BILL NUMBER: AB 289 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 21, 2010
AMENDED IN SENATE JANUARY 25, 2010
AMENDED IN SENATE AUGUST 17, 2009
AMENDED IN ASSEMBLY APRIL 14, 2009
INTRODUCED BY Assembly Member Galgiani
FEBRUARY 13, 2009
An act to amend Section 185024 of Sections
185024 and 185033 of, and to add Section 185036.5 to, the
Public Utilities Code, relating to high-speed rail, making an
appropriation therefor, and declaring the urgency thereof, to
take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 289, as amended, Galgiani. High-speed rail.
Existing law, the California High-Speed Rail Act, creates the
High-Speed Rail Authority to develop and implement a high-speed rail
system in the state, with specified powers and duties. Existing law,
pursuant to the Safe, Reliable High-Speed Passenger Train Bond Act
for the 21st Century, approved by the voters as Proposition 1A at the
November 4, 2008, general election, provides for the issuance of
$9.95 billion in general obligation bonds for high-speed rail and
related purposes. Existing law provides for appointment of an
executive director by the authority, who is exempt from civil service
and serves at the pleasure of the authority.
This bill would authorize the Governor to appoint up to 5 deputy
directors exempt from civil service who would serve at the pleasure
of the executive director.
The federal American Recovery and Reinvestment Act of 2009
(ARRA) provides funding for allocation nationally to high-speed
rail projects.
This bill would require the High-speed Rail Authority, to
the extent possible, to use the proceeds of bonds from the Safe,
Reliable High-Speed Passenger Train Bond Act for the 21st Century to
match federal funds made available from the American Recovery and
Reinvestment Act of 2009 appropriate $2.25 billion to
the authority from federal ARRA funds awarded to the state for
high-speed rail purposes and would identify the corridors eligible
for those funds. The bill would require the authority to take those
actions necessary to ensure that the federal funds are used and
expended in a manner that meets all applicable federal guidelines,
make the most efficient use of available state bond funds,
and are expended and used consistent with current state law. The
bill would require the authority to report to the Director of Finance
and the Legislature relative to the expenditure plan for ARRA funds.
The bill would require the authority to include in its business plan
an estimate of jobs created in each corridor. The bill would state
the intent of the Legislature to establish an inspector general to
oversee the fiscal functions of the authority .
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: 2/3. Appropriation: no yes .
Fiscal committee: yes. State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all
of the following:
(a) With the enactment of the federal American Recovery and
Reinvestment Act (ARRA) (Public Law 111-5) on February 17, 2009, the
federal government made available a grant program in which states
could apply for up to $8 billion in federal funds for the development
of high-speed rail throughout the nation.
(b) On October 2, 2009, the High-Speed Rail Authority (HSRA)
submitted to the Federal Railroad Administration (FRA) of the United
States Department of Transportation an application for $4.73 billion
in federal funds to further the development of high-speed rail in
California.
(c) On January 28, 2010, the federal government awarded the HSRA
$2.25 billion to advance the development of a high-speed rail system
in this state.
(d) (1) The HSRA's application was approved for preliminary
engineering, project-level environmental work, mitigation, final
design, and construction for the following four corridors:
(A) San Francisco to San Jose.
(B) Merced to Fresno.
(C) Fresno to Bakersfield.
(D) Los Angeles to Anaheim.
(2) In accordance with FRA guidelines, these corridors are
required to complete environmental review by September 2011 and to
start construction by September 2012, with construction completion by
September 2017.
(e) The HSRA's application was approved for preliminary
engineering, and project-level environmental work for the following
five corridors:
(1) Los Angeles to San Diego.
(2) Los Angeles to Palmdale.
(3) Palmdale to Bakersfield.
(4) Merced to San Jose.
(5) Sacramento to Merced.
(f) The HSRA estimates that 60,277 jobs will be created or
maintained by the investment of these ARRA funds in the dozens of
construction projects along the eligible corridors throughout
California.
(g) It is necessary to provide the HSRA with unambiguous statutory
authority to receive and expend federal funds awarded to the HSRA
for the purposes described in its application of October 2, 2009, and
consistent with the award of those federal funds.
