BILL NUMBER: SB 1856 CHAPTERED
BILL TEXT
CHAPTER 697
FILED WITH SECRETARY OF STATE SEPTEMBER 19, 2002
APPROVED BY GOVERNOR SEPTEMBER 19, 2002
PASSED THE SENATE AUGUST 30, 2002
PASSED THE ASSEMBLY AUGUST 29, 2002
AMENDED IN ASSEMBLY AUGUST 28, 2002
AMENDED IN ASSEMBLY AUGUST 24, 2002
AMENDED IN ASSEMBLY JULY 3, 2002
AMENDED IN ASSEMBLY JUNE 12, 2002
AMENDED IN SENATE MAY 24, 2002
AMENDED IN SENATE APRIL 30, 2002
INTRODUCED BY Senators Costa, Burton, Figueroa, Karnette, Kuehl,
Murray, Romero, Sher, Soto, Speier, and Torlakson
(Coauthors: Assembly Members Aroner, Cardoza, Florez, Koretz,
Longville, Lowenthal, Reyes, and Simitian)
FEBRUARY 22, 2002
An act to add Chapter 20 (commencing with Section 2704) to
Division 3 of the Streets and Highways Code, relating to financing a
high-speed passenger train system by providing the funds necessary
therefor through the issuance and sale of bonds of the State of
California and by providing for the handling and disposition of those
funds.
LEGISLATIVE COUNSEL'S DIGEST
SB 1856, Costa. Safe, Reliable High-Speed Passenger Train Bond
Act for the 21st Century.
Existing law creates the High-Speed Rail Authority with the
responsibility of directing the development and implementation of
intercity high-speed rail service.
This bill would enact the Safe, Reliable High-Speed Passenger
Train Bond Act for the 21st Century, which, subject to voter
approval, would provide for the issuance of $9.95 billion of general
obligation bonds, $9 billion of which would be used in conjunction
with available federal funds for the purpose of funding the planning
and construction of a high-speed train system in this state pursuant
to the business plan of the authority. Nine hundred fifty million
dollars of the bond proceeds would be available for capital projects
on other passenger rail lines to provide connectivity to the
high-speed train system and for capacity enhancements and safety
improvements to those lines. Bonds for the high-speed train system
would not be issued earlier than January 1, 2006.
The bill would provide for the submission of the bond act to the
voters at the general election on November 2, 2004.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) In light of the events of September 11, 2001, it is
very clear that a high-speed passenger train network as described in
the High-Speed Rail Authority's Business Plan is essential for the
transportation needs of the growing population and economic activity
of this state.
(b) The initial high-speed train network linking San Francisco and
the Bay Area to Los Angeles will serve as the backbone of what will
become an extensive 700-mile system that will link all of the state's
major population centers, including Sacramento, the Bay Area, the
Central Valley, Los Angeles, the Inland Empire, Orange County, and
San Diego, and address the needs of the state.
(c) The initial network from San Francisco and the Bay Area Bay
Area to Southern California could be in limited operation by 2008.
(d) The high-speed passenger train bond funds are intended to
encourage the federal government and the private sector to make a
significant contribution toward the construction of the high-speed
train network.
(e) The initial segments shall be built in a manner that yields
maximum benefit consistent with available revenues.
(f) After the initial investment from the state, operating
revenues from the initial segments and funds from the federal
government and the private sector will be used to pay for expansion
of the system. It is the intent of the Legislature that the entire
high- speed train system shall be constructed as quickly as possible
in order to maximize ridership and the mobility of Californians.
(g) At a minimum, the entire 700-mile system described in the
High-Speed Rail Authority's Business Plan should be constructed and
in revenue service by 2020.
SEC. 2. Chapter 20 (commencing with Section 2704) is added to
Division 3 of the Streets and Highways Code, to read:
CHAPTER 20. SAFE, RELIABLE HIGH-SPEED PASSENGER TRAIN BOND ACT
FOR THE 21ST CENTURY
Article 1. General Provisions
2704. This chapter shall be known and may be cited as the Safe,
Reliable High-Speed Passenger Train Bond Act for the 21st Century.
2704.01. As used in this chapter, the following terms have the
following meanings:
(a) "Committee" means the High-Speed Passenger Train Finance
Committee created pursuant to Section 2704.12.
(b) "Authority" means the High-Speed Rail Authority created
pursuant to Section 185020 of the Public Utilities Code.
