BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1889|
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THIRD READING
Bill No: AB 1889
Author: Mullin (D), et. al
Amended: 8/19/16 in Senate
Vote: 21
PRIOR VOTES NOT RELEVANT
SENATE TRANS. & HOUSING COMMITTEE: 6-4, 6/28/16
AYES: Beall, Allen, Leyva, McGuire, Mendoza, Wieckowski
NOES: Bates, Gaines, Galgiani, Roth
NO VOTE RECORDED: Cannella
SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/11/16
AYES: Lara, Beall, Hill, McGuire, Mendoza
NOES: Bates, Nielsen
SUBJECT: High-Speed Rail Authority: high-speed train
operation
SOURCE: Author
DIGEST: This bill allows for the expenditure of bond proceeds
identified in specified funding plans prepared by the High-Speed
Rail Authority (HSRA) 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, as specified.
Senate Floor Amendments of 8/19/16 requires HSRA to include
information on how bond proceeds used for "bookend" projects as
appropriated by the 2012 Budget Act are consistent with the
HSRA's most recent business plan and advances the development of
the Phase 1 blended system as identified in the business plan.
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ANALYSIS:
Existing law:
1)Establishes the HSRA and vests in 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)Appropriates, continuously, 25% of the state's cap-and-trade
program funds for the high-speed rail project.
4)Appropriates, per SB 1029 (Budget Act of 2012), an estimated
$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 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
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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)Specifies that for purposes of a funding plan required to be
prepared by HSRA 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.
2)Requires HSRA to include information on how bond proceeds used
for bookend projects as appropriated by the 2012 Budget Act
are consistent with the HSRA's most recent business plan and
advances the development of the Phase 1 blended system as
identified in the business plan.
Comments
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."
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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 an 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. This appropriation of $1.1 billion for
bookend/connectivity projects would allow, in various
corridors, for a "blended" system between high-speed and other
forms of passenger rail service as described in the HSRA's
2012 business plan. SB 1029 further included extensive
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:
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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
5)Clarification. 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. Thus, this bill aims to provide clarification to
existing law to allow HSRA to proceed with submitting funding
plans for various projects and proceed with expending existing
bond allocations while ensuring HSRA is in compliance with the
provisions specified in Prop 1A.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee, 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 the June 30, 2018,
encumbrance limitation tied to the previous appropriation of
bond funds.
SUPPORT: (Verified8/19/16)
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Bay Area Council
Metropolitan Transportation Commission
Peninsula Corridor Joint Powers Board
Silicon Valley Leadership Group
Santa Clara County Board of Supervisors
Santa Clara Valley Transportation Authority
San Mateo County Transit District
San Mateo County Transportation Authority
Southern California Association of Governments
OPPOSITION: (Verified8/19/16)
The California Rail Foundation
The Community Coalition on High Speed Rail
Transportation Solution Defense and Education Fund
ASSEMBLY FLOOR: 79-0, 5/5/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier,
Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger
Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey,
Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes,
McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,
O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Beth Gaines
Prepared by:Manny Leon / T. & H. / (916) 651-4121
8/22/16 22:10:18
**** END ****
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