timing
Subdivision (i) contains an intent statement directing the CTC to adopt an initial program of projects using the named state and federal funds 'as soon as practicable' and no later than May 17, 2018. While framed as an intent, the clause signals legislative urgency and creates an expectation that the CTC act quickly when implementing the law.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Disadvantaged and low‑income communities — the statute requires localized impact assessment and includes measures to evaluate benefits to these communities, increasing the chance projects will include mitigation, emission reductions, or community investments targeted to those areas.
- Regional transportation agencies and MPOs — regions control nomination of projects and receive 60 percent of the program funds, giving them direct influence over which corridor projects proceed and the ability to design interventions that address local freight constraints.
- Ports and freight operators deploying zero‑ or near‑zero emission equipment — the law explicitly funds infrastructure and human-operated zero/near-zero equipment, supporting decarbonization investments that retain human operation.
- Businesses dependent on reliable freight flows (distribution centers, manufacturers, retailers) — the program’s emphasis on velocity, throughput, and reliability aims to reduce delay and variability in supply chains, which can lower logistics costs and inventory risk.
- State environmental and public‑health agencies — the statute institutionalizes consideration of GHG reduction and diesel particulate mitigation within freight investment decisions, giving those agencies a concrete lever to influence infrastructure spending.
Who Bears the Cost
- Regional/local agencies and MPOs — to secure funds they must nominate projects, often provide matching or joint funding, and may expose local funds when using letters of no prejudice (with reimbursement contingent on future availability).
- Ports and terminal operators seeking automation — the prohibition on funding fully automated cargo-handling equipment constrains procurement options and may require ports to fund automation privately or delay purchases if they rely on program dollars.
- The California Transportation Commission — the CTC must develop detailed guidelines, implement complex benefit/equity evaluation methods, and administer the 60/40 allocation and prioritization rules, increasing its analytic and oversight workload.
- Caltrans/Department — projects nominated by the department compete within the 40 percent allocation and the department must coordinate nominations and consultations with regional agencies and port master plans.
- State treasury/funders — the requirement to evaluate and possibly reimburse local expenditures under letters of no prejudice creates contingent liabilities and administrative demands on program cash management.
Key Issues
The Core Tension
The bill tries to square two legitimate but competing goals: accelerate freight mobility and economic throughput while reducing emissions and protecting disadvantaged communities; prioritizing one will often undermine the other—faster throughput can mean more activity and localized emissions, while stricter emissions and labor-oriented procurement rules can limit efficiency gains or increase costs.
AB 2560 threads multiple priorities into one funding program—freight efficiency, economic benefit, emissions reduction, and equity—without prescribing how to reconcile them when they conflict. The bill requires the CTC to evaluate total economic and non‑economic benefits and to assess localized impacts in disadvantaged communities, but it stops short of a binding formula or minimum set‑asides for those communities.
That leaves substantial discretion to CTC scoring and the consultation process, which can advantage regions with more analytic capacity or stronger political influence.
The prohibition on using program funds for fully automated cargo-handling equipment is another source of trade-offs. It channels funds toward human-operated zero‑ and near‑zero technologies but may slow the adoption of automation that some ports say improves throughput and safety.
The definition of ‘‘fully automated’’ is operationally broad, hinging on whether equipment is remotely monitored or operated, which could create procurement ambiguity for hybrid or augmentation technologies. Finally, the letter-of-no-prejudice mechanism helps accelerate delivery but shifts financial risk to local agencies: reimbursement is explicitly dependent on future program fund availability, so regions could be left carrying sunk costs if the program’s revenue stream tightens.
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