BILL ANALYSIS
SB 965
Page 1
SENATE THIRD READING
SB 965 (DeSaulnier)
As Amended June 21, 2010
Majority vote
SENATE VOTE :26-8
TRANSPORTATION 14-0 APPROPRIATIONS 13-3
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|Ayes:|Bonnie Lowenthal, |Ayes:|Fuentes, Conway, |
| |Jeffries, | |Bradford, |
| |Bill Berryhill, | |Charles Calderon, Coto, |
| |Blumenfield, Buchanan, | |Davis, |
| |Eng, Furutani, Galgiani, | |De Leon, Gatto, Hall, |
| |Hayashi, Miller, Niello, | |Skinner, Solorio, |
| |Norby, Portantino, | |Torlakson, Torrico |
| |Solorio | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Harkey, Nielsen, Norby |
| | | | |
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SUMMARY : Authorizes the California High-Speed Rail Authority
(Authority) to expend federal funds made available by the
federal American Recovery and Reinvestment Act of 2009 (ARRA)
for high-speed rail purposes. Specifically, this bill :
1)Makes findings and declarations regarding the importance of
high-speed rail as a transportation facility to California and
as a potential source of jobs to the state.
2)Authorizes the Authority to expend ARRA funds, upon
appropriation by the Legislature, for conducting environmental
studies, planning analyses, and preliminary engineering
activities.
3)Authorizes the Authority to use ARRA funds for capital
expenditures, if matched by funds from the Safe, Reliable
High-Speed Passenger Train Bond Act for the 21st Century
(High-Speed Rail Bond Act), consistent with the requirements
for a peer review and appropriation by the Legislature.
4)Requires the Authority to take actions that ensure federal
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funds are obligated and expended in a manner that meets all
federal guidelines, maximizes job creation in the state,
expedites projects that improve rail-highway safety, mobility,
and performance, and makes the most efficient use of
High-Speed Rail Bond Act funds, including replacing bond funds
for project expenditures with federal funds where feasible.
5)Requires the Authority, within 60 days of the enactment of
this bill or finalizing a cooperative agreement with the
Federal Railroad Administration (FRA) for the use of ARRA
funds, which ever occurs later, to submit to the Legislative
Analyst's Office (LAO) and the fiscal committees and the
policy committees of the Legislature having jurisdiction over
transportation issues an adopted expenditure plan. The
expenditure plan is to include:
a) A description of the projects proposed for funding,
including a discussion of the projects' independent
utility;
b) The projects' location, the amount of federal, state,
and private funds proposed to be committed to each project;
c) A project schedule with milestones and project
completion dates for each project; and,
d) An estimate of the number of jobs the projects create in
the state.
1)Exempts from the bill's provisions ARRA funds approved for the
design and construction of the Transbay Transit Center.
EXISTING LAW :
1)Enacts the High-Speed Rail Bond Act. As 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 Legislature to establish conditions
and criteria on funds appropriated for planning and capital
costs. Authorizes, through enactment of the ARRA, $1.85
billion to the Authority for high-speed rail passenger
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services in California.
2)Requires the Authority, prior to expending bond funding for
the construction and acquisition of equipment and property, to
submit to the Department of Finance, the Joint Legislative
Budget Committee, the peer review group as established, and
the transportation and fiscal policy committees of the
Legislature, a detailed funding plan for each corridor or
usable segment that is to include, identify, or certify:
a) The corridor, or usable segment thereof, in which the
authority is proposing to invest bond proceeds;
b) A description of the expected terms and conditions
associated with any lease agreement or franchise agreement
proposed to be entered into by the authority and any other
party for the construction or operation of passenger train
service along the corridor or usable segment thereof;
c) The estimated full cost of constructing the corridor or
usable segment thereof, including an estimate of cost
escalation during construction and appropriate reserves for
contingencies;
d) The sources of all funds to be invested in the corridor,
or usable segment and the anticipated time of receipt of
those funds;
e) The projected ridership and operating revenue estimate
based on projected high-speed passenger train operations on
the corridor or usable segment;
f) All known or foreseeable risks associated with the
construction and operation of high-speed passenger train
service along the corridor or usable segment thereof and
the process and actions the authority will undertake to
manage those risks;
g) Construction of the corridor or usable segment thereof
can be completed as proposed in the plan;
h) The corridor or usable segment thereof would be suitable
and ready for high-speed train operation;
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i) One or more passenger service providers can begin using
the tracks or stations for passenger train service;
j) The planned passenger service by the Authority in the
corridor or usable segment thereof will not require a
local, state, or federal operating subsidy; and,
aa) The Authority has completed all necessary project level
environmental clearances necessary to proceed to
construction.
1)Establishes the Transbay Joint Powers Authority (TJPA) to
design, build, operate and maintain a new Transbay Transit
Center at the site of the current Transbay Terminal in
downtown San Francisco. Authorizes, through enactment of the
ARRA, $400 million to the TJPA directly.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, one-time bond-funded costs of up to $100,000 for
development of the expenditure plan.
COMMENTS : Following the passage of the High-Speed Rail Bond
Act, the Authority will be transitioning from a small study and
planning organization to a multi-billion dollar engineering and
construction entity. Supplementing state revenues for the
high-speed rail project pursuant to the High-Speed Rail Bond
Act, California has received approval from the federal
government for $2.25 billion in ARRA funds. According to the
author, this bill "creates a process for appropriation of
federal funds and for the Authority to use these dollars to
fully take advantage of the job creation potential of high-speed
rail. This bill also provides for needed oversight and
accountability by requiring a report to the Legislature within
60 days of entering into a cooperative agreement with the FRA
for the expenditure of the funds. SB 965 is an important
measure that strikes the proper balance between creation of
vitally needed California jobs and the appropriate level of
oversight of the Authority."
Federal process: This bill clarifies and establishes the
ability of the Authority to expend federal ARRA funds. Further,
the current process requires the Authority to enter into a
cooperative agreement with the FRA over the expenditure of
federal ARRA project funds. Once the agreement is consummated,
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the FRA will reimburse the state for 50% of the project's costs.
Information gap: Current state law, High-Speed Rail Bond Act,
requires the Authority, prior to expending state bond funding
for the construction and acquisition of equipment and property,
to submit to the Department of Finance, the Joint Legislative
Budget Committee and others, a funding plan for the expenditure
of those bond revenues. The requirements for the funding plan
are specified under the above Existing Law, section #2. This
bill requires the reporting of the Authority's plans for
expending ARRA funds that are beyond the current state
requirements as well as provides possibly for an earlier
disclosure of project expenditure information to the Legislature
than required by that law.
Transbay Transit Center: The Transbay Terminal is a regional
intermodal transfer facility that includes office towers and
housing on a 42 acre site in downtown San Francisco. The
High-Speed Rail Bond Act stipulates that the terminal is the
Northern California terminus for Phase I of the high-speed rail
service. The TJPA submitted an application for ARRA funding and
was awarded $400 million, which FRA included in its $2.25
billion award to the Authority. In March 2010, the FRA sent a
letter indicating basically that the TJPA, not the Authority, is
the direct recipient of the $400 million allocation.
Accordingly, this bill makes the $400 million provided to TJPA
exempt from the Authority's reporting of its $1.85 billion in
ARRA funds.
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093
FN: 0005608