BILL ANALYSIS Ó
AB 1717
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Date of Hearing: April 11, 2016
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
AB 1717
(Hadley) - As Amended March 18, 2016
SUBJECT: Greenhouse Gas Reduction Fund
SUMMARY: Redirects the 25% of Greenhouse Gas Reduction Fund
(GGRF) revenues that are currently continuously appropriated to
high-speed rail to the Transit and Intercity Rail Capital
Program (TIRCP). Specifically, this bill:
1)Makes various findings and declarations relating to the
Legislature's intent with the passage of SB 535 (de León),
Chapter 830, Statutes of 2012, which required that a minimum
of 25% GGRF funds be used to benefit disadvantaged communities
and SB 862 (Committee on Budget and Fiscal Review), Chapter
36, Statues of 2014, which directed 25% of GGRF funds to
high-speed rail.
2)Requires the 25% of GGRF funds continuously appropriated to
the high-speed rail project to be redirected to the TIRCP, if
the California High-Speed Rail Authority selects an
alternative Initial Operating Segment (IOS) other than what
was identified in the 2012 business plan.
AB 1717
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EXISTING LAW:
1)Establishes the California High-Speed Rail Authority
(Authority) and vests with it the responsibility to develop
and implement a high-speed rail system in California.
Requires the California Air Resources Board (ARB), pursuant to
AB 32 (Núñez), Chapter 488, Statutes of 2006, to develop a plan
of how to reduce statewide greenhouse gas emissions to 1990
levels by 2020. Under AB 32, ARB is authorized to include the
use of market-based mechanisms to comply with these regulations
(cap and trade).
2)Establishes the GGRF in the State Treasury and requires all
money collected pursuant to cap and trade, with limited
exceptions, be deposited into the fund and makes the GGRF
funds available for appropriation by the Legislature.
3)Continuously appropriates 25% of GGRF funds for the high-speed
rail project.
4)Creates the TIRCP, administered by the California State
Transportation Agency (CalSTA), and continuously
appropriates 10% of GGRF funds for the program.
5)Requires that a minimum of 25% of GGRF expenditures be used to
benefit disadvantaged communities.
FISCAL EFFECT: Unknown
COMMENTS: SB 862 created a variety of programs to help reach
the state's greenhouse gas emission reduction goals and
appropriated cap and trade revenues to these programs. Included
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in SB 862 is a 10% continuous appropriation for TIRCP, which is
managed by the CalSTA, and a 25% continuous appropriation for
high-speed rail project, which is managed by the Authority.
Regarding the high-speed rail appropriation, SB 862 specifically
appropriated the funds for the IOS and Phase I Blended System as
described in the 2012 business plan.
The Authority's Revised 2012 Business Plan (and the 2014
Business Plan) defined the IOS as a 300-mile segment from Merced
to the San Fernando Valley with service starting in 2022. Full
Phase I of the system, which includes the IOS, was defined as
520 miles from San Francisco to Los Angeles and Anaheim, with
service starting in 2026.
In February of this year, the Authority released its "Draft 2016
Business Plan" that proposed a shift from a southern-oriented
IOS as previously identified to a northern IOS, from San Jose to
north of Shafter in Kern County, dubbed the Silicon Valley to
Central Valley line. The northern IOS includes the current
construction underway in the Central Valley from Madera to Wasco
in Kern County and would continue to Gilroy and end at Diridon
Station in San Jose.
The author asserts that, since SB 862 appropriated funds for the
IOS and Phase 1 Blended System as set forth in the 2012 Business
Plan and since a different IOS is now proposed, the
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SB 862 appropriation cannot not be used on the revised IOS. AB
1717 directs those funds instead to CalSTA for the TIRCP.
Committee concerns:
1)SB 862 provides funding for the IOS and Phase I Blended with
cap and trade funds, as described in the 2012 Business Plan.
Although the IOS orientation is proposed to shift, all
sections of the newly proposed northern IOS are included in
the Phase I Blended as defined in the 2012 Business Plan.
Consequently, since the SB 862 appropriation provides funding
for the Phase 1 Blended, and since all sections of the
proposed northern IOS are included in the Phase 1 Blended,
then arguably the SB 862 appropriation can be applied to the
northern IOS.
2)The author uses as further evidence that SB 862 appropriation
was envisioned for a purpose other than what is currently
proposed by the Authority, a letter dated June 14, 2014, from
the Authority to Senator Fran Pavley. In that letter, the
Authority committed to use the cap and trade funds granted to
their agency through SB 862 to "accelerate work on the segment
from Burbank to Palmdale... The Burbank-Palmdale segment,
which potentially could become an operating segment on its
own, would accelerate benefits to the Los Angeles region."
This intent was formally adopted by the Authority Board of
Directors in Resolution #HSRA 14-19 that resolved that, "The
Authority Board concurs with the priority to move forward with
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the approach outlined in the CEO's letter to State Senator
Fran Pavley, including the prioritization of the Palmdale to
Burbank project section for expenditure of cap and trade
proceeds as they become viable and in accordance with
provisions of the law."
Although the letter to State Senator Pavley does convey a
commitment to accelerate work on the Burbank to Palmdale
sections, that level of specificity was not referenced in SB
862 as a requirement for the appropriation.
3)AB 1717 includes the following two legislative findings and
declarations that are particularly troublesome:
a) "SB 862 specifies that any subsequent decision by the
High-Speed Rail Authority to deprioritize southern
California and direct construction funding for an
alternative route would not be eligible for funding;" and,
b) "SB 862 requires that any redirection of cap-and-trade
investments away from some of the state's most
disadvantaged communities in southern California would
require reauthorization by the Legislature."
Although one might interpret SB 862 to have this intent and
meaning, SB 862 does not actually include these specific
requirements. Given the litigious nature of this project
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already, the Legislature should be careful not to muddy the
facts with misleading findings.
Double referral: This bill will be referred to the Assembly
Natural Resources Committee should it pass out of this
committee.
Previous legislation: SB 862 (Committee on Budget and Fiscal
Review), Chapter 36, Statues of 2014, continuously appropriated
25% of GGRF funds to the high-speed rail project and 10% to the
TIRCP.
SB 535 (de León), Chapter 830, Statutes of 2012, required, among
other things, that a minimum of 25% of the moneys available in
GGRF be used to benefit disadvantaged communities.
REGISTERED SUPPORT / OPPOSITION:
Support
AB 1717
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Howard Jarvis Taxpayer Association
Opposition
None on file
Analysis Prepared by:Melissa White / TRANS. / (916) 319-2093