BILL ANALYSIS Ó
AB 2847
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Date of Hearing: May 4, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2847 (Patterson) - As Amended April 11, 2016
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill adds the following two reporting elements to the
High-Speed Rail Authority's (HSRA's) Business Plan and Project
Update Report.
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1)Projected financing costs, if financing is proposed for a
segment or combination of segments.
2)Identification of any significant changes in scope for project
segments identified in the previous version of each report,
and an explanation of adjustments in cost and schedule
attributable to these changes.
FISCAL EFFECT:
Any costs for the HSRA to incorporate the additional reporting
elements should be minor and absorbable.
COMMENTS:
1)Background. The HSRA was required to prepare a business plan
by March 1, 2014, and must provide a updated plan every two
years thereafter, that includes:
a) The types of services it expects to develop and a
chronology for construction;
b) A forecast of the expected patronage, service level, and
operating and maintenance costs for Phase I of the system;
c) Alternative financing scenarios for different levels of
service;
d) Expected schedule of completing environmental review and
initialing and completing construction for segments of
Phase I;
e) An estimate, description, and confidence level of the
total anticipated federal, state, local and other funds;
f) Any written agreements with public and private entities
to fund components of the system;
g) Alternative public-private development strategies for
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Phase I; and,
h) Risks associated with construction, technology,
financing and other aspects of the project, and the
Authority's strategy for managing risks.
In February, the authority released its Draft 2016 Business
Plan, which signaled a major shift in its proposed planning
and construction of the high-speed rail system. Rather than
pursue a south-oriented Initial Operating Segment (IOS) from
the City of Merced in the Central Valley through the Tehachapi
Mountains to the San Fernando Valley in Los Angeles County,
the Authority is now proposing a north-oriented IOS, from the
Central Valley to San Jose. The Authority also updated its
plans, cost estimates, and schedule for the remainder of Phase
I (San Francisco to Los Angeles/Anaheim by 2029) and
eventually Phase II (Sacramento and San Diego).
1)Purpose. In its March review of the Business Plan, the
Legislative Analyst's Office (LAO) identified additional items
that could be added to the business plan to better inform the
Legislature and help maintain oversight of the project. AB
2847 implements these recommendations.
a) The LAO notes that "the information provided by HSRA
[High-Speed Rail Authority] in the business plan and other
documents can be difficult to compare over time."
Essentially, if the scope of project segments change from
one report to the next, it is impossible to make an
"apples-to-apples" comparison of costs and schedule, and to
identify any concerns or trends. This bill requires the
authority to identify any significant changes in scope of
segments described in previous reports and provide an
explanation of any adjustments of costs and schedule
attributable to the changes.
b) Second, AB 2847 requires the Authority to include all
projected finance costs, for any financing proposed for a
segment or combination of segments. Providing detailed
information about financing costs will help the Legislature
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understand the complete funding picture.
Analysis Prepared by:Chuck Nicol / APPR. / (916)
319-2081