(h) Moreover, it is in the state's interest to obligate and expend
awarded funds as expeditiously as possible and in a manner
consistent with the voters' expectations when they approved the Safe,
Reliable High-Speed Passenger Train Bond Act for the 21st Century
(Chapter 20 (commencing with Section 2704) of Division 3 of the
Streets and Highways Code) in November 2008, in order to expand job
creation and to complete vital infrastructure improvements as soon as
possible.
SECTION 1. SEC. 2. The High Speed
Rail Authority shall, to the extent possible, use the proceed of
bonds described in paragraph (1) of subdivision (b) of Section
2704.04 of the Streets and Highways Code to match federal funds made
available from the American Recovery and Reinvestment Act of 2009
(Public Law 111-5).
SEC. 2. SEC. 3. Section 185024 of the
Public Utilities Code is amended to read:
185024. (a) The authority shall appoint an executive director,
who shall serve at the pleasure of the authority, to administer the
affairs of the authority as directed by the authority.
(b) The executive director is exempt from civil service and shall
be paid a salary established by the authority and approved by the
Department of Personnel Administration.
(c) The executive director may, as authorized by the authority,
appoint necessary staff to carry out the provisions of this part.
(d) The Governor may appoint up to five employees, exempt from
civil service, as deputy directors of the authority, who shall serve
at the pleasure of the executive director.
SEC. 4. Section 185033 of the Public
Utilities Code is amended to read:
185033. (a) The authority shall prepare, publish, adopt, and
submit to the Legislature, not later than January 1, 2012, and every
two years thereafter, a business plan. At least 60 days prior to the
publication of the plan, the authority shall publish a draft business
plan for public review and comment. The draft plan shall also be
submitted to the Senate Committee on Transportation and Housing, the
Assembly Committee on Transportation, the Senate Committee on Budget
and Fiscal Review, and the Assembly Committee on Budget. The business
plan shall identify all of the following: the type of service the
authority anticipates it will develop, such as local, express,
commuter, regional, or interregional; a description of the primary
benefits the system will provide; a forecast of the anticipated
patronage, operating and maintenance costs, and capital costs for the
system; an estimate and description of the total anticipated
federal, state, local, and other funds the authority intends to
access to fund the construction and operation of the system; and the
proposed chronology for the construction of the eligible corridors of
the statewide high-speed train system. The business plan shall also
include a discussion of all reasonably foreseeable risks the project
may encounter, including, but not limited to, risks associated with
the project's finances, patronage, right-of-way acquisition,
environmental clearances, construction, equipment, and technology,
and other risks associated with the project's development. The plan
shall describe the authority's strategies, processes, or other
actions it intends to utilize to manage those risks.
(b) (1) In addition to the requirements of subdivision (a), the
business plan shall include, but need not be limited to, all of the
following elements:
(A) Using the most recent patronage forecast for the system,
develop a forecast of the expected patronage and service levels for
the Phase 1 corridor as identified in paragraph (2) of subdivision
(b) of Section 2704.04 of the Streets and Highways Code and by each
segment or combination of segments for which a project level
environmental analysis is being prepared for Phase 1. The forecast
shall assume a high, medium, and low level of patronage and a
realistic operating planning scenario for each level of service.
Alternative fare structures shall be considered when determining the
level of patronage.
(B) Based on the patronage forecast in subparagraph (A), develop
alternative financial pro formas for the different levels of service,
and identify the operating break-even points for each alternative.
Each pro forma shall assume the terms of subparagraph (J) of
paragraph (2) of subdivision (c) of Section 2704.08 of the Streets
and Highways Code.
(C) Identify the expected schedule for completing environmental
review, and initiating and completing construction for each segment
of Phase 1.
(D) Identify the source of federal, state, and local funds
available for the project that will augment funds from the bond act
and the level of confidence for obtaining each type of funding.
(E) Identify written agreements with public or private entities to
fund components of the high-speed rail system, including stations
and terminals, any impediments to the completion of the system, such
as the inability to gain access to existing railroad rights-of-way.
