BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 557
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          SENATE THIRD READING
          SB 557 (Hill)
          As Amended  May 2, 2013
          Majority vote 

           SENATE VOTE  :30-5  
           
           TRANSPORTATION      13-2        APPROPRIATIONS      13-4        
          
           ----------------------------------------------------------------- 
          |Ayes:|Lowenthal, Linder,        |Ayes:|Gatto, Bocanegra,         |
          |     |Achadjian, Ammiano,       |     |Bradford,                 |
          |     |Bloom, Bonta, Buchanan,   |     |Ian Calderon, Campos,     |
          |     |Daly, Gordon, Gatto,      |     |Eggman, Gomez, Hall,      |
          |     |Holden, Nazarian,         |     |Holden, Linder, Pan,      |
          |     |Quirk-Silva               |     |Quirk, Weber              |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Morrell, Patterson        |Nays:|Harkey, Bigelow,          |
          |     |                          |     |Donnelly, Wagner          |
           ----------------------------------------------------------------- 
           SUMMARY  :  Restates various provisions in existing law related to  
          funds appropriated by the Legislature for the development of  
          high-speed rail in the San Francisco Bay Area.  Specifically,  
           this bill  :  

          1)Makes funds available only for improvements consistent with  
            the Memorandum of Understanding (MOU) approved prior to the  
            appropriation between California High-Speed Rail Authority  
            (HSRA) and local partners.  

          2)Prohibits funds dedicated to the San Francisco-to-San Jose  
            Peninsula corridor from being used to expand the project  
            beyond the agreed-upon "blended system" with existing commuter  
            rail service or to build a four-track system.  

          3)Provides that the requirement to use funds consistent with the  
            MOU and the prohibition on the use of funds for purposes other  
            than the San Francisco-to-San Jose Peninsula corridor remain  
            in effect as long as the appropriation for the "bookend"  
            segments remains available for encumbrance.  

          4)Requires approval from all parties to the MOU to expand the  
            system beyond the "blended system" planned for the Peninsula  








                                                                  SB 557
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            corridor.  

           EXISTING LAW  :

          1)Creates the HSRA to direct development and implementation of  
            inter-city high-speed rail service.  

          2)Authorizes, by voter approval of Proposition 1A, $9.95 billion  
            in general obligation bonds for the high-speed rail project.  

          3)Appropriates bond funds for expenditure, including $1.1  
            billion for investment in the "bookend" segments of the system  
            located in the northern and southern California regions.  

          4)Requires extensive reporting by the HSRA with respect to the  
            appropriation for projects in the "bookend" segments and makes  
            funds available only for improvements consistent with the MOU  
            approved prior to the appropriation between HSRA and the local  
            partners.  

          5)Prohibits funds dedicated to the San Francisco-to-San Jose  
            Peninsula corridor from being used to expand the project  
            beyond the agreed-upon "blended system" with existing commuter  
            rail service or to build a four-track system.  

          6)Requires HSRA to enter into a project management and funding  
            agreement with the local sponsor of the project.  

          7)Requires audits of bond fund expenditures to affirm HSRA acts  
            accordance with established criteria and existing agreements.   


          8)Makes funds available for encumbrance or liquidation until  
            June 30, 2018.  

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee, negligible fiscal impact, as this bill restates  
          current requirements for expenditure of the appropriated funds.   


           COMMENTS  :  According to the author, this bill closes potential  
          loopholes to make sure that funds cannot be transferred from the  
          San Francisco Peninsula segment to other segments of the  
          high-speed rail system.  In addition, the bill clarifies that  








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          appropriated funds will be used solely to implement the  
          negotiated two-track blended system on the San Francisco  
          Peninsula.  Finally, the author contends this bill provides a  
          critical safeguard against expansion of the shared system by  
          requiring HSRA to obtain approval for any changes from all nine  
          entities that were party to the original MOU involving the San  
          Francisco Peninsula segment.  The author feels that these  
          protections are important to ensure that the HSRA continues to  
          honor existing agreements and funding restrictions.  

          All of the protections provided in this bill already exist  
          either explicitly or implicitly in current law.  Additionally,  
          all provisions in the state budget appropriations remain  
          attached to the funds as long as the funds are available for  
          expenditure and cannot be changed or adjusted without new  
          legislation.  Therefore, all the restrictions stated in existing  
          law as well as in this bill will continue to govern the  
          high-speed rail fund expenditures unless the Legislature passes,  
          and the Governor approves, legislation directing otherwise.   
          Despite the fact that this bill simply restates existing law and  
          highlights existing agreements, the author feels it is important  
          to explicitly outline existing agreements between the HSRA and  
          MOU signatory entities and conditions set forth in the budget.  
           

          Analysis Prepared by  :    Victoria Alvarez / TRANS. / (916) 319-  
          2093 


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