BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 400  


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          Date of Hearing:  August 19, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          SB 400  
          (Lara) - As Amended June 1, 2015


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill: 


          1)Requires the High-Speed Rail Authority (HSRA) to allocate at  








                                                                     SB 400  


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            least 25% of the cap-and-trade revenues received by the  
            authority for mitigation measures and projects to reduce or  
            offset greenhouse gas (GHG) emissions generated by  
            construction of the high-speed rail project.


          2)Stipulates that priority for the allocation per (1) is for  
            projects in communities located in areas designated as extreme  
            nonattainment.


          FISCAL EFFECT:


          Under current law, 25% of annual cap-and-trade revenues are  
          allocated to the high-speed rail project. Assuming $2 billion in  
          total cap-and-trade revenues for 2015-16, $500 million would be  
          allocated to high-speed rail, of which $125 million would be  
          allocated for construction-related mitigation pursuant to this  
          bill. (This allocation would vary based on total cap-and-trade  
          revenues in any given year.) To the extent this allocation  
          exceeds the level of funding currently necessary or contemplated  
          for mitigation (see below), the bill will increase overall  
          project costs.


          COMMENTS:


          1)Purpose. The communities along the high-speed rail corridor  
            through California's Central Valley suffer from some of the  
            state's, and the nation's, worst air quality. The author  
            introduced SB 400 out of concern for such communities, which  
            are burdened by nearby, heavily congested highway corridors.   
            He asserts that, while the high-speed rail project will  
            eventually reduce GHG emissions and air pollution, the project  
            will be detrimental to the Central Valley in the short-term  
            due to the environmental impacts from construction.









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          2)HSRA Actions. The authority has committed to achieving  
            zero-net GHG emissions related to construction activities,  
            material deliveries, and worker travel.  For example, the  
            authority has committed to planting trees to offset the first  
            phases of construction.  Furthermore, HSRA has entered into a  
            Memorandum of Understanding (MOU) whereby HSRA will pay the  
            District quarterly based on the use and impact of construction  
            equipment on the project, with the payments to be used for  
            programs to, for example, replace aging farm and other  
            high-polluting equipment. This mitigation is intended to  
            complement requirements that HSRA already imposes on its  
            construction contractor to use clean construction vehicles.   
            HSRA expects that it could pay the District approximately $40  
            million under the terms of the MOU. 

          3)Concerns. This bill raises several concerns:

             a)   The high-speed rail project is severely underfunded.  
               Other than one-time state bond and federal funds, the  
               cap-and-trade revenues are the only ongoing funding source  
               for the project, thus diverting a significant portion of  
               these revenues for mitigation could exacerbate the overall  
               funding situation.

             b)   Though SB 400 is intended to offset the environmental  
               impacts from construction, the bill, by authorizing  
               expenditures in areas designated as extreme nonattainment  
               areas, allows funds to be spent in communities outside the  
               construction zones.

             c)   The amount of mitigation required may not bear related  
               to the actual construction-related impacts.

             d)   At least 25% of total cap-and-trade revenues are already  
               earmarked to benefit disadvantage communities, including a  
               10% allocation directly within such communities. 
          










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          Analysis Prepared by:Chuck Nicol / APPR. / (916)  
          319-2081