BILL ANALYSIS Ó
SB 325
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Date of Hearing: June 27, 2011
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
SB 325 (Rubio) - As Amended: June 9, 2011
SENATE VOTE : 38-1
SUBJECT : Central California Railroad Authority
SUMMARY : Establishes the Central California Railroad Authority
(CCRA) to provide shortline rail freight service within Fresno,
Kern, Kings, Merced, and Tulare Counties. Specifically, this
bill :
1)Establishes the CCRA to provide rail freight service within
Kern, Kings, Fresno, Merced, and Tulare Counties.
2)Authorizes the Counties of Madera, San Joaquin, and Stanislaus
to elect to join CCRA and for those joining, that the service
area of CCRA be expanded to incorporate those counties.
3)Requires CCRA to be governed by a board of directors (Board),
composed as follows:
a) One member appointed by the Council of Fresno County
Governments;
b) One member appointed by the Kern Council of Governments;
c) One member appointed by the Kings County Association of
Governments;
d) One member appointed by the Merced County Association of
Governments; and,
e) One member appointed by the Tulare Association of
Governments.
1)Requires all members of CCRA to be elected officials of a city
or a county member who belongs to the regional transportation
planning agency (RTPA) or council of government (COG) who is
appointing them.
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2)Requires Board to serve for terms of two years and until their
successors have qualified.
3)Requires CCRA to conduct its first meeting no later than 120
days after abandonment or discontinuance of service on any
railroad line, provided the member RTPA or COG have formed a
joint exercise of powers agreement to implement and manage
CCRA.
4)Specifies that the RTPA or COG representing the counties of
Fresno, Kern, Kings, Merced, and Tulare and any RTPA of other
counties that may elect to join the CCRA, may operate freight
rail service within the area of jurisdiction of CCRA.
5)Requires CCRA to do all of the following:
a) Adopt rules for proceedings;
b) Use the established quorum requirement;
c) Act by motion, resolution, or ordinance;
d) Conduct meetings under the Ralph M. Brown Act;
e) Adopt a budget;
f) Adopt an administrative code; and,
g) Conduct a financial audit annually.
1)Authorizes the Board to provide, by motion, ordinance or
resolution, that each of its members may receive compensation
in an amount not to exceed $100 for each day of service with a
maximum of six days of service per month and defines "day of
service". Authorizes Board to waive any or all payments
allowed.
2)States that CCRA may sue and be sued.
3)States that CCRA has all of the following powers:
a) To acquire, own, operate, and lease real and personal
property reasonably related to the operation and
maintenance of railroads;
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b) To issue revenue bonds;
c) To acquire property by purchase, lease, gift, or through
exercise of the power of eminent domain, within its area of
jurisdiction;
d) To operate railroads, including those outside its
boundaries in order to connect its lines with the lines of
another railroad corporation, provided the service begins
within CCRA's area of jurisdiction;
e) To accept grants or loans from federal agencies; and,
f) To select a franchisee, which may be a public or private
entity, to acquire or operate a rail transportation system
within the area of CCRA's jurisdiction.
1)Allows CCRA to acquire, own, lease, and operate railroad lines
and equipment, including, but not limited to, real and
personal property, tracks, rights-of-way, equipment, and
facilities.
2)Allows CCRA to prepare a plan for the acquisition and
operation of any railroad line.
3)Authorizes CCRA, after preparation of a plan, to do any of the
following:
a) Conduct engineering and other studies related to the
acquisition of any railroad line;
b) Evaluate alternative plans from the private sector to
acquire, finance, and operate a railroad system;
c) Establish criteria for the award of a franchise;
d) Select a franchisee to acquire, finance, and operate the
railroad system;
e) Accept grants, gifts, fees, or allocations from other
entities, including private and public sources; and,
f) Employ an executive officer, other staff, and
consultants deemed appropriate for support of the
activities of CCRA.
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1)States that an election is not required when the Board
authorizes revenue bonds to be issued for railroad facilities
and all other facilities authorized to be acquired,
constructed, or completed by CCRA.
2)Provides that the state is not liable for any contracts,
debts, or other obligations of CCRA.
3)Requires agencies forming the joint powers agreement (JPA)
implementing CCRA to be liable for all debts and obligations
of the CCRA.
4)Prohibits CCRA utilizing or be a claimant for Transportation
Development Act funds.
5)Prohibits CCRA from being entitled to receive funds from the
Public Transportation Account (PTA).
EXISTING LAW :
1)Authorizes the creation of railroad authorities in various
parts of the state.
