BILL ANALYSIS
SB 783
Page 1
Date of Hearing: June 29, 2009
ASSEMBLY COMMITTEE ON TRANSPORTATION
Mike Eng, Chair
SB 783 (Ashburn) - As Amended: June 23, 2009
SENATE VOTE : 38-0
SUBJECT : California High-Speed Rail Passenger: Biennial
Business Plan
SUMMARY : Revises the contents of the business plan of the
California High-Speed Rail Authority (HSRA) and requires it to
prepare, publish, and adopt it on a continuing basis, starting
on January 1, 2012, and every two years thereafter.
Specifically, this bill :
1)Revises the contents of the HSRA business plan and requires
HSRA to prepare a draft business plan and submit it for public
review and comment 60 days prior to publication.
2)Requires that the draft business plan also be submitted to the
transportation committees of the Legislature.
3)Requires HSRA to adopt the final plan and submit it to the
Legislature by January 1, 2012, and every two years
thereafter.
4)Requires that the business plan include the following
additional information:
a) The most recent patronage forecast to identify high,
medium, and low ridership scenarios and the corresponding
levels of service for Phase I of the project;
b) Alternative financial pro formas based on the patronage
forecast for each level of service, and the operating
break-even points for each alternative without operating
subsidies;
c) The expected schedule for completion of environmental
review, and initiation and completion of each segment of
Phase 1;
d) The supplemental sources of any federal, state, and
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local funding that is available to augment bond funds, and
the level of confidence for obtaining each type of funding;
e) Any written agreements with public or private entities
to fund components of the high-speed rail stations and
terminals; and,
f) Alternative public-private development strategies for
implementing Phase I.
EXISTING LAW :
1)Enacts the Safe, Reliable High-Speed Passenger Train Bond Act
for the 21st Century (High-Speed Rail Bond Act). The
High-Speed Rail Bond Act, approved as Proposition 1A in
November 2008, provides $9.95 billion in general obligation
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.
2)Requires HSRA to prepare a business plan by September 1, 2008,
that includes the types of services it expects to develop, a
description of the system's benefits, a patronage forecast,
the sources of funds to construct and operate the project, the
chronology for construction of the corridors in which it will
operate, the risk associated with construction, technology,
financing and other aspects of the project, and the HSRA's
strategy for managing risks.
FISCAL EFFECT : According to the Senate Appropriations
Committee, costs, after the initial business plan revisions
pursuant to Senate Budget Bill Language, approximately $100,000
- $150,000, that would be provided by California High-Speed
Passenger Train Bond Funds.
COMMENTS : The author's office states that this bill implements
the recommendations of the Legislative Analyst's Office (LAO)
concerning the business plan for the California high-speed rail
passenger project as submitted by HSRA. In its review of the
HSRA budget request for the 2009-10 fiscal year, LAO summarized
inadequacies it found in the HSRA's November business plan. It
indicated that "Lacking detailed information such as this, the
Legislature really has no better sense than prior to the plan's
submission as to how HSRA plans to accomplish its objective. As
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the HSRA continues to develop the high-speed rail system, it is
essential that the Legislature have a clear understanding of how
the state is proceeding with the project and, most importantly,
the risks it may be assuming and how those risks would be
mitigated. So that the Legislature will have the necessary
information, we recommend that the Legislature require HSRA to
expand upon its business plan and submit information to include
specific elements missing from the original document before
appropriating any bond funding for 2009-10. Although it is
likely that there will be an appropriation of bond revenue for
continuing the environmental and preliminary engineering work
that is already underway, the HSRA will not be seeking funding
for a construction project for the 2009-10 fiscal year."
HSRA Business Plan : Current law, pursuant to the High-Speed
Rail Bond Act, required HSRA to prepare a business plan and
submit the report to the Legislature by September 1, 2008. The
law specifies the contents of the business plan, included
information on the types of services HSRA expects to develop, a
description of the system's benefits, a patronage forecast, the
sources of funds to construct and operate the project, the
chronology for construction of the corridors in which it will
operate, the risks associated with construction, technology,
financing and other aspects of the project, and the HSRA's
strategy for managing risks. The business plan, as required to
be submitted on a one-time basis, was submitted late to the
Legislature in November 2008, beyond the date for statewide
voters to benefit from reading its content in consideration of
their vote on the High-Speed Rail Bond Act.
Senate Budget Bill Language : Separately, as a part of the state
budget conference compromise for high-speed rail, the conference
committee proposed to adopt the full funding level for HSRA as
requested by the Administration ($139 million from Proposition
1A bond funds), along with adopting Senate budget bill language
that requires HSRA to submit a revised business plan to the
Joint Legislative Budget Committee by December 15, 2009. The
revised business plan is to include additional information
similar to that requested by this bill.
Related bill : SB 455 (Lowenthal) of 2009, among other
provisions, requires the creation of an overall project schedule
with project delivery milestones for all aspects of the
high-speed rail project and the identification of the elements
of the project schedule that are critical. Also, requires the
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submittal of quarterly reports to the Legislature and the
Legislative Analyst's Office. That bill is being heard in this
committee today.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093