BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 409
SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: ducheny
VERSION: 5/21/09
Analysis by: Art Bauer FISCAL: yes
Hearing date: June 9, 2009
SUBJECT:
Department of Railroads
DESCRIPTION:
This bill creates a Department of Railroads in the Business,
Transportation and Housing Agency.
ANALYSIS:
Existing law:
1. Creates the Department of Transportation (Caltrans) in
the Business, Transportation and Housing Agency (BT&H). An
undersecretary of the agency is required to oversee
Caltrans matters.
2. Requires the Governor to appoint a director of Caltrans
subject to confirmation by the Senate, who holds office at
his pleasure.
3. Creates within Caltrans a division of rail, which is
responsible for the development of a comprehensive rail
passenger system and the preparation of the rail passenger
development plan.
4. Authorizes Caltrans to:
a. Contract with Amtrak for passenger rail
service and related feeder bus services and with
railroad corporations for the use of tracks and other
facilities for passenger services.
SB 409 (DUCHENY) Page 2
b. Provide intermodal facilities along corridors
on which services is operated under contract to the
state.
c. Prepare marketing strategies for intercity
passenger rail services and the feeder-bus services.
d. Purchase, lease, and sell passenger rail
equipment, including passenger cars and locomotives.
e. Acquire, lease, design, construct, and improve
track lines and related facilities.
f. Purchase, lease, or condemn property necessary
for the development and implementation of the state's
rail passenger plan.
g. Prepare and submit to the Legislature every
two years a State Rail Plan consisting of a passenger
rail element and a freight rail element. Prior to
submitting the plan to the Legislature, Caltrans must
submit the plan to the California Transportation
Commission for its advice and consent. The plan is
required under federal law in order for California to
be eligible for certain capital funds for passenger
rail services.
5. Assigns Caltrans responsibility for developing intercity
passenger rail service with speeds up to 125 miles per hour
(mph).
6. Prohibits Caltrans from operating railroads.
7. Requires capital expenditures for intercity rail
projects funded from the state's Public Transit Account
(PTA) to be included in the State Transportation
Improvement Program (STIP), which is a five-year state
transportation capital outlay program, adopted every
two-years by the California Transportation Commission
(CTC).
8. Authorizes that the state rail program be funded from
the Public Transit Account for state operations and from
the State Highway Account for the grade separation program
and the grade crossing program.
SB 409 (DUCHENY) Page 3
9. Authorizes $400 million for rail capital programs from
Proposition 1B, the Highway Safety, Traffic Reduction, Air
Quality, and Port Security Bond Act of 2006, and $190
million for capital programs from 2008's Proposition 1A,
the Safe, Reliable High-Speed Passenger Train Bond Act for
the 21st Century.
10. Authorizes the California Public Utilities
Commission (PUC) to allow, close, and regulate railroad
at-grade crossings and grade separations between railroads,
local streets and roads, and light rail transit systems, to
regulate the crossing of one railroad with another, to
authorize the installation and maintenance of
grade-crossing devices, and to apportion cost for the
construction and maintenance of such devices and grade
separations.
11. Requires the PUC to establish a priority list of
grade separation projects based on criteria it adopts to be
funded by the Grade Separation Fund (Fund) in the State
Highway Account.
12. Authorizes the CTC to fund projects from the
priority list prepared by the PUC with revenue from the
Fund, based on a recommendation made by Caltrans.
13. Establishes the California High-Speed Rail
Authority (HSRA), which is governed by five members
appointed by the Governor, two members appointed by the
Senate Rules Committee, and two members appointed by the
Speaker of the Assembly.
14. Authorizes the governing board of the HSRA to appoint an
executive director, who serves at the pleasure of the
board, and establish his or her salary with the consent of
the Department of Personnel Administration.
15. Authorizes the HSRA to develop and implement an
intercity high-speed passenger trail service that is fully
integrated with the state's existing intercity rail and bus
network, consisting of interlinked conventional and
high-speed rail lines and associated feeder buses. The
intercity network in turn shall be fully coordinated and
connected with commuter rail lines and urban rail transit
lines developed by local agencies, as well as other transit
services, through the use of common station facilities
SB 409 (DUCHENY) Page 4
whenever possible.
16. Assigns the HSRA responsibility for developing intercity
passenger rail service with speeds above 125 mph.
This bill :
1. Creates the Department of Railroads (DOR) in the BT&H
and requires an undersecretary of the agency to be assigned
to give attention to rail matters.
2. Requires the Governor to appoint a director for the DOR
who is subject to confirmation by the Senate, and who holds
office at his pleasure. The director of DOR shall be paid
the same salary as the director of Caltrans.
