BILL ANALYSIS �
AB 1092
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ASSEMBLY THIRD READING
AB 1092 (Bonnie Lowenthal)
As Introduced February 18, 2011
Majority vote
TRANSPORTATION 12-0 APPROPRIATIONS 12-5
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|Ayes:|Bonnie Lowenthal, |Ayes:|Fuentes, Blumenfield, |
| |Jeffries, Achadjian, | |Bradford, Charles |
| |Blumenfield, Bonilla, | |Calderon, Campos, Davis, |
| |Buchanan, Eng, Galgiani, | |Gatto, Hall, Hill, Lara, |
| |Miller, Norby, | |Mitchell, Solorio |
| |Portantino, Solorio | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Harkey, Donnelly, |
| | | |Nielsen, Norby, Wagner |
| | | | |
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SUMMARY : Requires the California High-Speed Rail Authority
(Authority), beginning March 1, 2012, and biannually thereafter,
to report on the development and implementation of intercity
high-speed rail. Specifically, this bill :
1)Requires the Authority to provide a report to the Senate
Committee on Transportation and Housing, the Assembly
Committee on Transportation, the Senate Committee on Budget
and Fiscal Review, and the Assembly Committee on Budget on the
development and implementation of the high-speed rail project.
2)Specifically requires the following elements to be included in
the report:
a) A summary describing the overall progress of the report;
b) The baseline budget for all project phase costs, by
segment or contract, beginning with the 2009 business plan;
c) The current and projected budget, by segment or
contract, for all project phases;
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d) Expenditures to date, by segment or contract, for all
project phases;
e) A comparison of the current and projected work schedule
against the baseline schedule contained in the 2009
business plan;
f) A summary of milestones achieved during the past year
and of milestones expected to be reached in the coming
year;
g) Any issues identified during the prior year and actions
taken to address those issues; and,
h) A thorough discussion of various risks to the project
and steps taken to mitigate those risks.
EXISTING LAW :
1)Creates the Authority to direct the development and
implementation of intercity high-speed rail service throughout
California, initially running from San Francisco to Los
Angeles via the Central Valley, and later to Sacramento and
San Diego.
2)Requires the Authority to prepare, publish, adopt, and submit
to the Legislature a business plan every two years, beginning
January 1, 2012, with prescribed elements.
3)Requires the Authority, no later than 90 days prior to making
an initial request for appropriation of bond proceeds for any
eligible capital costs on each corridor, or usable segment
thereof, to approve and submit to the Director of the
Department of Finance (DOF), the high-speed rail peer review
group, and the Legislature, a detailed funding plan for that
corridor or a usable segment thereof; and, requires the plan
to include, identify, or certify specific elements.
4)Requires the Authority, prior to committing any bond proceeds
for construction or right of way or equipment acquisition, on
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each corridor, or usable segment thereof, to have approved and
concurrently submitted to the DOF and the Legislature, the
following:
a) A detailed funding plan with specific elements; and,
b) Report or reports, prepared by one or more financial
services firms, financial consulting firms, or other
consultants, independent of any parties, other than the
Authority, involved in funding or constructing the
high-speed train system, affirming specific conditions.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, first-year special fund costs in the range of
$250,000 to provide the initial and first follow-up reports.
Annual costs thereafter for two reports should not exceed
$125,000.
COMMENTS : Existing law requires numerous reports of the
Authority, such as a business plan every two years, a detailed
funding plan prior to the Authority's initial request for bond
proceeds for capital expenditures, and another detailed funding
plan prior to expending any bond proceeds for capital
construction or right of way acquisition. The primary purpose
of these reports has been to ensure the feasibility of the
project overall, before construction begins, including the
feasibility of each individual segment of the system. The
reports are also intended to ensure that the state's fiscal
liability for the construction, operation, and maintenance of
the system is identified and is limited.
AB 1092 (Bonnie Lowenthal) requires a report of an entirely
different nature. The report required by this bill is one that
has been recommended by the Legislative Analyst's Office (LAO)
and that is currently being used to track the progress on the
project to replace the East Span of the San Francisco-Oakland
Bay Bridge. That project is currently the largest public works
project ever undertaken in California.
According to the LAO, "Multiyear mega projects such as the
high-speed rail project are susceptible to significant
unexpected challenges in their planning, development, and
construction as well as financing. For example, a 2004 report
by the �Bureau of State Audits] regarding the replacement of the
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Oakland-San Francisco Bay Bridge, another mega project, found
that a considerable financial crisis arose in part due to the
project management's failure to disclose huge cost overruns as
soon as it was aware of them. Because the state has committed a
significant amount of funding for the high-speed rail project,
it is important that the Legislature be provided from the outset
with regular updates on the project's progress to avoid
unexpected challenges in the project's development."
According to the author, "AB 1092 will ensure the Legislature is
provided with the regular project status reporting it needs as
we begin development and construction of the next, largest
public works project California has ever undertaken."
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093
FN: 0000934