BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 1779 (Galgiani) - Intercity rail agreements: San Joaquin
Corridor.
Amended: August 6, 2012 Policy Vote: T&H 8-0
Urgency: No Mandate: No
Hearing Date: August 6, 2012
Consultant: Mark McKenzie
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 1779 would authorize the Department of
Transportation (Caltrans) to enter into an interagency transfer
agreement with a joint powers authority for intercity rail
service in the San Joaquin Corridor.
Fiscal Impact:
One-time costs to Caltrans of approximately $200,000
(Public Transportation Account) to administer the transition
of operations and management to the JPA.
Cost pressures to maintain current levels of service for
three years due to expected reductions in federal funding
for intercity rail (Public Transportation Account).
Although those federal reductions would be related to
service in the San Diego-Los Angeles-San Luis Obispo
intercity rail corridor (LOSSAN corridor), this bill reduces
flexibility to address shortfalls statewide.
Additional cost pressures related to provisions in the bill
that would shift financial risk from the JPA to the state,
while also removing operational and management decisions
from the state to the JPA. (see staff comments)
Background: Since 1979, Caltrans has contracted with Amtrak for
providing intercity passenger rail service from Bakersfield to
Oakland and Sacramento, with additional bus service to San
Francisco and other communities. This service in the San
Joaquin corridor includes four daily round trips between
Bakersfield and Oakland, and two between Bakersfield and
Sacramento. Approximately one million passengers travel in the
San Joaquin corridor each year, which makes it the fifth most
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patronized Amtrak corridor in the country.
In addition to the San Joaquin corridor, the state has funded
Amtrak service in the LOSSAN corridor from San Diego to Los
Angeles and San Luis Obispo since 1976, and the state contracted
with Amtrak to operate service from Sacramento to Oakland/San
Jose in 1991. The management of the latter service was devolved
to the Capitol Corridor Joint Powers Agency (CCJPA) in 1998 by
an interagency transfer agreement. This bill is intended
emulate the institutional relationship between Caltrans and the
CCJPA in the San Joaquin corridor.
Proposed Law: AB 1779 would authorize Caltrans to transfer all
responsibility for administering state-funded intercity
passenger rail service in the San Joaquin corridor through an
interagency transfer agreement (ITA) to the San Joaquin Joint
Powers Authority (SJJPA). Specifically, this bill would:
Define the San Joaquin corridor as the Los
Angeles-Bakersfield-Fresno-Stockton-Sacramento-Oakland
intercity passenger rail corridor.
Create the 11-member SJJPA Board, as specified, and
deems the board organized if six of the appointing agencies
elect to appoint a member to serve on the board prior to
December 31, 2013.
Authorize the SJJPA to enter into an ITA with Caltrans
by December 31, 2013 for assumption of all responsibility
for administering intercity passenger rail service, if the
Secretary of the Business, Transportation and Housing
Agency determines the transfer would result in
administrative or operating cost reductions.
Require SJJPA to protect existing services and
facilities and seek to expand services as warranted by
ridership and available revenue.
Prohibit the state from requiring a corridor agency to
use local funds to augment service or fund shortfalls when
agreed upon performance standards are not met.
Prohibit the use of local funds for expenditure to
offset any redirection, elimination, reduction, or
reclassification of state resources for operating intercity
passenger rail services in the corridor.
Require that cost for categories of service shall be
controlled by the cost allocation procedures established by
Amtrak in accordance with the federal Passenger Rail
Investment and Improvement Act of 2008
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Prohibit the termination of feeder bus services, except
as specified.
Express legislative intent that state funding for
intercity rail service in each corridor should be
maintained at a level equal to at least the current level
of service in each corridor for at least three years.
Related Legislation: SB 1225 (Padilla), which is currently
pending in the Assembly Appropriations Committee, would
authorize Caltrans to transfer all responsibility for
administering state-funded intercity passenger rail service in
the LOSSAN corridor through an interagency transfer agreement to
the LOSSAN Rail Corridor Agency.
Staff Comments: Staff notes that federal support will end on
certain rail corridors that are less than 750 miles, including
the LOSSAN corridor in southern California, pursuant to Section
209 of the federal Passenger Rail Investment and Improvement
Act. As a result, the state will support 100 percent of the
Amtrak operational costs of the LOSSAN corridor beginning in
2013-14, which will require an increase in state funding of
almost $25 million annually to continue service at current
levels. This reduction in federal funding support may affect
available revenues for all three intercity rail corridors. AB
1779 would create cost pressures to maintain current levels of
service for three years due to expected reductions in federal
funding for intercity rail.
Caltrans indicates that this bill would require a temporary
increase of 2 PY of staff time for one year at an estimated cost
of $200,000 to cover the transition of administration to the
JPA, including the formulation of an ITA and agreements
regarding state-owned facilities. In addition, three to four PY
of staff dedicated to operations and capital projects for the
San Joaquin corridor would no longer be necessary at Caltrans,
but the equivalent funding level would be provided to the SJJPA
upon execution of the ITA.
This bill makes several changes to the statutes used to
establish an ITA with the Capitol Corridor JPA that are
disadvantageous to the state. For example, existing law
authorizes the JPA to augment state funding to address funding
shortfalls in achieving agreed-upon performance standards, while
this bill explicitly prohibits the state from requiring the use
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of local funds for that purpose. The bill also adds a provision
to the ITA authorizing statute to prohibit the use of local
funds for expenditure to offset any redirection, elimination,
reduction, or reclassification of state resources for operating
intercity passenger rail services in the corridor. These
factors would insulate the JPA from certain financial risks, and
shift the burden of those risks to the state while subsequently
taking the state out of operational and management decision
making in the corridor. All of these provisions could impose
additional cost pressures on the state. The Committee may wish
to consider amending the bill to conform more closely to the
existing statute that was used to execute the Capitol Corridor
JPA to insulate the state from increased risk, and instead leave
these matters subject to negotiation rather than including them
in statute.
Existing law requires that any funds beyond the amount allocated
in an annual appropriation that are needed for operation of
passenger rail service in a fiscal year would be provided by the
JPA. Although this bill does not amend Section 14070.4 of the
Government Code, SB 1225 (Padilla), which authorizes Caltrans to
enter into an ITA for transfer of administrative authority in
the LOSSAN corridor, would delete the requirement that
operational shortfalls be covered by the JPA. Staff notes that
if both AB 1779 and SB 1225 are enacted, the SJJPA would be
relieved of the requirement to cover operational shortfalls,
thereby shifting responsibility to pay for annual shortfalls to
the state. The Committee may wish to amend this provision to
clarify that this requirement still applies to the SJJPA.
Proposed Author Amendments: The author has proposed amendments
to specify that the San Joaquin JPA board member representing
Contra Costa County would be appointed by the Contra Costa
Transportation Authority.
Recommended Amendments: Staff notes that SB 1225 includes an
explicit statutory requirement that the ITA be for a duration of
three years, and authorizes an extension upon mutual agreement.
Staff suggests that this bill be amended to place a similar
explicit requirement in statute.
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