3. Transfers the HSRA to the DOR and the HSRA a division
within DOR and authorizes the director of the DOR to
nominate a chief of the division of high speed rail who
shall be approved by the board of the HSRA and whose
position shall be exempt from the civil service
4. Designates the director of DOR to be the chair of the
California High-Speed Rail Authority (HSRA).
5. Authorizes the Governor to appoint a deputy director for
DOR, upon the recommendation of the director.
6. Transfers from Caltrans to DOR the powers, prohibitions,
and responsibilities identified in items 4, 5, 6, 7, 8, and
9 in existing law above.
7. Transfers from the PUC to DOR the powers and
responsibilities identified in items 10 and 11 above.
8. Creates a division of railroad-highway grade separation
and grade crossing protection for purposes of housing the
Caltrans and PUC functions associate the grade separation
and grade crossing protection programs.
9. Requires that the HSRA's annual budget to be developed
jointly by the director of the DOR and the HSRA.
10. Mandates the DOR to be the only state agency eligible to
apply for and receive grant and loan funds from the federal
government or other sources for intercity rail, high-speed
SB 409 (DUCHENY) Page 5
rail, or freight rail purposes.
11. Requires the secretary of BT&H to convene a joint task
force, co-chaired by the DOR director, the Caltrans
director, and representative of the PUC for the purpose of
resolving issues between the three agencies relative to
overlapping jurisdictions
COMMENTS:
1.Purpose . The purpose of this bill is to elevate to
departmental status Caltrans' division of rail in order to
bring more policy oversight by the Legislature and the
administration to the state's growing rail program, and to
ensure that the California's rail program receives the same
level of attention as the state's highway program.
2.Background . During the 1970s, Caltrans' mission was broadened
to include public transportation. The clearest manifestation
of this policy shift is the intercity passenger rail program
that Amtrak has been operating since 1975 under contract with
Caltrans. The Division of Rail manages this contract for
Caltrans. The first Amtrak service was between San Diego and
Los Angeles, followed by service between Bakersfield and
Oakland, and finally from Auburn-Sacramento to Oakland-San
Jose. The intercity rail program is managed in consultation
with Amtrak, the private railroad corporations over whose
tracks the Caltrans service operates, and the commuter rail
operators in the state who often share trackage rights with
the state-sponsored Amtrak service.
The PUC was originally established in 1911 by a constitutional
amendment as the California Railroad Commission, for the
purpose of regulating the railroad industry. In 1912, the
Legislature expanded its regulatory authority to include
natural gas, electric, telephone, and water companies. Until
the 1970s the PUC was responsible for regulating the fares and
prices that railroads and other transportation companies
charge shippers and passengers for the services they provided
in California and for enforcing rail safety standards. By
1980, Congress had deregulated the trucking and rail
industries, including ending intrastate regulation by the PUC.
After this action, the PUC no longer regulated the intrastate
rates of the transportation industry. In regard to railroad
safety, Congress has pre-empted the PUC's authority and
assigned it to the Federal Railroad Administration (FRA). The
SB 409 (DUCHENY) Page 6
FRA, however, contracts with the PUC to perform certain safety
inspections on its behalf. The PUC does regulate urban rail
mass transportation systems. In the event of an accident in
the transportation sector, the investigation and determination
of probable cause is the responsibility of the National
Transportation Safety Board.
In 1996, the California High-Speed Rail Authority was created
with responsibility for planning, constructing, and operating
a high-speed train system serving California's major
metropolitan areas. With passage of Proposition 1A, the Safe,
Reliable High-Speed Passenger Train Bond Act for the 21st
Century, the HSRA is responsible for developing high-speed
rail service between Anaheim-Los Angeles-Bakersfield-San
Jose-San Francisco. This service is to be developed as a
public-private partnership, with private, state, and federal
funding. Proposition 1A specified that the service cannot rely
upon state, federal, or local operating subsidies.
3.Removing overlap between the PUC and Caltrans in the
management of the grade-separation program . One of the most
vexing problems for local agencies, railroads, and other
stakeholders is the grade separation and grade crossing
program jointly managed by Caltrans and the PUC. The grade
separation program is funded from a statutorily required
annual appropriation of $15 million. Every two years the PUC
develops project evaluation criteria and then issues a call
for grade-separation projects. It evaluates the projects
against the criteria and arrays them in rank order. Caltrans
recommends to the CTC which projects to fund. Because of the
complexity in funding and the readiness of projects, projects
are not usually funded in order. This bill consolidates the
grade separation and grade crossing program under the new DOR.