2)Defines "shortline" railroads to mean "any standard gauge
railroad which is being, or is planned to be, used for
passenger service, other than a class I railroad, as that term
is used and applied in federal law.
3)Enacts, in 1971, the Transportation Development Act that
establishes the PTA. The PTA provides a source of state funds
primarily for transit (including bus and rail) purposes. Makes
eligible for PTA funding shortline railroad rehabilitation
projects upon adoption in the state transportation improvement
program.
FISCAL EFFECT : Unknown
COMMENTS : The author contends that "within the southern San
Joaquin Valley, there are currently several instances where
short line railroad activities have been abandoned by the
operator. Once a rail line has been removed, it is unlikely
that rail service would resume in the foreseeable future. In
turn, this creates a critical situation whereby adjacent
communities are ostensibly left without any viable rail
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service."
In June 2008, the Surface Transportation Board (STB), the
federal agency that oversees the United States' railroad
industry, authorized the abandonment of 30.6 miles of rail
service operated by the San Joaquin Valley Railroad (SJVRR)
between Strathmore and Jovista in Tulare County. In the same
decision, STB denied a request to abandon the rail line from
Strathmore to near Exeter. STB documents show that SJVRR sought
authority to abandon the line because "there is insufficient
traffic available to justify the cost of maintaining and
operating the line, and that investing capital in the line would
not be a prudent use of carrier resources." During the
abandonment process, Tulare County sought to acquire the section
being abandoned and asked STB to set terms and conditions for
the sale of the right-of-way. STB set the purchase price at
$3.3 million. Tulare County declined to purchase the line at
that price.
Matters related to railroad operations, corporate structure,
ownership, service provision, and other aspects of the railroad
business are preempted by the federal government. In fact,
states and local governments cannot exercise the right of
eminent domain to obtain railroad property and are unable to
regulate shipping rates and other aspects of railroad
operations.
Accordingly, the author further states that "SB 325 would create
an authority to ensure railroad service if the Surface
Transportation Board (STB) authorizes the abandonment or
discontinuance of service on-or in the event of the bankruptcy
or sale of-existing short line railroad operations in the
Counties of Kern, Tulare, Kings, Fresno and Merced." They
further cite the need for this bill as communities heavily
reliant on short rail services stand to lose access to goods
movement and shipping services if an alternative is not
developed to ensure dependable rail service for Kern, Tulare,
Kings, Fresno and Merced Counties. Unemployment in these
counties hovers around 18% and includes many communities with
jobless rates exceeding 40%. Small and large businesses alike
throughout California-particularly in the Central Valley-stand
to lose greatly if short rail operations decline or cease to
exist."
The SJVR operates 417 miles of track in central California. The
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SJVR interchanges with the BNSF Railway at Fresno and
Bakersfield and with the Union Pacific Railroad at Fresno and
Goshen Junction. The SJVR service features primary commodities
of petroleum products, cattle feed, building products, tomato
paste, consumer products, dry and liquid fertilizer products.
This bill would create the CCRA to ensure the continuation of
shortline rail service in the San Joaquin Valley for shippers
and receivers along with enabling opportunities to provide
high-speed rail passenger rail service connections. CCRA would
be established in statute to be comprised of locally-elected
officials appointed from the COGs in Fresno, Kern, King, Merced,
and Tulare Counties. This bill also requires that the member
RTPA or COG form a joint exercise of powers agreement to
implement and manage the CCRA.
Support : Supporters contend that CCRA would help preserve the
rail lines for goods movement which are an intricate part of the
San Joaquin Valley economy.
Opposition : Although there is no opposition to this bill, one
could argue that rail lines have not been abandoned yet and that
this bill may be premature and the effort to form the CCRA could
be done locally through a JPA when needed.
REGISTERED SUPPORT / OPPOSITION :
Support
Kern COG (sponsor)
Fresno COG
Kings COG
Tulare COG
Merced COG
City of Blythe
City of Lemoore
City of Lindsay
City of Parlier
City of Reedley
City of San Joaquin
City of Taft
City of Wasco
County of Kern
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County of Tulare
Organizations / Companies:
California Partnership for the San Joaquin Valley
Central California Rail Shippers & Receivers Association
Fresno Business Council
Golden Empire Transit District
Greater Merced Chamber of Commerce
Kings Canyon Unified School District
Madera County Transportation Commission
Richard Best Transfer Inc.
San Joaquin Refining Co., Inc.
Superior Soil Supplements
Tricor Refining LLC
Tulare Frozen Foods LLC
Opposition
None on file
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093