BILL ANALYSIS Ó
AB 76
Page 1
Date of Hearing: April 11, 2011
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
AB 76 (Harkey) - As Introduced: December 22, 2010
SUBJECT : California High-Speed Rail Authority: bond financing
SUMMARY : Reduces the amount of authorized indebtedness for the
California High-Speed Rail Authority (Authority) to the amount
contracted as of January 1, 2012.
EXISTING LAW :
1)Establishes and provides the Authority with the responsibility
to develop and implement a high-speed rail system in
California.
2)Authorizes the sale of $9 billion in general obligation bonds
to partially fund the development and construction of the
high-speed rail system.
3)Authorizes the Legislature to establish conditions and
criteria on funds appropriated for planning and capital costs;
requires the Authority, prior to expending bond funding for
the construction and acquisition of equipment and property, to
submit a detailed funding plan for each corridor or usable
segment.
4)Provides explicit authority for the Legislature to reduce the
amount of indebtedness authorized by a bond act to an amount
not less than the amount contracted at the time of the
reduction.
FISCAL EFFECT : Unknown
COMMENTS : The proposed California high-speed rail project
consists of an 800+ mile high-speed system capable of a speed up
to 220 miles per hour, initially serving the major metropolitan
market of San Francisco through the Central Valley into Los
Angeles and Orange County (Phase 1). Eventually the service
would be extended to Sacramento, the Inland Empire, and San
Diego. Estimated costs for Phase 1 of the project are $43
billion, to be funded as follows:
AB 76
Page 2
1)$17 billion to $19 billion in federal grants;
2)$9 billion from Proposition 1A bonds;
3)$4 billion to $5 billion in local governments grants; and,
4)$10 billion to $12 billion in private investments.
To date, approximately $5.9 billion has been made available for
the project: $3.1 billion from federal grants and $2.8 billion
from state bonds.
In introducing AB 76, the author contends that "While there may
be some benefits to high-speed rail, it should not come at the
expense of our schools, local transportation, public safety, and
health and human services. It should be noted that $9-10
billion represents only startup costs for this project. The
High-Speed Rail Authority estimates the costs for this project
in excess of $40-60 billion. The Legislature should demand
complete projections and tracking mechanisms prior to funding
any project with public funds."
Writing in opposition to this bill, the California Labor
Federation indicates that "Proposition 1A, the bond measure to
construct a statewide high-speed rail system, was overwhelmingly
approved by California voters?Construction of high-speed rail in
California is projected to create 160,000 construction jobs at a
time when unemployment in the building trades ranges from
30-50%...This project is vital to spur California economy
through job creation and also through easing traffic congestion,
speeding the flow of goods through the state and increasing
tourism." Additionally, the California Public Interest Research
Group contends that "Ýt]he cost of scrapping the high-speed rail
project is not zero. On the contrary, the highway and airport
expansions California would need to build without high-speed
rail are expected to exceed $80 billion."
Related bill: AB 2121 (Harkey) of 2010, as introduced, was
nearly identical to this bill. That bill was later amended to
deal with high-speed rail reporting requirements.
REGISTERED SUPPORT / OPPOSITION :
Support
AB 76
Page 3
None on file
Opposition
California High-Speed Rail Authority
California Labor Federation
California Public Interest Research Group
California State Council of Laborers
State Building and Construction Trades Council
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093