BILL ANALYSIS
SB 409
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Date of Hearing: June 28, 2010
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
SB 409 (Ducheny) - As Amended: August 2, 2010
SENATE VOTE : 32-0
SUBJECT : California High-Speed Rail Authority realignment and
reporting
SUMMARY : Makes various changes regarding the governance and new
report requirements of the California High-Speed Rail Authority
(Authority). Specifically, this bill :
1)Requires the five members appointed to the Authority by the
Governor be confirmed by the Senate.
2)Requires the California Department of Transportation
(Caltrans) to prepare a five-year Strategic Rail Connectivity
Plan (strategic plan). Requires the strategic plan to be
developed in consultation with the Authority. Requires
Caltrans to present the strategic plan for information at a
meeting of the California Transportation Commission (CTC).
Establishes a 45-day comment period. Requires Caltrans to
prepare summary of objections and recommendations and its
responses to them and to make it available to the public at
least 15 days prior to a subsequent regular meeting of the
CTC.
3)Requires the strategic plan to include the following elements:
a) Desirable linkages and feeder opportunities between
various passenger rail services, including high-speed and
conventional intercity rail, commuter rail, and rail
transit, where the various services are the responsibility
of different implementing and operating agencies.
b) Identification of the coordination in planning and
capital investments necessary to maximize the opportunities
for each of those services in providing a cohesive,
connected, and easy-to-use system for Californians
consisting of all of those services, rather than a
cumbersome set of unlinked individual rail services.
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c) Identification of future right-of-way needs of passenger
rail lines in connection with state and local highway
system improvements in order to accommodate future rail
system improvements as those highway improvements proceed
to implementation, with the objective of avoiding lost
opportunities by failure to reserve right-of-way capacity
for future rail improvements.
d) As an option, may also include other matters that offer
similar opportunities for statewide coordination, including
the efficient movement of goods.
1)Requires the Authority to submit, annually, a project funding
program to the Governor and Legislature not later than October
1. Requires the program to cover a period of five fiscal
years, beginning July 1 of the year following the year it is
adopted, and shall be a statement of intent by the Authority
to request funding in the annual Budget Act for the following
five years.
2)Requires the project funding program to include a listing of
all capital improvement projects that are expected to require
appropriation in the annual Budget Act, including state,
federal, local, and private funds, during the following five
fiscal years.
3)Requires, for each segment, the program specify the
expenditure amount and the expenditure year for each of the
following project components:
a) Completion of all permits and environmental studies.
b) Preparation of plans, specifications, and estimates.
c) The acquisition of rights-of-way, including, but not
limited to, support activities.
d) Construction and construction management and
engineering, including surveys and inspection.
e) Any additional components the Authority may deem to be
appropriate.
EXISTING LAW :
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1)Enacts the Safe, Reliable High-Speed Passenger Train Bond Act
for the 21st Century (High-Speed Rail Bond Act). The
High-Speed Rail 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.
$950 million is authorized for capital projects on other
passenger rail lines to provide connectivity to the high-speed
train system and for capacity enhancements and safety
improvements to those lines.
2)Establishes Authority and charges it with the planning,
designing, constructing, operating, and maintaining a
state-of-the-art high-speed train system for California.
Authority consists of a nine-member board (five appointed by
the Governor, two appointed by the Senate Rules Committee, and
two by the Speaker of the Assembly). The appointments are not
subject to Senate confirmation.
3)Authorizes the Legislature to establish conditions and
criteria on funds appropriated for planning and capital costs.
Requires Authority, prior to expending capital bond funding
for the construction and acquisition of equipment and
property, to submit a detailed funding plan for each corridor
or usable segment to an independent peer review group as well
as the Legislature and the Department of Finance.
4)Establishes BT&H 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.
5)Establishes 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 also advises and
assists BT&H and the Legislature in formulating and evaluating
state policies and plans for California's transportation
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programs. Requires capital expenditures for intercity rail
projects funded from the state's Public Transit Account to be
included in the State Transportation Improvement Program,
which is a five-year state transportation capital outlay
program, adopted every two-years by the CTC.
6)Establishes the multi-modal Caltrans, and within it 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, including a discussion of
rail freight services.
7)Under federal law, approves $2.25 billion for high-speed rail
passenger services for California, through the American
Recovery and Reinvestment Act of 2009 (ARRA, the recently
enacted federal economic stimulus package).
8)Under the federal Passenger Rail Investment and Improvement
Act of 2008 (PRIIA), focuses on improving intercity rail
passenger service, operations, and facilities, including the
development of high-speed rail corridors.
FISCAL EFFECT : Unknown.
COMMENTS : The proposed California high-speed rail passenger
train network consists of an 800+ mile high-speed system capable
of a speed up to 220 miles per hour (mph), initially serving the
major metropolitan market of San Francisco through the Central
Valley into Los Angeles and Orange County (Phase 1). The system
is required by statute to transport people from San Francisco to
Los Angeles in two hours and forty minutes. Eventually the
service would be extended to Sacramento, the Inland Empire, and
San Diego. Further, improved rail service over the Altamont
corridor would be implemented.
In August 2008, AB 3034 (Galgiani) Chapter 267, was enacted that
laid the framework for improving the oversight of the Authority's
high-speed rail project. That bill also clarified and modified
bond provisions that eventually were approved by the California
voters in November 2008 with the passage of the Proposition 1A
(High-Speed Rail Bond Act). With that endorsement, $9.95 billion
state general obligation bond funds were authorized for eventual
sale, providing the initial capital seed funds for the completion
of the entire statewide system.
