BILL ANALYSIS Ó
AB 1087
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Date of Hearing: April 20, 2015
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
AB 1087
(Grove) - As Introduced February 27, 2015
SUBJECT: Greenhouse Gas Reduction Fund: high-speed rail
SUMMARY: Specifies that the cap and trade funds continuously
appropriated to the High-Speed Rail Authority (Authority) are to
be spent on specified components of the initial operating
segment and Phase 1 Blended System of the high-speed train
system as described in the Safe, Reliable High-Speed Passenger
Train Bond Act for the 21st Century.
EXISTING LAW:
1)Establishes the Authority and vests with it 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 expenditure of an additional $950 million in
general obligation bonds for capital projects on other
passenger rail lines to provide connectivity to the high-speed
rail system, as well as for capacity enhancements and safety
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improvements to those lines.
4)Continuously appropriates, beginning in the 2015-16 fiscal
year, 25% of the annual proceeds of the Greenhouse Gas
Reduction Fund (cap and trade funds) to the Authority for the
following components of the initial operating segment and
Phase I Blended System as described in the Authority's 2012
business plan:
a) Acquisition and construction costs of the project.
b) Environmental review and design costs of the project.
c) Other capital costs of the project.
d) Repayment of any loans made to the Authority to fund the
project.
FISCAL EFFECT: Unknown
COMMENTS: In 2008, voters approved Proposition 1A, the Safe,
Reliable High-Speed Passenger Train Bond Act, a $9.95 billion
general obligation bond to fund the proposed California
high-speed rail project and related improvements. As envisioned
at the time of the ballot measure, the project was to consist of
an 800-mile dedicated high-speed passenger rail system capable
of speeds up to 220 miles per hour, initially serving San
Francisco through the Central Valley into Los Angeles and Orange
County (Phase 1) with service eventually extended to Sacramento,
the Inland Empire, and San Diego.
When voters approved the bonds in 2008, the Authority estimated
the cost for the entire project to be $45 billion, to be paid by
a mix of state bonds, federal grants, and private investments.
Since then, estimated costs for the project have risen markedly.
The Authority's most recent business plan estimates costs for
just Phase 1 to be $68 billion using a "blended approach" -
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relying in part on existing tracks - rather than a fully
built-out system of dedicated rail lines. Federal contributions
to date have been limited to $3.3 billion and there have been no
private investments.
In 2012, the Legislature passed and the Governor signed SB 1029
(Committee on Budget and Fiscal Review), Chapter 152, Statutes
of 2012, to appropriate $8 billion ($4.7 billion in Proposition
1A bond funds and $3.3 billion in federal funds) to the
Authority to initiate construction of the high-speed rail
project. This amount included $1.1 billion of Proposition 1A
bond funding for bookend projects on the San Francisco Peninsula
and in the Los Angeles Basin. Additionally, last year's Budget
allocated $250 million in cap-and-trade revenues to high-speed
rail for the 2014-15 fiscal year and dedicated 25% of all
cap-and-trade revenues to the project on an ongoing basis.
AB 1087 specifies that the cap and trade revenues continuously
appropriated to the Authority must be spent on the initial
operating segment and Phase 1 Blended System as described in the
Safe, Reliable High-Speed Passenger Train Bond Act for the 21st
Century. According to the author, "this bill merely clarifies
the Legislature's intent that the Authority construct one
high-speed train system. As long as the Authority plans to use
Proposition 1A bond funds, the cap-and-trade funds must support
the same project."
Committee concerns: It is not clear why this bill is needed.
The Authority is already restricted to using the cap and trade
revenues on the initial operating segment and Phase 1 Blended
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System as described in its 2012 business plan, which was
explicitly designed around compliance with Proposition 1A. As
the author points out in background materials submitted to the
committee, "So long as the [Authority] is planning to use any
Proposition 1A bond money for construction, the entire project
is required to comply with the performance requirements laid out
in Proposition 1A." If the entire project is already required
to comply with the performance requirement laid out in
Proposition 1A and cap and trade funds are supporting the
project, then those funds inherently will be spent on a system
that complies with the requirements of the bond act.
Related legislation: AB 6 (Wilk) prohibits the sale of any
additional bonds for high-speed rail and redirects the remaining
bonding authority to fund the construction of school facilities
for K-12 and higher education. AB 6 is set for hearing in this
committee on April 20, 2015.
AB 397 (Mathis) prohibits the sale of any additional bonds for
high-speed rail and redirects the remaining bonding authority to
fund the construction of water-related infrastructure. AB 397
is set for hearing in this committee on April 20, 2015.
AB 1138 (Patterson) prohibits the Authority, or the State Public
Works Board acting on behalf of the Authority, from commencing
an eminent domain proceeding to acquire property for the
high-speed rail system unless it identifies the sources of all
funds to be invested in the corridor the property is needed for
and certifies that it has completed all project-level
environmental clearances necessary to proceed to construction.
AB 1138 is set for hearing in this committee on April 20, 2015.
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REGISTERED SUPPORT / OPPOSITION:
Support
None on file
Opposition
None on file
Analysis Prepared by:Anya Lawler / TRANS. / (916) 319-2093