BILL ANALYSIS
AB 1375
Page 1
ASSEMBLY THIRD READING
AB 1375 (Galgiani)
As Amended January 15, 2010
Majority vote
TRANSPORTATION 9-4 APPROPRIATIONS 12-5
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|Ayes:|Eng, Blumenfield, Conway, |Ayes:|De Leon, Ammiano, |
| |Furutani, Galgiani, | |Bradford, Charles |
| |Bonnie Lowenthal, | |Calderon, Coto, Davis, |
| |John A. Perez, Solorio | |Fuentes, Hall, John A. |
| | | |Perez, Skinner, Solorio, |
| | | |Torlakson |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Jeffries, Garrick, |Nays:|Conway, Harkey, Miller, |
| |Miller, Niello | |Nielsen, Audra Strickland |
| | | | |
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SUMMARY : Establishes the Department of High-Speed Trains
(Department). Specifically, this bill :
1)Expresses legislative intent, including the desire to "provide
an efficient governmental structure for the development of
high-speed train operations in the state."
2)Establishes the Department, within the California Business,
Transportation and Housing Agency (BTHA), to implement the
high-speed passenger rail development policies as established
by the High-Speed Rail Authority (Authority), whose existence
would continue as the policy and project programming entity
for high-speed rail projects of the state.
3)Transfers certain of the existing powers and responsibilities
of the Authority to the Department, and would specify
additional powers and duties of the Authority and Department
relative to implementation of the high-speed rail project.
4)Requires the Authority to establish policies, in consultation
with the Department, directing the development and
implementation of intercity high-speed train service that is
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fully integrated with the state's existing intercity rail and
bus network. Requires the Department to implement the
policies.
5)Requires the Authority to establish an independent peer review
group for the purpose of reviewing the planning, engineering,
financing, and other elements of the Authority's plans and
issuing an analysis of appropriateness and accuracy of the
Authority's assumptions and an analysis of the viability of
the Authority's financing plan, including the funding plan for
each corridor.
6)Specifies the powers, duties, and responsibilities of the
Authority as follows:
a) Select the routes of the high-speed train system;
b) Serve as the governing body of the Department, for
purposes of the adoption of resolutions of necessity;
c) Advise BTHA and the Department concerning high-speed
rail matters. Thereupon, requires the Department to
consider such advice in the exercise of its powers and
duties.
d) Adopt criteria for the award of franchises; and,
e) Set fares or establish guidelines for the setting of
fares.
7)Specifies the organization of the Department and authorizes
its director to perform all duties, exercise all powers and
jurisdiction, assume and discharge all responsibilities, and
carry out and effect all purposes vested by law in the
Department.
8)Establishes that the director of the Department would be
appointed by the Governor, who would serve at the pleasure of
the Authority.
9)Authorizes the Department to include up to 10 executive
employees of the Department who would be exempt from civil
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service, appointed by the Governor, and serve at the pleasure
of the director. Authorizes the Authority to set the salary
of the executive employees and director in amounts that are
reasonably necessary to attract and hold a person of superior
qualifications. Sets parameters for the Authority in its
determination of salary compensation.
10)Authorizes the Governor, BTHA, and the Department to enter
into agreements, execute documents, establish and manage
accounts, and take any other appropriate action to receive and
expend available federal funds for mass transportation
programs and projects.
11)Provides authority to the Department for property acquisition
and disposition and authorization to employ its own legal
staff or contract out.
EXISTING LAW :
1)Creates, in 1996, the Authority to be responsible for
planning, constructing, and operating a high-speed train
system serving California's major metropolitan areas. The
Authority has a nine-member policy board (five appointed by
the Governor, two appointed by the Senate and two appointed by
the Assembly). Its executive director is selected by and
reports directly to the Authority's policy board.
2)Enacts the Safe, Reliable High-Speed Passenger Train Bond Act
for the 21st Century (Bond Act). The Bond Act, approved as
Proposition 1A in November 2008, 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. Authorizes the Authority to use up 10% of the bond
proceeds for environmental studies, planning, and preliminary
engineering activities. Authorizes 75% of the 10% of the
funds to be used for purchase of property and right of way,
mitigation of environmental impacts, and other uses as
specified. Establishes a 2.5% cap on the use of bond proceeds
for administrative purposes. The actual amount to be
appropriated in the annual Budget Act. Authorizes the cap to
be adjusted by statute, but not beyond a maximum 5% level.
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3)Authorizes, through enactment of the federal American Recovery
and Reinvestment Act of 2009 (the recently enacted federal
economic stimulus package), $8 billion for high-speed rail
passenger services throughout the nation. Also, the federal
stimulus package provides additional intercity and commuter
rail passenger discretionary funding that potentially could
benefit the state.