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Additionally, AB 3034 established significant oversight
processes and control mechanisms for the independent review and
approval of financing and engineering plans for the construction
of California's high-speed train system. Reporting and other
oversight mechanisms were also required by subsequent California
legislative Budget Act requirements.
The author's office contends that California has a network of
5,488 miles of Class I rail and 1,409 miles of short line and
terminal rail that traverse the state and over which 7,578,465
carloads of freight carrying 177,907,810 tons of freight travel.
In addition, over 28 million intercity and commuter passengers
traveled in 2006 on facilities owned by Class I railroads or
over tracks owned by public agencies, but over which Class I
railroads may operate. The office further states that the
High-Speed Rail Bond Act provided $995 million for intercity and
commuter systems and concludes that "given the magnitude of
California's rail system, the difficulty in coordinating safety
concerns and multi-modal investments, the myriad of players at
the state, local and private sector level and the imminent
implementation of a high-speed rail, there is a need to
coordinate functions between private firms and public agencies."
Together with the passage of Proposition 1A and California's
approval and pending receipt of $2.25 billion in federal ARRA
high-speed rail funds, Authority will soon be approving
multi-billion dollar engineering and construction contracts, in
accordance with a schedule approved by the federal ARRA funding
agency (Federal Railroad Administration). Accordingly,
environmental reviews of the initial Phase 1 segments are slated
to be completed by September 30, 2011, with construction
beginning by September 30, 2012. Filling an immediate need, the
Authority, after a nationwide search, selected a chief executive
officer to manage its operations.
Oversight hearings of the legislative transportation committees
and reviews by others : This committee and the Senate
Transportation and Housing Committee conducted oversight
hearings of the Authority. Separately, the Legislative
Analyst's Office and the California State Auditor conducted
independent reviews of the Authority's business plans,
organizational staffing plans, budget requests, ridership
models, and operations and management. Overall, from the
hearings and reviews, these entities expressed concerns over the
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operations and management of the Authority. General criticisms
included inadequate planning for ultimate system build-out, weak
oversight due to inactivity of peer review group, inadequate
administrative accounting over expenditures, poor contract
management, etc.
PRIIA : The new federal rail passenger law (PRIIA) tasks states
to develop statewide rail plans to set policy involving freight
and passenger rail transportation within their boundaries;
establish priorities and implementation strategies to enhance
rail service in the public interest; and serve as the basis for
federal and state rail investments within the state. Under that
law, state rail plans are to address a broad spectrum of issues,
including an inventory of the existing rail transportation
system, rail services and facilities within the state. They
must also include an explanation of the state's passenger rail
service objectives, an analysis of rail's transportation,
economic, and environmental impacts in the state, and a
long-range investment program for current and future freight and
passenger infrastructure in the state. The plans are to be
coordinated with other state transportation planning programs
and clarify long-term service and investment needs and
requirements. The Federal Railroad Administration is to
establish minimum standards for the preparation and periodic
revision of state rail plans.
Support : Writing in support of the bill, the Planning and
Conservation League (PCL) indicates that "Since the passage of
Proposition 1A, PCL has worked closely with legislative members,
local residents, and community groups throughout the state to
ensure that this complicated and expensive public works project
"be done right" in the first instance. However, we have
consistently been troubled by the Authority's questionable
business activities and general lack of transportation planning
expertise, as detailed in recent reports from the Legislative
Analyst's Office and the State Auditor. In an effort to right
the project's course, PCL has urged the Legislature to exercise
its statutory authority to appoint a successor-agency staffed
with professionals experienced with implementing large-scale
transportation projects. Only with qualified and experienced
professionals to lead the Authority will a high-speed rail
project be completed successfully? PCL strongly supports the
increased oversight and accountability measures imposed on the
Authority by SB 409. The policies in this measure represent a
good first step toward righting some of the fundament problems
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plaguing this project. First, this bill would require that
members recommended to the Authority by the Governor be
appointed with the advice and consent of the Senate. This
provision will not only allow the Legislature ensure the
Authority is staffed with transportation and financial
professionals, but will also provide the Legislature an
opportunity to proactively exercise greater oversight over the
Authority's policy decisions going forward and provide the
public a chance to comment on appointments. This substantive
reform will lead to more thoughtful and responsible
decision-making by the Authority and help to ensure that a
high-speed rail system is successfully designed and implemented
in the best interest of all Californians."
Related bills : SB 455 (Lowenthal) of 2009, requires the
Governor's appointees to the Authority to be subject to Senate
confirmation, establishes criteria for selecting high-speed rail
projects, and provides the Authority with eminent domain
authority similar to the authority assigned to Caltrans and the
Department of Water Resources. That bill is on the Assembly's
third reading inactive file.
AB 1375 (Galgiani) of 2010, creates a Department of Railroads to
manage and implement the high-speed rail program described in
the High-Speed Rail Bond Act and other statutes. The management
of that department would be overseen by the governing board of
the Authority. The department would be required to submit an
annual progress report as well as a six-year funding program.
According to the author of that bill, the bill is being amended
to remove provisions that would reorganized the existing
Authority. The bill is in Senate Transportation and Housing
Committee awaiting hearing.
AB 289 (Galgiani) of 2009, pertains to ARRA funding and staffing
of the Authority. The bill is in Senate Transportation and
Housing Committee awaiting hearing.
AB 2121 (Harkey) of 2010, among other items, requires a six-year
programming document. The bill is in the Senate Rules Committee
awaiting assignment.
REGISTERED SUPPORT / OPPOSITION :
Support
SB 409
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Planning and Conservation League
Opposition
None on file
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093