(c) "Fund" means the High-Speed Passenger Train Bond Fund created
pursuant to Section 2704.05.
(d) "High-speed train" means a passenger train capable of
sustained revenue operating speeds of at least 200 miles per hour
where conditions permit those speeds.
(e) "High-speed train system" means a system with high-speed
trains and includes, but is not limited to, the following components:
right-of-way, track, power system, rolling stock, stations, and
associated facilities.
Article 2. High-Speed Passenger Train Financing Program
2704.04. (a) It is the intent of the Legislature by enacting this
chapter and of the people of California by approving the bond
measure pursuant to this chapter to initiate the construction of a
high-speed train network consistent with the authority's Final
Business Plan of June 2000.
(b) (1) Nine billion dollars ($9,000,000,000) of the proceeds of
bonds authorized pursuant to this chapter, as well as federal funds
and other revenues made available to the authority, to the extent
consistent with federal and other fund source conditions, shall be
used for planning and eligible capital costs, as defined in
subdivision (c), for the segment of the high-speed train system
between San Francisco Transbay Terminal and Los Angeles Union
Station. Once construction of the San Francisco-Los Angeles segment
is fully funded, all remaining funds described in this subdivision
shall be used for planning and eligible capital costs, as defined in
subdivision (c), for the following additional high-speed train
segments without preference to order:
(A) Oakland-San Jose.
(B) Sacramento-Merced.
(C) Los Angeles-Inland Empire.
(D) Inland Empire-San Diego.
(E) Los Angeles-Irvine.
(2) Revenues generated by operations above and beyond operating
and maintenance costs shall be used to fund construction of the
high-speed train system.
(c) Capital costs eligible to be paid from proceeds of bonds
authorized for high-speed train purposes pursuant to this chapter
include all activities necessary for acquisition of right-of-way,
construction of tracks, structures, power systems, and stations,
purchase of rolling stock and related equipment, and other related
capital facilities and equipment.
(d) Proceeds of bonds authorized pursuant to this chapter shall
not be used for any operating or maintenance costs of trains or
facilities.
(e) The State Auditor shall perform periodic audits of the
authority's use of proceeds of bonds authorized pursuant to this
chapter for consistency with the requirements of this chapter.
2704.05. The proceeds of bonds issued and sold pursuant to this
chapter shall be deposited in the High-Speed Passenger Train Bond
Fund, which is hereby created.
2704.06. Nine billion dollars ($9,000,000,000) of the money in
the fund, upon appropriation by the Legislature, shall be available,
without regard to fiscal years, for planning and construction of a
high-speed train system in this state, consistent with the authority'
s Final Business Plan of June 2000, as subsequently modified pursuant
to environmental studies conducted by the authority.
2704.07. The authority shall pursue and obtain other private and
public funds, including, but not limited to, federal funds, funds
from revenue bonds, and local funds, to augment the proceeds of this
chapter.
2704.08. Proceeds of bonds authorized for high-speed train
purposes pursuant to this chapter shall not be used for more than
one-half of the total cost of construction of track and station costs
of each segment of the high-speed train system.
2704.09. The high-speed train system to be constructed pursuant
to this chapter shall have the following characteristics:
(a) Electric trains that are capable of sustained maximum revenue
operating speeds of no less than 200 miles per hour.
(b) Maximum express service travel times for each corridor that
shall not exceed the following:
(1) San Francisco-Los Angeles Union Station: two hours, 42
minutes.
(2) Oakland-Los Angeles Union Station: two hours, 42 minutes.
(3) San Francisco-San Jose: 31 minutes.
(4) San Jose-Los Angeles: two hours, 14 minutes.
(5) San Diego-Los Angeles: one hour.
(6) Inland Empire-Los Angeles: 29 minutes.
(7) Sacramento-Los Angeles: two hours, 22 minutes.
(8) Sacramento-San Jose: one hour, 12 minutes.
(c) Achievable operating headway (time between successive trains)
shall be five minutes or less.
(d) The total number of stations to be served by high-speed trains
for all of the segments described in subdivision (b) of Section
2704.04 shall not exceed 24.
(e) Trains shall have the capability to transition intermediate
stations, or to bypass those stations, at mainline operating speed.
(f) For each corridor described in subdivision (b), passengers
shall have the capability of traveling from any station on that
corridor to any other station on that corridor without being required
to change trains.
(g) In order to reduce impacts on communities and the environment,
the alignment for the high-speed train system shall follow existing
transportation or utility corridors to the extent possible.