4)Authorizes, through the passage of Proposition 1B in November,
2006, $100 million for high priority highway-railroad at-grade
separation projects to be selected by the California
Transportation Commission (CTC) in consultation with the
Authority.
5)Establishes BTHA that includes, under its aegis, 13
departments and several economic development programs and
commissions consisting of more than 44,000 employees and a
budget of $20 billion. Its responsibilities and operations
address issues that directly impact the state's economic
vitality and quality of life including; transportation, public
safety, affordable housing, international trade, financial
services, tourism, and managed health care.
6)Establishes, in 1978, the CTC for the development and
implementation of a single, unified California transportation
policy. CTC is responsible for the programming and allocating
of funds for the construction of highway, passenger rail and
transit improvements throughout California. The CTC consists
of 11 voting members and two non-voting ex-officio members.
Of the 11 voting members, nine are appointed by the Governor,
one is appointed by the Senate Rules Committee, and one is
appointed by the Speaker of the Assembly. The CTC is
responsible for the programming and allocating of funds for
the construction of highway, passenger rail and transit
improvements throughout California. The CTC also advises and
assists the BTHA and the Legislature in formulating and
evaluating state policies and plans for California's
transportation programs.
7)Establishes, in 1972, the multi-modal California Department of
Transportation (Caltrans) by consolidating the Department of
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Public Works and the State Aeronautics Board and establishing
six divisions: transportation planning, highways, mass
transportation, aeronautics, administrative services, and
legal. Caltrans manages more than 45,000 miles of
California's highway and freeway lanes, provides intercity
rail services, permits more than 400 public-use airports and
special-use hospital heliports, and works with local agencies.
The Caltrans director is appointed by the Governor, and not
by the CTC.
8)Requires the California Research Bureau, in consultation with
specified others, to study the consolidation of various rail
functions, including high-speed rail development, currently
performed by several distinct state entities.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, likely moderate additional administrative and
operating costs associated with establishing a separate
department, distinct from the existing authority, to implement
the high-speed rail program. These costs are unknown, but would
be in the range of several hundred thousand dollars annually
(bond funds).
COMMENTS : The enactment of AB 3034 (Galgiani) Chapter 267,
Statutes of 2008, and the subsequent passage of Proposition 1A
by state voters in November 2008, advanced the development and
implementation of the state's 800-mile high-speed train project
and provided $9.95 billion in bonds for high speed rail and
related urban and commuter passenger rail services.
Accordingly, there is a need to strengthen the operational and
administrative capabilities of the state's high-speed train
project management and provide additional state oversight.
According to the author, this bill "helps protect the state's
interests and establishes further oversight of the activities
and use of the funds to be invested in the high-speed train
project following voter approval of Proposition 1A, and ensures
that an adequate public forum and transparency is maintained
regarding the development of the high-speed train project. This
bill creates a new Department of High-Speed Trains (Department)
as part of the state government, distinct from the existing
Authority, and revises the role of the Authority. Furthermore,
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AB 1375 repeals, revises, and reenacts the provisions
constituting the Bond Act."
Arguments in Support of the bill:
1)The intent of this bill is to strengthen the capabilities of
the Authority to complete the high-speed train project and to
ensure adequate oversight of the state's financial
participation and related interests in the project. This bill
is among others currently being considered in legislation that
would expand the powers of the Authority or reorganize it.
This bill is a good first step in the latter.
2)This bill will provide an updated and more suitable
administrative and operational structure for the development,
construction and implementation of the high-speed train
project.
3)With the passage of the Bond Act, the need to reorganize and
restructure the Authority in preparation of spending over $40
billion of federal, state, local, and private monies
necessitates this change in management and oversight of the
existing governance structure.
4)This bill basically follows the governance structure and
reporting relationships currently established for the BTHA,
CTC, and Caltrans. This is one of several organizational
configurations that should be analyzed.
5)Reorganizing the Authority now would better position the state
to administer federal economic stimulus funds by prioritizing
and allocating funds to the Department for its subsequent
budgeting, contracting, expending, and monitoring of the
federal and state funds.
Arguments Against the bill:
1)This bill is premature as the SB 53 (Ducheny) Chapter 53,
Statutes of 2008, report was due May 1, 2009, that could
contain recommendations for reorganizing the high-speed rail
functions of the state. The report's current due date is
February 2010.
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2)Another approach, as suggested by SB 409 (Ducheny) of 2009,
would consolidate the intercity and high-speed rail functions
of the state under one department. As funding and operation
for these two separate systems are intertwined, this approach,
that would allow closer linkages between the two independent
systems, makes some sense in that regard.
3)This bill contains distinct differences regarding the
selection of the Department director as well as the setting of
Department salaries in comparison to the existing selection of
the Caltrans director and the setting of Caltrans' employee
salaries. Further, Department's authorization to have 10
exempt Governor-appointed positions is questionable and needs
justification.
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093
FN: 0003578