BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1889 (Mullin) - High-Speed Rail Authority: high-speed train
operation
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|Version: August 1, 2016 |Policy Vote: T. & H. 6 - 4 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 1, 2016 |Consultant: Mark McKenzie |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 1889 would explicitly allow for the expenditure of
specified bond proceeds on a high-speed rail corridor or usable
segment if the project would enable high-speed trains to operate
either immediately or after additional planned investments are
made.
Fiscal
Impact: Potential accelerated expenditure of $1.1 billion in
previously-appropriated bond funds, relative to current law
(High-Speed Passenger Train Bond Fund). This bill would
explicitly allow for expenditure of bond funds in the near-term
for projects that benefit passenger train service without
providing all necessary funding for investments in a usable
segment that would be necessary for the immediate operation of
high-speed trains. Absent the bill, these funds may not be
available for project expenditures prior to the expiration of
AB 1889 (Mullin) Page 1 of
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the June 30, 2018 encumbrance limitation tied to the previous
appropriation of bond funds.
Background: Existing law, the Safe, Reliable High-Speed Passenger Train
Bond Act for the 21st Century (Proposition 1A, 2008), provides
$9.95 billion in general obligation bond authority to fund the
planning and construction of a high-speed passenger train system
and capital improvements to other rail systems that provide
direct connectivity to high-speed rail. Proposition 1A requires
the High-Speed Rail Authority (HSRA) to submit a detailed
funding plan prior to seeking an initial appropriation of bond
funds for a specific corridor or usable segment, as specified.
The Bond Act also requires HSRA, prior to committing any bond
proceeds for construction expenditures, to submit the following
to the Director of Finance and Joint Legislative Budget
Committee: (1) a detailed funding plan that includes an
identification of the corridor or usable segment, the estimated
full cost of construction, and the sources of all funds to be
used and anticipated timelines for receiving those funds, and
(2) a specified report that includes an indication that
construction of the corridor or usable segment can be completed
as proposed, and if so completed, it would be suitable and ready
for high-speed train operation.
The HSRA released its Final 2012 Business Plan on April 2, 2012,
which provided for a "blended operations" that share tracks with
existing regional rail partners in the San Francisco/San Jose
northern end of the project, and the Los Angeles/Anaheim
segments on the southern end. The 2012 Business Plan called for
the investment of $1.1 billion in Proposition 1A bond funds for
"bookend" improvements to regional service in the short term,
and to make initial investments in the blended system that
support high-speed rail service.
As part of the 2012 Budget Act, SB 1029 (Budget and Fiscal
Review Committee), Chap 152/2012, was enacted to appropriate
$2.61 billion in Prop 1A bond funds for the initial construction
segment in the Central Valley, $1.1 billion in bond funds for
"bookend" investments, as well as additional high-speed
rail-related appropriations. According to the Senate Floor
analysis of SB 1029, the $1.1 billion appropriation would
provide "funding as a match for two memoranda of understanding
(MOUs) agreed to by the Authority and the Southern California
AB 1889 (Mullin) Page 2 of
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Association of Governments (SCAG) for $500 million and the
Metropolitan Transportation Commission (MTC) for $600 million.
The MOU with MTC would primarily fund the electrification of the
Caltrain corridor between San Francisco and San Jose. The MOU
with SCAG would fund projects on the Metrolink Antelope Valley
line between Palmdale and the San Fernando Valley necessary to
improve travel times for Metrolink trains providing service for
high-speed rail as part of the blended system, as well as lay
the foundation for future, dedicated high-speed rail service on
the southern end of the Initial Operating Segment." The
southern bookend projects include investments at Union Station
to improve throughput for high-speed trains, and a number of
grade separation projects. The control language for this
appropriation specifies that the funds are available for
encumbrance or liquidation until June 30, 2018.
Proposed Law:
AB 1889 would specify, for purposes of a certain funding plan
required in existing law for each usable segment of the
high-speed rail project, that a corridor or usable segment is
"suitable and ready for high-speed train operation" if bond
proceeds are used for capital project costs that would enable
high-speed trains to operate immediately or after additional
planned investments on the corridor or usable segment, and
passenger train service providers will benefit from the project
in the near-term.
Staff
Comments: This bill provides clarity that the 2012
appropriation of $1.1 billion in Prop 1A bond funds for
"bookend" investments was intended to be consistent with the
blended system strategy identified in the HSRA's 2012 Business
Plan. The blended system provides for incremental investments
in a bookend corridor that benefit regional rail in the short
term and both regional and intercity high-speed rail in the long
term. Specifically, the bill explicitly states that a corridor
is "suitable and ready for high-speed train operation" if bond
allocations are used to benefit passenger train service
providers in the short term while enabling high-speed trains to
operate in the corridor after additional planned investments are
AB 1889 (Mullin) Page 3 of
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completed in the future. The bill could be perceived as a
simple clarification of legislative intent relative to the
previous appropriation of $1.1 billion in Prop 1A bond funds for
"bookend" projects, which may help accelerate those projects.
Absent the bill, however, it is plausible that the initial
appropriation authority provided in SB 1029 would expire before
funds could be dedicated to investments in "bookend" projects.
If this were to occur, the Legislature would need to
re-appropriate funds in the future in order for the Caltrain
electrification project on the northern end, and Union Station
improvements and grade separation projects on the southern end,
to move forward.
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