BILL ANALYSIS
AB 713
Page 1
(Without Reference to File)
CONCURRENCE IN SENATE AMENDMENTS
AB 713 (Torrico)
As Amended May 18, 2006
2/3 vote. Urgency
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|ASSEMBLY: |52-13|(May 27, 2005) |SENATE: |33-0 |(June 26, |
| | | | | |2006) |
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Original Committee Reference: TRANS.
SUMMARY : Postpones, until 2008, the scheduled November 7, 2006
vote on the Safe, Reliable High-Speed Passenger Train Bond Act
for the 21st Century (Bond Act) and makes corrective changes in
language.
The Senate amendments add an urgency clause.
EXISTING LAW sets forth the Bond Act. The Bond Act is required
to be submitted before voters at the November 7, 2006 General
Election and, if approved, would provide $9.95 billion in
general obligation (G.O.) bond authority to fund the planning
and construction of a high-speed passenger train system and
complementary improvements to other specified rail systems in
the state.
AS PASSED BY THE ASSEMBLY , this bill:
1)Delayed the scheduled vote on the Bond Act by two years,
requiring that the construction bond proposal be submitted to
the state's voters on the November 4, 2008 General Election,
rather than the November 7, 2006 General Election.
2)Removed the waiting period for the issuance or sale of High
Speed Rail Bonds once they have been authorized by voters on
the statewide ballot.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, there are moderate cost shifts of $250,000, from
fiscal year (FY) 2005-06 to FY 2007-08, to the Secretary of
State to print descriptions of the proposition and arguments for
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and against it. In addition, there could be a potential delay
in state debt service costs resulting from the issuance and sale
of up to $9.95 billion in G.O. bonds. If these bonds are sold
as 25-year bonds at an average of 5%, the total General Fund
principal and interest cost over this period is $16.42 (or $657
million of average debt service per year over the 25-year
period).
COMMENTS : According to the author, the proposed high-speed rail
system "would be a valuable asset to California however, the
state's ongoing budget deficits and precarious financial
condition have diminished its ability to undertake new programs
and projects, including long-term and costly transportation
projects." The intent of this bill is to set a more suitable
date for the vote on whether to approve the bonding authority
for the detailed planning and construction of the high-speed
train system.
This is one of several bills that have been introduced to either
postpone or repeal the November 2004 vote on a ballot measure to
provide $9.95 billion in funding through the sale of G.O. bonds
for the detailed planning and construction of a high-speed train
system. It is widely understood that the state's structural
budget deficit and precarious financial condition has diminished
the state's ability to undertake new programs and projects,
including long-term and costly transportation projects like the
high-speed train proposal.
SB 1856 (Costa), Chapter 697, Statutes of 2002, required the
Bond Act be submitted to the state's voters at the November 2,
2004 General Election and, if approved, would provide $9.95
billion in G.O. bond authority, which would be federally
matched, to fund construction for most of the high-speed rail
segment from San Francisco to Los Angeles, and $950 million for
improvements to other specified rail systems in the state. SB
1169 (Murray), Chapter 71, Statutes of 2004, delayed the
scheduled November 2, 2004 General Election vote on the Bond Act
to November 7, 2006.
Voters at the March 2, 2004 Primary Election approved two
statewide bond measures totaling $27.3 billion in bonding
authority for school construction and the expansion and
extension of the state's borrowing for deficit financing. Upon
the issuance of the approved bonds, the state's bond financing
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debt ratio climbed significantly, making it more difficult to
approve even more bonding expenditure authority in the near
term. As of February 1, 2005, the Treasurer's office estimates
that California has authorized over $100 billion in bonds and
accrued more than $86.3 billion in debt. The Legislative
Analyst's Office estimates that the current bond debt will
consume more than 7% of state revenues in 2008-09. In addition,
the California Transportation Commission states that the state
already faces a $100 billion shortfall in transportation funding
over the next decade. According to the High Speed Rail
Authority, the estimated cost of the 700-mile high speed rail
system is $37 billion.
Although this bill would delay the bond election by two years,
it would not necessarily delay the construction of the
high-speed rail system because the issuance of the bonds could
transpire in less than a year. Current law sets the election at
November of 2006 but does not permit the issuance of bonds until
January 2008. This bill would set the election for November of
2008 and allow issuance as soon as possible after that date.
The urgency clause added to this bill on May 18 will make this
bill effective immediately. Without the urgency clause, this
bill, like most others without an urgency clause, would become
effective on January 1, 2007. This amendment is necessary
because the November 7, 2006 election date precedes the January
1, 2007 effective date thus negating this bill's purpose.
Related legislation: AB 1173 (Tran) would designate Anaheim,
rather than Los Angeles, as the southern terminus for the
initial segment of the high-speed rail system. That bill was
held in Assembly Appropriations Committee.
AB 2865 (Bogh) of 2004 would have postponed, from the scheduled
November 2, 2004 general election to the November 7, 2006
general election, the vote on the Bond Act. That bill was held
in Senate Transportation Committee.
SB 1169 (Murray), Chapter 71, Statutes of 2004, delayed the
scheduled November 2, 2004 General Election vote on the Bond
Act, to November 7, 2006.
SB 1256 (McClintock) would have completely repealed the SB 1856
Bond Act proposal. That bill was held in the Senate
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Transportation Committee.
SB 1483 (Perata), would have postponed for two years the
scheduled vote on the Bond Act. That bill was held in the
Senate Transportation Committee.
Analysis Prepared by : Frances Chacon / TRANS. / (916)
319-2093 FN: 0015260