(F) Identify alternative public-private development strategies for
the implementation of Phase 1.
(G) Identify the number of jobs each corridor is estimated to
create in this state.
(2) To the extent feasible, the business plan should draw upon
information and material developed according to other requirements,
including, but not limited to, the preappropriation review process
and the preexpenditure review process in the Safe, Reliable
High-Speed Passenger Train Bond Act for the 21st Century pursuant to
Section 2704.08 of the Streets and Highways Code. The authority shall
hold at least one public hearing on the business plan and shall
adopt the plan at a regularly scheduled meeting. When adopting the
plan, the authority shall take into consideration comments from the
public hearing and written comments that it receives in that regard,
and any hearings that the Legislature may hold prior to adoption of
the plan.
SEC. 5. Section 185036.5 is added to the
Public Utilities Code , to read:
185036.5. (a) The Legislature hereby appropriates to the
authority the sum of two billion two hundred fifty million dollars
($2,250,000,000) made available to the state for high-speed rail
purposes pursuant to Title XII of Division A of the American Recovery
and Reinvestment Act of 2009 (ARRA). The authority may expend these
funds for the purposes of developing a project or projects on the
high-speed rail network consistent with this section.
(b) The federal funds appropriated in subdivision (a) shall be
available for obligation and expenditure by the dates specified in
the federal requirements implementing the federal act. The authority
shall take those actions necessary to ensure the federal funds
awarded to it (1) are expended and used in a manner that meets all
applicable federal guidelines, (2) make the most efficient use of
available state bond funds, including replacing bond funds for
project expenditure with available federal funds where feasible, and
(3) are expended and used consistent with state law.
(c) The authority shall consider actions that (1) maximize job
creation in California at the earliest feasible time and (2) expedite
the completion of vital infrastructure projects that improve rail
safety, mobility, and performance.
(d) (1) The ARRA funds appropriated in subdivision (a) are
available for preliminary engineering, project-level environmental
work, mitigation, final design, and construction for the following
corridors that were approved by the Federal Railroad Administration
(FRA), without reference to any individual corridor or corridors:
(A) San Francisco to San Jose.
(B) Merced to Fresno.
(C) Fresno to Bakersfield.
(D) Los Angeles to Anaheim.
(2) The ARRA funds appropriated in subdivision (a) are also
available for preliminary engineering and project-level environmental
work for the following five corridors, without reference to any
individual corridor or corridors:
(A) Los Angeles to San Diego.
(B) Los Angeles to Palmdale.
(C) Palmdale to Bakersfield.
(D) Merced to San Jose.
(E) Sacramento to Merced.
(e) (1) The authority shall work with the FRA to establish
priorities among the four corridor programs in paragraph (1) of
subdivision (d) and, if applicable, for the five corridor programs in
paragraph (2) of subdivision (d), and to create a plan for
expenditure of ARRA funds appropriated in subdivision (a).
(2) No later than 30 days following the submittal of the initial
plan for expenditure of ARRA funds to the FRA, the authority shall
submit a copy of the plan to the Director of Finance and to the
policy committees with jurisdiction over transportation matters and
the fiscal committees in both houses of the Legislature.
(3) All funds appropriated pursuant to subdivision (a) shall be
expended in a manner that is consistent with and subject to the
requirements of Section 2704.08 of the Streets and Highways Code
applicable to bond proceeds, to the extent those requirements are
consistent with the federal conditions applicable to expenditure of
the funds.
(f) It is the intent of the Legislature to establish an inspector
general to oversee the fiscal functions of the authority to ensure
public confidence and private investor confidence in the fiscal
management and construction of the project. The inspector general
would report to the authority and Legislature annually.
SEC. 3. SEC. 6. This act is an
urgency statute necessary for the immediate preservation of the
public peace, health, or safety within the meaning of Article IV of
the Constitution and shall go into immediate effect. The facts
constituting the necessity are:
In order to ensure that California may secure the maximum amount
of funds available for high-speed rail development and to provide for
necessary staff in that regard as quickly as possible, it is
necessary that this act take effect immediately.