BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 3034
                                                                  Page  1

          Date of Hearing:   May 7, 2008 

                                  Mark Leno, Chair

                  AB 3034 (Galgiani) - As Amended:  April 21, 2008 

          Policy Committee:                              Transportation  
          Vote:        10-0

          Urgency:     Yes                  State Mandated Local Program:  
          No     Reimbursable:               


          This bill modifies the Safe, Reliable High-Speed Passenger Train  
          Bond Act, as originally enacted by SB 1856 (Costa) - Chapter  
          697, Statutes of 2002, to reflect activities and project design  
          changes that occurred over the past six years, and to better  
          present the bond authorization measure to voters at the November  
          4, 2008 statewide election.

           FISCAL EFFECT  

          Potentially substantial reallocation, if voters approve the  
          High-Speed Rail Bond on the November 2008 statewide ballot, of  
          general obligation bond proceeds due to the changes made to the  
          allocation and spending process outlined in 2002 by SB 1856.   
          The total $9.95 billion bond authorization amount remains  


          Specifically, this bill:

          1)Eliminates language specifying that, after the initial  
            investment from the state to construct the initial segment,  
            operating revenues and funds from the federal government and  
            the private sector will be used to pay for expansion of the  

          2)Replaces language that requires the $9 billion of bond  
            proceeds earmarked for high-speed rail to first be spent on  
            the segment between San Francisco Transbay Terminal and Los  
            Angeles Union Station, with language that requires bond  


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            proceeds to be spent generally on all high-speed rail segments  
            and the Altamont Corridor between the Central Valley and the  
            East Bay.  This bill requires the High Speed Rail Authority  
            (HSRA) to give priority to those system segments that require  
            the least amount of bond funding as a percentage of total  
            cost, to consider the utility of that segment for other  
            passenger rail services, and to ensure that other services  
            will not result in any operating or maintenance cost to the  

          3)References the 2005 High Speed Rail Environmental Impact  
            Report instead of the High Speed Rail Final Business Plan of  

          4)Allows up to 10% of bond proceeds earmarked for the high-speed  
            rail system (a maximum $900 million) to be used for  
            environmental studies, planning and engineering activities.

          5)Specifies that the $950 million in bond proceeds earmarked for  
            intercity and commuter rail lines and urban rail systems can  
            be allocated to systems that are part of the construction of  
            the high-speed rail system.

          6)Prohibits the siting of a high-speed rail station between the  
            Merced station and the Gilroy station.

           1)Rationale  .  This bill, sponsored by the HSRA, makes  
            modifications to the original SB 1856 high speed rail bond  
            bill to reflect activities, progress, and changes in focus and  
            priorities that have occurred since the bill's enactment in  
            2002.  The HSRA believes the changes made by AB 3034 will  
            better reflect the system proposed to be designed and  
            constructed, and give voters at the November 4, 2008 statewide  
            election a better picture of the whole high speed rail  

           2)Legislative History  .  SB 1856 submitted the High-Speed Bond  
            Act for voter approval at the November 2, 2004 statewide  
            election.  Primarily due to budgetary concerns and competition  
            with other bond authorization priorities, SB 1169 (Murray) -  
            Chapter 71, Statutes of 2004 delayed bond authorization to the  
            November 7, 2006 statewide election, and AB 713 (Torrico) -  
            Chapter 44, Statutes of 2006 delayed it again to November 4,  


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          3)Train Station Prohibition  .  While the HSRA has never planned  
            on siting a high-speed train station between the Merced  
            station and the Gilroy station, there was concern that somehow  
            a station would be located in Los Banos.  This amendment  
            eliminates those concerns.  

          4)November 2008 Statewide Ballot  .  The Safe, Reliable High-Speed  
            Passenger Train Bond Act for the 21st Century is the only bond  
            act currently qualified to appear on the November 2008  
            statewide ballot.  If all $9.95 billion worth of G.O. bonds  
            are issued and sold as 30-year bonds at an average interest  
            rate of 5%, the total principal and interest cost over this  
            period is $19.4 billion, or $647 million of debt service per  
            year for 30 years.

           5)Urgency Measure  .  The deadline for a legislative measure to  
            qualify for the November 4, 2008 statewide ballot is June 26.   
            If the changes proposed by this bill to the original High  
            Speed Bond Act are to be reflected without incurring the  
            additional costs of preparing a supplemental ballot pamphlet,  
            AB 3034 would have to be enacted by the Legislature within the  
            next seven weeks.

           Analysis Prepared by  :    Steve Archibald / APPR. / (916)