BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: AB 1889 Hearing Date: 6/28/2016
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|Author: |Mullin |
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|Version: |6/21/16 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Manny Leon |
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SUBJECT: High-Speed Rail Authority: high-speed train operation
DIGEST: This bill provides that upon approval of a funding plan
for a specific corridor or usable segment by the High-Speed Rail
Authority (HSRA), the project(s) identified in the funding plan
will be deemed suitable and ready for high-speed train
operation, as specified.
ANALYSIS:
Existing law:
1)Establishes the California High-Speed Rail Authority (HSRA)
and vests with it the responsibility to develop and implement
a high-speed rail system in California.
2)Enacts the Safe, Reliable High-Speed Passenger Train Bond Act
for the 21st Century (Prop 1A, 2008). Prop 1A provides $9.95
billion in general obligation bond authority to fund the
planning and construction of a high-speed passenger train
system and complementary improvements to other specified rail
systems in the state.
3)Continuously appropriates 25% of the state's cap-and-trade
program funds for the high-speed rail project.
4)Per SB 1029 (Budget Act of 2012), appropriated an estimated $8
AB 1889 (Mullin) Page 2 of ?
billion in federal and state funds to construct the first
high-speed rail segments in the Central Valley and fund 15
"bookend" and connectivity projects throughout California. SB
1029 also enacted a number of reporting requirements,
including the issuance of a Project Update Report every two
years.
5)Requires HSRA to prepare a Project Update Report on March 1,
2017, and every two years thereafter that includes a number of
reporting requirements, as specified.
6)Requires HSRA, prior to seeking an initial appropriation of
bond funds for a specific corridor or usable segment using
bond funds, to submit a detailed funding plan to the Director
of Finance, the HSRA Peer Review Group, and the Legislature on
the specific corridor or usable segment.
7)Requires HSRA, prior to committing bond funds for construction
or real property/equipment acquisition for a specific corridor
or usable segment that has been appropriated, to obtain a
report or reports by one or more financial consulting firms
that includes an analysis on a number of elements, including
whether the corridor or usable segment will be suitable and
ready for high-speed train operation upon completion of
construction.
8)Requires the state Director of Finance to approve the funding
plan, with the abovementioned reports included, prior to HSRA
entering any commitments to expend bond funds for a specific
corridor or usable segment.
This bill:
1)Provides that upon approval of a funding plan that was
prepared to commit funds to a specific corridor or usable
segment by the HSRA, the project identified in the funding
plan will be deemed suitable and ready for high-speed train
operation.
2)Provides that approval by HSRA of a funding plan that
identifies the corridor or usable segment that would be
suitable and ready for high-speed train operation is
conclusive.
COMMENTS:
AB 1889 (Mullin) Page 3 of ?
1)Purpose. The author asserts, "Prop 1A is unclear when it
comes to the initial investments that can be made in a
corridor while still allowing a plan to go forward that would
enable the [HSRA] to declare the investments as making the
corridor "suitable and ready" Therefore, AB 1889 would clarify
the Legislature's intent in appropriating these moneys: build
the early investments that facilitate longer-term high-speed
train operations that can be used by commuter/ intercity
services in the meantime."
2)HSRA. The California HSRA was established in 1996 to direct
development and implementation of intercity high-speed rail
service that is fully coordinated with other public
transportation services. In 2008, HSRA responsibilities
increased as voters approved Prop 1A, authorizing $9.95
billion in general obligation bonds for the high-speed rail
project. Prop 1A additionally included a number of reporting
requirements.
3)Funding Plans. Amongst a variety of reporting requirements
specified in the bond act, Prop 1A required HSRA to develop
and submit a funding plan for a specific corridor or usable
segment prior to HSRA seeking its initial request for
appropriation of Prop 1A funds. HSRA completed this funding
plan and submitted it to the Legislature, the peer review
group, and the state Director of Finance in late 2011.
Prop 1A further requires HSRA to prepare, approve, and submit
to the Director of Finance and to the Legislature a detailed
funding plan on a specific corridor or usable segment prior to
committing any proceeds from the appropriated funds. This
funding plan must include a report(s) from independent
financial firm(s) indicating the particular segment can be
completed within budget, is suitable and ready for high-speed
train operation, will not require an operating subsidy, etc.
Thus, in order for HSRA to provide funding for bookend
projects in both the northern and southern regions of the
state, HSRA will have to provide a funding plan accordingly.
4)HSRA Project Update Report: SB 1029 (Budget Act of 2012)
appropriated almost $8 billion in federal and state funds to
construct the first high-speed rail segments in the Central
Valley and fund 15 bookend and connectivity projects
throughout California. SB 1029 further included extensive
AB 1889 (Mullin) Page 4 of ?
reporting requirements to increase legislative oversight over
the high-speed rail project. The Project Update Report is
required to include a number of elements, including, but not
limited to:
a) A summary of the progress on the project
b)The baseline budget for all project phase costs by segment or
contract
c)The current and projected budget for all project phase costs
d)All expenditures to date for all project costs
1)Alignment. This bill intends to provide clarification on the
approval process for funding plans HSRA is require to prepare
prior to committing bond funds for a specified corridor or
usable segment. While Prop 1A required funding plans to be
submitted for both an initial appropriation of bond funds by
the Legislature and prior to the commitment of bond funds to
corridor-specific projects, Prop 1A is unclear on a number of
provisions specified in the funding plan requirements. This
has created some ambiguity in how HSRA is to proceed with
submitting funding plans in order to commit bond funds for
projects. For example, SB 1029 provided over $1 billion for
bookend projects that will make significant improvements to
local passenger rail systems in both northern and southern
California that will eventually allow for a "blended" system
comprised of both passenger rail and high-speed rail
operation. However, these projects will also need to be
completed over a period of time in multiple phases. Thus,
providing funding for bookend improvement projects that will
ultimately be suitable and ready for high-speed rail operation
could also provide immediate mobility benefits to a specific
corridor (i.e., Caltrain electrification) while other
high-speed rail improvements are made within the corridor.
This bill aims to remedy this ambiguity by allowing HSRA to
proceed with submitting funding plans to commit bond funds to
high-speed rail projects, while ensuring HSRA is compliance
with the provisions specified in Prop 1A.
Assembly Votes:
Prior votes not relevant
AB 1889 (Mullin) Page 5 of ?
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: No
POSITIONS: (Communicated to the committee before noon on
Wednesday,
June 22, 2016.)
SUPPORT:
None received
OPPOSITION:
None received
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