It does not transfer the vestigial commercial railroad safety
responsibilities nor does it transfer the urban rail transit
safety responsibilities of the PUC to the new DOR.
The PUC adopts the evaluation criteria used to rank grade
separation project applications and to resolve cost sharing
disputes among parties involved with the installation and
maintenance of grade crossing devices and grade separation.
The grade-crossing protection program is a federally funded
program. The PUC identifies the safety project to be funded
and Caltrans allocates the funds and manages the construction
of the projects.
SB 409 (DUCHENY) Page 7
4.Incorporation of the HSRA authority into the DOR creates
opportunities for an integrated passenger rail system . The
Senate Transportation and Housing Committee has held four
oversight hearing on the HSRA. One conclusion from the
hearings is that the HSRA has operated as a promotion and
planning entity. Its efforts have been focused on developing a
vision of high-speed rail that the voters would endorse, which
they did with the passage of Proposition 1A. The HSRA is now
on the cusp of being a project development and construction
agency. The HSRA is unique however, in its degree of
separation from typical forms of accountability in that the
governing board is not subject to Senate confirmation. The
board, not the Governor, appoints the executive director, and
the appointment is not subject to Senate confirmation. While
Proposition 1A provides strong oversight and accountability
before bond revenues can be appropriated for construction
purposes, the requirements for an integrated rail system
development plan on a statewide basis is limited.
Although the HSRA has entered into memorandums of
understanding with local agencies, including, Caltrain, the
commuter operator on the San Francisco Peninsula, and the
Orange County Transportation Authority, which is developing
half-hourly commuter service in the high-speed rail corridor
between Anaheim and Los Angeles, it has not defined how a
statewide feeder network of Amtrak services and regional
services commuter services would function. The DOR could
provide an environment where the probability of integration
would be enhanced as both conventional intercity and
high-speed service would be located in the purposed
department.
5.Reorganization implications . The creation of a Department of
Railroads serves to consolidate state railroad functions and
ensures an integrated passenger rail development program by
placing the high-speed rail program and the conventional
intercity programs into the same agency. The high-speed rail
program is predicated on the development of a high quality
passenger rail feeder service. By placing the two programs in
the same agency the parallel development of the state's
passenger rail system will occur in tandem.
In addition, the consolidation of the grade separation and the
grade separation programs, currently operated by Caltrans and
the PUC will reduce the organizational friction and the cost
SB 409 (DUCHENY) Page 8
it creates between the two agencies that currently occurs. The
entire process of developing guidelines, prioritizing
projects, and recommending project funding to CTC would be
housed in one organization. The grade crossing program, which
is frequently referred to by its federal code designation as
the "section 130" program is also shared between Caltrans and
the PUC. An unusual feature of this program, according to PUC
staff, is that there is no authorization for this program in
state statute. It essentially operates on an informal
agreement between Caltrans and the PUC. The PUC staff
indicates that there is a joint effort underway between the
two agencies to craft a more detailed agreement between the
two agencies. The PUC's concern with the merger of the section
130 program is the safety aspect of the grade crossing program
may be lost because the DOR will be an operations-oriented
agency. This bill takes a step in this direction by protecting
the integrity of the safety program by creating a division for
the grade crossing and grade protection programs. Further,
steps could ensure the integrity of the safety recommendation
of the division.
All the programs are currently funded and the cost of the
department should not exceed current funding. In addition, the
organization cost due to inter-agency frictions should be
reduced. This does not reduce the state's ability to regulate
crossing safety.
6.SB 53 study . SB 53(Ducheny), Chapter 612, Statues of 2008,
requires the California Research Bureau (CRB) to conduct as
analysis of the state's rail functions, including examining
the practices of other states, and report to the Legislature
by May 1, 2009. This bill was originally scheduled to be heard
on April 14, 2009, but was put over pending the CRB report.
The CRB report, which involved consultation with stakeholders
in the public and private sector in the state as well as
managers of rail programs in other states, was issued on May
8, 2009, and the May 21 amendments to this bill reflect the
information it provided.
Related legislation
SB 455 (Lowenthal) requires the Governor's appointees to the
HSRA to be subject to Senate confirmation, establishes criteria
for selecting high-speed rail projects, and provides the HSRA
with eminent domain authority similar to the authority assigned
to Caltrans and the Department of Water Resources.
SB 409 (DUCHENY) Page 9
AB 1375 (Galgiani) creates a Department of High-Speed Rail to
manage and implement the high-speed rail program described in
Proposition 1A and other statutes. The management of this
department is overseen by the governing board of the HSRA.
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
June 3, 2009)
SUPPORT: None received.
OPPOSED: California Public Utilities Commission