(h) Stations shall be located in areas with good access to local
mass transit or other modes of transportation.
(i) The high-speed train system shall be planned and constructed
in a manner that minimizes urban sprawl and impacts on the natural
environment.
(j) Preserving wildlife corridors and mitigating impacts to
wildlife movement where feasible in order to limit the extent to
which the system may present an additional barrier to wildlife's
natural movement.
2704.095. (a) (1) Of the proceeds of bonds authorized pursuant to
this chapter, nine hundred fifty million dollars ($950,000,000)
shall be allocated to eligible recipients for capital improvements to
intercity and commuter rail lines and urban rail systems to provide
connectivity to the high-speed train system as that system is
described in subdivision (b) of Section 2704.04 and to provide
capacity enhancements and safety improvements. Funds under this
section shall be available upon appropriation by the Legislature in
the Annual Budget act for the eligible purposes described in
subdivision (d).
(2) Twenty percent (one hundred ninety million dollars
($190,000,000)) of the amount authorized by this section shall be
allocated for intercity rail to the Department of Transportation, for
state-supported intercity rail lines that provide regularly
scheduled service and use public funds to operate and maintain rail
facilities, rights-of-way, and equipment. A minimum of 25 percent of
the amount available under this paragraph (forty-seven million five
hundred thousand dollars ($47,500,000)) shall be allocated to each of
the state's three intercity rail corridors.
The California Transportation Commission shall allocate the
available funds to eligible recipients consistent with this section
and shall develop guidelines to implement the requirements of this
section. The guidelines shall include provisions for the
administration of funds, including, but not limited to, the authority
of the intercity corridor operators to loan these funds by mutual
agreement between intercity rail corridors.
(3) Eighty percent (seven hundred sixty million dollars
($760,000,000)) of the amount authorized by this section shall be
allocated to eligible recipients, except intercity rail, as described
in subdivision (c) based upon a percentage amount calculated to
incorporate all of the following:
(A) One-third of the eligible recipient's percentage share of
statewide track miles.
(B) One-third of the eligible recipient's percentage share of
statewide annual vehicle miles.
(C) One-third of the eligible recipient's percentage share of
statewide annual passenger trips.
The California Transportation Commission shall allocate the
available funds to eligible recipients consistent with this section
and shall develop guidelines to implement the requirements of this
section.
(b) For the purposes of this section, the following terms have the
following meanings:
(1) "Track miles" means the miles of track used by a public agency
or joint powers authority for regular passenger rail service.
(2) "Vehicle miles" means the total miles traveled, commencing
with pullout from the maintenance depot, by all locomotives and cars
operated in a train consist for passenger rail service by a public
agency or joint powers authority.
(3) "Passenger trips" means the annual unlinked passenger
boardings reported by a public agency or joint powers authority for
regular passenger rail service.
(4) "Statewide" when used to modify the terms in paragraphs (A),
(B), and (C) of paragraph (3) of subdivision (a) means the combined
total of those amounts for all eligible recipients.
(c) Eligible recipients for funding under paragraph (3) of
subdivision (a) shall be public agencies and joint powers authorities
that operate regularly scheduled passenger rail service in the
following categories:
(1) Commuter rail.
(2) Light rail.
(3) Heavy rail.
(4) Cable car.
(d) Funds allocated pursuant to this section shall be used for
connectivity with the high-speed train system or for the
rehabilitation or modernization of, or safety improvements to, tracks
utilized for public passenger rail service, signals, structures,
facilities, and rolling stock.
(e) Eligible recipients may use the funds for any eligible rail
element set forth in subdivision (d).
(f) In order to be eligible for funding under this section, an
eligible recipient under paragraph (3) of subdivision (a) shall
provide matching funds in an amount not less than the total amount
allocated to the recipient under this section.
(g) An eligible recipient of funding under paragraph (3) of
subdivision (a) shall certify that it has met its matching funds
requirement, and all other requirements of this section, by
resolution of its governing board, subject to verification by the
California Transportation Commission.
(h) Funds made available to an eligible recipient under paragraph
(3) of subdivision (a) shall supplement existing local, state, or
federal revenues being used for maintenance or rehabilitation of the
passenger rail system. Eligible recipients of funding under
paragraph (3) of subdivision (a) shall maintain their existing
commitment of local, state, or federal funds for these purposes in
order to remain eligible for allocation and expenditure of the
additional funding made available by this section.
