BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 517 (Lowenthal)
Hearing Date: 05/26/2011 Amended: 05/17/2011
Consultant: Mark McKenzie Policy Vote: T&H 7-2
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BILL SUMMARY: SB 517 would place the High Speed Rail Authority
(HSRA) under the Business, Transportation and Housing Agency
(BT&H), restructure the governing board, and enact specified
conflict of interest provisions. Specifically, this bill would:
Place the HSRA under BT&H and require the Secretary of BT&H to
propose an annual budget for, and in consultation with, the
HSRA.
Sunset the terms of the existing governing board membership on
January 1, 2012 and provide for new board membership as
follows: five members appointed by the Governor, each with
specified expertise and subject to Senate confirmation; two
members appointed by the Senate, one of whom represents
organized labor; two members appointed by the Assembly, one of
whom represents organized labor; and the Secretary of BT&H,
who would serve as a nonvoting ex-officio member.
Require Senate confirmation of the appointment of the HSRA
executive director.
Prohibit board members from taking a job with a firm that is
under contract with the HSRA or supplies and manufactures
rolling stock or other equipment directly related to a high
speed rail system within two years of leaving the HSRA.
Prohibit the hiring of an employee or appointment of a board
member who has received direct or indirect compensation from a
firm that supplies and manufactures rolling stock or other
equipment directly related to a high speed rail system in the
two years prior to appointment to that position, as specified.
Prohibit an HSRA board member or employee from participating
in decision-making on an issue before the HSRA if that person,
his or her spouse, minor child, or partner has had a financial
interest in that issue within two years of appointment to that
position, as specified.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
BT&H administration minor costs to coordinate with HSRA
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staffGeneral
HSRA up to $65 up to $130 up to $100Bond*
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* High-Speed Passenger Train Bond Fund
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STAFF COMMENTS: SUSPENSE FILE.
Existing law establishes the HSRA in state government and
provides for a nine-member governing board; five of the members
are appointed by the Governor, and two members each are
appointed by the Senate Rules Committee and the Speaker of the
Assembly (SB 1420 (Kopp), Chapter 796 of 1996). Existing law
requires the HSRA to appoint an executive director to administer
the affairs of the authority. Current law does not prescribe a
revolving door policy or conflict of interest restrictions for
board members and employees.
This bill is intended to ensure HSRA board members have the
background and expertise necessary to manage a complex
multi-billion dollar construction project, increase
accountability by incorporating HSRA into the structure of state
government, and to ensure the integrity of HSRA board members
and employees by implementing conflict of interest and revolving
door policies.
Placing the HSRA under BT&H and requiring the Secretary to
submit an annual budget would not impose significant burdens on
BT&H staff. BT&H currently oversees the budgets of numerous
state departments with substantial budgets, such as the
Department of the California Highway Patrol, the Department of
Housing and Community Development, the Department of Motor
Vehicles, the Department of Transportation, and the Department
of Managed Healthcare, among others. BT&H staff currently
performs an oversight function by reviewing and approving annual
budget documents prepared by each department or entity under the
agency. HSRA staff would continue to assess its annual
budgetary needs and prepare any necessary budget documents. SB
517 would impose minor costs on BT&H to coordinate with HSRA
staff in the preparation of an annual budget.
HSRA indicates that the bill would create inefficiencies by
SB 517 (Lowenthal)
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adding another layer of bureaucracy between the authority and
the Governor and Legislature, which may result in staffing
pressures and delays in developing HSRA policies, submitting
budgetary documents, and approving reports. HSRA estimates the
additional coordination is difficult to quantify but could
result in additional staffing costs to HSRA of up to $130,000
and 2 PY of staff time annually. Staff notes that while the
bill's requirements may result in disruptions to the operations
of HSRA in the short term, it is unlikely that such delays and
disruptions would create significant ongoing staffing pressures
at the HSRA. Any costs related to the bill would likely fall in
subsequent years after the new board is established, and any
necessary conflict of interest and revolving door procedures are
established.