BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 145 (Galgiani)
Hearing Date: 08/15/2011 Amended: 07/13/2011
Consultant: Mark McKenzie Policy Vote: T&H 5-3
_________________________________________________________________
____
BILL SUMMARY: AB 145 would place the High Speed Rail Authority
(HSRA) under the Business, Transportation and Housing Agency
(BT&H), repeal and recast its authorizing statutes, and update
the powers and duties of HSRA. Specifically, this bill would:
Continue the HSRA in existence in state government, retain the
existing membership, and place it under BT&H.
Require Senate confirmation of future appointments by the
Governor to the HSRA.
Update HSRA powers, duties, and responsibilities to affirm
that the authority would select high-speed train system
alignments, serve as the governing body for purposes of
adopting resolutions of necessity, advise the Secretary of
BT&H, adopt criteria for the award of franchises, and set
fares or establish guidelines to do so.
Require the HSRA to prepare, publish, adopt, and submit to the
Legislature and Governor a high speed capital program by
November 1 of even-numbered years.
Specify that the capital program is a six-year planning
document that includes a listing of all capital improvement
projects for each segment, specifying the expected expenditure
amount for each year for each of the following components:
permits and environmental studies; plans, specifications, and
estimates; right-of-way acquisition, including support
activities; construction, construction management, and
engineering, including surveys and inspections; and any
additional components.
Require at least one public hearing on the capital program,
consideration of public comments, and adoption of the program
at a regularly scheduled meeting.
Delete certain provisions that were part of the Proposition 1A
Bond Act that explicitly authorize HSRA to contract with the
Department of Transportation (Caltrans) for specified project
design and engineering services.
_________________________________________________________________
____
Fiscal Impact (in thousands)
AB 145 (Galgiani)
Page 1
Major Provisions 2011-12 2012-13 2013-14 Fund
Biennial Capital Program $250-$375 $250-$375
$75-$150Bond*
HSRA coordination $37 $75 $75 Bond*
BT&H administration likely minor
costs to coordinate with HSRA General
_____________
* High-Speed Passenger Train Bond Fund
_________________________________________________________________
____
STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
Existing law requires HSRA to prepare, publish, and adopt a
business plan by January 1, 2012 and biennially thereafter that
identifies: the type of system it will develop; a description
of the primary benefits of the system; forecasts of anticipated
patronage and costs to construct, operate, and maintain the
system; estimates of anticipated federal, state, local, and
other funds for construction and operation; and a proposed
chronology for construction of each corridor of the statewide
high-speed rail system. The business plan will also include a
discussion of foreseeable risks, corresponding mitigation
strategies, and other specified information. The HSRA must hold
at least one public hearing on the business plan, consider any
public comments, and adopt the plan at a regularly scheduled
meeting.
AB 145 would require HSRA to prepare, publish, and adopt a
capital program on a biennial basis that provides project level
data and expenditure needs over a six-year planning window. The
initial program must be adopted less than a year after the
operative date of the bill, which could impose significant
burdens on HSRA to essentially develop a six-year budget for
expenditures on a project level basis. These costs are unknown,
but could be in the range of $500,000 to 750,000 for
preparation, publication, and adoption of the initial program in
the 2012 calendar year. Since HSRA has limited staff, the
authority would likely contract out for much of the work. The
bill requires the adoption of a capital program every two years,
so costs would continue. Staff estimates that costs to update
AB 145 (Galgiani)
Page 2
projections and add two years to future capital programs would
decrease costs to approximately $150,000 to $300,000 every two
years thereafter. For purposes of illustration, HSRA costs to
develop and adopt the business plan that is due this fall is an
estimated $1.5 million.
Placing the HSRA under BT&H would not impose significant burdens
on BT&H staff. BT&H currently oversees numerous state
departments with substantial budgets, such as the Department of
the California Highway Patrol, the Department of Housing and
Community Development, the Department of Motor Vehicles, the
Department of Transportation, and the Department of Managed
Healthcare, among others. BT&H staff currently performs an
oversight function by reviewing and approving annual budget
documents prepared by each department or entity under the
agency. HSRA staff would continue to assess its annual
budgetary needs and prepare any necessary documents. AB 145
would impose minor costs on BT&H to coordinate with HSRA staff
in the preparation of an annual budget, and in the performance
of any oversight functions.
HSRA indicates that the bill would create inefficiencies by
adding another layer of bureaucracy between the authority and
the Governor and Legislature, which may result in staffing
pressures and delays in developing HSRA policies, submitting
budgetary documents, and approving reports. HSRA estimates the
additional coordination is difficult to quantify but could
result in additional staffing costs to HSRA of up to $75,000 and
1 PY annually. Staff notes that any disruptions associated with
placing HSRA under BT&H would likely be short term.