(i) In order to receive any allocation under this section, an
eligible recipient under paragraph (3) of subdivision (a) shall
annually expend from existing local, state, or federal revenues being
used for the maintenance or rehabilitation of the passenger rail
system in an amount not less than the annual average of its
expenditures from local revenues for those purposes during the
1998-99, 1999-2000, and 2000-01 fiscal years.
(j) Funds allocated pursuant to this section to the Southern
California Regional Rail Authority for eligible projects within its
service area shall be apportioned each fiscal year in accordance with
memorandums of understanding to be executed between the Southern
California Regional Rail Authority and its member agencies. The
memorandum or memorandums of understanding shall take into account
the passenger service needs of the Southern California Regional Rail
Authority and of the member agencies, revenue attributable to member
agencies, and separate contributions to the Southern California
Regional Rail Authority from the member agencies.
Article 3. Fiscal Provisions
2704.10. Bonds in the total amount of nine billion nine hundred
fifty million dollars ($9,950,000,000), exclusive of refunding bonds,
or so much thereof as is necessary, may be issued and sold to
provide a fund to be used for carrying out the purposes expressed in
this chapter and to be used to reimburse the General Obligation Bond
Expense Revolving Fund pursuant to Section 16724.5 of the Government
Code. The bonds, when sold, shall be and constitute a valid and
binding obligation of the State of California, and the full faith and
credit of the State of California is hereby pledged for the punctual
payment of both principal of, and interest on, the bonds as the
principal and interest become due and payable.
2704.11. (a) Except as provided in subdivision (b), the bonds
authorized by this chapter shall be prepared, executed, issued, sold,
paid, and redeemed as provided in the State General Obligation Bond
Law, Chapter 4 (commencing with Section 16720) of Part 3 of Division
4 of Title 2 of the Government Code, and all of the provisions of
that law apply to the bonds and to this chapter and are hereby
incorporated in this chapter as though set forth in full in this
chapter.
(b) Notwithstanding any provision of the State General Obligation
Bond Law, each issue of bonds authorized by the committee shall have
a final maturity of not more than 30 years.
2704.12. (a) Solely for the purpose of authorizing the issuance
and sale, pursuant to the State General Obligation Bond Law, of the
bonds authorized by this chapter, the High-Speed Passenger Train
Finance Committee is hereby created. For purposes of this chapter,
the High-Speed Passenger Train Finance Committee is "the committee"
as that term is used in the State General Obligation Bond Law. The
committee consists of the Treasurer, the Director of Finance, the
Controller, the Secretary of the Business, Transportation and Housing
Agency, and the chairperson of the authority, or their designated
representatives. The Treasurer shall serve as chairperson of the
committee. A majority of the committee may act for the committee.
(b) For purposes of the State General Obligation Bond Law, the
authority is designated the "board."
2704.13. The committee shall determine whether or not it is
necessary or desirable to issue bonds authorized pursuant to this
chapter in order to carry out the actions specified in Sections
2704.06 and 2704.095 and, if so, the amount of bonds to be issued and
sold. Successive issues of bonds may be issued and sold to carry
out those actions progressively, and it is not necessary that all of
the bonds authorized be issued and sold at any one time. However,
bonds for the high-speed train system may not be issued and sold
prior to January 1, 2006. The committee shall consider program
funding needs, revenue projections, financial market conditions, and
other necessary factors in determining the shortest feasible term for
the bonds to be issued.
2704.14. There shall be collected each year and in the same
manner and at the same time as other state revenue is collected, in
addition to the ordinary revenues of the state, a sum in an amount
required to pay the principal of, and interest on, the bonds each
year. It is the duty of all officers charged by law with any duty in
regard to the collection of the revenue to do and perform each and
every act which is necessary to collect that additional sum.
2704.15. Notwithstanding Section 13340 of the Government Code,
there is hereby appropriated from the General Fund in the State
Treasury, for the purposes of this chapter, an amount equal to that
sum annually necessary to pay the principal of, and interest on,
bonds issued and sold pursuant to this chapter, as the principal and
interest become due and payable.
2704.16. The board may request the Pooled Money Investment Board
to make a loan from the Pooled Money Investment Account, in
accordance with Section 16312 of the Government Code, for purposes of
this chapter. The amount of the request shall not exceed the amount
of the unsold bonds which the committee has, by resolution,
authorized to be sold for the purpose of this chapter, less any
amount borrowed pursuant to Section 2701.17. The committee may adopt
a resolution for such purposes prior to January 1, 2006. The board
shall execute such documents as required by the Pooled Money
Investment Board to obtain and repay the loan. Any amount loaned
shall be deposited in the fund to be allocated by the board in
accordance with this chapter.
2704.17. For the purpose of carrying out this chapter, the
Director of Finance may authorize the withdrawal from the General
Fund of an amount or amounts not to exceed the amount of unsold bonds
which have been authorized by the committee to be sold for the
purpose of carrying out this chapter, less any amount borrowed
pursuant to Section 2704.16. Any amount withdrawn shall be deposited
in the fund. Any money made available under this section shall be
returned to the General Fund, plus the interest that the amounts
would have earned in the Pooled Money Investment Account, from the
sale of bonds for the purpose of carrying out this chapter.
2704.18. All money deposited in the fund which is derived from
premium and accrued interest on bonds sold shall be reserved in the
fund and shall be available for transfer to the General Fund as a
credit to expenditures for bond interest.
2704.19. The bonds may be refunded in accordance with Article 6
(commencing with Section 16780) of the State General Obligation Bond
Law. Approval by the electors of the state for the issuance of bonds
shall include approval of the issuance of any bonds issued to refund
any bonds originally issued or any previously issued refunding
bonds.
2704.20. The Legislature hereby finds and declares that, inasmuch
as the proceeds from the sale of bonds authorized by this chapter
are not "proceeds of taxes" as that term is used in Article XIII B of
the California Constitution, the disbursement of these proceeds is
not subject to the limitations imposed by that article.
2704.21. Notwithstanding any provision of the State General
Obligation Bond Law with regard to the proceeds from the sale of
bonds authorized by this chapter that are subject to investment under
Article 4 (commencing with Section 16470) of Chapter 3 of Part 2 of
Division 4 of Title 2 of the Government Code, the Treasurer may
maintain a separate account for investment earnings, order the
payment of those earnings to comply with any rebate requirement
applicable under federal law, and may otherwise direct the use and
investment of those proceeds so as to maintain the tax-exempt status
of those bonds and to obtain any other advantage under federal law on
behalf of the funds of this state.
SEC. 3. Section 2 of this act shall take effect upon the adoption
by the voters of the Safe, Reliable High-Speed Passenger Train Bond
Act for the 21st Century, as set forth in Section 2 of this act.
SEC. 4. (a) Section 2 of this act shall be submitted to the voters
at the November 2, 2004, general election in accordance with
provisions of the Government Code and the Elections Code governing
the submission of statewide measures to the voters.
(b) Notwithstanding any other provision of law, all ballots of the
November 2, 2004, general election shall have printed thereon and in
a square thereof, exclusively, the words "Safe, Reliable High-Speed
Passenger Train Bond Act for the 21st Century" and in the same square
under those words, the following in 8-point type: "This act
provides for the Safe, Reliable High-Speed Passenger Train Bond Act
for the 21st Century. For the purpose of reducing traffic on the
state's highways and roadways, upgrading commuter transportation,
improving people's ability to get safely from city to city,
alleviating congestion at airports, reducing air pollution, and
providing for California's growging population, shall the state build
a high-speed train system and improve existing passenger rail lines
serving the state's major population centers by creating a rail trust
fund that will issue bonds totaling $9.95 billion, paid from
existing state funds at an average cost of ____ dollars ($____) per
year over the 30-year life of the bonds, with all expenditures
subject to an independent audit?" The blank space in the question to
appear on the ballot pursuant to this subdivision shall be filled in
by the Attorney General with the appropriate figure provided by the
Legislative Analyst relative to the annual average cost of the bonds.
Opposite the square, there shall be left spaces in which the voters
may place a cross in the manner required by law to indicate whether
they vote for or against the measure.
(c) Notwithstanding Sections 13247 and 13281 of the Elections
Code, the language in subdivision (b) shall be the only language
included in the ballot label for the condensed statement of the
ballot title, and the Attorney General shall not supplement, subtract
from, or revise that language, except that the Attorney General may
include the financial impact summary prepared pursuant to Section
9087 of the Elections Code and Section 88003 of the Government Code.
The ballot label is the condensed statement of the ballot title and
the financial impact summary.
(d) Where the voting in the election is done by means of voting
machines used pursuant to law in the manner that carries out the
intent of this section, the use of the voting machines and the
expression of the voters' choice by means thereof are in compliance
with this section.